author: TALBOT SMITH, Senior District Judge.

text:
    NATIONAL LABOR RELATIONS BOARD, Petitioner, v. PRESCOTT INDUSTRIAL PRODUCTS COMPANY, Respondent.
    No. 73-1777.
    United States Court of Appeals, Eighth Circuit.
    Submitted May 13, 1974.
    Decided July 16, 1974.
    Joseph E. Mayer, Atty., N. L. R. B., Washington, D. C., for petitioner.

      Walter B. Connolly, Jr., Asst. Counsel, Firestone Tire & Rubber Co., Akron, Ohio, for respondent.
    Before JOHNSEN and VAN OOSTERHOUT, Senior Circuit Judges, and TALBOT SMITH, **§Senior District Judge.

       TALBOT SMITH, Senior District Judge, Eastern District of Michigan, sitting by designation.

   TALBOT SMITH, Senior District Judge.

The National Labor Relations Board (the Board) seeks enforcement of its order against Prescott Industrial Products Company (the Company) for violations of § 8(a)(1) of the National Labor Relations Act, 29 U.S.C. § 158(a)(1) (1970), which it found the Company had committed by discharging L. H. Berry and by coercively interrogating Johnny Sorrells. The Company defended upon the ground that Berry was discharged solely for insubordination, and that Sorrells was never “interrogated,” far less coercively so. The Board ordered the Company to cease and desist from the unfair labor practices found, to reinstate Berry and reimburse him for lost earnings, and to post the customary notices. The Company cross-petitions to vacate the orders of the Board. We enforce in part and deny enforcement in part.

The Discharge of Luke Berry.

It was the ruling of the Board that Berry’s discharge was “in violation of Section 8(a)(1) of the Act for engaging in protected activity.” The Company argues to us, the Board contesting, that Berry’s activities were not concerted but individual, that they were unprotected under the Board’s own precedents, and, moreover, that Berry’s conduct, regardless of any other issue in the case, “was grossly insubordinate and his egregious conduct was the cause of his discharge.” Since we regard the resolution of this latter issue as determinative of the case we will proceed directly to it.

The facts are relatively simple. We are dealing with an organizational drive by the Union and the circumstances attendant thereon. The election was scheduled for June 15, 1972. The Company, opposing unionization, had held a number of meetings of its employees conducted by its plant manager, Thomas Krengel. On these occasions Krengel had permitted employees to ask questions. One such questioner had been employee Berry, who, the Administrative Law Judge found, “had raised issues that had disclosed his prounion stand.”

On the day preceding the election, Krengel delivered what is conceded to be a lawful speech to a group of employees, pointing out the disadvantages of a union. This meeting was held upon Company premises and upon Company time. At or about the end of his prepared statement Krengel asked the employees whether or not the Union could give them a written guarantee of its promises, and stated that the Company could do so. He called upon the employees to step forward and receive their guarantees. As a few were so doing, Berry stood up and stated that he wanted to ask a question. “It requires no great powers of deduction,” the Administrative Law Judge held, “to conclude that the question Berry proposed to ask or statement to make was responsive to the speech he had just been required to hear and Krengel admitted that he believed Berry to be a union advocate. * * * Berry was about to ask a question or make a statement favoring the union organization.” Krengel stated that there would be no question and answer period and requested, or ordered, Berry to sit down. Berry refused to do so. He remained standing, repeated that he wanted to ask a question, and asserted that he had a right to do so. He was again refused and told to sit down. This procedure, Krengel’s request that Berry sit and Berry’s insistence that he be permitted to speak, was repeated several times; Krengel’s “request” finally developed into an order to leave the room. Berry was still standing in defiance of this order when a fellow employee took him by the arm and led him from the meeting; some twenty or twenty-five employees, over one third of the group, followed shortly thereafter. It appears in the record, and we find no specific denials thereof, that Berry was loud and arrogant, pointing his finger at Krengel, at times “blatant” and incoherent, all of this taking place in full view of the assembled employees. He did not, however, direct personally abusive language toward Krengel. Berry’s discharge for insubordination followed. His version of these events, we note, was not placed in the record by deposition or otherwise.

A proper evaluation of the incident requires some perspective. It is clear, as the Supreme Court has held, that

The act does not interfere with the normal exercise of the right of the employer to select its employees or to discharge them. The employer may not, under cover of that right, intimidate or coerce its employees with respect to their self-organization and representation, and, on the other hand, the Board is not entitled to make its authority a pretext for interference with the right of discharge when that right is exercised for other reasons than such intimidation and coercion.

NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 45-46, 57 S.Ct. 615, 628, 81 L.Ed. 893 (1937).

We have held, in NLRB v. Red Top, Inc., 455 F.2d 721, 726 (8th Cir. 1972), quoting in part NLRB v. Ace Comb Co., 342 F.2d 841, 847 (8th Cir. 1965) that

“It must be remembered that it is not the purpose of the Act to give the Board any control whatsoever over an employer’s policies, including his policies concerning tenure of employment, and that an employer may hire and fire at will for any reason whatever, or for no reason, so long as the motivation is not violative of the Act.”

The Board’s brief concedes that Berry’s conduct “was ‘mildly disruptive’ and ‘insubordinate’ ” but argues that it was not sufficiently flagrant to justify discharge, quoting Boaz Spinning Co. v. NLRB, 395 F.2d 512, 514 (5th Cir. 1968), that despite Berry’s insubordination,

as a union activist making a pro-union speech, he can avail himself of the protective shield of section 7 so long as his insubordination was not so flagrant as to take him beyond the pale.

The Board’s holding on the point was that:

Berry’s conduct was not violent. There is no evidence it was engaged in for improper motives or in bad faith. Nor was Berry’s activity of such a character as to render him unfit for further service. Berry’s activity came after the speech while Employer was passing out “guarantees” and at most can be characterized as mildly disruptive. Moreover, although Berry protested that he should be permitted to ask the question he did not attempt to do so in face of Krengel’s instructions to the contrary. Accordingly, we find that Berry’s concerted activity was protected and therefore Respondent’s discharge of Berry for that activity was unlawful. [Footnote ours.]

The Company also relies on Boaz which presents a close factual analogy to the case at bar. A pro-union employee was discharged for insubordination arising out of an attempt to speak during a company “captive audience” meeting. The discharge was upheld by the court against charges, and a finding by the Board, of the company’s violation of § 8(a)(1). The court, noting that “[the plant manager’s] talk was clearly protected by the free speech provisions of the Act and conceded so to be by the Board,” 395 F.2d at 515, held:

[The employee’s] deliberate, vigorous defiance in the presence of other employees put the employer in an untenable position. With other employees seated around him [the plant manager] was confronted with an employee who had twice disobeyed lawful instructions and on the second occasion had resorted to invective.

395 F.2d at 516. The court also observed, quoting NLRB v. Soft Water Laundry, Inc., 346 F.2d 930, 934 (5th Cir. 1965):

“ ‘If an employee is both inefficient [insubordinate] and engaged in Union activities, that is a coincidence that does not destroy just grounds for his discharge.’ ” [Bracketed word in original]

Id.

The Board’s brief seeks to distinguish Boaz on the ground that the employee’s added invective was personally offensive to the Plant Manager, but such lack in the case before us does not impeach the principles enunciated in the Court’s refusal to enforce the Board’s order.

