author: LIVELY, Circuit Judge.

text:
    AFRO AMERICAN PATROLMENS LEAGUE et al., Plaintiffs, Fraternal Order of Police Lodge #40, Applicant for Intervention-Appellant, v. Robert DUCK, Police Chief of Toledo, et al., Defendants-Appellees. AFRO AMERICAN PATROLMENS LEAGUE et al., Plaintiffs, Toledo Police Patrolmen’s Association, Applicant for Intervention-Appellant, v. Robert DUCK et al. AFRO AMERICAN PATROLMENS LEAGUE et al., Plaintiffs-Appellees, v. Robert DUCK et al., Defendants-Appellants, John Bryant et al., Defendants Intervenors. AFRO AMERICAN PATROLMENS LEAGUE et al., Plaintiffs-Appellees, v. Robert DUCK et al., Defendants, John Bryant et al., Applicants for Intervention-Appellants.
    Nos. 74-1135, 74-1136, 74-1266 and 74-1267.
    United States Court of Appeals, Sixth Circuit.
    Argued June 14, 1974.
    Decided Sept. 26, 1974.

      Gerald S. Lubitsky, Toledo, Ohio, for Fraternal Order of Police Lodge No. 40; Richard M. Neller, Toledo, Ohio, on brief.
    George R. Royer, Toledo, Ohio, for applicant-intervenor on brief for Toledo Police Patrolmen’s Ass’n.
    John J. Burkhart, Chief Counsel, Toledo, Ohio, on brief for Robert Duck, and others.
    Merritt W. Green, II, Toledo, Ohio, on brief for Afro-American Patrolmens League, and others.
    Feinberg, Meyers, Schumacher & Schumacher, by Robert H. Schumacher, Minneapolis, Minn., for Minneapolis Police Federation of Minneapolis, Minn., for amicus curiae.
    George R. Royer, Toledo, Ohio, for Ohio Union of Patrolmen’s Ass’n and Toledo Police Patrolmen’s Assoc., Inc.
    Before McCREE, LIVELY and EN-GEL, Circuit Judges.
   LIVELY, Circuit Judge.

This civil rights action is concerned with requirements for promotion within the police department of Toledo, Ohio. The plaintiffs in the district court were two black patrolmen and an association open to all members of the Toledo safety forces, with a membership composed largely of black policemen. Both of the individual plaintiffs have taken examinations for promotion to sergeant in the Toledo Police Department on a number of occasions, and each has passed the examination several times. However, neither of the individual plaintiffs has been promoted to sergeant. The defendants are the chief of police, the city manager, the safety director, the members of the Toledo Civil Service Commission and its executive director. The complaint alleges violations of 42 U.S.C. §§ 1981 and 1983 and 42 U.S.C. § 2000d in addition to denial of constitutional rights guaranteed by the Thirteenth and Fourteenth Amendments.

Three separate groups sought to intervene in the action. The court denied intervention to the Fraternal Order of Police and the Toledo Police Patrolmen’s Association, two groups which claimed to have a “joint exclusive” right to represent Toledo patrolmen in bargaining with the City on matters concerning wages, conditions of employment, “and otherwise.” This right of representation exists by virtue of a provision of the Toledo Municipal Code. The court granted intervention to 15 white patrolmen who had passed the most recent line sergeant examination and had been chosen for promotion from patrolman to sergeant prior to the dates this suit was filed.

Following several days of proof, the district court concluded that the plaintiffs had carried their burden of demonstrating that discriminatory elements were present in the practices followed by the Toledo Police Department in promoting to command positions and that it was necessary to eliminate the discriminatory features of the system in order to avoid the perpetuation of a racial imbalance which was found to exist. The court specifically found that (1) a rule requiring a patrolman to have five years sei'vice before becoming eligible to take the examination for sergeant and two years of service in each succeeding rank before becoming eligible for examination for the next higher rank, and (2) a rule which gave a “bonus” for seniority, had a discriminatory effect upon promotion in the Toledo Police Force. The opinion of the district court is reported at 366 F.Supp. 1095.

The original defendants and the 15 intervening defendants have appealed, as have the two organizations which were denied intervention. All appeals were heard by a single panel of the court on the same day and will be disposed of in this opinion.

The unsuccessful applicants for intervention maintain that as statutory bargaining agents for all patrolmen they were entitled to intervention as a matter of right under Rule 24(a), Fed. R.Civ.P., or in the alternative, should have been permitted to intervene under Rule 24(b). It is alleged that the district court order enjoining all promotions and appointments under existing practices will require the City of Toledo to breach its collective bargaining agreement with the representatives of the patrolmen. It is also contended that the Fraternal Order of Police should be permitted to assert the right of all the citizens of Toledo to have a high quality police department. We do not believe that either of the organizations established that it qualified for intervention as a matter of right under Rule 24(a). The rights of the patrolmen who are members of the Fraternal Order of Police and the Toledo Police Patrolmen’s Association were adequately represented in this action by the existing parties and the 15 white patrolmen who were permitted to intervene. An applicant for intervention has the burden of showing that representation by existing parties is inadequate. Edmondson v. State of Nebraska ex rel. Meyer, 383 F.2d 123, 127 (8th Cir. 1967); 3B Moore’s Federal Practice, para. 24.09-1 [4]. The provisions of the collective bargaining contract must give way to the constitutional requirement of equal protection, and the fact that these applicants have such agreements with the City of Toledo does not establish that they are entitled to intervention as a matter of right. See Southern Illinois Builders Association v. Ogilvie, 471 F.2d 680, 687 (7th Cir. 1972). Intervention under Rule 24(b) is addressed to the sound discretion of the trial court. Hatton v. County Board of Education of Maury County, Tennessee, 422 F.2d 457, 459 (6th Cir. 1970). We find no abuse of discretion in the denial of intervention in this case.

The defendants challenged the right of the plaintiffs to proceed in a class action under Rule 23, Fed.R.Civ.P. It is their contention that the possible class consists of no more than the 35 minority group members who were eligible to take the most recent examination for line sergeant or the 17 members of that group who actually took the examination. In their complaint the plaintiffs sought to represent a class “composed of all present and future minority members of the Toledo Police Department who have been discriminated against by Defendants’ use of unvalidated and culturally biased tests, practices, and procedures, . . . . ” The district court certified the class to include all present and future minority police officers, and we hold that this class is so numerous as to make joinder of all impracticable. It seems evident that the plaintiffs adequately represent the members of this class and there is no claim that questions of law or fact common to all do not exist in the case or that the claims of the representatives are not typical of those of the class. We have held that class actions are properly utilized in cases involving alleged discrimination in employment practices. Manning v. International Union, UAW, 466 F.2d 812 (6th Cir. 1972), cert. denied sub nom., Manning v. General Motors Corporation, 410 U.S. 946, 93 S.Ct. 1366, 35 L.Ed.2d 613 (1973). As this court pointed out in Tipler v. E. I. duPont deNemours & Company, 443 F.2d 125, 130 (1971), a suit by a single employee which is not brought as a class action “is perforce a sort of class action for a fellow employee similarly situated” when it attacks the employment practices of the employer on grounds of discrimination. We conclude that the district court correctly determined that this case should proceed as a class action.

The defendants have seriously maintained in the trial court and on appeal that the plaintiffs should be barred from obtaining relief in this action by the equitable doctrine of laches. It is claimed that the plaintiffs made no protest or complaint at the time the most recent examination for line sergeant was given or when the eligibility list was posted, but waited until a day or two before the appointments were to be made before filing this action. We fail to see how any of the original defendants were prejudiced in any way by this delay on the part of the plaintiffs. Both a lack of diligence on the part of the plaintiffs and prejudice to the defendants is necessary to justify a court’s refusal to consider a claim on the basis of laches. Costello v. United States, 365 U.S. 265, 282, 81 S.Ct. 534, 5 L.Ed.2d 551 (1961); Gardner v. Panama Railroad Company, 342 U.S. 29, 31, 72 S.Ct. 12, 96 L.Ed. 31 (1951). Although the 15 intervening defendants asserted that they were prejudiced by the delay in bringing the action since they had spent many hours studying for the examination for sergeant which was given in April 1973, had successfully passed the examination and earned a place on the eligibility list and ultimately been chosen for promotion, we cannot hold that a delay of less than four months in filing suit to vindicate constitutional rights is so unreasonable as to require its dismissal. However, we agree with the district court that the situation with respect to lieutenants and captains is different. Upon a balancing of the equities, the district court found that appointments made from old promotion lists to the rank of lieutenant and captain should be permitted to stand. We find no abuse of discretion in the district court’s treatment of the issue of laches. Czaplicki v. The Hoegh Silvercloud, 351 U.S. 525, 534, 76 S.Ct. 946, 100 L.Ed. 1387 (1956).

