author: WINTER, Circuit Judge:

text:
    Louis BERENSON and Sue A. Berenson et al., Plaintiffs-Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Defendant-Appellee.
    Nos. 454 to 455 and 464 to 467, Dockets 73-1701 and 73-1706 to 73-1710.
    United States Court of Appeals, Second Circuit.
    Argued July 15, 1974.
    Decided Nov. 6, 1974.

      Michael L. Paup, Atty., Tax Div., Dept, of Justice, Washington, D. C. (Scott P. Crampton, Asst. Atty. Gen., and Leonard J. Henzke, Atty., Tax Div., Dept, of Justice, Washington, D. C.), for defendant-appellee.
    Charles S. Lyon, New York City (Monroe J. Winston, New York City), for plaintiffs-appellants.
    Before WINTER, and MULLIGAN, Circuit Judges, and NEWMAN, District Judge.

       Of the United States Court of Appeals for the Fourth Circuit, sitting by designation.

       Of the United States District Court for the District of Connecticut, sitting by designation.

   WINTER, Circuit Judge:

In Commissioner v. Brown, 380 U.S. 563, 85 S.Ct. 1162, 14 L.Ed.2d 75 (1965) (Clay Brown), the Supreme Court considered the tax consequences under the Internal Revenue Code of 1954 of a sale and leaseback transaction between an ordinary seller and a tax-exempt purchaser. It held that the proceeds of sale were taxable as capital gains. The instant case arises from another such transaction entered into after the decision in Clay Brown and before enactment of the Tax Reform Act of 1969. Upon a finding that the purchase price negotiated between the sellers and the tax-exempt purchaser was double the amount that a nonexempt purchaser would have agreed to pay under comparable conditions of payment, a majority of the Tax Court held Clay Brown distinguishable and concluded that the proceeds of sale were taxable to the sellers as ordinary income. Louis Berenson, 59 T.C. 412 (1972). We agree in part and disagree in part. We hold Clay Brown inapplicable to the extent, but only to the extent, that the proceeds of sale exceed the fair market value of the securities sold if they had been sold by the sellers to a nonexempt purchaser. Accordingly, they are taxable, in part, as capital gains and, in part, as ordinary income. We reverse in part and affirm in part, and remand for further proceedings.

I.

As of December 31, 1965, Louis Ber-enson et al. (Taxpayers) owned all of the capital stock of two New York corporations — Kitro Casuals, Inc. and Marilyn Togs, Inc. These companies were engaged, respectively, in the manufacture and sale of women’s sportswear. Taxpayers had operated them successfully as closely held family corporations for the four preceding years.

On December 31, 1965, Taxpayers sold all of their stock in these corporations to the Temple Beth Ami (Temple), a nonprofit religious corporation located in Philadelphia, Pennsylvania. Temple was exempt from federal income tax under §§ 501(a) and 501(c)(3) of the Internal Revenue Code, and since it was a “church” ' within the meaning of § 511(a)(2)(A), as that section read prior to its amendment by the Tax Reform Act of 1969, Temple was also exempt from the tax imposed by § 511(a)(1) upon the “unrelated business taxable income” of exempt organizations.

Temple agreed to pay $6,000,000 for Taxpayers’ stock in quarterly installments, with interest at 4%, in accordance with the schedule set forth in the margin. Temple was not required to make any initial downpayment, and the first quarterly installment was due at the end of the first quarter of 1966.

On the same day that it acquired Taxpayers’ stock, Temple formed a partnership under the name Kitro Casuals Co. with one Robert M. Bernstein, who had acted as a finder in relation to the stock purchase. Temple was a limited partner and Bernstein "the general partner; the purpose of the partnership was to operate the businesses of the two corporations. During the period from January 3, 1966 through January 1, 1981, Temple’s share of the net profits of the partnership was fixed at 95.5%, with the remaining 4.5% going to Bernstein. After January 1, 1981, net profits were to be divided equally. Upon acquiring Taxpayers’ stock, Temple caused the two corporations to be liquidated and their assets distributed to Temple which then conveyed them to the partnership.

On January 3, 1966, Kitro Casuals Co. employed Taxpayer David Cohen to manage the business of manufacturing and selling women’s sportswear that it had just acquired from Temple. After becoming general manager, David Cohen, acting in behalf of the partnership, employed Taxpayers Louis Berenson, Samuel Cohen, and Isidore Cohen to be assistant general managers. These taxpayers served the partnership in these capacities throughout the tax years in issue. Thus, the continuity of the management of the underlying business was left completely undisturbed by the sale of stock.

Two important modifications to the sales agreement were subsequently agreed to by Taxpayers and Temple. First, it was provided that, in the event that Temple defaulted in its obligation to meet scheduled payments of the purchase price, Taxpayers’ “sole remedy shall be the right to have returned to them [Temple’s] capital account in the business formerly conducted by the Corporations.” None of Temple’s other assets were to be subject to its obligation to pay the purchase price. Second, it was agreed that in the event that 80% of Temple’s distributive share of the partnership’s net profits for a given quarter exceeded the payment due to Taxpayers for that quarter, such excess would be paid to Taxpayers in prepayment of future installments in inverse order of maturity.

The tax years in issue are 1966 through 1968. During them, Temple made payments to Taxpayers out of its distributive share of the net profits of Kitro Casuals Co. in accordance with the schedule of payments, as subsequently modified, set forth in the sales' agreement, except that Taxpayers agreed to the withholding of certain amounts due to be reinvested in the business. Taxpayers reported the amounts that they received from Temple during these years, using the installment method under § 453, as gains from the sale of capital assets held for longer than six months. Upon the theory that the transaction described above did not constitute a “sale” of Taxpayers’ stock in Kitro Casuals, Inc. and Marilyn Togs, Inc. within the meaning of § 1222(3) of the Code, the Commissioner ruled that the payments that Taxpayers received during the years in issue were ordinary income and he assessed deficiencies against each of Taxpayers accordingly. The Tax Court, by a split decision, upheld the Commissioner’s determination.

II.

Prior to the enactment of the Tax Reform Act of 1969, including the time of the stock purchase agreement and each of the three subsequent tax years in issue, Temple’s distributive share of the net profits of the limited partnership was exempt from both the federal corporate income tax and the tax upon the “unrelated business income” of exempt organizations imposed by § 511(a)(1). Therefore, the entire amount of such distributive share, before taxes, was available to meet the quarterly installments on the purchase price due to Taxpayers.

By the purchase, Temple, made no outlays and risked none of its other property. At the same time it potentially would acquire an unencumbered one-half interest in the assets of the businesses after thirteen years if its share of the pretax earnings turned out to be sufficient to pay off the purchase price. Furthermore, should Temple’s distributive share of the partnership income for any quarter exceed the payment due Taxpayers for that quarter, Temple could retain such excess up to 20% of the total distributive share for such quarter. Temple acquired these rights to increase its income and assets at no greater cost than the effort of putting pen to paper.

It is at once obvious that the incentive to Taxpayers to enter into the transaction lay in the tax treatment afforded the amounts to be paid to them,- as well as certain benefits accruing to them, directly or indirectly, because of Temple’s tax-exempt status. If the transaction constituted a “sale” of Taxpayers’ stock within the meaning of § 1222(3), payments received by them, for the tax years in question, would be treated as capital gains. As a result, Taxpayers would be able to transform the future pretax earnings of the businésses that they had owned, up to a ceiling of $7,840,000, spread out over thirteen years in the manner set forth in the schedule of payments, into income taxed at favorable capital gains rates. Temple’s tax-exempt status made the transaction economically feasible — both with regard to the payments to be made and perhaps also with regard to the total purchase price.

The Commissioner has waged a long war, both in the courts and Congress, to strip transactions of the nature described of their beneficial tax consequences. In 1965, the Commissioner sought to have the Supreme Court rule that a transaction similar to that in the instant case was not a “sale” of the taxpayer’s stock under § 1222(3). That decision was Clay Brown Unsuccessful in the Supreme Court in Clay Brown, the Commissioner finally prevailed in Congress by the enactment of the Tax Reform Act of 1969. But since the latter would not apply to the tax years in issue in the instant case, we must analyze Clay Brown with care and decide if it is applicable here.

In Clay Brown, the Supreme Court held that the transaction under review was a “sale” within the meaning of § 1222(3). The basis of this holding was that, in the absence of a special Code definition of the term “sale,” the ordinary meaning of the word should govern, unless the application of such ordinary meaning can be shown to lead to a result contrary to the underlying purposes of the Code provision under consideration. There, the transaction had all the incidents of a sale under applicable local law. The Commissioner’s primary contention was that the transaction should not be regarded as a “sale” because the purchasing exempt organization incurred no downside risk in entering the transaction. The Supreme Court refused to establish a requirement that a transfer of a business involve some shifting of the negative risks of its operation from the transfer- or to the transferee in order to constitute a “sale” of such business for capital gains purposes. It decided that the absence of such risk-shifting did not prevent the exempt organization from acquiring the property interest in the corporate stock and underlying assets under local law which normally results from a sale transaction, and which could ripen into unencumbered title should the future profits of the business be sufficient to satisfy the purchase price; and, most importantly, that the absence of such risk-shifting did not threaten the underlying purposes of the capital gains provisions.

To the contrary, the Court explained that, since the purchase price had been found by the Tax Court to be “ ‘within a reasonable range in light of the earnings history of the corporation and the adjusted net worth of the corporate assets.’ 37 T.C. 461, 486,” 380 U.S. at 572, 85 S.Ct. at 1167, it represented appreciation in the property that had accrued during the period prior to the date of its transfer to the exempt organization. It is the purpose of the capital gains provisions to permit a taxpayer to realize such prior accrued appreciation at capital gains rates. 380 U.S. at 572-573, 85 S.Ct. 1162. The Court stressed that the Commissioner failed to attack frontally the Tax Court’s findings concerning the value of the business; instead, the Commissioner invited the Court to consider that the purchase price agreed upon between a selling taxpayer and a purchasing exempt organization in a transaction such as that under consideration would, of necessity, be excessive because of the absence of risk-shifting and the availability of the future pretax income of the business to satisfy the purchase price. The Supreme Court said that it could not ignore the Tax Court’s express findings on value and that, therefore, a ruling in favor of the Commissioner would necessarily invade the current capital gains policy. 380 U.S. at 579, 85 S.Ct. 1162. The Court suggested that the Commissioner seek a more precise legislative remedy for the disturbing tax avoidance features of transactions, such as that before the court, that resulted from the existing state of statutory law. Id.