The question before us, as was the case in Boaz, supra, 395 F.2d at 514, “ ‘is not the usual one of whether the Board’s findings on disputed facts are supported by substantial evidence in the record as a whole, e. g., N.L.R.B. v. Brown, 1965, 380 U.S. 278, 291, 85 S.Ct. 980, 13 L.Ed.2d 839, but whether the inferences drawn by the Board * * from the uncontroverted facts in this case are reasonable ones.’ N.L.R.B. v. Suniland Furniture Co., 5 Cir. 1967, 387 F.2d 123 (Dec. 15, 1967).” Where, as here, an employee’s pro-union activity is asserted to have interfered with management’s right to maintain order and respect and its right to deliver an anti-union speech, the Board must engage in what we have described as a “balancing process.” The employees’ rights are to be weighed against the interests of management in the pursuit of its lawful objectives. This balancing process, resting initially with the Board, is not immune from judicial review. As the court held in NLRB v. Thor Power Tool Company, 351 F.2d 584, 587 (7th Cir. 1965):

The employee’s right to engage in concerted activity may permit some leeway for impulsive behavior, which must be balanced against the employer’s right to maintain order and respect. N.L.R.B. v. Illinois Tool Works, 153 F.2d 811 (7th Cir. 1946). Initially, the responsibility to draw the line between these conflicting rights rests with the Board, and its determination, unless illogical or arbitrary, ought not be disturbed. [Emphasis added.]

We recognize, of course, with the Board, that under the tensions and exac-erbations experienced during an organizing campaign the statements of the parties may be both “bitter and extreme.” Similarly, during the processing of a grievance or in the course of collective bargaining, some leeway must be accorded employees where, as the Board puts it they “exceed the bounds of lawful conduct in a moment of animal exuberance.” But before us we have no situation of mere exuberant conduct. The record discloses that here, as in Boaz, supra, there was challenge and deliberate defiance, repeatedly asserted before the assembled employees, at a meeting lawfully convened for the presentation of the employer’s position. Moreover this captive audience speech was not a grievance or bargaining meeting where “employees must be placed in the status of equals in dealing with management.”

As in NLRB v. Red Top, Inc., supra, 455 F.2d at 728, we are of the opinion that

The Board apparently is enunciating a general principle that insolvent, rough, and intimidating conduct cannot serve as a basis for discharge if that conduct is carried out in connection with the assertion of protected activity under § 7 of the Act and that unless such improper conduct, including threats, intimidations and acts adverse to the operation of the employer’s business is “egregious,” the same must be accepted as a normal and usual incident of labor-management relationships. ■

But a line must be drawn lest there be a complete disintegration of the relationships reasonably required, under any circumstances, between management and labor, to the detriment of both. The Act, as we have noted, does not purport to give the Board any control whatever over the employer’s policies concerning tenure of employment, and his measures of discipline and standards of conduct within his plant remain his own.

Upon the facts here presented it is both unreasonable and arbitrary to ascribe Berry’s discharge to protected concerted activity under the Act. Where, as here, “the employer has proper cause for discharging an employee, the Board may not rely on scant evidence and repeated inferences to make a finding that places the Board in the position of substituting its own ideas of business management for those of the employer.” We are convinced that when the entire record is considered there was neither substantial evidence nor reasonable inference therefrom to support the Board’s finding that Berry’s discharge was the result of the exercise of his § 7 rights. Accordingly, the Board’s order as it relates to the discharge of Berry will not be enforced.

The Interrogation of Sorrells.

The Board’s ruling with respect to the interrogation of Johnny Sorrells stands in a different light. As noted, the Company defended by denying that such interrogation ever occurred. We are presented with a question of credibility which the Administrative Law Judge resolved against the Company. He found that Sorrells’ supervisor had asked him to report on who had attended previous union meetings, and, on another occasion, asked him to report back on who attended future meetings. We find substantial evidence on the record as a whole to support this finding. See NLRB v. Penzel Construction Co., 449 F.2d 148 (8th Cir. 1971).

The Company now argues, however, that even if such interrogation did occur, it was not a violation of § 8(a)(1) of the Act. It urges that the circumstances here reveal no background of union hostility as was presented in NLRB v. Speed Queen, 469 F.2d 189 (8th Cir. 1972) and in NLRB v. Louisiana Manufacturing Co., 374 F.2d 696 (8th Cir. 1967), cases where § 8(a)(1) violations were found. But the absence of this single factor does not preclude a finding of coercion. We find no valid purpose in the Company’s obtaining information concerning the union’s strength, and we note that the supervisor gave Sorrells no assurances that reprisals would not be taken. We believe, as we found in NLRB v. Louisiana Manufacturing Co., supra, 374 F.2d at 700-701, that such questioning is inherently suspect, especially where the employee is asked to report back the names of union adherents. Substantial evidence supports the Board’s conclusions respecting Sorrells’ interrogation.

The order of the Board as it relates to the discharge of Berry is denied enforcement. The order of the Board as it relates to the interrogation of Sorrells is enforced.

      . Reported in 205 NLRB No. 15 (1973).

      . § 8(a) (1) makes it an unfair labor practice for an employer
      to interfere with, restrain or coerce employees in the exercise of the rights guaranteed in section 7 [29 U.S.C. § 157 (1970) ] of this title.
      § 7 guarantees employees, inter alia,

      the right to self-organization, to form, join, or assist labor organizations * * * and to engage in other concerted activities for the purpose of * * * mutual aid or protection * * *.

      . We read this language as the Board’s characterization of the conduct which caused the discharge. We note the Board expressly declined to reach the issue of whether the discharge was a violation of § 8(a)(3) of the Act, 29 U.S.C. § 158(a)(3) (1970), an inquiry which normally focuses on whether the discharge was motivated by an antiunion purpose. American Ship Building Co. v. NLRB, 380 U.S. 300, 311, 85 S.Ct. 955, 13 L.Ed.2d 865 (1965); Mead & Mount Constr. Co. v. NLRB, 411 F.2d 1154 (8th Cir. 1969). See Shieber & Moore, Section 8(a) (3) of the National Labor Relations Act: A Rationale — Part II. Encouragement or Discouragement of Membership in any Labor Organization and the Significance of Employer Motive, 33 La.L.Rev. 1 (1972).

      . Citing Livingston Shirt Corp., 107 N.L.R.B. 400 (1953). The majority of the Board found no applicability of the case to the facts before it, although the dissenting members found it controlling. The literature on the issue is abundant, see, e. g., Note, Labor Law — NLRB Regulation of Employer’s Pre-Election Captive Audience Speeches, 65 Mich.L.Rev. 1236 (1967) ; Comment, Restrictions on the Employer’s Right of Free Speech During Organizing Campaigns and Collective Bargaining, 63 Nw.U.L.Rev. 40 (1968) ; Pokempner, Employer Free Speech Under the National Labor Relations Act, 25 Md.L.Rev. Ill (1965), and cases and authorities cited therein.

      . United Rubber, Cork, Linoleum and Plastic Workers of America, AFL-CIO.