On the merits of the case the original defendants maintain that they were entitled to an order of dismissal because the plaintiffs produced no evidence of a history of racial discrimination in the Toledo Police Department and that mere statistics are not sufficient to make a prima facie case. The court undoubtedly relied on these statistics which showed that the minority population of Toledo was 16 percent and that the breakdown by race within the police department disclosed that only 8.2 percent of the members of the Department were of minority races. Furthermore, at the time of the trial there was one black lieutenant out of 39, no black sergeants out of 80 and no black officers above the rank of lieutenant, while out of a total of 621 patrolmen 52 were black and 11 were of Spanish origin. No policeman of Spanish origin had ever held a command position. Although the district court in this case specifically rested its finding on a combination of statistics and other evidence, we note that at least two circuits have held that a prima facie case of discrimination in hiring may be made on statistics alone. In Carter v. Gallagher, 452 F.2d 315 (8th Cir. 1971), cert. denied, 406 U.S. 950, 92 S.Ct. 2045, 32 L.Ed.2d 338 (1972), it was held that statistical evidence can make out a prima facie case of discrimination and that neither Section 1981 nor 1983 contains a,/ requirement that discrimination be willful or intentional. In Morrow v. Crisler, 479 F.2d 960 (5th Cir. 1973), it was held that the fact that there were no black highway patrolmen on the state force of Mississippi which had a black population of 36.7 percent was sufficient to support the conclusion of the district court that the hiring practices of the department violated the Equal Protection Clause of the Fourteenth Amendment.

The district court referred several times to the pending case of Sarabia v. Duck, which concerned alleged racial discrimination in police hiring practices of the City of Toledo. Since no findings or judgment had been entered in that case, the appellants maintain that the district court should not have relied upon evidence adduced in that action. We do not view the references of the Sarabia case made by the district court to indicate that it was basing its findings or judgment in this action on anything other than the evidence which was heard at the trial of this case. Nor was the court required to go outside the record in deciding this case. The defendant, Angelo T. Toldes, Executive Director of the Toledo Civil Service Commission staff, testified that prior to November 1972 the entrance level examination of the Toledo Police Department was a “general abilities type test” and was not concerned with the duties of a patrolman, that, is, it was not “job-related.” Furthermore, if an applicant for appointment as patrolman successfully passed the written examination he was required to submit to an oral interview conducted by a panel consisting of two technicians and the police chief or his representative. This interview was totally unstructured. There was no procedure for determining the questions which would be asked or the criteria which would be relied upon in carrying the interview forward. The chief of police asked most of the questions and each member of the panel assigned a score for the interview. The scoring of the interview was entirely subjective. The three scores were averaged and this average counted 30 percent toward the total score which determined whether the applicant became a member of the police force.

We believe that the fact that the entrance level examination employed by the defendants prior to November 1972 was a general intelligence test which rewarded verbal skills and that in addition to this test 30 percent of an applicant’s total score was derived from a completely unstructured and totally subjective interview, when considered with the statistical imbalance of minority representation on the police force, fully supports the district court’s determination that racial discrimination existed in the police hiring practices. We also hold that the district court correctly concluded that two elements of the promotion system of the Toledo Police Department tended to perpetuate the racial imbalance that existed among officers above the rank of patrolman. The percentage of black patrolmen eligible under the Department’s rules to take the most recent examination for promotion to line sergeant was significantly smaller than the minority representation on the force as a whole. This indicated that even though there had been some correction of past discrimination in initial hiring of minority policemen, practices within the promotion system were preventing members of minorities from receiving their proportionate share of promotions. The rule which required five years service as a patrolman before one became eligible to take an examination for sergeant and that which conferred extra credit for mere length of service were held to have no real relation to ability to perform in the higher rank. More significantly, the court found that these two rules tended to freeze the status quo of an almost exclusively white command corps which was established by prior discriminatory practices.

There was a great deal of evidence in the case on the job-relatedness of the most recent line sergeant examination which was given in April 1973 and upon the basis of which the 15 intervenors were scheduled for promotion from patrolman to sergeant. The court held that the plaintiffs had failed to prove that the April promotion examination was itself unvalidated or culturally biased. It held that the examination was job related insofar as any written examination can determine the qualities required for a police command position. The appellants maintain that the finding by the court that the most recent examination was job related required dismissal of the complaint. However, the plaintiffs did not rely solely on the fact that the examination was allegedly non-job related. They specifically attacked the five-year service requirement and the rule providing additional credit for mere seniority. In Bridgeport Guardians, Inc. v. Members of Bridgeport Civil Service Commission, 482 F.2d 1333 (2d Cir. 1973), the plaintiffs claimed that a written examination violated their right to equal protection. The case involved black and Puerto Rican applicants for appointment to a police force and the statistics showed a serious imbalance in the numbers of minority policemen in comparison with the total number of Negro and Puerto Rican residents of the city. Although the court held that there was no showing of substantial de facto discrimination in a written promotion examination and reversed the district court’s establishment of hiring quotas for command officers, it is significant that a suggested solution to the problem of too few minority officers in command positions consisted of requiring a shorter time in service for eligibility and the elimination of seniority points. These are precisely the two elements in the Toledo promotion system which the district court found to be discriminatory in this case.

The appellants contend that since the district court found that the written examination for line sergeant was job related and could not conclude from the evidence that it was in itself discriminatory, the court was without power to enjoin further use of the examination and seniority lists based upon it. We have not heretofore decided this issue in the context of suits under Sections 1981 and 1983 contesting employment practices of a municipal body, but have dealt with it several times in private employment cases under Title VII of the Civil Rights Act of 1964 which the Eighth Circuit referred to in Carter v. Gallagher, supra, as “analogous” to the present type action. In Head v. Timken Roller Bearing Company, 486 F.2d 870 (6th Cir. 1973), we held that a system of seniority and transfer which appeared fair and neutral on its face but in practice perpetuates prior discrimination is itself illegal under Title VII. In Sims v. Sheet Metal Workers International Association, Local Union # 65, 489 F.2d 1023 (6th Cir. 1973), the district court found that tests for an apprenticeship program and entry into a journeyman program were valid and not facially discriminatory This court held that this finding was not clearly erroneous but that employment of such tests in a setting where their use furthers racial discrimination constitutes a violation of Title VII. In both opinions we relied upon the language of the Supreme Court in Griggs v. Duke Power Company, 401 U.S. 424, 430, 91 S.Ct. 849, 853, 28 L.Ed.2d 158 (1971), that:

Under the Act, practices, procedures, or tests neutral on their face, and even neutral in terms of intent, cannot be maintained if they operate to “freeze” the status quo of prior discriminatory employment practices.

In Sims the wide discretion enjoyed by the testing committee was pointed to as a means of perpetuating past discrimination.

We hold that the district court properly concluded that the Equal Protection Clause of the Fourteenth Amendment and the provisions of, Sections 1981 and 1983 were violated by a promotion system which: (1) began with an imbalance in favor of white police officers because of past discrimination in hiring, and (2) combined a racially neutral and job-related written test with a requirement of five years in service for eligibility to be examined for promotion to the first level of command and granted “bonus” points toward promotion for seniority.