To recount the Commissioner’s victory in Congress, the Tax Reform Act of 1969 stripped transactions, such as that recognized to be a “sale” in Clay Brown, of their tax avoidance potential by ensuring that the income from the business in the hands of the exempt organization was taxable as unrelated business income. Section 511(a)(2)(A) was amended to subject churches and related organizations to the tax imposed by § • 511(a)(1) upon “unrelated business taxable income”; § 514 was also revamped to ensure that rental income from all leases of business assets acquired through debt financing would be included within the exempt organizations’ “unrelated business taxable income.” No effort was made to alter the § 1222(3) capital gains provision at issue both here and in Clay Brown. Consequently, congressional disapproval of the Supreme Court’s resolution of the “sale” issue in Clay Brown cannot be inferred.

III.

The issue to be resolved is whether the transaction consummated by Taxpayers and Temple in 1965 is sufficiently different from that recognized to be a “sale” in Clay Brown to warrant different tax treatment. A majority of the Tax Court found that it was, because of its finding that the purchase price was more than twice what a nonexempt purchaser would have agreed to pay under comparable conditions of payment.

The Tax Court’s specific finding was that

the stated price of $6,000,000 was more than double the price that would be paid for the stock, on substantially the same terms, by a prospective purchaser who was not exempt from the income tax. 59 T.C. at 416.

It emerged from the following: the Commissioner qualified an investment banker as an expert witness, and he testified that, had he been representing a nonexempt purchaser interested in acquiring Kitro Casuals, Inc. and Marilyn Togs, Inc. (including a guarantee of Taxpayers’ continued management) through an arrangement whereby the payment of the purchase price was secured by the future earnings of the business, he would have recommended that the purchaser agree to pay the net worth of the business as an original downpayment plus ten times the annual average earnings after taxes of the business for the first three years after the sale. Based on the assumption that such after-tax earnings would be approximately $250,000 per year, and given a net worth of between $400,000 and $500,000, the expert said he would advise a prospective purchaser to pay between $2,500,000 and $3,000,000.

In contrast to the Tax Court’s finding here that the negotiated price was more than double the price that would be paid by a nonexempt purchaser, the Tax Court’s finding in Clay Brown — accepted by the Supreme Court — was that the negotiated price was within a reasonable range given the net worth and earnings history of the company. Specifically, in Clay Brown, the appraised net worth of the assets of the business was $1,064,877. The taxpayers sold all of their stock in this business corporation, plus two notes in the aggregate amount of $125,000 issued by the corporation, for $1,300,000. Thus, for a price of $1,300,000 ($125,000 of which was repayable in satisfaction of the notes), the exempt organization received a business owning property that could have been disposed of without regard to continuation of the business for approximately $1,064,877. The $110,123 premium, i. e., the excess of net purchase price over net asset value, that had been agreed to could readily be explained by the favorable earnings history of the business.

We agree with the majority of the Tax Court that, because of the finding that the purchase price in this transaction was substantially in excess of what a nonexempt purchaser would have paid for the business under identical terms, Clay Brown does not compel the conclusion that all of the proceeds of sale must be afforded capital gains treatment. The Supreme Court took such pains to explain the significance of the Tax Court’s finding in Clay Brown that the purchase price was within a reasonable range in view of the adjusted net worth and earnings history of the company, that we cannot escape the conclusion that the Court would have found itself presented with a substantially different problem had there been a finding of an excessive purchase price such as that here and would have reached a different result. However, we also believe that the result reached by the Tax Court, i. e., that none of the proceeds of sale is entitled to capital gains treatment, is, in part, inconsistent with the decision in Clay Brown, and that, to the extent of such inconsistency, it must be reversed.

As pointed out earlier, the Supreme Court said that the result contended for by the Commissioner in Clay Brown would amount to a significant invasion of the policy underlying the capital gains provisions, i. e., the policy to mitigate the harshness of taxing the entire amount of appreciation in value accruing over an extended period of time in the tax accounting period in which a final disposition of such property is made. The Tax Court’s implied, but inexact, finding concerning the value of the business in the instant ease means that there was substantial, although not precisely determined, past accrued appreciation in Taxpayers’ stock. As a consequence, the Tax Court’s ruling that all gain should be denied capital gains treatment defeated this purpose since it characterized the entire amount of Taxpayers’ gain as ordinary income. We, therefore, believe that a “sale,” within the meaning of § 1222(3), has indeed occurred here and that the amount realized on such sale must include such amounts of the agreed upon purchase price as represent the appreciation in the value of Taxpayers’ businesses that had accrued up to the date of sale. Taxpayers are, we hold, entitled to capital gains treatment on that portion of each of the payments here in issue which bears the same ratio to such payment as the gain, computed by subtracting Taxpayers’ basis from the fair value to a nonexempt purchaser under identical terms, bears to the entire purchase price. The balance, to the extent that it exceeds Taxpayers’ basis and the portion entitled to capital gains treatment, is taxable as ordinary income.

Taxpayers’ contention that the agreed upon purchase price here was not excessive in the sense necessary to distinguish their cases from Clay Brown is based upon the assertion that the amount that a nonexempt purchaser would have been willing to pay under identical terms is an improper standard against which to measure the “reasonableness” of the purchase price. Admittedly, the Tax Court did not find that the price was unreasonably high from the point of view of an exempt purchaser. Indeed, since the transaction here was arrived at through good faith bargaining and was not a sham, the conclusion seems inescapable that the agreed upon price was within a reasonable range for a tax-exempt purchaser. However, Congress has long regarded the impact upon the market place of an exempt organization’s ability to conduct a business free from income taxation as an unwholesome form of discrimination. The same tax exemption which gives an unfair competitive advantage to an exempt organization in the operation of a business also permits it an unfair degree of purchasing power in the acquisition of such a business. We think it would be inappropriate to include an increase in value, attributable solely to the presence of such unfair purchasing power, within the past accrued appreciation that the capital gains provisions seek to shield from taxation at ordinary rates. We therefore reject Taxpayers’ contention.

In sum, we conclude that the portion of the purchase price agreed to by Temple and Taxpayers that is in excess of the price a nonexempt purchaser would have paid under identical terms is not part of the proceeds of a § 1222(3) “sale,” and is, therefore, taxable as ordinary income to the recipients.

IV.

Although the Tax Court has found that the purchase price agreed to was substantially in excess of the price that would have been negotiated with a nonexempt purchaser under identical terms, and its finding is properly supported by the evidence of an expert witness, the finding is not precise enough to permit a final disposition of Taxpayers’ deficiency assessments without a further ev-identiary hearing. It will be necessary for the Tax Court, as a beginning computation, to separate the purchase price into the portion that is attributable to the accumulated value of the corporations at the time of the purchase and the portion attributable solely to the extra purchasing power possessed by Temple by virtue of its tax-exempt status.

Accordingly, the judgment of the Tax Court is reversed in part and affirmed in part, and the cases remanded for further proceedings consistent with this opinion. Costs shall be divided equally between the parties.

Reversed in part; affirmed in part; and remanded.

      . A small (12%) outside interest was redeemed on May 21,1965.

      . The taxes imposed by paragraph (1) shall apply in the case of any organization (other than a church, a convention or association of churches, or a trust described in subsection (b)) which is exempt . . . from taxation under this subtitle by reason of section 401(a) or of paragraph (3), (5), (6), or (17), of section 501(c). 26 511(a)(2)(A) (1964). U.S.C.

      .

        Year Annual Amount to te Paid Quarterly Amount to he Paid Allocation Between Interest and Principal

      1966 $ 300,000 $ 75,000 Principal
      1987 300.000 75,000 Principal
      1968 400.000 100,000 Principal
      1969 400.000 100,000 Principal
      1970 400.000 100,000 Principal
      1971 500.000 125.000 Principal
      1972 600.000 150.000 Principal
      1973 700.000 175.000 Principal
      1974 700.000 175.000 Principal
      1975 700.000 175.000 Principal
      1976 1,000,000 250.000 Principal
      1977 920.000 230.000 Interest
      1978 920.000 230.000 Interest
      Total Payments $7,840,000

      . There were differences between the transaction in Clay Brown and that employed here. Unlike Temple, the exempt organization in Clay Brown was not also exempt from the “unrelated business income” tax under § 511(a). Therefore, it could not operate the acquired business through the medium. of a limited partnership. Reg. § 1.-512(c)-l. Instead, the acquiring exempt organization leased the assets of the business for a term of five years to a corporation managed by the selling taxpayers. The exempt organization was entitled to 80% of the operating profits, before taxes and depreciation, as rent, 90% of which was to be applied to the purchase price of the stock. This arrangement guaranteed that the rents would be tax exempt in the hands of the exempt organization, because rents from real property,* and personal property leased with real property, were excluded from “unrelated business taxable income.” 26 U.S.C. § 512(b)(3) (1964). Although § 514, as it then read, included rental income from the lease of business assets, to the extent that the exempt organization acquired such assets through debt financing, these provisions did not apply to leases for terms of five years or less. 26 U.S.C. § 514(c)(1) (1964).

      . P.L. 91-172, 91st Cong., 1st Sess., § 121(a), 83 Stat. 536.

      . P.L. 91-172, 91st Cong., 1st Sess., § 121(d), 83 Stat. 543. These amendments were aimed specifically at the situation in Clay Brown. They eliminated the exception for leases for a term of five years or less. See note 4, supra.

      . This $250,000 post-tax earnings figure was based upon an estimate that the pre-tax earnings of the two companies would have been $500,000 for the period July 1, 1965 through June 30, 1966. Such estimate was based upon projections from monthly income statements for the 1965 calendar year.

      . Clay B. Brown, 37 T.C. 461, 469 (1961).

      . 37 T.C. at 472.

      . The real amount of such appreciation could, of course, only be determined by subtracting from the Tax Court’s estimate of the fair market value of the businesses the taxpayers’ original basis in their stock.

      . Tlie availability of the pretax earnings of the enterprise to satisfy the purchase price underlies the phenomenon that a tax-exempt purchaser will be willing to pay substantially in excess of what a non-exempt purchaser would agree to. The evidence here demonstrates the operation of this factor very well. The agreed upon purchase price was determined by a projection of the pretax earnings of the businesses into the future. 59 T.C. at 416.