      . Witnesses differed as to whether the announcement was also made “in advance” or only when Berry attempted to speak. The Administrative Law Judge and the Board concluded the latter. We regard the moment of the announcement as irrelevant, so long as it was clear and clearly made, as to which no issue is presented to us.

      . The Company asserts there were six instances of Berry’s refusal to obey Krengel; the Board’s brief lists five. The Administrative Law Judge recounts four instances in his statement of facts, while the Board’s decision mentions only three. All versions are supported by one witness or another who variously recalled from three to six commands by Krengel that Berry sit or leave.

      . The Board’s brief argues that at this point “Berry walked out of the room with Stewart without further comment.” The Appendix references here cited by the Board do not confirm the statement made. To the contrary, on the cited p. 46 we find: “But L. T. Stewart got up first and walked toward Luke [Berry] and turned to go out and said, ‘If I have to leave, I think everybody that feels the way I do will go along with me.’ So after he stood and Luke started out, I guess there was about twenty of us walked out, maybe more. I don’t know. Approximately.”

      . He was being held in the custody of tlie Arkansas Department of Correction at the time of the hearing.

      . We note that the Board’s brief states, to the contrary, that “Berry remained standing and repeated that he wished to ask a question.” The conclusions of the dissenting Board members are in accord with the brief: “Berry continued to defy Krengel who told Mm twice more to leave the room.”

      . See also NLRB v. Leece-Neville Co., 396 F.2d 773 (5th Cir. 1968).

      . § 10(c) of the Act, 29 U.S.C. § 160(c) (1970), provides in part:
      No order of the Board shall require the reinstatement of any individual as an employee who has been suspended or discharged, or the payment to him of any back pay, if such individual was suspended or discharged for cause.

      . § 8(c) of the Act, 29 U.S.C. § 158(c) (1970) provides:
      The expressing of any views, argument, or opinion, or the dissemination thereof, whether in written, printed, graphic, or visual form, shall not constitute or be evidence of an unfair labor practice under any of the provisions of this subchapter, if such expression contains no threat of reprisal or force or promise of benefit.
      The legislative history of § 8(c), part of the Taft-Hartley amendments, makes it clear that its purpose was to effectuate employers’ first amendment rights as a response, in part, to the restrictions placed by the Board on captive audience speeches :
      The Board has placed a limited construction upon [court cases holding that the Constitution guarantees freedom of speech on either side in labor controversies] by holding such speeches by employers to be coercive * * * if the speech was made in the plant on working time (Clark Brothers, 70 N.L.R.B. 60). The committee believes these [Board] decisions to be too restrictive * * *.
      S.Rep.No.105, 80th Cong., 1st Sess. 23-4 (1947). Bee generally the authorities cited supra note 4.

      . McDonnell Douglas Corp. v. NLRB, 472 F.2d 539, 545 (8th Cir. 1973).

      . Linn v. Plant Guard Workers, Local 114, 383 U.S. 53, 58, 86 S.Ct. 657, 15 L.Ed.2d 582 (1966).

      . NLRB v. Red Top, Inc., 455 F.2d 721 (8th Cir. 1972); NLRB v. Thor Power Tool Company, 351 F.2d 584 (7th Cir. 1965).

      . Bettcher Mfg. Corp., 76 NLRB 526 (1948).

      . The Company and the dissenting Board members argue that “[t]he employer, under the majority’s view, could not limit or control the [employees’] participation in such a meeting,” the result burdening “an employer’s right to make a noncoercive speech.” The Board’s brief replies that
      “[I]f at the conclusion of the employer’s speech, the employees insisted upon speaking over the employer’s objection, the employer could terminate the meeting and direct the employees to return to work. Thereafter, the employees’ persistence in speaking would not simply be insubordinate, but would be an interference with the employer’s right to insist that ‘working time is for work.’
      Under the view we take of the egregious nature of Berry’s conduct we do not rule upon the Company’s argument that an employee-imposed termination of the meeting violates the employer’s right of free speech.

      . NLRB v. Red Top, Inc., 455 F.2d 721, 728 (8th Cir. 1972).
      The Board found that Berry, in protesting that he had a right to ask the questions, was “presenting] a grievance,” thus converting a company meeting, convened and sanctioned under § 8(c) of the Act, into an immediate grievance hearing. We find no warrant in the record or in the precedents, upon these facts, for such holding, which the dissenting members of the Board characterized as “specious”.

      . Here the Company had published “Rules of Conduct” with which Berry admitted his familiarity, which provide that “defying the authority of supervision” and “refusal * * * to follow the directions * * * of management” are infractions punishable by discharge.

      . NLRB v. Blue Bell, Inc., 219 F.2d 796, 798 (5th Cir. 1955).

      . See NLRB v. Midwest Hanger Co. & Liberty Engineering Corp., 474 F.2d 1155, 1161 n. 5 (8th Cir. 1973).

      . See id.


source: Caselaw Access Project

author: LUMBARD, Circuit Judge:

license: Public Domain

text:
    UNITED STATES of America, Appellee, v. Cecil Grafton ROSE, Defendant-Appellant.
    No. 1010, Docket 73-2760.
    United States Court of Appeals, Second Circuit.
    Argued April 26, 1974.
    Decided July 10, 1974.

      Michael B. Mukasey, Asst. U. S. Atty. (Paul J. Curran, U. S. Atty. for the S. D.N.Y., and S. Andrew Schaffer, Asst. U. S. Atty., on the brief), for appellee.
    E. Thomas Boyle, St. James, N. Y. (William J. Gallagher, The Legal Aid Society, Fed. Defender Service Unit, New York City, on the brief), for defendant-appellant.
    Before LUMBARD and HAYS, Circuit Judges, and JAMESON, District Judge.

       Senior District Judge of the District of Montana, sitting by designation.

   LUMBARD, Circuit Judge:

Cecil Grafton Rose appeals from a judgment of conviction entered after a three-day trial before Judge Brieant and a jury in the Southern District of New York. An indictment filed July 13, 1973 charged Rose in three counts with impersonating a federal officer and in such pretended character obtaining money and other things of value in violation of 18 U.S.C. § 912. Following dismissal of the first count because of a material variance between the government’s proof and its bill of particulars, the jury on October 25, 1973 found Rose guilty as charged on counts two and three. On November 30, Judge Brieant sentenced Rose to concurrent prison terms of one year and a day on each count.

On appeal Rose claims that his convictions must be reversed because the indictment did not allege an essential element of the crime and because the prosecutor on cross-examination of Rose asked several questions that constituted improper comment upon his Fifth Amendment right to remain silent following arrest. We affirm.

I.

The government’s evidence showed that on September 22, 1972 Harold Hines, a Brooklyn building superintendent and a Costa Rican immigrant, went to the office of the Immigration and Naturalization Service (INS) at 20 West Broadway in Manhattan to obtain a visa extension for his cousin, Evalina Adassa Craig. At the time he was carrying Craig’s Costa Rican passport. Immigration authorities told him to mail the passport together with a ten-dollar extension fee. As Hines was leaving the building he was approached by Rose, who told him that the INS was going to deport him for failing to obtain an extension visa. Hines said that it was his cousin’s visa, not his, that was in difficulty. Rose showed Hines a badge and said that he was a secret detective with the INS and could help Hines. He said that he knew a lawyer in New Jersey who could get the extension visa. Rose said that it would cost $500 and arranged to visit Hines’ home that night to obtain part of the money. Hines gave Rose, who used the name Slim Johnson, his cousin’s passport.