The appellants point out that there was no specific evidence concerning promotions above the level of sergeant and that the evidence does not support the findings of the district court that the promotion requirements for lieutenant and captain also perpetuate past discriminatory practices. Since an arbitrary requirement of service in the next preceding rank is required for each of these promotions and since extra points for seniority are allowed, we believe that the district court could reasonably conclude from the evidence that the requirements for promotion to these two grades also tended to perpetuate past discriminatory practices at the entry level. The fact that none of the plaintiffs was eligible to take the examination for lieutenant or captain is immaterial since the very requirements which are under attack are at least partially responsible for the fact that no black member of the Toledo Police Force is presently eligible for promotion to lieutenant or captain. The complaint specifically sought an adjudication with respect to the promotion requirements to these two grades as well as to that of sergeant. The statistical evidence that only three black patrolmen have ever advanced to command positions in the Toledo Police Department was sufficient to warrant the district court’s conclusion that the entire seniority and promotion system had the effect of keeping alive the results of past discrimination in hiring.

While we agree with the conclusion of the district court that the five-year requirement for promotion from patrolman to sergeant was not shown to have any relationship to the requirements of the sergeant’s job and that this in-service requirement and the two-year requirement for promotions above the rank of sergeant appear to have been arbitrarily established, we find no basis in the record for the court’s order that the in-service requirements for all promotions be reduced to one year. Actually, a new member of the policy force is in a probationary status for the first year. He must attend a policy academy which is conducted by the Department for four months, and then serves as a probationary officer for the ensuing eight months. While seniority and experience should not be the sole, or even the primary basis upon which promotions are made, we believe the district court failed to strike a proper balance between the right of the people of Toledo to the protection of a police department where only seasoned and qualified officers are advanced to command positions and the necessity to obliterate as quickly as possible the present racial imbalance which exists in that Department. Upon remand the district court will hold further hearings and make a determination, based on such evidence as the parties may produce, of the proper in-service requirement for promotion at each level in the Toledo Police Department.

The original defendants contend on appeal that it was an abuse of discretion for the court to require the City to pay for and accept the input of an expert chosen by the plaintiffs in constructing new promotion examinations. We find no abuse of discretion in this provision of the district court’s judgment. There was abundant testimony from city officials that they were dissatisfied with the existing examinations and were in the process of changing them. In view of the recognition of the need to eliminate the results of past discrimination while constructing a set of examinations that is valid and job related, it seems reasonable to provide for substantive contributions from a representative of the group who have been deprived of promotions by reason of the past discriminatory practices. We also find no abuse of discretion in the court’s act of enjoining all promotions pending completion of new eligibility lists since existing lists were based in part on practices which have been held to violate the rights of plaintiffs.

All defendants have objected to a number of evidentiary rulings by the court. The objections of the original defendants are concerned primarily with evidence offered with respect to the last line sergeant examination given by the City. In view of the court’s finding that this test was job related and not culturally biased, if these rulings were incorrect, it was harmless error. The intervening defendants argue that evidence which they offered and which the court rejected tended to show that poor performance of minority candidates on the written examination resulted from factors other than discriminatory promotion practices. They attempted to show that the successful white candidates had studied harder and been more diligent in their preparation. The district court did not base its judgment in this case on its finding that the minority candidates performed poorly on the written examination. It determined that minority candidates were discriminated against at the time they sought employment as police officers and that the total promotion system, particularly the five-year service requirement and the system of bonus points for seniority put them at a disadvantage in obtaining promotions to command positions. We hold that the district court did not err in refusing this evidence. On page 22 of their brief the intervening defendants appear to concede that past hiring practices of the Toledo Police Department resulted in very few minority officers being eligible for promotion. This is the very basis upon which the district court decided the ease.

In their answer the intervening defendants included a cross-claim against the original defendants. The trial court failed to enter any orders with respect to this pleading. Upon remand, an appropriate order will be entered disposing of the cross-claim.

This case is remanded to the district court for the limited purposes set forth herein and in all other respects the judgment is affirmed. Costs will be taxed to appellants.


source: Caselaw Access Project

author: CRAVEN, Circuit Judge:

license: Public Domain

text:
    Frank R. CASALE, Appellee, v. DOONER LABORATORIES, INC., Appellant.
    No. 72-2180.
    United States Court of Appeals, Fourth Circuit.
    Argued May 7, 1973.
    Decided July 13, 1973.

      Donald E. Sharpe, Baltimore, Md., (Browne L. Kooken and Piper & Marbu-ry, Baltimore Md., on brief), for appellant.
    Arthur Dale Leach, Hyattsville, Md., for appellee.
    Before BOREMAN, Senior Circuit Judge, CRAVEN and WIDENER, Circuit Judges.
   CRAVEN, Circuit Judge:

This is an appeal from a judgment on a jury verdict in federal district court awarding Frank Casale damages against Dooner Laboratories, Inc., for fraudulent misrepresentation and libel. Jurisdiction rests on diversity of citizenship, and the law of Maryland applies. We affirm that part of the judgment below based upon fraud, but we reverse the libel count because we conclude the district court should have granted Dooner’s motion for a directed verdict.

In November 1967 Casale and Eugene Dooner, president of Dooner Laboratories, held several meetings concerning the possible employment of Casale as a drug representative and salesman for the defendant company. At that time, Casale was employed in a similar capacity by the William S. Merrell Company, and had been for over 14 years. Following these discussions, Casale quit his job with Merrell and accepted employment with Dooner in January 1968. Casale continued to act as Dooner’s sales representative, primarily covering drugstores in the Washington, D. C., area, until he was fired in July 1968 for allegedly ineffective salesmanship.

Casale filed suit against Dooner in the Circuit Court for Prince George’s County, Maryland, alleging in count one of the complaint that he had quit his job with Merrell in reliance upon Dooner’s fraudulent misrepresentations concerning Dooner’s favorable situation in the industry and the salary and benefits of his new employment. Count two alleged that he was unable to obtain new employment after being fired by Dooner because he had been “blackballed” within the pharmaceutical industry as a result of libelous material contained in the following letter written by Dooner to various pharmacies in the Washington area.

September 25, 1968
Dear Mr. Pharmacist:
Dooner Laboratories has been the victim of rather vindictive tactics by a certain party in the Washington, D. C. area.
The approach to the pharmacist has many variations but the intent is to establish in your mind that this firm is going to discontinue its operation.
Our firm is very much in business and growing. Our local sales director is:
Mr. James E. Lucas
9453 Arlington Boulevard
Fairfax, Virginia 22030
Tel. No. 591-3141
Jim is constantly available to answer any questions regarding this firm and to offer any and all services relative to the ethical promotion of Dooner pharmaceuticals.
I would appreciate it if you would exercise extreme caution relative to rumors about this firm.
Being the astute business person that you are, I think you fully realize the harm that can result from such malicious intent.
Your assistance in curbing these rumors is deeply appreciated.
Yours very truly,
Dooner Laboratories, Inc.
Gene Dooner,
President

The action was subsequently removed to the United States District Court for the District of Maryland, 343 F.Supp. 917. At the trial, as to count one Dooner denied making false representations to induce Casale to change employment, and as to count two raised the defense of qualified privilege.

With respect to the latter, Dooner presented evidence that was largely un-contradicted. In September 1968 James Lucas, the new salesman replacing Ca-sale in the Washington area, advised Dooner that he had encountered numerous rumors among local pharmacists to the effect that Dooner was ceasing operation. Lucas also informed Dooner that some pharmacists were planning to return the merchandise they had previously purchased from Dooner’s company. Lucas and Eugene Dooner discussed the possibility of writing a letter to the pharmacies in the area assuring them that the company was still operating, but Lucas thought a letter was unnecessary at that time because he felt he could counteract the rumors himself. Despite his efforts, the rumors continued to spread and some pharmacists began returning Dooner’s merchandise. On October 1, 1968, Lucas wrote to Dooner recommending that the previously suggested letter to the pharmacies be sent. Dooner wrote the allegedly libelous letter to various pharmacies in an effort to protect his business by quieting the rumors.

In an effort to rebut Dooner’s defense of privilege, Casale attempted at trial to show that Dooner had abused the occasion by using unnecessarily abusive language in the letter and by mailing it to more persons than were reasonably necessary to accomplish its purpose.