      . The Revenue Act of 1950, 81st Cong., 2d Sess., Ch. 994, 64 Stat. 906, for the first time imposed a tax on the unrelated business income of exempt organizations. One of the primary purposes of this provision was to eliminate the unfair competitive advantage that an exempt organization had over nonexempt persons in the operation of a business. ILRept.No.2319, 81st Cong., 2d Sess. at 36. This same policy was reiterated in the legislative history of the provisions of the Tax Reform Act of 1969, which eliminated the tax exemption which made transactions such as that now under consideration an attractive tax savings device. H.Rept.No. 91-413, 1969 U.S.Code Cong. & Admin.News at 1691.


source: Caselaw Access Project

author: WEICE, Circuit Judge. McCREE, Circuit Judge

license: Public Domain

text:
    Niles W. BLACK, Plaintiff-Appellant, v. PENN CENTRAL COMPANY, Defendant-Appellee.
    No. 74-1339.
    United States Court of Appeals, Sixth Circuit.
    Dec. 9, 1974.

      Niles W. Black, Harry E. Elide, Hinton, Mylett, Elide & Stocker, Jerry P. Hontas, Canton, Ohio, for plaintiff-appellant.
    Eldon S. Wright, Harrington, Huxley & Smith, Youngstown, Ohio, for defendant-appellee.
    Before WEICE and McCREE, Circuit Judges, and O’SULLIVAN, Senior Circuit Judge.
    WEICK, J., delivered the opinion of the Court, in which O’SULLIVAN, Senior Circuit Judge, joined. McCREE, J., (pp. 271-273) filed a dissenting opinion.
   WEICE, Circuit Judge.

This appeal is from a judgment entered upon a jury verdict for defendant in an action for damages for personal injuries, which action was brought in the District Court under the Federal Safety Appliance Act, 45 U.S.C. §§ 1 et seq., and the Federal Employers’ Liability Act, 45 U.S.C. §§ 51 et seq.

Plaintiff-appellant Black was a brakeman employed by Penn Central Transportation Company at the Republic Steel Corporation’s plant in Canton, Ohio. His duties included, among other things, the coupling and uncoupling of freight cars. At the time of his injury he was engaged in the movement of freight ears inside a building of the Steel Company. Some of the cars were empty and some were loaded. One of the empty cars had a defective hand brake. Black was injured when the train started to back up, and he was pinned between the empty car and the cement wall of the building.

The conductor of the train testified that Black gave the signal to back the train, and that he acted pursuant to the signal. Black denied giving any such signal. In any event, it was the movement of the train, and not any defective brake, which caused Black’s injury. The defective brake on the car had not been applied, and it had nothing whatsoever to do with causing the accident.

It was plaintiff’s theory that if the brake on the empty car had not been defective, the car could have been “spotted” outside the building on an incline, and that the accident inside the building would not have occurred.

The District Court declined to submit to the jury the alleged Safety Appliance Act violation, ruling, as a matter of law, that there was no causal connection whatever between the defective brake and Black’s injury.

In Carter v. Atlanta & St. Andrews Bay Ry., 338 U.S. 430, 435, 70 S.Ct. 226, 229, 94 L.Ed. 236, the Supreme Court stated:

We made clear in Coray v. Southern Pacific Co., supra, 335 U.S. [520] at 523, 69 S.Ct. [275] at page 277, [93 L.Ed. 208] that if the jury determines that the defendant’s breach is “a contributory proximate cause” of injury, it may find for the plaintiff. See also Union Pacific R. Co. v. Hadley, 246 U.S. 330, 333, [38 S.Ct. 318, 319, 62 L.Ed. 751] (1918); Spokane & I. E. R. Co. v. Campbell, 241 U.S. 497, 510, [36 S.Ct. 683, 689, 60 L.Ed. 1125] (1916).

In our opinion there was not the slightest evidence that the defective brake was a contributory proximate cause of Black’s injury.

The present case really involved only the liability of the railroad under F.E. L.A. for negligence of Black’s fellow-employees and for failure to provide Black with a safe place to work. ■

In order to recover under the F. E.L.A. it was necessary for Black to prove that the railroad was negligent and that such negligence caused his injury, either in whole or in part. Rogers v. Missouri Pac. R.R., 352 U.S. 500, 506, 77 S.Ct. 443, 1 L.Ed.2d 493 (1957); Bridger v. Union Ry., 355 F.2d 382, 386 (6th Cir. 1966).

The F.E.L.A. issues were fairly submitted to the jury, which found no liability. In our opinion the verdict was supported by substantial evidence. Black does not even claim that the Court erred in its instructions to the jury.

Black further contends that it was prejudicial error for defendant’s counsel to ask him, on cross-examination, whether he was the plaintiff in a suit filed in the Common Pleas Court of Stark County, Ohio, against the Republic Steel Corporation, arising out of the same accident. His answer was, “Yes.” Plaintiff’s counsel objected after the answer, and the Court overruled the objection. Plaintiff’s counsel did not move to strike the answer, and did not move for any instruction on the subject. He did establish, however, by questioning plaintiff, that plaintiff had not received any money from Republic Steel.

The theory of defendant’s question was to obtain an admission against interest in the course of another judicial proceeding to the effect that plaintiff was claiming that another corporation caused his injury, at least in part. 21 Ohio Jur.2d, Evidence, § 347 pp. 355, 356.

The District Court had wide latitude and discretion in determining the scope of cross-examination. United States v. Marchesani, 457 F.2d 1291 (6th Cir. 1972). We find no abuse of discretion on the part of the trial judge. Furthermore, in view of the overwhelming evidence in this case which supports the jury’s verdict, we find no prejudice to the plaintiff.

The judgment of the District Court is affirmed.

McCREE, Circuit Judge

(dissenting).

I agree that the district court correctly declined to submit to the jury the claim of violation of the Federal Safety Appliance Act, 45 U.S.C. § 1 et seq. because there was no evidence that the defective brake was in any respect a causal factor in appellant’s injury. Since we determine that the defective brake played no part in causing the injury, I find it unnecessary and erroneous to state, as does the majority opinion, that “The defective brake was [not] a contributory proximate cause of Black’s injury.” (Emphasis added). Coray v. Southern Pacific Co., 335 U.S. 520, 69 S.Ct. 275, 93 L.Ed. 208 (1944), makes it clear that railroads shall be responsible for injuries to their employees “resulting in whole or in part” from defective appliances, and Rogers v. Missouri Pacific Railroad Co., 352 U.S. 500, 77 S.Ct. 443, 1 L.Ed.2d 493 (1957), makes it clear that in adopting the language “resulting in whole or in part”, the Congress intended to depart from the language of proximate causation because it was dissatisfied with the common-law duty of the master to his servant. See also Hausrath v. New York Central Railroad Company, 401 F.2d 634 (6th Cir. 1968).

Although I agree that no error was committed in not submitting the defective brake issue to the jury, I would hold that it was prejudicial error to permit defendant’s counsel, on cross-examination, to ask appellant, over objection, whether he was the plaintiff in a suit filed in the Common Pleas Court of Stark County, Ohio, against the owner of the premises upon which he was injured. The majority opinion suggests that because the objection was untimely, because no motion to strike the answer was made, and because appellant’s counsel established that the appellant had received no money from Republic Steel, no prejudicial error occurred. It views the question as an attempt to elicit an admission that appellant was claiming “that another corporation contributed, at least in part, to his injury.”

I do not regard the objection as untimely.

The relevant portion of the transcript is as follows:

By Mr. Wright:
Q. Mr. Black, are you the plaintiff in a case that is filed in the Stark County Court of Common Pleas here in Ohio against the Republic Steel Corporation arising out of this same accident ?
A. Yes sir.
MR. HONTAS: Note an objection in the record.
THE COURT: The objection shall be overruled.
Q. And you are making a claim in that case against Republic Steel Corporation for the same damages and injuries that you are claiming in this case?
MR. HONTAS: Note an objection in the record.
THE COURT: The objection shall be overruled.

It is clear that an objection was made before the jury was informed that the case in the Stark County Court of Common Pleas was for the same injuries for which damages were sought in this case. Rule 46 of the Rules of Civil Procedure does not require the making of a formal exception to a ruling to preserve an error for review. Also, since the court permitted an answer over objection, appellant’s counsel should not be faulted for trying to soften the impact of the error.

Although the admission of an attorney, as in a pleading, may come in as an adopted admission of his client, the statement must be not only authorized but also relevant. Relevance means having a tendency to prove any material matter, and if the relationship between the evidence and the matter to be proved is very slight but its impact is highly prejudicial, it should be excluded. United States v. Craft, 407 F.2d 1065, 1069-1070 (6th Cir. 1969). Here, the material matter is whether the injury resulted in whole or in part from appellee’s negligence. If appellant contended that ap-pellee’s negligence was the sole cause of his injury, the claim that someone else was responsible would be contradictory of his claim against appellee. However, even in a common-law negligence action, there can be more than one proximate cause of an injury, and claims against several putative tortfeasors would not be mutually exclusive nor inconsistent. A fortiori, the claim here that the negligence of the owner of the premises was a proximate cause of the injury does not contradict appellant’s claim that his employer’s “negligence played any part, even the slightest, in producing the injury . . for which damages are sought.” Rogers v. Missouri Pacific Railroad Co., supra, 352 U.S. at 506, 77 S.Ct. at 448.

Nevertheless, its impact on a jury, at that point uninstructed, is highly prejudicial because it insinuated that Black either was making inconsistent claims or did not know who was responsible for his injury. Its impact is as devastating as would be the revelation that appellant had been paid for his injury by the. proceeds of an insurance policy. Yet, evidence of this fact would also be irrelevant and clearly reversible error if admitted over objection.

I do not regard the admission of irrelevant and highly prejudicial evidence as within the discretion of the district court. I regard it as error that cannot be dismissed as harmless. I would reverse and grant a new trial.

      . Although the Supreme Court in Carter employed the language quoted in the majority opinion, a careful reading of that case and of the opinion in Coray demonstrates that evidence that a defendant’s breach is a “contributory proximate cause” of an injury is a sufficient but not necessary predicate for submission of the case to a jury. On the contrary, the Court made clear in both Carter and Coray that proof of any relationship, however slight, between the defendant’s negligence and the plaintiff’s injury permits submission of the case to a jury.