At the meeting Hines gave Rose $250. Rose called the next day and Hines agreed to meet him on September 25 near the INS office and give him $210. On September 25 Hines withdrew the money from the bank and gave it to Rose. On September 29 Rose called again and asked for $50 more. A meeting was arranged for that afternoon. Apparently suspicious at this point, Hines called a friend and then the INS. Rose kept the appointment and was arrested by INS officers. A search incident to arrest revealed a badge and Craig’s passport.

Rose took the stand on his own behalf. He claimed that he had met Hines in the course of looking for an apartment. When Hines told him about this cousin’s difficulty in getting a visa extension, he had offered to help Hines get the visa extension in return for Hines’ offering him the first vacant apartment in Hines’ building. At a meeting that night Mrs. Hines gave him Craig’s passport. After cancelling one appointment, he agreed to meet Hines on September 29 in front of the INS office. He said that he was shocked when he was arrested, that he told the officers he would not try to flee and that he asked what was wrong. He testified that he found the badge at a subway stop and had kept it for the purpose of scaring children who caused trouble in the record store where he worked. He denied ever flashing it at Hines or claiming to be a federal officer.

On cross-examination Rose said that Hines might have seen the badge when he took out some used airline tickets to identify himself. Rose was questioned about the statements he made at the time of arrest including his protestations of surprise. Rose had offered no explanation of why he was meeting Hines in front of the INS office. The relevant portions of the examination of Rose have been reproduced in the margin.

II.

It was enough that the indictment charged Rose with falsely assuming and pretending to be a detective of the Immigration and Naturalization Service, an officer and employee acting under authority of the United States, and that in such character he demanded and obtained money. It was not necessary to charge that the crime was committed with intent to defraud.

The indictment here charged:

On or about the dates indicated in Counts 1 through 3 hereof, in the Southern District of New York, Cecil Grafton Rose, the defendant, unlawfully, wilfully and knowingly did falsely assume and pretend to be an officer and employee acting under the authority of the United States and a department, agency and officer thereof, to wit, a detective of the United States Immigration and Naturalization Service, and in such pretended character demanded and obtained money, papers, documents and things of value in the approximate amounts indicated in Counts 1 through 3 hereof:
Amount
Count Date Obtained
1 September 22, 1972 $250.00
2 September 25, 1972 210.00
3 September 29, 1972 —

The language of the indictment tracks the language of part [2] of 18 U.S.C. § 912, which deals with two distinct offenses:

Whoever falsely assumes or pretends to be an officer or employee acting under the authority of the United States or any department, agency or officer thereof, [1] and acts as such, [2] or in such pretended character demands or obtains any money, paper, document, or thing of value, shall be fined not more than $1,000.or imprisoned not more than three years, or both.

The predecessor of § 912, 18 U.S.C. § 76 (1940), codifying Act of March 4, 1909, ch. 321, § 32, 35 Stat. 1100, as amended by Act of Feb. 28, 1938, ch. 37, 52 Stat. 83, required an additional element in the crime, that there be “intent to defraud the United States or any person.” Rose claims that, even though this language was dropped from the statute when it was revised in 1948, intent to defraud is still an essential element of the crime and must be alleged in the indictment.

The Fifth Circuit supports Rose’s position, United States v. Randolph, 460 F.2d 367 (5th Cir. 1972) (case involving part [1] offense); Honea v. United States, 344 F.2d 798 (5th Cir. 1965) (case involving part [2] offense), while the Fourth and Ninth Circuits support the contrary position, United States v. Guthrie, 387 F.2d 569 (4th Cir. 1967), cert. denied, 392 U.S. 927, 88 S.Ct. 2284, 20 L.Ed.2d 1386 (1968) (case involving part [1] offense); United States v. Mitman, 459 F.2d 451 (9th Cir.), cert. denied, 409 U.S. 863, 93 S.Ct. 154, 34 L.Ed.2d 111 (1972) (case involving part [2] offense). See also United States v. Harth, 280 F.Supp. 425, 426 n. 4 (W.D.Okl.1968); United States v. Carr, 194 F.Supp. 144, 145 n. 1 (N.D.Cal.1961); United States v. Meeker, 110 F.Supp. 743, 14 Alaska 249 (D.Alaska 1953).

The requirement that there be an “intent to defraud” was dropped in the 1948 revision of the Criminal Code. The only explanation for the deletion came in the Reviser’s Note: “The words ‘with the intent to defraud the United States or any person’ contained in said section 76 of title 18, U.S.C., 1940 ed., were omitted as meaningless in view of United States v. Lapowich, [Lepowitch, 318 U.S. 702 (1943)], 63 S.Ct. 914 [87 L.Ed. 1727].” In Lepowitch, the Supreme Court was concerned with an indictment that charged defendants with impersonating FBI agents in violation of part [1] of the former 18 U.S.C. § 76. Defendants argued that the “intent to defraud” requirement, which applied to both parts [1] and [2], meant that for them to be guilty they would have to have intended to deprive someone of something valuable. Since part [2] already provided as a separate offense demanding or obtaining things of value in a pretended capacity, this interpretation would have rendered part [1] meaningless. The Court stated: “We hold the words ‘intent to defraud,’ in the context of this statute, do not require more than the defendants have, by artifice and deceit, sought to cause the deceived person to follow some course he would not have pursued but for the deceitful conduct.” 318 U.S. at 704, 63 S.Ct. at 916 (footnote omitted).

Initially, Rose argues that our decision in United States v. Wight, 176 F.2d 376 (2d Cir. 1949), cert. denied, 338 U.S. 950, 70 S.Ct. 478, 94 L.Ed. 586 (1950), indicates agreement with'the Fifth Circuit position. We do not agree. It is true that in that case we said, “The statute plainly prohibits any false assumption or pretense of office or employment under the authority of the United States in any department or office in the government when done with intent to defraud and accompanied by any of the specified acts in the pretended character.” 176 F.2d at 379. But it seems likely that the offenses in that case arose under the old § 76 rather than § 912, for the court cited both provisions. In any event, we were not concerned with how the 1948 revision had changed the elements of the offense and did not determine the issue before us. Indeed, only recently we declined to rule on this very point in deciding United States v. Harmon, 496 F.2d 20 (2d Cir. 1974), at 21.

The leading case supporting Rose’s argument is Honea v. United States, supra. There the defendant was charged with gaining money from his bride on the pretext that he was a CIA agent and needed the money for a' CIA venture, when, of course, he had no connection with the Central Intelligence Agency. The Fifth Circuit quoted the definition of intent to defraud from Lepowitch, which we have quoted above. The court, however, read Lepowitch to limit this definition only to a part [1] offense. Arguing that to hold otherwise would greatly expand the scope of § 912, the court concluded that intent to defraud was still an essential element of a part [2] offense.