At the close of all of the evidence, the trial judge denied Dooner’s motion for a directed verdict and submitted inter alia the following issues to the jury:

(6) Did the defendant in sending the letter have a business interest to protect which would give the letter the protection of a qualified privilege ?
Answer Yes or No: _
If your answer to Question No. 6 is “No”, then proceed to answer Question No. 8. If your answer to Question No. 6 is “yes”, then proceed to answer No. 7.
(7) Do you find that the letter of September 25, 1968 sent by Eugene Dooner contained statements which were made in reckless disregard of the truth, or that in the letter Eugene Dooner used unnecessarily abusive language, or that the letter was motivated by ill will toward the plaintiff Frank R. Casale ?
Answer Yes or No: _

The jury answered issue number six in the negative, failed to answer issue number seven, as instructed, and proceeded to issue number eight, which related to the amount of compensatory damages. The jury returned a verdict for Casale and awarded him $8,000 in compensatory damages and $60,000 in punitive damages on the libel count, and $744 in compensatory damages and $20,000 in punitive damages on the fraud count. In response to the district court’s intimation that the punitive damages were excessive, Casale filed a re-mittitur and accepted an award of $10,000 in punitive damages on count one and $30,000 in punitive damages on count two. Dooner appealed.

Under the law of Maryland, the elements of actionable fraud are these: (1) a false representation, (2) knowledge of its falsity or such reckless indifference to truth so as to impute knowledge, (3) that the false representation was made for the purpose of defrauding another, (4) that the other person relied upon the misrepresentation, had the right to rely upon it, believed it to be true, and embarked upon a course of conduct he would not have chosen but for the misrepresentation, and (5) damage directly resulting from the false representation. James v. Goldberg, 256 Md. 520, 261 A.2d 753, 758 (1970); Appel v. Hupfield, 198 Md. 374, 84 A.2d 94, 95-96 (1951).

Dooner’s only point of assigned error with respect to the fraud count is its contention that the district court erred in submitting the issue of fraud to the jury. The evidence as to fraudulent representation to induce Casale to give up his job with Merrell was sharply conflicting. It is enough to say that the jury could have believed, and apparently did, that Casale was promised a larger salary than he received, other employment benefits that were not forthcoming, and that the nature, extent, and degree of establishment of the Dooner business was falsely represented to lure him from his former employment. We think that it was not error to submit the fraud count to the jury, and that the judgment entered upon count one, after remittitur, should be affirmed.

It is otherwise as to the libel count, and for reasons to be stated we hold that the judgment entered upon it must be reversed.

We think the district judge erred in submitting to the jury determination of whether the alleged libel was made upon a privileged occasion. Under Maryland law, where the facts are not in substantial dispute, as here, privilege is initially a question of law to be decided by the court. Moreover, we conclude that Casale did not present sufficient evidence of malice to rebut and send to the jury the issue of qualified privilege, and that the district court, therefore, should have granted Dooner’s timely motion for a directed verdict.

Maryland decisions accord with those of most jurisdictions in emphasizing the active role of the trial judge in libel actions. Initially, it is for the court to determine the defamatory nature of the writing, to decide “whether the words charged in the declaration amount in law to libel. ...” Brinsfield v. Howeth, 107 Md. 278, 284, 68 A. 566, 567 (1908). Heath v. Hughes, 233 Md. 458, 197 A.2d 104, 106 (1964); Walker v. D’Alesandro, 212 Md. 163, 129 A.2d 148, 157 (1957); see W. Prosser, Law of Torts 765 (3d ed. 1964). It is also traditionally within the province of the court to determine whether the words, assuming they are libelous, were written on a privileged occasion, and whether any existing privilege is qualified or absolute. Peurifoy v. Congressional Motors, Inc., 254 Md. 501, 255 A.2d 332, 338 (1969); Stevenson v. Baltimore Baseball Club, Inc., 250 Md. 482, 243 A.2d 533, 538 (1968); Brinsfield, supra, 107 Md. at 287, 68 A. 566 (1908); Fresh v. Cutter, 73 Md. 87, 92, 93, 20 A. 774 (1890); see Prosser, supra, at 823.

The defense of qualified privilege has been defined as follows:

[T]he law considers such [libelous] publication as malicious, unless it is fairly made by a person in the discharge of some public or private duty, whether legal or moral, or in the conduct of his own affairs, in matters where his interest is concerned. In such cases, the occasion prevents the inference of malice, which the law draws from unauthorized communications, and affords a qualified defence depending upon the absence of actual malice. If fairly warranted by any reasonable occasion or exigency, and honestly made, such communications are protected for the common convenience and welfare of society; and the law has not restricted the right to make them within any narrow limits. [Original emphasis].

Peurifoy v. Congressional Motors, Inc., 254 Md. 501, 255 A.2d 332, 338 (1969) (quoting from Toogood v. Spyr-ing, 1 C.M. & R. 181, 193, 149 Eng.Rep. 1044 [1834]). See Stevenson, supra, 250 Md. 482, 243 A.2d at 337-338; Fresh, supra, 73 Md. at 92, 20 A. 774. The Restatement puts it more succinctly:

Factors Which Determine the Existence of a Conditionally Privileged Occasion
Protection of the Publisher’s Interest An occasion is conditionally privileged when the circumstances induce a correct or reasonable belief that
(a) facts exist which affect a sufficiently important interest of the publisher, and
(b) the recipient’s knowledge of the defamatory matter will be of service in the lawful protection of the interest.

Restatement of Torts § 594 (1938).

The trial judge here submitted the legal question involving the defense of qualified privilege to the jury in the form of issue number six. This, we hold, was error under Maryland decisions. We think reasonable men could not differ as to whether Dooner had a legitimate business interest to protect. The evidence was uneontradicted that false rumors were circulating, that they had detrimentally affected Dooner’s business, that merchandise was being returned, that sales resistence was increasing, that Lucas had not succeeded in his efforts to correct the rumors, and that Eugene Dooner believed that the letter was necessary to protect the business. We conclude, therefore, that

all of the evidence . . . tends to show only that the statements made and the letters and memoranda written were part of the normal and ordinary duties which [the defendant] owed, as general manager, to his corporation and its board of directors. They were, therefore, privileged communications

Domchick v. Greenbelt Consumer Services, Inc., 200 Md. 36, 87 A.2d 831, 834 (1952).

Once the court determines that the occasion is one of qualified privilege, the burden is on the plaintiff to rebut the defense. Peurifoy, supra, 254 Md. 501, 255 A.2d at 338; Domchick, supra, 200 Md. 36, 87 A.2d at 834; 1 F. Harper & F. James, The Law of Torts 437 (1956); W. Prosser, supra, at 823. The privilege may be defeated by evidence that the defendant abused the privilege by not exercising it in a reasonable manner and for a proper purpose, or that there was “actual malice.” Peurifoy, supra, 254 Md. 501, 255 A.2d at 338; Stevenson, supra, 250 Md. 482, 243 A.2d at 536. Domchick, supra, 200 Md. 36, 87 A.2d at 834-835; W. Prosser, supra, at 823. While the issue of the existence of a qualified privilege is one of law to be decided by the court, the plaintiff has the right to go to the jury on the issue of malice and abuse once he has presented evidence deemed by the court to be legally sufficient. Peurifoy, supra, 254 Md. 501, 255 A.2d at 338; Stevenson, supra, 250 Md. 482, 243 A.2d at 536; Brinsfield, supra, 107 Md. at 288, 68 A. 566. F. Harper & F. James, supra, at 437; W. Prosser, supra, at 823. If the occasion is found to be privileged, and if there is not sufficient evidence of abuse or malice to require submission of the issue to the jury, the trial court must direct a verdict in favor of the defendant.