      . Formal exceptions to rulings or orders of the court are unnecessary; but for all purposes for which an exception has heretofore been necessary it is sufficient that a party, at the time the ruling or order of the court is made or sought, makes known to the court the action which he desires the court to take or his objection to the action of the court and his grounds therefor; and, if a party has no opportunity to object to a ruling or order at the time it is made, the absence of an objection does not thereafter prejudice him.


author: PHILLIPS, Chief Judge. McALLISTER, Senior Circuit Judge

text:
    Gerald FAUGHT, Petitioner-Appellant, v. Henry E. COWAN, Warden, Kentucky State Penitentiary, Respondent-Appellee.
    No. 74-1042.
    United States Court of Appeals, Sixth Circuit.
    Nov. 25, 1974.
    Certiorari Denied April 14, 1975.
    See 95 S.Ct. 1583.

      Gerald Faught, pro se.
    Ed W. Hancock, Atty. Gen., of Kentucky, Frankfort, Ky., Douglas E. Johnson, Lexington, Ky., for respondent-ap-pellee.
    Before PHILLIPS, Chief Judge, EDWARDS, Circuit Judge, and MC-ALLISTER, Senior Circuit Judge.
   PHILLIPS, Chief Judge.

This is an appeal from a dismissal of a petition for a writ of habeas corpus. We affirm.

Petitioner-appellant, Gerald Faught, was tried in the Daviess Circuit Court at Owensboro, Kentucky, in 1968 for the offenses of malicious shooting and wounding with intent to kill (two counts) and malicious shooting without wounding with intent to kill (one count) and found guilty by a jury of aiding and abetting on each count. In view of his prior felony convictions, appellant was sentenced to life imprisonment as a habitual criminal on September 27, 1968. His motion for a new trial was denied. No appeal was taken from this conviction, although appellant had been represented by counsel at all stages of the proceeding.

Subsequently, appellant filed two Kentucky RCr 11.42 motions, both of which were denied and the denials were affirmed by the Court of Appeals of Kentucky. Appellant also filed a petition for a writ of habeas corpus in the United States District Court for the Western District of Kentucky. That petition was dismissed, and application for a certificate of probable cause was denied by the District Court and by this court.

Thereafter, appellant filed the petition in the case at bar. The issue on appeal, as it was in the District Court, concerns appellant’s allegations that he did not know and was not advised of his right to appeal in forma pauperis and to have assistance of counsel. Were such allegations to be true, appellant would be entitled to a new trial or a direct appeal from his conviction. Lovelace v. Haskins, 474 F.2d 1254 (6th Cir. 1973).

The District Court held an evidentiary hearing as required by numerous decisions of this court. See Woodall v. Neil, 444 F.2d 92 (6th Cir. 1971); Goodwin v. Cardwell, 432 F.2d 521 (6th Cir. 1970); Henderson v. Cardwell, 426 F.2d 150 (6th Cir. 1970). At the hearing, it was stipulated that neither the trial judge nor petitioner’s attorney at the trial had any present recollection of the event in question. Petitioner was the only witness at the hearing. He testified that neither his attorney nor the trial judge had ever advised him, nor did he know, of his right to appeal in forma pauperis and to have assistance of counsel.

After reviewing petitioner’s testimony, District Judge James F. Gordon stated: “We observed the petitioner while testifying, and simply stated, we do not believe him and give no credence to his testimony. His testimony was too inconsistent.” Judge Gordon then examined the state court record at sentencing and made a specific finding that appellant had been advised of his right to appeal in forma pauperis and to have assistance of counsel. We are of the view that this finding was not clearly erroneous but, to the contrary, is supported by the record.

Although the state record in this case is not free from ambiguity, it does show that the trial judge specifically cited and referred to Kentucky RCr 11.02. The Rule provides as follows:

“11.02 Sentence.
“(1) Sentence shall be imposed without unreasonable delay. Pending sentence the court may commit the defendant or continue or alter the bail. Before imposing sentence the court shall afford the defendant and his counsel an opportunity to make a statement or statements in the defendant’s behalf and, if the sentence is fixed by the court, to present any information in mitigation of punishment.
“(2) After imposing sentence in a case which has gone to trial on a plea of not guilty, the court shall advise the defendant of his right to appeal and of the right of a person who is unable to pay the cost of an appeal, or unable to employ counsel, to apply for leave to appeal in forma pauperis and to have the continued assistance of counsel to perfect and prosecute the appeal. If the defendant so requests, the clerk of the court shall prepare and file forthwith a notice of appeal in his behalf.”

Petitioner and his attorney were present at the sentencing proceedings and were both given an opportunity to make statements. Such a proceeding carries with it a statutory presumption of correctness. 28 U.S.C. § 2254(d). It cannot be assumed that the trial judge, who specifically referred to Rule 11.02 at the sentencing, and petitioner’s attorney, who was present at the sentencing, were not aware of its requirements and neglected to advise petitioner of his rights, especially in the absence of evidence to the contrary. Williams v. Babineaux, 357 F.2d 481, 482 (5th Cir. 1966). Neither can we assume that a state court proceeding was subject to flagrant irregularities or that petitioner’s attorney failed to render effective assistance. Morales v. Rodriguez, 373 F.2d 15, 16 (10th Cir. 1967).

Petitioner had the burden of establishing by a preponderance of the evidence that he had not been advised of his rights. Williams v. Smith, 434 F.2d 592, 595 (5th Cir. 1970) ; Waddy v. Heer, 383 F.2d 789, 793 (6th Cir. 1967); Bates v. Meadows, 358 F.2d 674, 675 (6th Cir.), cert denied, 385 U.S. 937, 87 S.Ct. 299, 17 L.Ed.2d 217 (1966). His testimony was uncorroborated and the “District Judge, as the fact finder, was not required to believe the uncorroborated testimony of the petitioner, even though no evidence to the contrary had been (or could have been) adduced.” Walker v. Beto, 387 F.2d 626, 627 (5th Cir. 1967). See also Whitney v. Craven, 460 F.2d 1267 (9th Cir. 1972).

Appellant’s testimony was inconsistent on its face, and Judge Gordon, who had an opportunity to observe appellant, expressly discredited and refused to believe his testimony.

Under the facts and circumstances of this case, we affirm the judgment of the District Court.

EDWARDS, Circuit Judge, joins.

McALLISTER, Senior Circuit Judge

(dissenting).

Gerald Faught, petitioner herein, was found guilty by a jury in the Daviess Circuit Court of the Commonwealth of Kentucky, of the offenses of malicious shooting and wounding with intent to kill, of malicious shooting without wounding with intent to kill, and of aiding and abetting in the two named offenses, and, on the day of his appearance before the court for sentence, September 27, 1968, was sentenced to life imprisonment as an habitual criminal.

Petitioner Faught filed a petition for a new trial which was denied. He then filed, in accordance with RCr 11.42 of the Kentucky Rules of Criminal Procedure, a motion based on RCr 11.02 which pi’ovides, in two entirely different sections, the following:

“(1) Sentence shall be imposed without unreasonable delay. Pending sentence the court may commit the defendant or continue or alter the bail. Before imposing sentence the court shall afford the defendant and his counsel an opportunity to make a statement or statements in the defendant’s behalf and, if the sentence is fixed by the court, to present any information in mitigation of punishment.”

The second section of RCr 11.02 provides:

“(2) After imposing sentence in a case which has gone to trial on a plea of not guilty, the court shall advise the defendant of his right to appeal and of the right of a person who is unable to pay the cost of an appeal, or unable to employ counsel, to apply for leave to appeal in forma pauperis and to have the continued assistance of counsel to perfect and prosecute the appeal.”

This motion was denied in an order without a hearing and the order of denial was afterward affirmed by the Kentucky Court of Appeals on some date not disclosed by the record. Petitioner thereafter filed a petition for a writ of habeas corpus in the United States District Court for the Western District of Kentucky, at Owensboro. This petition was denied in an order, without a hearing, on January 27, 1970. The order of denial was afterward affirmed by this court on a date not appearing in the record. Petitioner then filed a second RCr 11.42 motion in the Daviess Circuit Court on May 18, 1972, which was denied without an evidentiary hearing, the order of denial being affirmed by the Kentucky Court of Appeals on February 16, 1973. On June 15, 1973, petitioner filed a petition for a writ of habeas corpus in the United States District Court and, on the same day, filed an affidavit for leave to proceed in forma pauperis, to which the Government filed a response and motion to dismiss the petition for the writ of habeas corpus. On September 6, 1973, the Honorable James F. Gordon, United States District Judge, held an evidentiary hearing, and on October 1, 1973, entered an order denying the petition.

On November 9, 1973, Judge Gordon entered an order granting a certificate of probable cause granting petitioner a right to appeal from the dismissal of his petition for the writ of habeas corpus.

There is only one issue in this case: Did the Daviess County Court comply with RCr 11.02 after imposing sentence on the petitioner, in advising the defendant of his right to appeal and of the right of a person who is unable to pay the costs of an appeal, to apply for leave to appeal in forma pauperis, and to have the continued assistance of counsel to perfect and prosecute the appeal, and did the District Court comply with the same rule in denying the petition for the writ of habeas corpus?

The evidence is not in conflict. Petitioner testified, without contradiction, that the trial judge, after sentencing, had told him nothing about his right to appeal, or of appointing an attorney to make the appeal and prosecute it.

The State conceded that at the trial in the Daviess County Court, at which petitioner was sentenced, “neither the trial judge nor the petitioner’s attorney at trial have any present recollection of the event in question. Petitioner testified that he had served time on two previous felony convictions resulting from pleas of guilty, but that this was his first jury trial and that he was not aware of his right to appeal in forma pauperis and was not advised of this right by the judge, his attorney, or anyone else. He stated that he first learned of this right about two years after he arrived at Ed-dyville from a fellow inmate who advises on such matters and who assisted him in the preparation of an RCr 11.42 motion.”

There is nothing whatever in the record in this ease that discloses that the trial judge complied with the rigorous Kentucky Rule of Criminal Procedure, RCr 11.02, Section 2.