With all due respect, we believe that the court in Honea erred. If by intent to defraud the court meant that the defendant to violate part [2] of § 912 must demand or receive something of greater value than what he gives in return, its holding is in conflict with a prior Supreme Court decision. In United States v. Barnow, 239 U.S. 74, 36 S.Ct. 19, 60 L.Ed. 155 (1915), the Court held that it was no defense under a similarly worded predecessor to § 76 and § 912 to a charge of receiving a thing of value in a pretended character that the defendant had given in return a thing of equal value.

The only other likely definition of “intent to defraud” is that used in Lepo-witch, which the court in Honea rejected. The requirement of § 912 that the money or thing of value be demanded or received “in pretended character” adequately covers the possibility raised by the Lepowitch definition that the impersonation did not affect the actions of the person deceived. Analyzed this way, the issue in Honea, which the court did not discuss, was whether the defendant received money from his wife because he was supposedly a CIA Agent or because he was her husband.

In any event, we agree with Judge So-beloff’s observation in United States v. Guthrie, supra, 387 F.2d at 571:

It is an accepted canon of statutory construction that where Congress has advertently changed the legislative language the change must be given effect. This is particularly true when the revision was precipitated by a specific Supreme Court interpretation.
. It cannot be assumed that Congress deleted an element theretofore regarded as essential without intending to affect the meaning of the statute.

The indictment in this case is sufficient to state an offense under § 912.

III.

Finally, Rose claims that the questioning of him by the Assistant United States Attorney on cross-examination, which is quoted in footnote, 1, swpra, constituted an improper comment upon Rose’s right under the Fifth Amendment to remain silent following arrest. See Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966). Rose relies on cases which have held that no inference of guilt can be drawn from the fact that the defendant remained silent when arrested. See, e. g., United States v. Mullings, 364 F.2d 173 (2d Cir. 1966); United States v. Lo Biondo, 135 F.2d 130 (2d Cir. 1943). The government argues that the questioning did not suggest that Rose had remained silent at the time of arrest, only that when arrested he had not told the same story he told on the stand. The government also points out that it may not be improper to impeach a defendant’s testimony at trial by showing that he remained silent upon arrest on the theory that silence is inconsistent with the story told at trial. See United States ex rel. Burt v. New Jersey, 475 F.2d 234 (3d Cir.), cert. denied, 414 U.S. 938, 94 S.Ct. 243, 38 L.Ed.2d 165 (1973); United States v. Ramirez, 441 F.2d 950 (5th Cir.), cert. denied, 404 U.S. 869, 92 S.Ct. 91, 30 L.Ed.2d 113 (1971); cf. Harris v. New York, 401 U.S. 222, 91 S.Ct. 643, 28 L.Ed.2d 1 (1971). But see Johnson v. Patterson, 475 F.2d 1066 (10th Cir.), cert. denied, 414 U.S. 878, 94 S.Ct. 64, 38 L.Ed.2d 124 (1973).

Since Rose’s counsel failed to object to the examination during the trial, we need not reach the merits of whether the government may show that the defendant was silent upon arrest because that is inconsistent with the defendant’s trial testimony. Ordinarily there must be a sufficient contemporaneous objection during the trial before an evidentiary matter can be raised on appeal. While in cases involving plain error affecting substantial rights we have discretion to consider matters not objected to, see United States v. Indiviglio, 352 F.2d 276, 280-281 (2d Cir. 1965) (en banc), cert. denied, 383 U.S. 907, 86 S.Ct. 887, 15 L.Ed.2d 663 (1966), here as in Indiviglio we see no reason to consider this claim of error made for the first time on appeal. The relationship between Rose’s failure to tell the arresting officers the story he told the jury and his right to remain silent must have seemed so remote that it escaped the notice of Rose’s counsel and the district judge. Where objection is promptly made by counsel, it would usually be enough for the trial judge to instruct the jury regarding the relevant considerations and what the jury should disregard. Such an instruction would have cured any possible misconception regarding Rose’s rights. In the absence of any objection at the trial, we see no reason to consider whether the cross-examination was a violation of the defendant’s rights.

Affirmed.

      . The trial transcript (pp. 145-46) reads:
      Q. When you got upstairs and they [the arresting officers] took the material [seized from Rose’s person] out, did you explain what you just told us to the arresting officer?
      A. What is wrong?
      Q. Did you explain to them how you came to have the passport?
      A. Passport?
      Q. Yes.
      A. I didn’t make no statement to the officers.
      Q. Did you explain to them why you had met Mr. Hines that day?
      A. Why I had met Mr. Hines?
      Q. Yes.
      A. I didn’t have to tell them why I had met Mr. Hines.
      Q. Nobody said you had to. I’m asking you whether you did.
      A. No, sir.
      Q. You didn’t offer them the explanation that you offered the jury on direct examination?
      A. What explanation?
      Q. The explanation that you met Mr. Hines when you were looking for an apartment and essentially that you were going to do that to help you find an apartment.
      A. No, I didn’t have to do it.
      Q. You did not tell them that?
      A. No.
      Q. Why did you not?
      A. Because there was no reason for it. I didn’t know I was under arrest.

      . As have other courts, we insert [1] and [2] into § 912 to emphasize the two distinct offenses.

      . In full, 18 U.S.C. § 76 (1940) provides (with [1] and [2] again inserted) :
      Whoever, with intent to defraud either the United States or any person, shall falsely assume or pretend to be an officer or employee acting under the authority of the United States, or any department, or any officer of the Government thereof, or under the authority of any corporation owned or controlled by the United States, and [1] shall take upon himself to act as such, or [2] shall in such pretended character demand or obtain from any person or from the United States, or any department, or any officer of the Government thereof, or any corporation owned or controlled by the United States, any money, paper, document, or other valuable thing, shall be fined not more than $1,000 or imprisoned not more than three years, or both.

      . It also should be noted that Forms 8 and 9 in the Appendix of Forms to the Federal Rules of Criminal Procedure, which illustrate indictments charging violations of parts [1] and [2] of § 912, contain the allegation “with intent to defraud,” but these forms are illustrative and not mandatory. Fed.R.Crim.P. '58.

      . The Honea court gave the following hypothetical to support its conclusion that “intent to defraud” is a requirement for an offense under part [2] of § 912: “For example, an ex-Marine, FBI man, PX clerk, Revenue Officer, or law clerk desires to cash a check for which there are funds in the bank, but not being known to the cashier, he flashes his expired Government ID card.” 344 F.2d at 803. Here too, the issue is not whether the bank received full value, Bar-now bars this defense, but whether the former federal employee had his check cashed in the guise of a government employee or of a bank depositor.


author: HILL, Circuit Judge.

text:
    UPPER PECOS ASSOCIATION, a New Mexico non-profit corporation, Individually and on behalf of its members, Plaintiff-Appellant, v. Maurice H. STANS, Individually and as Secretary of Commerce of the United States, et al., Defendants-Appellees.
    No. 71-1411.
    United States Court of Appeals, Tenth Circuit.
    July 16, 1974.

      See also 409 U.S. 1021, 93 S.Ct. 458, 34 L.Ed.2d 313.
    James B. Alley, Jr., Santa Fe., N. M., for plaintiff-appellant.
    Wallace H. Johnson, Asst. A tty. Gen., George R. Hyde and Peter R. Steenland, Attys., Dept, of Justice, Washington, D. C., for defendants-appellees.
    Before PHILLIPS, HURRAH and HILL, Circuit Judges.
   HILL, Circuit Judge.