The Court of Appeals of Maryland has recently exposited the proper application of these state law standards:

We have said that, in this context malice means “a reckless disregard of truth, the use of unnecessarily abusive language, or other circumstances which would support a conclusion that the defendant acted in an ill-tempered manner or was motivated by ill-will.” In determining an abuse of privilege all relevant circumstances are admissible, including the defendant’s reasonable belief in the truth of his statements, the excessive nature of the language used, whether the disclosures were unsolicited, and whether the communication was made in a proper manner and only to proper parties. [Citations omitted].

Orrison v. Vance, 262 Md. 285, 277 A.2d 573, 578 (1971).

Here, Casale presented opinion evidence, in order to show abuse or actual malice, that several pharmacists who had recieved the letter considered the language to be extremely harsh. He also attempted to show that, because several persons in Maryland had allegedly received copies of the letter, Dooner had mailed the letter to more persons than necessary for the protection of the business interest.

We believe this evidence, as a matter of law, is insufficient to take the issue of malice or abuse to the jury. To characterize the spreading of false rumors that a business is discontinuing its operation as “vindictive” and “malicious” seems to us fair comment. Indeed, it is difficult to conceive of an innocent motivation on the part of one knowingly spreading such false rumors. A simple reading of the letter in its entirety effectively refutes defendant’s argument that the letter was “unnecessarily abusive” and “excessive.” See Heath, supra, 233 Md. 458, 197 A.2d at 107.

As for the contention that the letter was mailed to more persons than necessary to protect Dooner’s business interests, we believe that argument is also without merit. That the letter may have been sent to some pharmacists who had not been Casale’s customers, in Maryland or elsewhere, and that seems doubtful, falls short of establishing unnecessarily broad dissemination. Pharmacists, like other business persons, presumably have some business contact with one another, and once a rumor starts, it can be spread quite innocently by those who hear it from the originator. Moreover, there is no evidence that the letter was disseminated far beyond Casale’s general sales territory.

Casale presented no evidence that the letter exhibited “a reckless disregard of truth,” or that the “communication was made in a[n] [im]proper manner.” As was true in A. S. Abell Co. v. Barnes, 258 Md. 56, 265 A.2d 207, 220 (1970), where the Court of Appeals of Maryland held that actual malice was not established in a libel action, we think that

The evidence here showed the [the defendant] did not simply fabricate the story, or that it was the product of [the defendant’s] imagination, or that it was based wholly on unverified information anonymously received or that the statements were so inherently improbable that only a reckless man would have put them in circulation. Nor was the evidence sufficient to establish that there were obvious reasons to doubt the veracity of the reporter or the accuracy of his reports.

We have considered the defendant’s point of error with respect to allegedly improper jury argument by Casale's counsel, and conclude that reversible error does not appear.

The judgment of the district court will be affirmed as to count one, and reversed as to count two.

Affirmed in part.

Reversed in part.

      . Atwell v. Retail Credit Co., 431 F.2d 1008 (4th Cir. 1970).

      . “Vindictive tactics by a certain party” in paragraph one of the letter, and “malicious intent” in paragraph six constitute the alleged libel.

      . Although the allegedly libelous letter is dated September 25, 1968, Dooner testified that he did not write it until early October after having received the recommendation from Lucas.

      . Because we believe that, the alleged libel enjoyed a qualified privilege, we find it unnecessary to determine whether the letter of September 25, 1968, was actually libelous under Maryland law. Orrison v. Vance, 262 Md. 285, 277 A.2d 573, 576 (1971). We also need not delve into the somewhat cloudy Maryland distinction between libel “per se” and “per quod.” See Murnaglian, From Figment to Fiction to Philosophy — The Requirement of Proof of Damages in Libel Actions, 22 Cath.U.L.Rev. 1 (1972).

      . See 1 F. Harper and F. James, The Law of Torts § 5.24 (1956); W. Prosser, Law of Torts 765 (3d ed. 1964); Murnaglian, supra note 4.

      . Harnish v. Herald-Mail Co., 264 Md. 326, 286 A.2d 146 (1972); Orrison v. Vance, 262 Md. 285, 277 A.2d 573 (1971); Peurifoy v. Congressional Motors, Inc., 254 Md. 501, 255 A.2d 332 (1969); Stevenson v. Baltimore Baseball Club, Inc., 250 Md. 482, 243 A.2d 533 (1968); Heath v. Hughes, 233 Md. 458, 197 A.2d 104 (1964).

      . The only other evidence offered to show malice was the colloquy between Eugene Dooner and Casale at the time Casale was fired. Such conversations are usually unpleasant. Language attributed to Eugene Dooner, albeit* excitable and intemperate, does not, we think, indicate malice in disseminating the letter.

      . We have previously noted that the question of actual malice, although presented to the jury, was not answered. P. 306, supra.

      . Eugene Dooner, Lucas, and Dooner’s secretary all testified that only 25-30 copies of the letter were made, and that these were mailed to the company’s customers in the Washington, D. C., “area.”


author: McENTEE, Circuit Judge.

text:
    LOCAL UNION NO. 251, affiliated with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Plaintiff-Appellee, v. NARRAGANSETT IMPROVEMENT COMPANY, Defendant-Appellant.
    No. 74-1157.
    United States Court of Appeals, First Circuit.
    Submitted Sept. 9, 1974.
    Decided Sept. 24, 1974.

      Patrick A. Liguori and Adler, Pollock & Sheehan Inc., Providence, R.I., on brief for appellant.
    Dennis J. Roberts, II, and Roberts & Willey Inc., Providence, R.I., on brief for appellee.
    Before COFFIN, Chief Judge, Mc-ENTEE and CAMPBELL, Circuit Judges.
   McENTEE, Circuit Judge.

This appeal stems from confirmation by the district court of an arbitration award pursuant to 29 U.S.C. § 185 (1970) and 9 U.S.C. § 9 (1970). The appellant contends that the district court erred in ruling that no grounds for vacating the award existed under 9 U.S.C. § 10 (1970).

Arbitration is the final dispute-resolving mechanism in the collective bargaining agreement between Narragansett (the company) and its employees. This dispute arose out of the discharge of a truck driver after a heated argument with his supervisor. The employee contended that his discharge lacked just cause and therefore violated the collective bargaining agreement. The company claimed that the employee was discharged because he had an excessive accident record and was otherwise delinquent, and that he had in fact been discharged on two previous occasions. It put forward some partially contested evidence at the arbitration hearing with regard both to the accident record and the previous discharges. In his award, the arbitrator stated that the accident record had not been stressed as a reason for the discharge until the hearing. He also stated regarding the contested discharges that company records verified only one such incident, that that incident was a threatened rather than actual discharge, that that warning had occurred over two years ago, and that “warnings of this type are usually nullified after such a period of time.” The arbitrator concluded that the driver was discharged for the verbal altercation with his supervisor and for threatening him with a steel pipe. The arbitrator held this to be justification for disciplinary layoff but not “just cause” for discharge, and therefore ordered reinstatement. When the company did not reinstate the employee, the union sought confirmation of the award in the district court.

The company’s answer affirmatively alleged grounds for vacating the award. At the arbitration hearing the company had sought a postponement to present further testimony about the previous discharges and the accident record. No reason for such a postponement seems to have been offered the arbitrator, nor was one voiced below. The arbitrator denied the request, and the company sought to have his award vacated on the ground that the refusal constituted “misconduct” within the meaning of 9 U.S.C. § 10(c). The district court confirmed the award, and the company appeals.

The district court did not err. Congress has carefully limited the scope of judicial review of arbitration awards. Where judicially enforceable arbitration is agreed to and confirmation of the award is sought, “the court must grant such an order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title.” 9 U.S.C. § 9 (1970). The courts are precluded from considering factual or legal issues which are by voluntary agreement made the subject of arbitration. Judicial intrusion is restricted to extraordinary situations indicating abuse of arbitral power or exercise of power beyond the jurisdiction of the arbitrator. Transport Workers Union v. Philadelphia Transp. Co., 283 F.Supp. 597 (E.D.Pa.1968). The burden is on the party challenging the arbitral award to establish substantially more than an erroneous conclusion of law.or fact. Saxis Steamship Co. v. Multifacs Int’l Traders, Inc., 375 F.2d 577 (2d Cir. 1967).