The trial court’s Order of September 27, 1968, sets forth:

“The defendant, Gerald Edward Faught, being in Court, the Judge of this Court informed the defendant, pursuant to KRS 11.02, that he had a right to make any statement he desired to make, before sentencing, and his Attorney was also asked relative to any statement he desired to make in connection therewith; whereupon, the defendant’s counsel, Gene Lanham, made statements to the Court but the defendant made no statement. The Court questioned the defendant and ascertained that he was satisfied with his appointed counsel, Gene Lanham.”

The above is the sole reference in the record of the trial court’s action with reference to RCr 11.02, and is limited to Section 1 of that Rule.

It is Section 2 of the Rule upon which defendant relies, and upon which the claim of reversible error is based. Section 2, as above mentioned, requires the trial judge to advise defendant of his right to appeal in forma pauperis. This is the most important section of the Rule, and is crucial to the decision in this case.

This is not an unusual case. The books are full of adjudications where trial courts have failed in their rigorously imposed duty to inform a defendant after conviction on a jury trial, of his right to appeal at the expense of the state. The failure of trial courts to discharge this most important duty can result from forgetfulness, oversight, or fatigue. But the cases hereinafter cited, and quoted from, show this to be a common and not unusual failing, and require a reversal of the judgment.

The District Judge, in his order denying the petition for the writ of habeas corpus, said that he had observed the petitioner while testifying, and he did not believe him or give any credence to his testimony. The judge observed that petitioner had filed a previous habeas corpus petition in which he made several broad, conelusory, shotgun allegations about the conduct of his trial. However, that petition had been prepared by a fellow prisoner, and contained none of the allegations of the petition afterward before the court. In his order of denial of the writ of habeas corpus, the District Judge recited that “While the trial order is not a model of clarity, we believe it does reflect that RCr 11.02 was fully complied with. Judgments and records of state court proceedings carry with them a presumption of regularity. Bates v. Meadows, 358 F.2d 674 (6th Cir. 1966), cert. den., 87 S.Ct. 229 [299], 385 U.S. 937 [17 L.Ed.2d 217]. Petitioner has failed in his efforts to rebut it. The petition is dismissed.”

While the general rule is that judgments and records of court proceedings carry with them a presumption of regularity, that rule has absolutely no application to this case, because of the fact that any presumption of regularity in this case is obliterated by the fact that the court omitted all words or language informing defendant of his right of appeal at government expense, with the assistance of counsel paid for by the state, which is in violation of Kentucky law as well as federal law. This uncontradicted fact carries no presumption of regularity of such proceedings.

It is easy to trace the misconception in the order of the District Court in concluding the state criminal rule was fully complied with, after sentencing, and that petitioner was advised of his right to appeal and that if unable to pay the costs of an appeal or unable to pay counsel, he could apply for leave to appeal in forma pauperis and to have the continued assistance of counsel to perfect and prosecute the appeal.

The brief of the Attorney General for the Commonwealth of Kentucky, in stating the first contention relied upon to defeat the defendant, declared that “it was established that Faught had been advised pursuant to RCr 11.02.” But this was contrary to the actual fact since, although Faught had been advised by the court of RCr 11.02(1), it is un-contradicted that Faught was not advised by the court under the much more important Section 2 of RCr 11.02, which informs a defendant after sentence of his right to appeal at state expense with legal assistance provided at state expense. The failure to advise Faught of his rights under Section 2 of RCr 11.02 is decisive of this case.

The order of the trial court in the criminal case in the Daviess County Court does not reflect that the state Criminal Rule was complied with. The trial court, according to the language of its order, stated that the trial judge informed petitioner that “he had a right to make any statement he desired to make, before sentencing, and his Attorney was also asked relative to any statement he desired to make in connection therewith.” (Emphasis supplied.) The trial court made no statement to the petitioner or his attorney, after sentencing, advising petitioner of his right to appeal in forma pauperis, with counsel appointed for him to make and prosecute the appeal. This is the gist of the case. Such a statement of the court, after sentencing, is absolutely required by RCr 11.02(2). This is in keeping with Rule 32(a)(2) of the Federal Rules of Criminal Procedure which states:

“After imposing sentence in a case which has gone to trial on a plea of not guilty, the court shall advise the defendant of his right to appeal and of the right of a person who is unable to pay the cost of an appeal to apply for leave to appeal in forma pauperis. If the defendant so requests, the clerk of the court shall prepare and file forthwith a notice of appeal on behalf of the defendant.”

The failure of the trial court of Da-viess County to inform the petitioner of his rights of appeal and counsel to appeal and prosecute the proceedings, in derogation of the Criminal Rules of the State of Kentucky, resulted in a denial of due process in the same way as the neglect of a federal court so to advise a defendant in accordance with Rule 32(a)(2) of the Federal Rules of Criminal Procedure.

The District Judge did not state that he believed the trial judge had informed defendant of his right to appeal at state expense, with counsel provided at the expense of the state. And under the evidence he could not have made such a statement, because all the evidence was to the contrary including the record of the trial court.

In the prevailing opinion it is stated: “Judge Gordon (the United States District Judge) then examined the state court record at sentencing and made a specific finding that appellant had been advised of his right to appeal in forma pauperis and to have assistance of counsel." (Emphasis supplied.) There is, in the record, no evidence of any statement that the District Court made any specific finding, or any finding, that appellant had been advised of his right to appeal in forma pauperis and to have assistance of counsel. The above reference to the statement of the District Judge is clearly erroneous. If the District Judge had made such a specific finding that appellant had been advised of his right to appeal by the state court, and to have assistance of counsel, and the record sustained that statement, there would be no case now before this Court to warrant an opinion to the contrary. It is a singular circumstance that while the record of the trial court showed that appellant had been told, in accordance with RCr 11.02(1), that “he had a right to make any statement he desired, before sentencing,” there is nothing whatever in the record showing that the trial court advised appellant of his right to appeal in forma pauperis.

In United States ex rel. Smith v. McMann, 2 Cir., 417 F.2d 648, 654, it was held that the state has the duty to warn every indigent convicted of crime of his right to appeal and his right to prosecute his appeal without expense to him by counsel appointed by the state, whether or not there is merit in the appeal. The Court went on to say:

“We think the only practical, logical and fair interpretation to be given to Douglas v. California [372 U.S. 353, 83 S.Ct. 814, 9 L.Ed.2d 811] is that it imposes upon the state a duty to warn every person convicted of crime of his right to appeal and his right to prosecute his appeal without expense to him by counsel appointed by the state, if he is indigent. The right to appeal at the expense of the state is mere illusion if the convicted indigent defendant does not know such a right exists. And the one way to make sure that he does know is to tell him so.”

The conviction was reversed for failure to tell the indigent defendant of his right to appeal at the state’s expense.

In Prater v. Commonwealth, Ky., 476 S.W.2d 833, 834 (Kentucky Court of Appeals), the court said:

“The record does not show that the trial judge, after imposing sentence on these appellants, made any effort to advise them of their right to appeal. Prater and Smith make the statement that they were not aware of this right, were not advised of it at the time the court passed sentence, and had only recently become aware of this right.
“RCr 11.02(2) requires the trial judge to advise a defendant of his right to appeal, if he has been tried upon a plea of not guilty.
“There is nothing in the record showing that Prater and Smith may have waived this right.
“It is the opinion of this court that Prater and Smith were entitled to a hearing on the question of a denial of the right to a direct appeal.”

The foregoing Kentucky case is practically identical with the case before us. There is nothing in the instant case to counteract the foregoing established facts.

Under these circumstances, there can be no presumption of the regularity of the proceedings, as the facts of the record itself show there was no regularity in the court’s informing the defendant of his right to appeal at state expense. “To preserve the protection of the Bill of Rights for hard-pressed defendants, we indulge every reasonable presumption against the waiver of fundamental rights.” Glasser v. United States, 315 U.S. 60, 70, 62 S.Ct. 457, 465, 86 L.Ed. 680.

What evidence do we have, then, in this case that defendant was not told of his right to appeal, and did not waive such right? In the first place, we have defendant’s repeated, undisputed testimony that he was never told of his right to appeal. We have the trial judge, who does not dispute defendant on this claim, but merely says he cannot remember whether he told defendant of his right to appeal. There is counsel for the state, present at the sentencing, who could not remember whether the trial judge informed defendant of his right to appeal. Finally, we have the record of the case as transmitted to the Kentucky Court of Appeals, in which the Clerk of that court records only Section 1 of RCr 11.02, as being mentioned by the trial court, and omits any mention of the trial court’s informing defendant of his right of appeal at the expense of the state — the only reasonable conclusion being that the trial judge never told the defendant of his right to appeal and never mentioned the most important section of RCr 11.02, which is Section 2. In the instant case there was nothing to show that the defendant had waived his right to appeal, yet the District Court must necessarily have found that defendant knew his rights and waived them by not appealing. This, however, is untenable.

“There is a presumption against the waiver of constitutional rights, see, e. g., Glasser v. United States, 315 U.S. 60, 70-71 [62 S.Ct. 457, 464-465, 86 L.Ed. 680,] and for a waiver to be effective it must be clearly established that there was ‘an intentional relinquishment or abandonment of a known right or privilege.’ Johnson v. Zerbst, 304 U.S. 458, 464 [58 S.Ct. 1019, 82 L.Ed. 1461.]” Phillips v. Neil, 452 F.2d 337, 349 (C.A.6, 1971). (quoting Brookhart v. Janis, 384 U.S. 1, 86 S.Ct. 1245, 16 L.Ed.2d 314 (1965)). * * * “For waiver to be valid, it must be plain from the record that the accused understands the nature of the right waived and knowingly assents to its waiver.” ibid.

The District Court, in its order denying defendant’s claim, stated that he had observed petitioner while he was testifying and he did not believe him or give credence to his testimony, which was too inconsistent. The testimony is of such a nature that it would seem this Court could read it as well as the District Court. After many readings of the brief testimony, whatever inconsistencies may appear are not pertinent, are irrelevant, of no importance, and betray no evasive or dishonest motives.

The District Court seems to have believed that defendant knew of his rights to appeal, regardless of whether the trial judge told him of these rights. Yet, if this conclusion was based on defendant’s two prior convictions on comparatively minor offenses without jury trials, the District Court’s even partial reliance oh the defendant’s prior criminal experience would be an example of “the fallacy of relying upon defendant’s supposed knowledge [of his right to appeal], for finding a waiver [of such right]. The previous criminal experience of a defendant is not a factual springboard from which courts may perfunctorily catapult to the conclusion that the defendant possesses the requisite knowledge to prosecute his appeal. * * * ” Davis v. United States, 464 F.2d 1009, 1014 (C.A.6). To hold on the meager record we have here that defendant knew of his rights solely on the basis of disbelieving defendant’s testimony, would be a violation of the established rule that the waiver must be clear on the record.