Appellant is a New Mexico nonprofit corporation dedicated to preserving and improving the quality of environment in the Upper Pecos River Valley. Appel-lees are officers of the United States Department of Commerce who made a grant offer to the San Miguel Board of County Commissioners for construction of the Elk Mountain Road project. The issue for our consideration is whether the trial court erred in dismissing appellant’s case for mootness.

On October 21, 1970, the Economic Development Administration (EDA) of the Department of Commerce offered the San Miguel Board of County Commissioners (Board) a grant of nearly four million dollars for the construction and surfacing of 33.3 miles of roadway through a remote area of the Santa Fe Forest in New Mexico. This grant would pay 80 percent of the project’s total cost. EDA did not prepare a draft or final impact statement before making the grant offer. In January, 1971, appellant brought this action claiming that EDA had violated the National Environmental Policy Act of 1964, 42 U.S. C. § 4321 et seq. (NEPA), by failing to prepare an environmental impact statement before making the grant offer.

In February, 1971, the United States Forest Service, the agency exercising control over all public lands involved in the project, filed a draft impact statement. Four months later, on June 25, 1971, the Forest Service filed its final impact statement on the project.

At the trial’s conclusion the Forest Service was found to be the “lead agency” and thus the proper agency to prepare an impact statement under NEPA. Upper Pecos Ass’n v. Stans, 328 F.Supp. 332 (D.N.Mex.1971). We affirmed this decision at 452 F.2d 1233 (10th Cir. 1971). Subsequently appellants petitioned for a writ of certiorari to the United States Supreme Court, which petition was granted May 22,1972.

After certiorari was granted EDA filed a draft environmental impact statement on the Elk Mountain Road project with the Council on Environmental Quality. This draft was circulated to appropriate agencies and organizations. The government then filed with the Supreme Court a Memorandum for Respondents Suggesting Mootness since EDA had chosen to prepare an environmental impact statement and had frozen all funds for the project until EDA thoroughly evaluated all aspects of the project in compliance with NEPA. The Supreme Court thereafter remanded the case to the Tenth Circuit to determine “whether [this] ease has become moot.” Upper Pecos Ass’n v. Peterson et al., 409 U.S. 1021, 93 S.Ct. 458, 34 L.Ed.2d 313 (1972). The Tenth Circuit in turn remanded it to the trial court “for the limited purpose of having it determine the issue of mootness.”

On remand to the trial court appellant argued that actions taken by EDA subsequent to the grant offer do not make the case moot, and also that appellees did not follow the procedural requirements of NEPA before making the grant and therefore it should be declared illegal. Thus a case or controversy still exists.

Appellant, in explaining why the grant should be declared illegal, suggests that once a grant has been approved the reviewing agencies will be reluctant to change their original decision even if the subsequent environmental impact statement demands such reversal. Therefore the grant should be voided ab initio and' the application for the Elk Mountain Road project considered with projects currently competing for available funds.

The trial court rejected appellant’s argument and concluded that NEPA does not specifically require voiding ab initio a grant offer made prior to filing an environmental impact statement. We agree.

Consideration of environmental factors should come in the early stages of program and project formulation. If the decision is delayed until the latter stages it “tends to serve as a post facto justification of decisions based on traditional and narrow grounds.” CEQ Third Annual Report 246 (Aug. 1972). See also Scientists’ Inst, for Pub.Inf.,Inc. v. Atomic Energy Com’n, 156 U.S.App.D.C. 395, 481 F.2d 1079 (1973); Lathan v. Volpe, 455 F.2d 1111 (9th Cir. 1971); Calvert Cliffs’ Coord. Com. v. United States A. E. Com’n, 146 U.S.App.D.C. 33, 449 F.2d 1109 (1971). The question therefore confronting us is whether the Elk Mountain Road project is presently in such a stage of flexibility that consideration of environmental factors will be merely a hollow gesture. We do not think so. To date EDA has disbursed no funds on the grant, nor does it intend to disburse any funds until such time as the grant is reconsidered at every level of EDA in light of the final environmental impact statement. Although unquestionably appellees should have drafted their environmental impact statement prior to making the grant offer, we do not believe the Elk Mountain Road project is so far along that appellees are precluded from objectively reconsidering the project. Appellant offers no evidence suggesting that EDA is irretrievably committed to the project and we find no evidence in the record to substantiate such a conclusion. Under the circumstances of this case we believe EDA has complied with the mandates of NEPA.

Although appellant demands several kinds of relief, it is clear each demand stems from EDA’s alleged failure to' comply with the procedural requirements of NEPA. Since we believe EDA timely prepared, although belatedly, an environmental impact statement no case or controversy now exists. Hence this case is moot. See SEC v. Medical Comm. for Human Rights, 404 U.S. 403, 92 S.Ct. 577, 30 L.Ed.2d 560 (1972).


author: PER CURIAM.

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Walter Lee BUSH, Defendant-Appellant.
    No. 74-1187.
    United States Court of Appeals, Sixth Circuit.
    Argued June 7, 1974.
    Decided July 16, 1974.

      Joe B. Campbell (Court-appointed), Bell, Orr, Ayers & Moore, Bowling Green, Ky., on brief, for defendant-appellant.
    George J. Long, U. S. Atty., Richard A. Dennis, Asst. U. S. Atty., Louisville, Ky., on brief, for plaintiff-appellee.
    Before EDWARDS and ENGEL, Circuit Judges, and GRAY, District Judge.

       The Honorable Frank Gray, Jr., Chief Judge, United States District Court for the Middle District of Tennessee, sitting by designation.

   PER CURIAM.

In a two-count indictment returned in the United States District Court for the Western District of Kentucky, the appellant herein, as a convicted felon, was charged with transporting a firearm in interstate commerce, in violation of 18 U.S.C. § 922(g), and with receiving and possessing a firearm which had moved in interstate commerce, in violation of 18 U.S.C. App. § 1202(a)(1). Having been acquitted on the transportation count, he appeals his jury conviction on the other count.

The three grounds for reversal of his conviction urged by appellant were substantially these: (1) There was not a sufficient nexus charged or proven between the interstate movement of the firearm in question and his possession thereof; (2) the firearm which formed the basis of the charge was the fruit of an illegal search and seizure; (3) the verdict of guilty was not supported by the evidence. These grounds will be discussed seriatim.

In contesting the sufficiency of the nexus between the interstate movement of the firearm and the receipt and possession of that firearm, the appellant contends that the mere showing that the firearm in question had once moved in interstate commerce does not suffice and that, under the decision in United States v. Bass, 404 U.S. 336, 92 S.Ct. 515, 30 L.Ed.2d 488 (1971), it is necessary to allege and prove either that there was possession in commerce or that the possession affected commerce. While it may be argued that Bass perhaps left open the door for appellant’s contention, it is nevertheless clear that this court’s decision in United States v. Brown, 472 F.2d 1181 (6th Cir. 1973), applying Bass, closed that door. This argument must, therefore, be rejected.