The appellant attempts to meet this burden by arguing that under § 10(c) the failure to postpone and the resulting exclusion of allegedly material and relevant evidence rise to the level of unfairness or misconduct. While a postponement and the subsequent reception of additional testimony might have provided some support for the company’s claims, deprivation of this possibility alone does not constitute misconduct under § 10(c). In a case in which the disciplinary record of an employee is at issue in determining whether good cause for discharge existed, it is not misconduct for an arbitrator to discount disputed oral testimony and to rely more heavily on the fact that the previous charges against the employee were not sufficiently substantiated in the company records. Moreover, even if the proposed testimony were necessary to decide an issue, the company does not appear to have given any explanation as to why a postponement was necessary to assure a fair proceeding. There has been no assertion of surprise by the company, and the arbitrator stated that the company apparently knew its records .were not specific enough to provide confirmation of all the charges. Nor is there evidence that the proposed witnesses were unavailable at the time of the hearing. The basic purpose of arbitration is to dispose of disputes without excessive delay and expense. The arbitrator’s refusal to countenance a delay here was within his discretion and did not deprive the company of a fair proceeding.

To support its view the company cites Harvey Aluminum v. United Steelworkers of America, 263 F.Supp. 488 (C.D.Cal.1967). That case in no way establishes that determinations of relevance or materiality are reviewable by the court. It holds, rather, that an arbitrator cannot exclude relevant evidence on a material issue on the basis of purely technical procedural rules of which the parties have not been apprised. The company also cites Shopping Cart, Inc. v. Food Employees, Local 196, 350 F.Supp. 1221 (E.D.Pa.1972), to support its position. In that case the arbitrator refused to reopen the hearing to allow the employer to present evidence from a handwriting expert to support its claim that the discharged employee had falsified reports and stolen cash. It was held that the arbitrator’s action did not deny the employer a fair hearing, because the employer had a full opportunity to present evidence at the hearing, the employer knew or should have known that expert testimony would be relevant, the employer sought no continuance of the hearing, and no proffer was made of what the testimony would show. The instant case involves the same considerations, except that the company sought a postponement from the arbitrator. That difference is insignificant, however, because the company knew or should have known it would have to support its discharge of the truck driver at the arbitration hearing. Far from supporting appellant’s claim, Shopping Cart indicates the weakness of appellant’s position.

Appellant’s position in this case reduces to a claim that it is entitled to a postponement merely by asking for it. Such a view is obviously unacceptable. We reiterate that we are disinclined to tolerate frivolous delay in labor disputes. NLRB v. Smith & Wesson, 424 F.2d 1072 (1st Cir. 1970). The district court order is affirmed, and pursuant to FRAP 38 we award the union, in addition to its regular costs, reasonable counsel fees for this appeal.

       Section 10 authorizes a district court to vacate an award
      “(a) Where the award was procured by corruption, fraud, or undue means.
      (b) Where there was evident partiality or corruption in the arbitrators ....
      (c) Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced.
      (d) Where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.” 9 U.S.C. § 10 (1970).
      In addition to its § 10(c) claim, the company also adduced arguments for vacating the award based on §§ 10(a), 10(b), and 10(d), but those arguments are wholly without merit.


author: FAIRCHILD, Circuit Judge.

text:
    Wallace F. THRALL, Plaintiff-Appellee, v. Cecil M. WOLFE, Regional Commissioner, Internal Revenue Service, et al., Defendants-Appellants.
    No. 73-1539.
    United States Court of Appeals, Seventh Circuit.
    Argued Feb. 26, 1974.
    Decided Aug. 23, 1974.

      David J. Cannon, U. S. Atty., Milwaukee, Wis., Irving Jaffe, Acting Asst. Atty. Gen., and Michael Kimmel, Atty., Dept, of Justice, Washington, D. C., for defendants-appellants.
    Charles C. Victor, Marinette, Wis., for plaintiff-appellee.
    Before FAIRCHILD and CUMMINGS, Circuit Judges, and JAME-SON, Senior District Judge.

       Senior District Judge William J. Jameson of the District of Montana is sitting by designation.

   FAIRCHILD, Circuit Judge.

Plaintiff Thrall brought this action for review of a decision by the Internal Revenue Service denying his application for a license as a dealer and manufacturer of firearms. Defendants are the IRS Regional Commissioner and the Secretary of the Treasury. The district court denied defendants’ motion for summary judgment. Thrall v. Wolfe, 352 F.Supp. 1074 (E.D.Wis., 1972). Subsequently, the court granted plaintiff’s cross motion, and ordered the Secretary to reconsider the license application without regard to plaintiff’s prior felony conviction. We reverse.

Plaintiff constructs replica antique guns and repairs modern hunting weapons. Incidentally to that business, he applied under 18 U.S.C. § 923 for a license as a dealer and manufacturer of firearms. Plaintiff, however, had been convicted in 1942 by a Montana state court of assault in the first degree (a felony) and sentenced to 5 years in prison. This offense involved the use of a loaded pistol. Section 922(g) prohibits any person convicted of a crime punishable by more than one year’s imprisonment from shipping or transporting any firearm or ammunition in interstate commerce. Section 922(h) prohibits such person from receiving any firearm or ammunition which has been so transported. Section 923(d)(1)(B), in turn, bars issuance of a firearms dealer license to one so prohibited under § 922(g) and (h). On this basis the I.R.S. denied plaintiff’s application.

Plaintiff then obtained a pardon for his 1942 offense from the governor of Montana. The pardon provided: “I do hereby grant Wallace M. Thrall Full Pardon and Restoration of all Civil Rights lost by reason of the above conviction, and the right to receive, possess, or transport in commerce a firearm.” Accordingly, plaintiff renewed his license application, and a hearing was held. The hearing examiner concluded that a state governor’s pardon did not remove the disabilities which § 922 imposes. The Assistant Regional Director of the Internal Revenue Service agreed, and again refused to issue the license. Plaintiff then sought judicial review in the district court under 18 U.S.C. § 923(f)(3).

I.

Plaintiff asserts that a federal agency may not premise denial of a license on a pardoned state conviction. He argues that a pardon blots out guilt and, thus, that defendants must disregard the earlier offense.

The Supreme Court, construing Article II, § 2 of the Constitution, the presidential power to pardon federal offenders, stated in Ex Parte Garland, 71 U.S. (4 Wall.) 333, 380, 18 L.Ed. 366 (1866) :

“A pardon reaches both the punishment prescribed for the offense and the guilt of the offender, and when the pardon is full, it releases the punishment and blots out of existence the guilt, so that in the eye of the law the offender is as innocent as if he had never committed the offense.”

Subsequent authorities have questioned the import of the broad language quoted above and considered it unnecessary to the Court's holding. See Richards v. United States, 89 U.S.App.D.C. 354, 192 F.2d 602, 607 (1951), cert. denied, 342 U.S. 946, 72 S.Ct. 560, 96 L.Ed. 703 (1952), reh. denied, 343 U.S. 921, 72 S.Ct. 676, 96 L.Ed. 1334. Williston, Does A Pardon Blot Out Guilt?, 28 Harv.L. Rev. 647 (1915). Richards held that a general pardon of all prior federal offenses for those serving in the armed forces during World War II did not preclude use of a pardoned conviction for impeachment purposes at a later federal trial.

Whatever the efficacy of a presidential pardon in removing the federal consequences of conviction, the issue here is the impact of a state pardon on a federal disability. In considering the effects in one sovereignty of pardons granted by another, the federal courts have exercised caution. In United States ex rel. Palermo v. Smith, 17 F.2d 534, 535 (2d Cir. 1927), the Second Circuit refused to treat an Italian pardon for crimes committed in Italy as blotting out guilt for purposes of United States immigration law. Similarly, the Supreme Court has declined to require the states to accord the same consequences to a federal pardon as Garland suggests the federal government must. In Carlesi v. New York, 233 U.S. 51, 34 S.Ct. 576, 58 L.Ed. 843 (1914), the Court held that, despite a presidential pardon, New York could consider a prior federal conviction in applying its second offender statute. The Court noted that:

“The issue is a narrow one and involves not the determination of the operation and effect of a pardon within the jurisdiction of the sovereignty granting it, but simply requires it to be decided how far a pardon granted as to an offense committed against the United States operates, so to speak, extraterritorially as a limitation upon the states, excluding them from considering the conviction of a prior and pardoned offense against the United States in a prosecution for a subsequent state offense.” 233 U.S. at 57, 34 S.Ct. at 577.