The defendant was a poor man, without anything but the clothes on his body. The good things of the world, reserved for us, were not for him. He had no money. He left school at the seventh grade. He had no occupation, except occasionally trimming tree tops for his brother. A few slips in his brief statement before the District Court could reasonably be attributed to ignorance and lack of knowledge of legal terminology. What the shooting affray, for which defendant was convicted, was all about, is not disclosed by the record. Defendant’s co-defendant was given parole. Defendant, because of his two prior break-ins of a warehouse, was sentenced to life imprisonment as an habitual criminal.

However, the facts prove beyond doubt that he was not informed by the trial court of his right to appeal at state expense; and that is the proof that is conclusive in this case.

“When society acts to deprive one of its members of his life, liberty or property, it takes its most awesome steps. No general respect for, nor adherence to, the law as a whole can well be expected without judicial recognition of the paramount need for prompt, eminently fair and sober criminal law procedures. The methods we employ in the enforcement of our criminal law have aptly been called the measures by which the quality of our civilization may be judged.” Coppedge v. United States, 369 U.S. 438, 449, 82 S.Ct. 917, 923, 8 L.Ed.2d 21.

The judgment of the District Court should be reversed, and the ease remanded for further proceedings in accordance with this opinion.

      . Rule 11.42 provides in part:
      "A prisoner in custody under sentence who claims a right to be released on the ground that the sentence is subject to collateral attack may at any time proceed directly by motion in the court -which imposed the sentence to vacate, set aside or correct it.”

      . RCr 11.42 provides for the filing of motions to vacate, set aside or correct sentences on various grounds.


author: CELEBREZZE, Circuit Judge.

text:
    INCARCERATED MEN OF ALLEN COUNTY JAIL, Plaintiff-Appellee, v. Edward FAIR, Sheriff of Allen County, et al., Defendants-Appellants.
    No. 74-1052.
    United States Court of Appeals, Sixth Circuit.
    Nov. 13, 1974.

      Lawrence S. Huffman, Lima, Ohio, for defendants-appellants.
    Frank S. Merritt, Joseph F. Vargyas, R. Michael Frank, Russel A. Kelm, Toledo, Ohio, David A. Little, Lima, Ohio; for plaintiff-appellee.
    Before CELEBREZZE, LIVELY and ENGEL, Circuit Judges.

      . See generally, Hearings Before the Sub-comm. on Representation of Citizen Interests of the Senate Comm, on the Judiciary, 93d Cong., 1st Sess., Parts 3 and 4 (1973).

   CELEBREZZE, Circuit Judge.

This suit was begun on June 20, 1972, when eleven inmates of the Allen County Jail filed a pro se complaint, stating that “Our conditions are unbearable to the point of not serviving [sic].” Allegations were made of severe overcrowding, lack of blankets and medical care, prevalence of scalp diseases and lice, and lack of sunlight, among other things.

The District Court treated the complaint as a class action under 42 U.S.C. § 1983, with jurisdiction founded on 28 U.S.C. § 1343(3), and it appointed Advocates for Basic Legal Equality (A.B.L.E.) to represent the inmates. A.B.L.E. filed an amended complaint on August 15, 1972, seeking declaratory and injunctive relief against Sheriff Fair, who is responsible for the Jail’s operation, and the three Allen County Commissioners, who are responsible for the Jail’s equipment, structure, and staff. Appellants denied that the Jail’s conditions violated the inmates’ constitutional rights, but after extensive discovery they consented to an order running against “Defendants Fair, Shafer, Townsend, and Thompson, their agents, employees, assigns, successors in office and all those in active concert and participation therewith.” 376 F.Supp. 483 (N.D.Ohio 1973). The consent order covered several aspects of the Jail’s operation, including ventilation, mail censorship, commissary privileges, visiting hours and facilities, jail population, plumbing, inmates’ personal items, counseling and medical services, and a classification system. The parties could not agree on the need for additional surveillance measures, and this issue was tried to the Court. After a hearing, the District Court found the present surveillance inadequate and ordered Appellants to install an electronic surveillance system or to hire more guards. A second consent order followed, requiring Appellants to allow inmates awaiting trial a reasonable number of local telephone calls and to hold a due process hearing before an inmate could be placed in solitary confinement.

On July 24, 1973, A.B.L.E. filed a request for attorney fees, attaching an affidavit detailing the time spent on the case. Appellants did not file an opposing memorandum. The District Court entered an order which awarded A.B.L.E. $2,000 in attorney fees for 134 hours of work. The award was “taxed as costs against both defendant Sheriff Fair and defendant Allen County.” Appellants object to this award.

There are two basic questions before us: whether an equitable basis exists for an attorney fees’ award to A.B.L.E., and against whom and in what manner an award may be assessed. Because of the increasing frequency of cases such as this, we feel it necessary to treat these issues fully, so as to resolve confusion and to set forth the proper considerations for district courts to take into account in deciding whether and in what manner to assess attorney fees against local defendants in suits to enforce civil rights under § 1983.

The first issue is whether an equitable basis exists for an attorney fees’ award, leaving aside the question of who should pay the assessment. There are two elements to this problem: ■ whether this case lies within an exception to the “American Rule” against awards of attorney fees and whether A.B.L.E. is a proper recipient of an attorney fees’ award, notwithstanding its partial public subsidy.

The “American Rule” is that “attorney’s fees are not ordinarily recoverable in the absence óf a statute or enforceable contract providing therefor.” Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 717, 87 S.Ct. 1404, 1407, 18 L.Ed.2d 475 (1967). This general rule was recently reaffirmed by the Supreme Court, in the context of ordinary commercial litigation. F. D. Rich Co., Inc. v. Industrial Lumber Co., Inc., 417 U.S. 116, 94 S.Ct. 2157, 40 L.Ed.2d 703 (1974).

Persons who -have vindicated public interests through § 1983 litigation, however, have been awarded attorney fees under several exceptions to the general rule, all of which rest on the traditional equitable powers of the federal courts to shift litigation expenses from one party to another.

One exception is that “attorneys’ fees may be awarded to a successful par-. ty when his opponent has acted in bad faith, vexatiously, wantonly, or for oppressive reasons.” F. D. Rich Co., Inc., 417 U.S. at 129, 94 S.Ct. at 2165. See Vaughan v. Atkinson, 369 U.S. 527, 530-531, 82 S.Ct. 997, 8 L.Ed.2d 88 (1962); Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 402 n. 4, 88 S.Ct. 964, 19 L.Ed.2d 1263 (1968); Milburn v. Huecker, 500 F.2d 1279, 1282 (6th C.ir. 1974); Gates v. Collier, 489 F.2d 298 (5th Cir. 1973); Sims v. Amos, 340 F.Supp. 691, 694 (M.D.Ala.), aff’d, 409 U.S. 942, 93 S.Ct. 290, 34 L.Ed.2d 215 (1972); Mc-Enteggart v. Cataldo, 451 F.2d 1109, 1112 (1st Cir. 1971). The basis for a “bad faith” award is punitive, as it serves to deter and punish unwarranted personal conduct, both before and during litigation.

A second exception is that a successful party will be reimbursed for his legal fees when his litigation confers “a substantial benefit on the members of an ascertainable class, and where the court’s jurisdiction over the subject matter of the suit makes possible an award that will operate to spread the costs proportionately among [the members of the class].” Mills v. Electric Auto-Lite Co., 396 U.S. 375, 393-394, 90 S.Ct. 616, 626, 24 L.Ed.2d 593 (1970). See Sprague v. Ticonic Nat. Bank, 307 U.S. 161, 59 S.Ct. 777, 83 L.Ed. 1184 (1939); Hall v. Cole, 412 U.S. 1, 93 S.Ct. 1943, 36 L.Ed.2d 702 (1973); Trustees v. Greenough, 105 U.S. 527, 26 L.Ed. 1157 (1882); Milburn v. Huecker, 500 F.2d 1279, 1282 (6th Cir. 1974). The rationale for the “common benefit” exception is the desire to spread litigation costs among all who benefit from litigation undertaken by only a few.

A third exception, which has recently become well established, is that one party may be ordered to pay the legal fees of another who has acted as a “private attorney general.” When private litigants vindicate a strong public policy and provide widespread public benefit through their efforts, attorney fees should be paid by the adverse party. See Taylor v. Perini, 503 F.2d 899 (6th Cir. 1974); Bradley v. School Board, 416 U.S. 696, 94 S.Ct. 2006 n. 25, 40 L.Ed.2d 476 (1974), rev’g, 472 F.2d 318, 330-331 (4th Cir. 1972); Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 88 S.Ct. 964, 19 L.Ed.2d 1263 (1968); Wilderness Society v. Morton, 495 F.2d 1026 (D.C.Cir. 1974) (en banc) cert. granted, -U.S.-, 95 S.Ct. 39, 42 L.Ed.2d 47 (Oct. 15, 1974) ; Natural Resources Council v. Environmental Protection Agency, 484 F.2d 1331, 1333 (1st Cir. 1973); Calnetics Corp. v. Volkswagen of America, Inc., 353 F.Supp. 1219 (C.D.Cal.1973); Knight v. Auciello, 453 F.2d 852 (1st Cir. 1972) ; Cooper v. Allen, 467 F.2d 836 (5th Cir. 1972); N.A.A.C.P. v. Allen, 340 F.Supp. 703, 710 (M.D.Ala.1972); La Raza Unida v. Volpe, 57 F.R.D. 94, 98 (N.D.Cal.1972); Lee v. Southern Home Sites Corp., 444 F.2d 143 (5th Cir. 1971). The rationale for the “private attorney general” exception is that worthy claimants should not be discouraged from asserting rights embodying important public interests because of a lack of financial resources. Newman v. Piggie Park Enterprises, Inc., 390 U.S. at 402, 88 S.Ct. 964; Stolberg v. Trustees for State Colleges, 474 F.2d 485, 489-491 (2d Cir. 1973). Since someone must bear the cost of litigation, it is better that the adverse party do so, even though he may not have acted in bad faith. Otherwise, the “private attorney general” would be penalized by the significant cost of litigation for furthering important public interests through his individual suit. Without reimbursement for attorney fees, private litigants often could not protect the rights the law grants them. There should be no price tag on the enjoyment of constitutionally guaranteed freedoms. See Sims v. Amos, 340 F.Supp. 691, 694 (M.D.Ala.), aff’d, 409 U.S. 942, 93 S.Ct. 290, 34 L.Ed.2d 215 (1972).