With reference to appellant’s contentions as to the legality of the search, the record discloses that the police officers had information from the police dispatcher that the appellant was in a stolen car and that there might be a gun in the car. It further appears that, after the officers stopped the car in question, they searched the appellant and found several bullets. Based on the foregoing, we find that the officers had probable cause for their subsequent search of the automobile and its glove compartment, where the gun was found, and, under the circumstances, a warrant was not required for that search. It follows that neither the search nor the seizure herein was unreasonable under Fourth Amendment standards.

The appellant’s final contention must likewise be rejected. The record contains sufficient evidence from which the jury could conclude that the defendant was a convicted felon, that he received and possessed the firearm in question, and that the firearm had previously moved in interstate commerce. The evidence, therefore, sustains the conviction.

Affirmed.


author: DAKES, Circuit Judge:

text:
    John D. LAUPHEIMER, Appellant, v. McDONNELL & CO., INC., et al., Appellees.
    No. 908, Docket 73-2721.
    United States Court of Appeals, Second Circuit.
    Argued May 15, 1974.
    Decided July 5, 1974.

      Philip C. Patterson, Philadelphia, Pa. (Blank, Rome, Klaus & Comisky, Philadelphia, Pa.; Jay H. Landau, Zimmer, Fishbach, Hertan & Haberman, New York City), for appellant.
    Michael J. McAllister, New York City (Lunney & Crocco, New York City; J. Robert Lunney, New York City, of counsel), for appellee T. Murray McDonnell.

    Before KAUFMAN, Chief Judge, HAYS and OAKES, Circuit Judges.

       Lord, Day & Lord, New York, N. Y. (John J. Loflin and Richard Gaines, of counsel), filed a brief for the American Stock Exchange, Inc., as amicus curiae seeking af-firmance.

   DAKES, Circuit Judge:

This appeal is from an order of the District Court for the Southern District of New York, Robert L. Carter, Judge, granting a motion to stay all proceedings pending arbitration in this “Go-Go Years” securities fraud case. This appeal raises a question left in the interstices between Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953), and Coenen v. R. W. Pressprich & Co., 453 F.2d 1209 (2d Cir.), cert. denied, 406 U.S. 949, 92 S.Ct. 2045, 32 L.Ed.2d 337 (1972); in short, whether one who claims that he was fraudulently enticed to join the employ of and become an officer and stockholder in a brokerage firm, and thereby to become a member of the American Stock Exchange (“AmEx”) and New York Stock Exchange (“NYSE”), is required to submit the controversy to arbitration, rather than to seek his relief in federal courts, because the AmEx’s constitution provides that holders of stock and officers of member corporations and members of the Exchange must submit to arbitration “all controversies arising in connection with their business between or among themselves.”

Appellee McDonnell & Co., Inc. (“the firm”), which has not filed any brief in opposition to the appellant here, was a registered broker/dealer in securities under § 15(b) of the Securities Exchange Act of 1934 (“the 1934 act”), 15 U.S.C. § 78o(b), until April 9, 1970, when its registration was revoked pursuant to a consent order by the SEC for various willful violations of the securities laws and the NYSE requirements. The firm had been a member of the NYSE and AmEx until August 13, 1970, when it resigned its memberships. Ap-pellee T. Murray McDonnell as principal officer and stockholder of the firm was an allied member of the Exchanges until the August date. Appellee Morgan McDonnell and the late Thomas McKay, whose estate is an apppllee here, were also principal officers of the firm; the other appellee is the firm’s receiver.

Appellant Laupheimer’s complaint alleges that during the last quarter of 1968 and the first two months of 1969 appellees made separate offers to sell firm stock to approximately eight McDonnell employees and prospective employees, one of the latter of whom was Laupheimer. Ostensibly the offer of employment and firm stock was for the purpose of establishing a corporate underwriting department; in reality, it is alleged, the firm was already in violation of NYSE Rule 325, which in the period here involved provided that the ratio of debts to capital could in no event exceed 20 to 1, and the firm was desperately attempting to raise capital to bring itself into compliance. Through oral representations beginning in November, 1968, and later through written representations in 1969, Laupheimer was led to believe that the firm was making a good profit and in good financial condition, and that its back office operations (i.e., recordkeeping, stock certificate transfers, etc.) were sound, none of which was true. It was on the basis of these representations that Laupheimer left his employment with Laird Properties, Inc., a real estate affiliate of an investment banking firm in Wilmington, Delaware, and accepted employment with McDonnell on January 6, 1969. Later he was given a written offer to purchase the firm’s stock which he accepted, actually receiving the stock on or about March 20, 1969.

This action was instituted on January 8, 1973, and on June 15, 1973, appellee T. Murray McDonnell moved by an order to show cause for a stay of-the action pending arbitration. This was granted by Judge Carter on September 17, 1973, in a memorandum endorsement which is the order under appeal. In the proceedings on the motion for a stay pending arbitration the AmEx appeared as ami-cus curiae supporting T. Murray McDonnell’s motion and indeed filed a brief in connection with this appeal, although it did not appear in oral argument.

The district court determined that appellant became an officer of the firm on January 6, 1969, and applied for membership in the AmEx on February 28, 1969. The district court also found that “[t]he activity which plaintiff relies upon as an inducement took place in late January and February, 1969 and the transaction was consummated in March.” From this the court below concluded that during all that time all parties were either member corporations, officers or allied members of the AmEx and as such were bound by the language of Article VIII, Section 1 of the AmEx's constitution — in other words, appellees could require that appellant’s claims first be tested in arbitration.

Initially it must be pointed out that the district court’s statement that “[t]he activity which plaintiff relies upon as an inducement took place in late January and February . . .,” so that [d]uring all that time” he was at least an officer of McDonnell, is not supported by the record. While it may be true that all written inducements to purchase stock were given appellant after he became an officer, his complaint and supporting affidavits assert that he was given false oral representations in November and December of 1968, before he joined McDonnell, which induced him to leave his old job and to join McDonnell. Perhaps the district court viewed these representations only as inducements to securing appellant’s employment, but that is not what appellant alleges. In November, 1968, appellant was contacted by Joseph Rice, who himself was newly employed by McDonnell, and who requested appellant to meet with certain officers of McDonnell “to discuss the possibility of [his] becoming an officer and stockholder of McDonnell.” Later in November appellant met with appellee T. Murray McDonnell and Thomas L. Cassidy, officers of the firm, who “sought to persuade [appellant] to become a Vice-President of McDonnell, a member of its underwriting group, and a stockholder of McDonnell.” Appellant further alleges that on various occasions in November and December, 1968, Murray McDonnell and Cassidy represented that McDonnell was making a good profit, was in good financial condition, and that its back office operations were normal. Relying on these representations appellant quit his job, joined McDonnell and agreed to buy 1,000 shares of McDonnell stock. In appellant’s words, “As far as I was concerned my acceptance of a position as an officer of McDonnell stock [sic] and my purchase of McDonnell stock, were indispensable to each other.” Corroboration that this was the understanding of ap-pellees as well is found in the directors’ “consent” of January 20, 1969, which purported to consent at the same time to appellant’s election as an officer and to the authorization and issuance of 1,000 shares of stock to appellant.

We, therefore, find that appellees were offering appellant a package — employment as an officer with resulting allied membership in the AmEx and the opportunity to purchase 1,000 shares of McDonnell stock. The representations, allegedly false, were made prior to appellant's joining the firm in order to induce him to accept this package. Representations continued after he actually joined the firm to insure that he would not back out or blow the whistle.