The Coui’t concluded, noting that the action of the state did not constitute punishment for the pardoned offense, that the federal pardon exerted no such “extraterritorial” effect. Conversely, these cases suggest that there is nothing inherent in a state pardon which compels the federal government to disregard the pardoned offense.

In his complaint, plaintiff characterizes the refusal to license him as a failure to give full faith and credit to the Montana pardon. Article IV, § 1 of the Constitution, concerning “public acts, records, and judicial proceedings,” speaks only to the states. By statute federal courts must also accord full faith and credit to state legislative acts and judicial records and proceedings. 28 U. S.G. § 1738. However, it is open to question whether the full faith and credit clause extends to requiring a state court to treat a sister state’s pardons as eradicating guilt for the purpose here involved, even if the issuing state gives them that effect. Compare People v. Dutton, 9 Cal.2d 505, 71 P.2d 218, appeal dismissed 302 U.S. 656, 58 S.Ct. 365, 82 L.Ed. 508 (1937); Groseclose v. Plummer, 106 F.2d 311, 313 (9th Cir. 1939), cert. denied, 308 U.S. 614, 60 S.Ct. 264, 84 L.Ed. 513, with People v. Terry, 61 Cal.2d 137, 37 Cal.Rptr. 605, 390 P.2d 381, 388-389, cert. denied, 379 U.S. 866, 85 S.Ct. 132, 13 L.Ed.2d 68 (1964). In any event, the Supreme Court has indicated that the choice of law requirements which Article IV, § 1 imposes depend on an analysis of the policies underlying conflicting laws. See generally Hughes v. Fetter, 341 U.S. 609, 71 S.Ct. 980, 95 L.Ed. 1212 (1951).

We conclude that, in imposing on convicted felons an otherwise appropriate disqualification from regulated activity,a Congress has the power to accord a state pardon differing effects in differing contexts, depending on its objectives in creating the disqualification. Neither the inherent nature of a pardon nor full faith and credit require that a state pardon automatically relieve federal disabilities.

II.

The remaining issue is whether, in enacting Title VII of the Omnibus Crime Control and Safe Streets Act of 1968, Congress intended that one holding a state pardon no longer be regarded as convicted within the meaning of § 922(g) and (h). We cannot conclude that Congress desired a gubernatorial pardon to have this effect.

Section 925(c) provides:

“A person who has been convicted of a crime punishable by imprisonment for a term exceeding one year (other than a crime involving the use of a firearm or other weapon or a violation of this chapter or of the National Firearms Act) may make application to the Secretary for relief from the disabilities imposed ... by reason of such conviction, and the Secretary may grant such relief if it is established to his satisfaction that the circumstances regarding conviction, and the applicant’s record and reputation, are such that the applicant will not be likely to act in a manner dangerous to public safety and that the granting of the relief would not be contrary to the public interest.”

It is unlikely that Congress intended, in effect, to confer an even broader power on the 50 state governors, free of the standards and limitations placed on the Treasury Secretary. If a state pardon were an alternative to relief under § 925(c), the exception for crimes involving a firearm would have little vitality. Further, Congress would have to have assumed that a state pardoning authority would always make a satisfactory investigation of the individual’s record and reputation to determine his propensity for future violence. Regarding the parallel provision for relief from the prohibition in 18 U.S.C. § 842(i) against a felon’s transporting explosives, it has been observed:

“Since Congress intended this determination to be made to the satisfaction of the Secretary, whose discretion is guided by federal policy, the scheme intended by Congress is disrupted if a state, guided by state policies, may make the determination to nullify a conviction for purposes of § 842(i).” United States v. Hoctor, 487 F.2d 270, 274 (9th Cir. 1973) (dissenting opinion).

We have considered whether another section of Title IV, § 927, evinces an intention to give effect to state pardons. That provision states:

“No provision of this chapter shall be construed as indicating an intent on the part of Congress to occupy the field in which such provision operates to the exclusion of the law of any State on the same subject matter, unless there is a direct and positive conflict between such provision and the law of the State so that the two cannot be reconciled or consistently stand together.”

The section was doubtless inserted for the purpose of avoiding a claim of preemption. 18 U.S.C. ch. 44 deals with federal control of firearms, not the scope and efficacy of pardons, and it is difficult to view Montana’s pardon as “on the same subject matter” as chapter 44. See United States v. Hoctor, supra, at 274-275 (dissenting opinion). Further, absent an express contrary intention, the scope of a federal statute normally is not dependent on state law. See generally Jerome v. United States, 318 U.S. 101, 104, 63 S.Ct. 483, 87 L.Ed. 640 (1942). In McMullen v. United States, 349 F.Supp. 1348 (C.D.Cal. 1972), the court held that application of a state law permitting a judge to treat an offense, punishable as a felony, as a misdemeanor and impose a reduced penalty did not avoid the licensing prohibitions in § 923:

“We are dealing in this case with a federal licensing statute. We are governed, in interpreting that statute, by the terms employed by Congress as defined by the statute and the regulations under it. The only purpose in looking to state law in a case like the present one, is to determine the maximum penalty which could have been imposed. . . . The action taken under state law by the state Judge in disposing of the case does not change the nature and character of the offense insofar as its classification under the federal statutes and regulations concerned.” 349 F.Supp. at 1351.

Where Congress did intend that a state pardon exempt an individual from a portion of the federal gun control laws, it had no difficulty expressing that intention. A separate title of the Omnibus Crime Control and Safe Streets Act of 1968, Title VII, provides punishment for any felon “who receives, possesses, or transports in commerce or affecting commerce” a firearm. 18 U.S.C. App. § 1202(a)(1). Section 1203(2) exempts “any person who has been pardoned by the President of the United States or the chief executive of a State and has expressly been authorized ... to receive, possess, or transport in commerce a firearm.” Thus, in Title VII, Congress has provided that a state pardon will have the effect which plaintiff here seeks to attribute to it in Title IV.

We think that the absence of any comparable provision in Title IV (and the presence there of a provision for limited administrative relief) signifies that Congress did not intend that a state pardon affect the disabilities in that title. The existence of a section in Title VII giving force to a state pardon as to “This title” is no indication that Congress desired that result in Title IV. In United States v. Bass, 404 U.S. 336, 344, 92 S.Ct. 515, 30 L.Ed.2d 488 (1971), the Court, in construing 18 U.S.C. App. § 1203(2), reviewed the legislative history of the Omnibus Crime Control and Safe Streets Act. The Court stated: “In our view, no conclusion can be drawn from Title IV concerning the correct interpretation of Title VII.” The converse also appears to have validity. The two titles are of different, although overlapping, scope. In Title IV, Congress dealt, among other things, with the risks in allowing those convicted of serious crimes to ship or transport any firearm or ammunition in interstate or foreign commerce or to receive any firearm or ammunition which has been shipped or transported in such commerce or engage in business as a firearms or ammunition importer, manufacturer, or dealer, or be a collector. Title VII’s subject matter is possession, receipt, or. transportation in such commerce or affecting such commerce of a firearm. The maximum penalties are different, with a longer period of imprisonment, though a lower fine, being authorized for most violations of Title IV than for violations of Title VII. Congress may have concluded that the dangers in the conduct covered by Title VII and not by Title IV were sufficiently smaller to justify giving effect to state pardons in Title VII, but not Title IV. Considering the Act as a whole, we cannot conclude that Congress intended that a gubernatorial pardon remove the disabilities imposed in § 922.

The judgment appealed from is reversed and the case is remanded to the district court for the entry of summary judgment for defendants.