No finding of bad faith is before us. Rather, the District Court seems to have grounded the award on the “common benefit” and “private attorney general” exceptions. Although we have doubts about the precise applicability of the “common benefit” rationale, we agree that an equitable basis exists for an award. As the District Court stated,

The Court concludes that the interests of justice require the award to plaintiffs of reasonable attorney’s fees for services of Able connected with this case. Plaintiffs, through their suit, have sought to redress the alleged deprivation of constitutional rights of all inmates in the Allen County Jail. Although there has been no finding of liability on the part of the defendants because the parties agreed to an order of the Court disposing of most of the contested matters, plaintiffs have nonetheless substantially benefited all inmates of the Allen County Jail by insuring the protection of numerous constitutional rights through the orders of this Court affecting the Allen County Jail filed in connection with this case. The litigation at issue has not only benefited the present inmates of the jail but also all future inmates of the facility. Since all members of the general public in Allen County and all other persons subject to the jurisdiction of the Allen County courts and law enforcement agencies are potential subjects for incarceration in the Allen County Jail, the constitutional rights of the general public have been vindicated and protected by the litigation of these plaintiffs. The Court, therefore, believes that this is a proper case for the award of reasonable attorney’s fees. The award of attorney’s fees in cases like this one assures that the vindication of public constitutional rights need not depend upon the financial resources of the particular individuals who seek to secure those rights. Able has performed an important public service for those who are, or ever will be, confined in the Allen County Jail and the public which has benefited thereby should bear the financial responsibility for the litigation securing constitutional rights.

This reasoning supports an award under the “private attorney general” rationale, since Appellees’ litigation served the public interest by vindicating the strong public policies favoring the protection of constitutional rights. We uphold the propriety of an award on this ground. Indeed, in the circumstances of this case the award is better described as “part of the effective remedy a court should fashion to encourage public-minded suits, . . . and to carry out congressional policy.” Sims v. Amos, 340 F.Supp. at 694. See Knight v. Auciello, 453 F.2d 852 (1st Cir. 1973); Lee v. Southern Home Sites Corp., 444 F.2d 143 (5th Cir. 1971).

Appellant’s second argument that the award is improper is based on the contention that an award should not be paid to a legal services organization which is partially funded through federal grants and which has as its purpose the vindication of public interests. In short, an award is not necessary to encourage A.B.L.E. to bring this type of suit. See Ross v. Goshi, 351 F.Supp. 949 (D.Haw.1972).

The fact that Appellees’ counsel was a legal services organization, partially supported by public funds, is irrelevant in determining whether an award is proper. Legal services organizations do not have unlimited resources to devote to the public interest and must confine their representation of indigents to the boundaries of their budgets. An attorney fees’ award serves its purpose — to prevent worthy claimants from being silenced or stifled because of a lack of legal resources — whether it goes to private or “public” counsel. Brandenburger v. Thompson, 494 F.2d 885 (9th Cir. 1974) ; Jordan v. Fusari, 496 F.2d 646 (2d Cir. 1974); Fairley v. Patterson, 493 F.2d 598 (5th Cir. 1974); Hoitt v. Vitek, 497 F.2d 598 (1st Cir. 1974); Wilderness Society v. Morton, 495 F.2d 1026 (D.C.Cir. 1974) (era banc), cert. granted,-U.S. -, 95 S.Ct. 39, 42 L.Ed.2d 47 (Oct. 15, 1974); Lea v. Cone Mills Corp., 438 F. 2d 86 (4th Cir. 1971).

Given that attorney fees may properly be awarded to A.B.L.E., the second basic question is against whom and in what manner they should be assessed.

The District Court awarded a total of $2,000 in attorney fees “against both Sheriff Fair as an individual and Allen County.” The District Court made no finding that Sheriff Fair had engaged in bad faith, and it did not explain why the three County Commissioners were not held for the award.

When an individual has engaged in bad faith before or during litigation, an award of attorney fees against him “individually” is proper. Whether he is l’eimbursed by his employer or insurance company is of no concern to the court assessing an award on “bad faith” grounds.

In this case, however, no finding of bad faith is before us, and the District Court stated in making the award that “the public which has benefited thereby should bear the financial responsibility” for Appellees’ suit. Furthermore, the injunctions were drawn against Appellants in their official capacities, as they were made to run against the defendants,- “their agents, employees, assigns, successors in office, and all those in active concert or participation therewith.” It is clear, in short, that the District Court did not intend to reach the individual assets of Sheriff Fair but meant the award to be satisfied out of public funds.

Appellants invoke their “sovereign immunity” as a bar to the award. The Eleventh Amendment, though a bar to awards of attorney fees that will be satisfied out of a state’s treasury, Jordon v. Gilligan, 500 F.2d 701 (6th Cir. 1974), is not a bar to an award that may be satisfied out of a county’s treasury. Lincoln County v. Luning, 133 U.S. 529, 10 S.Ct. 363, 33 L.Ed. 766 (1890). See Edelman v. Jordan, 415 U.S. 651, 667 n. 12, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974). Thus, there is no constitutional bar to a federal court’s awarding attorney fees against a county and its officials.

There is a statutory bar within § 1983, however, which prevents direct suits against municipalities under it. The Supreme Court decided in Moor v. County of Alameda, 411 U.S. 693, 710, 93 S.Ct. 1785, 36 L.Ed.2d 596 (1973), that a county may not be directly sued under § 1983. See also City of Kenosha v. Bruno, 412 U.S. 507, 93 S.Ct. 2222, 37 L.Ed.2d 109 (1973); Monroe v. Pape, 365 U.S. 167, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961). Making Allen County directly liable for an attorney fees’ award, then, may not rest on § 1983 liability, since the District Court had no jurisdiction over the County under that statute. One other possible ground to hold the County directly liable might be a state claim that the County is vicariously liable for the good faith actions of its officials in the performance of their duties. This was one justification for the award in La Raza Unida v. Volpe, 57 F.R.D. 94, 102 n. 11, supplementing 337 F.Supp. 221 (N.D.Cal.1972), aff’d, 488 F.2d 559 (9th Cir. 1973) (without discussion of attorney fees). Since no state claim was raised below, we may not now consider whether the award may stand against Allen County on such a pendent state ground. See Moor v. County of Alameda, 411 U.S. at 710-717, 93 S.Ct. 1785. In the absence of a finding that an award against Allen County is justified under § 1983 or under Ohio law, the award against Allen County may not stand. Since the award against Allen County may have been in lieu of an award against the County Commissioners, it is proper to remand for consideration of an award against them, and the entire award will be subject to reconsideration by the District Court.

An award against Sheriff Fair is proper under § 1983. Jurisdiction exists over him, and he has been held liable in this litigation. As a means of effectuating its equitable decree, the District Court had the discretion to award attorney fees against him, to be paid out of public funds under his control. See Gates v. Collier, 489 F.2d 209, 302-303 (5th Cir. 1973); Brewer v. School Board of Norfolk, 456 F.2d 943 (4th Cir.), cert. denied, 406 U.S. 933, 92 S.Ct. 1778, 32 L.Ed.2d 136, 409 U.S. 892, 93 S.Ct. 109, 34 L.Ed.2d 149 (1972).

We distinguish our conclusion as to county officials from our holding that state officials may not be assessed attorney fees when it is clear that the fees will be paid out of a state treasury, Jor-don v. Gilligan, 500 F.2d 701 (6th Cir. 1974), on two basic grounds.

First, we held in Jordon that the Eleventh Amendment is “a limitation of federal judicial power, that is, on the constitutional grant of jurisdiction to the federal courts.” 500 F.2d at 706. The Eleventh Amendment is based on the sovereignty of states and leaves to them the choice of submitting to federal court jurisdiction in certain instances. As pointed out above, on the other hand, counties do not enjoy the absolute protection of the Eleventh Amendment. Counties may be directly suable under the general grant of federal question jurisdiction, 28 U.S.C. § 1331, for instance. City of Kenosha v. Bruno, 412 U.S. at 513-514, 516, 93 S.Ct. 2222 (Brennan, J., concurring, joined by Marshall, J.). There is no equation between the Eleventh Amendment’s broad immunization of states from federal court jurisdiction and the limited statutory exclusion of municipalities from § 1983 jurisdiction.

Second, whereas the Eleventh Amendment broadly protects sovereign state treasuries from involuntary federal court assessments, Edelman v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974), the exclusion of municipalities from § 1983 jurisdiction was based largely on a fear that municipal liability for damage awards against local officials could disrupt the functioning of local government and would impose substantial liability on municipal entities bearing no direct responsibility for the unauthorized acts of their officials. See Monroe v. Pape, 365 U.S. at 187-191, 81 S.Ct. 473; City of Kenosha v. Bruno, 412 U.S. at 517-520, 93 S.Ct. 2222 (Appendix to Opinion of Douglas, J., dissenting in part). Congress sought to personalize liability for damages under § 1983 and to leave the question of reimbursement for damage awards against state officials to state law and municipal discretion.

A federal court may, however, award equitable relief against local officials, even though it will have a severe impact on local governmental funds, without infringing the policies behind § 1983. See Brown v. Board of Education, 349 U.S. 294, 75 S.Ct. 753, 99 L.Ed. 1083 (1955); Northcross v. Board of Education, 489 F.2d 19 (6th Cir. 1973). For instance, although back payments of illegally withheld benefits may not be awarded against state officials under the Eleventh Amendment, Edelman, supra, back pay awards have been assessed against municipal agencies under § 1983, on the ground that they are “an integral part of the equitable remedy of injunctive reinstatement.” Harkless v. Sweeny Indep. School District, 427 F.2d 319, 324 (5th Cir. 1970). We find that the attorney fees’ award here is part of the equitable remedy against local officials and that its payment out of local funds does not infringe Congressional policy embodied in § 1983, just as the requirement that Allen County fund the improvements in the Jail as envisioned in the injunctions against Appellants is a proper exercise of a federal court’s jurisdiction.

Given an equitable basis for an award and the absence of a constitutional immunity for Allen County’s officials, the basic question resolves itself to this: what is equitable. This decision is largely within the District Court’s discretion, to be exercised with a “practical flexibility in shaping its remedies and by a facility for adjusting and reconciling public and private needs.” (footnotes omitted) Brown v. Board of Education, 349 U.S. at 300, 75 S.Ct. at 756. See Bowles v. Skaggs, 151 F.2d 817, 820 (6th Cir. 1945). We remand to the District Court for reconsideration of against whom and in what manner the award is to be assessed, and for proper findings and conclusions, which are necessary to our proper review of its final order. See Taylor v. Perini, 503 F.2d 899 (6th Cir. 1974); Milburn v. Huecker, 500 F.2d 1279 (6th Cir. 1974).

In its reconsideration, the District Court will want to take into account many factors. See, e. g., Hall v. Cole, 412 U.S. 1, 9 n. 13, 15 n. 23, 93 S.Ct. 1943, 36 L.Ed.2d 702 (1973) (effect of award on defendants’ “ability to operate effectively”) ; Hill v. Franklin County Board of Education, 390 F.2d 583 (6th Cir. 1968) (defendant’s good faith in implementing decree); Wyatt v. Stickney, 344 F.Supp. 387, 409-410 (M.D.Ala.1972), and United States v. Gray, 319 F.Supp. 871 (D.R.I.1970) (reasonableness of fee). We mention one particular consideration. If an official is held in his official capacity, and if the purpose of an award is to spread litigation costs among the public, we believe that the proper procedure is ordinarily to draw an order against the official so that the award will be paid out of the public funds under his control. Thus, if half the source of the conditions which the consent order sought to correct is attributable to the Sheriff’s operation of the Jail, and half is traceable to poor equipment and staffing, for which the County Commissioners are responsible, it seems equitable to make half the award run against the Sheriff, to be satisfied out of funds allocated to operate the Jail, and half against the County Commissioners, to be paid out of accounts for the Jail. Not only will this method make the remedy fit the violation, Milliken v. Bradley, 418 U.S. 717, 750, 94 S.Ct. 3112, 41 L.Ed.2d 1069 (1974), but it will charge the proper accounts for the expenses involved, so that the expenses of the Jail will be shown to include legal fees paid to persons who were forced into litigation by conditions which had deteriorated beyond acceptability.

The decision of the District Court granting attorney fees is vacated. The cause is remanded, with direction that further proceedings be held consistent with this opinion.

      . See Note, “Awarding Attorneys’ Fees to the ‘Private Attorney General’: Judicial Green Light to Private Litigation in the Public Interest,” 24 Hast.L.J. 733 (1973) ; Note, “Allowance of Attorney Fees in Civil Rights Litigation Where the Action is not Based on a Statute Providing for an Award of Attorney Fees,” 41 U.Cin.L.Rev. 405 (1972).

      . The most basic doubt is that the award may not be spread among those who will actually benefit from the award. It is a stretch of the judicial imagination to construe the benefited class as all citizens of Allen County, and it is merely an assumption that an award against Sheriff Fair will actually be paid out of the pockets of the County’s citizens. Other courts have expressed doubts about the applicability of the “common benefit” rationale in this type of case. See La Raza Unida, supra; Brewer v. School Board, 456 F.2d 943 (4th Cir.), cert. denied, 406 U.S. 933, 92 S.Ct. 1778, 32 L.Ed.2d 136, 409 U.S. 892, 93 S.Ct. 109, 34 L.Ed.2d 149 (1972).

      . See Note, “Awards of Attorney’s Fees to Legal Aid Offices,” 87 Harv.L.Rev. 411 (1973).

      . We need not, therefore, consider the scope of Appellant Pair’s possible qualified immunity under Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974), even assuming arguendo that immunity is an issue in considering whether an award of attorney fees is proper in conjunction with equitable relief.

      . See Note, “The Supreme Court, 1972 Term,” 87 Harv.L.Rev. 261-63 (1973).


author: PHILLIPS, Chief Judge.

text:
    Stephen MANCHESTER, Plaintiff-Appellant, v. Orlyn C. LEWIS et al., Defendants-Appellees.
    No. 74-1270.
    United States Court of Appeals, Sixth Circuit.
    Nov. 25, 1974.

      Wallace K. Sagendorph, Levin, Levin, Garvett & Dill, Detroit, Mich., for plaintiff-appellant.
    George E. Bushnell, Jr., Wolfgang Hoppe, Miller, Canfield, Paddock & Stone, Gregory L. Curtner, Detroit, Mich., for defendants-appellees.
    Before PHILLIPS, Chief Judge, and McCREE and LIVELY, Circuit Judges.
   PHILLIPS, Chief Judge.

Stephen Manchester, a non-tenured teacher in a Michigan public high school, filed this action under 42 U.S.C. § 1983 chai'ging that he was denied tenure because of his exercise of first amendment rights. The defendants were the members of the school board, the board secretary, the superintendent of schools and the high school principal.

After a full evidentiary hearing, District Judge John Feikens made the following finding of fact: “The reason that Manchester was not given tenure was the unsatisfactory level of his teaching performance.” The District Court dismissed the action and Manchester appeals. We affirm.

It is the well settled law of this Circuit that a public school teacher who is discharged or denied tenure because of the exercise of first amendment rights may maintain an action under § 1983. The constitutional rights of a teacher cannot be defeated by a pretext on the part of school authorities. Bates v. Dause, 502 F.2d 865 (6th Cir. 1974); Arnold v. Bondurant, 491 F.2d 718, 719 (6th Cir. 1974) ; Hetrick v. Martin, 480 F.2d 705, 708-709 (6th Cir.), cert. denied, 414 U.S. 1075, 94 S.Ct. 592, 38 L.Ed.2d 482 (1973); George v. Board of Educ., 472 F.2d 132, 133 (6th Cir. 1972); Orr v. Trinter, 444 F.2d 128 (6th Cir. 1971), cert. denied, 408 U.S. 943, 92 S.Ct. 2847, 33 L.Ed.2d 767 (1972). See McFerren v. County Bd. of Educ., 455 F.2d 199, 201 (6th Cir.), cert. denied, 407 U.S. 934, 92 S.Ct. 2461, 32 L.Ed.2d 817 (1972).

Orr v. Trinter, supra, states the rule of this Circuit as follows:

“Initially we recognize that plaintiff does not have a constitutional right to public employment. Cafeteria and Restaurant Workers Union, Local 473 v. McElroy [367 U.S. 886, 81 S.Ct. 1743, 6 L.Ed.2d 1230], supra. However, even though ‘one may not have a constitutional right to go to Bagdad, * * * the Government may not prohibit one from going there unless by means consonant with due process of law.’ Homer v. Richmond, 110 U.S.App.D.C. 226, 229, 292 F.2d 719, 722. Hence it is no longer open to debate that plaintiff would be entitled to relief if the board had refused to rehire him because he had exercised his rights as guaranteed by the free speech clause of the First Amendment, Pickering v. Board of Education, 391 U.S. 563, 88 S.Ct. 1731, 20 L.Ed.2d 811, Board of Trustees of Arkansas A & M College v. Davis, 396 F.2d 730 (8th Cir.), cert. denied, 393 U.S. 962, 89 S.Ct. 401, 21 L.Ed.2d 375; by the self incrimination clause of the Fifth Amendment, Slochower v. Board of Higher Education, 350 U.S. 551, 76 S.Ct. 637, 100 L.Ed. 692; by the due process clause of the Fifth or Fourteenth Amendments, Greene v. McElroy, 360 U.S. 474, 79 S.Ct. 1400, 3 L.Ed.2d 1377; or by the equal protection clause of the Fourteenth Amendment, Hatton v. County Board of Education, 422 F.2d 457 (6th Cir.); Rolfe v. County Board of Education, 391 F.2d 77 (6th Cir.). These are constitutionally impermissible reasons for refusal to rehire a teacher. Conversely courts have recognized as constitutionally permissible reasons for refusal to rehire the fact that the teacher is not as well qualified as another applicant, Brooks v. School District, 267 F.2d 733 (8th Cir.), cert. denied, 361 U.S. 894, 80 S.Ct. 196, 4 L.Ed.2d 151; . . . .” 444 F.2d at 134. (Footnotes omitted.)

Manchester contends that he was denied tenure because of his participation in the school visiting speaker program and his public comments criticizing the school’s policy concerning visiting speakers. This presents an issue of fact, which was determined adversely to Manchester by the District Court.

After a full evidentiary hearing, Judge Feikens made findings of fact to the effect that members of the school board disliked Manchester’s public comments on the school speaker policy but held that Manchester was not given tenure for the reason that the level of his teaching performance was unsatisfactory. Judge Feikens further held that Manchester was not deprived of his constitutional rights because of the school board members’ attitude toward his public speech, “when the reason he did not receive tenure was the unsatisfactory level of his teaching performance.” Upon a review of the entire record we conclude that the findings of fact by the District Judge are not clearly erroneous, Fed.R.Civ.P. 52(a), but to the contrary are supported by substantial evidence.

Manchester relies upon Mich. Comp.Laws Ann. § 38.83, which is part of the Teachers’ Tenure Law of Michigan. He complains that some of the reasons assigned by school authorities for denying tenure occurred during his first year of employment as a probationary teacher.

Review of actions of school authorities under the Teachers’ Tenure Law of Michigan is the prerogative of the courts of that State and not of the federal judiciary. Jurisdiction cannot be conferred on federal courts by the procedural device of filing an unsubstantial action under § 1983 and relying on the doctrine of pendent jurisdiction. Bates v. Dause, supra, 502 F.2d at 867. In this § 1983 action determination of whether the constitutional rights of Manchester were violated is not controlled by § 38.83.

Affirmed.

      . 38.83 Same; notice to teacher, written statement

      Sec. 3. At least 60 days before the close of each school year the controlling board shall provide the probationary teacher with a definite written statement as to whether or not his work has been satisfactory. Failure to submit a written statement shall be considered as conclusive evidence that the teacher’s work is satisfactory. Any probationary teacher or teacher not on continuing contract shall be employed for the ensuing year unless notified in writing at least 60 days before the close of the school year that his services will be discontinued.