      . 18 U.S.C. §§ 921-928 were created as chapter 44 of Title 18 by Title IV, “State Firearms Control Assistance,” of the Omnibus Crime Control and Safe Streets Act of 1968, Public Law 90-351, 82 Stat. 197, 225, and amended by Public Law 90-618, 82 Stat. 1214.

      . Under 18 U.S.C. App. § 1203(2), part of Title VII, “Unlawful possession or receipt of firearms,” Omnibus Crime Control and Safe Streets Act of 1968, the pardoning governor’s use of this language made Title VII inapplicable to plaintiff. See footnote 9, infra, and accompanying text. However, § 1203 does not apply to Title IV, of which § 922 is a part.

      . If Thrall’s prior conviction were federal, and had he a presidential pardon, the Treasury’s regulations would permit licensure. 26 C.F.R. § 178.142. Defendant’s brief suggests that the Treasury considers this treatment constitutionally compelled. We express no opinion as to whether Article II, § 2 and Garland actually require that result.

      a. See United States v. Nasser, 476 F.2d 1111, 1117 (7th Cir. 1973).

      . The consequences of a pardon expressly based on a determination of innocence need not be determined here. See Richards v. United States, supra, at 606. Similarly, this case does not involve the effect of a judicial order in the convicting jurisdiction setting aside the conviction. See United States v. Hoctor, 487 F.2d 270 (9th Cir. 1973). These situations entail considerations which could lead to a different conclusion.

      . Because his 1942 offense involved use of a pistol, Thrall is ineligible for this relief.

      . 18 U.S.C. § 845(b).

      . In Hootor, the majority held that a state statute under which certain convictions are judicially expunged after satisfactory completion of probation relieved defendant of the disability in § 842 (i). Hoctor may be distinguishable in that it involved a state court’s judicially setting aside the original guilty verdict.

      . Under this section, plaintiff’s pardon exempted him from Title VII.

      . We note two decisions which appear to assume, though not squarely to hold, that a state pardon would remove disability under Title IV as well as Title VII: United States v. Dameron, 460 F.2d 294 (5th Cir. 1972), cert. denied, 409 U.S. 882, 93 S.Ct. 168, 34 L.Ed.2d 137 and United States v. One Lot of Eighteen Firearms, 325 F.Supp. 1326 (D.N.H. 1971).

      . See United States v. Bass, supra, at 350, 351.


author: PER CURIAM:

text:
    A/S CUSTODIA, Petitioner-Appellant, v. LESSIN INTERNATIONAL, INC., Respondent-Appellee.
    No. 1033, Docket 74-1149.
    United States Court of Appeals, Second Circuit.
    Argued May 22, 1974.
    Decided June 10, 1974.

      John J. Reilly, New York City (Donald J. Kennedy and Haight, Gardner, Poor & Havens, New York City, on the brief), for petitioner-appellant.
    Hervey C. Allen, New York City (Burlingham Underwood & Lord, New York City, on the brief), for respondent-appellee.
    Before SMITH and TIMBERS, Circuit Judges, and TYLER, District Judge.

       Hon. Harold R. Tyler, Jr., of the District Court for the Southern District of New York, sitting by designation.

   PER CURIAM:

For the second time in as many years we have before us the propriety of a district court’s determination — on affidavits rather than after an evidentiary hearing — of disputed issues of fact with respect to the making of an arbitration agreement. See Interocean Shipping Co. v. National Shipping and Trading Corp., 462 F.2d 673 (2 Cir. 1972). As in In-terocean, we reverse and remand for an evidentiary hearing.

On October 5, 1973, A/S Custodia, a Norwegian corporation and the owner of the M/V Ferngrove, filed a petition in the Southern District of New York pursuant to Section 4 of the Federal Arbitration Act, 9 U.S.C. § 4 (1970), to compel arbitration of a controversy which had arisen under a charter party allegedly entered into on June 21, 1973 between Custodia and Lessin International, Inc., a New York corporation which was the charterer, for the transportation of a cargo of scrap from Tampa, Florida, to Taiwan. Lessin opposed the motion to compel arbitration on the ground that it had never entered into a written arbitration agreement, asserting that the alleged charter party relied upon by Cus-todia, although in writing, was unsigned.

The district court, Robert J. Ward, District Judge, without holding an evi-dentiary hearing but acting on the affidavits and briefs of the parties, on November' 15, 1973 entered a brief order denying the motion to compel arbitration on the ground that “the parties do not appear to have entered into ‘a written agreement for arbitration * * * ’ as required by the United States Arbitration Act, 9 U.S.C. § 4.” Thereafter, on December 21, 1973, the court denied Custodia’s motion for reargument, in connection with which Custodia for the first time brought to the attention of the court our decision in Interocean and requested the alternative relief of a trial on the issue of whether the parties had entered into a written arbitration agreement.

The claims as to whether there was a binding charter party, as disclosed in the papers upon which the district court acted, may be briefly summarized. Early in June 1973, Haakon Steckmest, of the brokerage firm of J. H. Winchester & Co., received a quotation from L.es-sin’s broker, Ocean Freighting & Brokerage Corp., to transport the cargo of scrap referred to above. This quotation was circulated by cable to various correspondents of Winchester. About two weeks later, on June 20, Steckmest received an offer on this business from Custodia’s broker in Norway. The offer was conveyed on June 20 to Ocean Freighting which, on the same day, made a counter-offer on the vessel on behalf of Lessin. After the terms of the contract allegedly were agreed upon between Custodia and Lessin, Ocean Freighting prepared a form of charter party and foi'warded it under cover of a letter dated June 25 to Steckmest with the request that he have it signed by Custodia. After obtaining authority from Custodia, Winchester signed the document on behalf of the owner and returned it to Ocean Freighting for execution by Lessin. Later, Steckmest was advised by Ocean Freighting that, since Lessin was unable to obtain the scrap cargo, it refused to sign the document.

Custodia claimed $76,000 damages as a result of Lessin’s failure to perform the alleged charter party. The unsigned contract which had been forwarded under cover of the letter of June 25 contained a standard arbitration provision. Pursuant thereto, Custodia named an arbitrator and demanded that Lessin do likewise so that the controversy could be submitted to arbitration. Upon Lessin’s failure to comply with the arbitration request, Custodia filed its petition in the district court to compel arbitration. A week later, Custodia filed its motion to compel arbitration.

The foregoing recital of the claims regarding the making of the charter party, which embodies the arbitration provision invoked, indicates disputed issues of fact. The critical issue is not whether the charter party was signed by the party sought to be charged (Lessin), but whether there was a meeting of the minds of the parties as to the essential terms of the agreement, even though unsigned by one party. Since a charter party is merely a contract, it is subject to all the rules and requirements of contract law. Gilmore and Black, The Law of Admiralty 172 (1957). As Judge Hincks observed in Fisser v. International Bank, 282 F.2d 231, 233 (2 Cir. 1960):

“It does not follow . . . that under the [Federal Arbitration] Act an obligation to arbitrate attaches only to one who has personally signed the written arbitration provision. For the Act contains no built-in Statute of Frauds provision but merely requires that the arbitration provision itself be in writing. Ordinary contract principles determine who is bound by such written provisions and of course parties can become contractually bound absent their signatures. . . .” (footnotes omitted) (emphasis added).

See also Bellmore Dress Co. v. Tanbro Fabrics Corp., 115 N.Y.S.2d 11 (Sup.Ct., N.Y.Co., 1952).

Also among the issues to be determined is the authority of the brokers to bind their respective principals — here especially the authority of Ocean Freighting to bind the charterer, Lessin. On this issue ordinary agency law applies.

In short, we hold that this case falls squarely under the provision of Section 4 of the Federal Arbitration Act, that “ [i] f the making of the arbitration agreement . . . be in issue, the court shall proceed summarily to the trial thereof.” Here, as in El Hoss Engineer & Transport Co. v. American Independent Oil Co., 289 F.2d 346, 351 (2 Cir.), cert. denied, 368 U.S. 837 (1961),

“[T]here would appear to be issues of fact .... These issues should not be determined on affidavits, but rather a full trial should be had.”

Reversed and remanded.