The question thus becomes whether the fact that when the stock purchase aspect of the package was fulfilled appellant already had become an officer, requires the enforcement of the AmEx constitutional provision which provides for arbitration. Our research has found no case directly on point. One case, however, is very closely analogous to the present one. In that case, Danford v. Schwabacher, 342 F.Supp. 65 (N.D.Cal.1972), appeal dismissed, 488 F.2d 454 (9th Cir. 1973), a customer and employee of a brokerage house was induced by false representations to invest $15,000 in the firm to become a general partner and thereby a member of the exchange. When he brought suit in federal court for fraud in violation of the securities acts, the firm moved to stay the proceedings pending arbitration pursuant to the NYSE provision requiring arbitration of disputes between members. The court denied the motion, finding that the fraud was directed against the plaintiff as a customer rather than as an exchange member. The court concluded with what appears to us the utmost sagacity:

A security dealer may not defraud a customer, in the course of the fraud convert him into an exchange member, and thereby deprive him of the protection of the securities laws and of the courts.

Id. 342 F.Supp. at 69. This statement, moreover, seems to apply to the case at hand, for viewing the employment contract and the sale of stock as a package offer by appellees, it then is but a technicality — a distinction without a difference — that one part of it was fulfilled before another, rather than simultaneously, as was apparently the case in Danford. Substantial rights are not to be lost through such artificialities, especially where the effective dates of these transactions were largely under the control of those who might wish to avoid federal court determination of liability by maneuver. As the court reasoned in Dan-ford, the alleged fraud here was perpetrated against appellant Laupheimer not as an officer of the firm, a member of the AmEx or a stockholder, but as an outsider who had capital desired by the firm. As such he is entitled to the protection of the federal securities laws in federal courts, and not to be required to go to arbitration by the self-same fraud of which he complains.

Coenen v. R. W. Pressprich & Co., supra, is not to the contrary. In Coenen the plaintiff voluntarily and for reasons not causally connected to his securities claim became a member of the NYSE “with full knowledge that he had a claim against Pressprich and that Pressprich was a Stock Exchange member.” Id. 453 F.2d at 1212. In other words, by joining the NYSE with its requirement that members arbitrate disputes, with his knowledge of an existing dispute with another member, the plaintiff in Coenen waived his right to have his claim determined by a federal court rather than an arbitrator. See also Gardner v. Shearson, Hammill & Co., 433 F.2d 367 (5th Cir. 1970), cert. denied, 401 U.S. 978, 91 S.Ct. 1209, 28 L.Ed. 329 (1971); Moran v. Paine, Webber, Jackson & Curtis, 389 F.2d 242 (3d Cir. 1968). That is certainly not the situation here. Appellant Laupheimer at the time he became an officer, a member of the exchanges, or a stockholder had no idea that he had been defrauded. Here there was no existing dispute, the resolution of which by a court he might have waived, when he accepted employment with McDonnell, became an allied member of the exchanges, or even accepted receipt of his stock.

In finding the present dispute not arbitrable under 9 U.S.C. § 3 we are not unmindful that “the federal policy [is] to construe liberally arbitration clauses, to find that they cover disputes reasonably contemplated by this language, and tQ resolve doubts in favor of arbitration. .” Metro Industrial Painting Corp. v. Terminal Construction Co., 287 F.2d 382, 385 (2d Cir.), cert. denied, 368 U.S. 817, 82 S.Ct. 31, 7 L.Ed.2d 24 (1961). This language, however, must be tempered by the policy of Wilko v. Swan, swpra. In Wilko an agreement to arbitrate any margin dispute, prior to the existence of any controversy, was held prohibited by the 1933 act. As interpreted by later courts the decision in Wilko has stood for the proposition that agreements to arbitrate any dispute surrounding the sale of securities, made before any dispute arises, will not be enforced against a member of the investing public. See, e.g., Axelrod & Co. v. Kordich, Victor & Neufeld, 451 F.2d 838, 842-843 (2d Cir. 1971). As was recognized in Axelrod, to enforce arbitration agreements like that in Wilko would make it easy for unscrupulous dealers to avoid statutory liability under the securities acts by using their superi- or bargaining position to require arbitration clauses in contracts with members of the investing public. The same might be said of the circumstances here. Here the package deal insured that the purchaser of the stock would also be subject to the exchanges’ arbitration provisions, so the practical effect of the package deal was to require a member of the investing public — appellant Laupheimer before he became an officer of McDonnell — to agree to a broad arbitration provision before he could purchase the shares of McDonnell. Were we to enforce the AmEx’s arbitration provision under these circumstances it would provide an incentive for unscrupulous dealers wishing to raise capital merely to appoint as officers those persons it could entice into buying stock, thereby avoiding statutory liability. In short, inasmuch as appellant was a member of the investing public when the fraud began, and inasmuch as his status changed to that of an officer only as a result of that fraud, he is entitled to those statutory protections afforded members of the investing public, including the choice of forum.

Judgment reversed and cause remanded.

      . Article VIII, Section 1, of the AmEx’s constitution provided during the time the transactions here were consummated:
      Members, member firms, partners of member firms, member corporations and officers and holders of stock in member corporations shall arbitrate all controversies arising in connection with their business between or among themselves or between them and their customers as required by any customer’s agreement or, in the absence of a written agreement, if the customer chooses to arbitrate.
      As of July 1, 1970 (after the cause of action arose but before the filing of the complaint in this action), Article VIII, Section 1, was amended so as to delete the words “and holders of stock . . . . ” In view of our disposition of the case, we need not determine whether the old or amended provision applies here.
      The NYSE has a similar provision which requires arbitration of “[a]ny controversy between parties who are members, allied members, member firms or member corporations . . . .” See generally Coenen v. R. W. Pressprich & Co., 453 F.2d 1209 (2d Cir.), cert. denied, 406 U.S. 949, 92 S.Ct. 2045, 32 L.Ed.2d 337 (1972). The motion for the stay in the district court, however, was sought and granted only upon the arbitration provision in the AmEx’s constitution.

      . On April 5, 1971, on the complaint of the trustee for the Special Trust Fund of the NYSE, the Chancery Court of New Castle County, Delaware, entered an order granting appointment of a receiver of and for McDonnell & Co. No brief was filed pursuant to another order in the receivership proceedings.

      . Appellant’s complaint was in eight counts.
      Count I — Violations of Section 10(b) of the 1934 act, 15 U.S.C. § 78j(b) ; Securities and Exchange Commission Rules 10b, 17 C.F.R. § 240.10b-5, 17a-3, 17 C.F.R. § 240.17a-3; and Rule 325 of the NYSE.
      Count II — Violations of Section 17(a) of the Securities Act of 1933 (“the 1933 act”), 15 U.S.C. § 77q(a) ; and Rule 325 of the NYSE.
      Count III — Violations of Section 15(c)(1) of the 1934 act, 15 U.S.C. § 78o (c)(1) ; and SEC Rules 15cl-2, -3, 17 C.F.R. § 240.-15cl-2, -3; and Rule 325 of the NYSE.
      Count IV — Violations of Section 12(2) of the 1933 act, 15 U.S.C. § 771(2).
      Count V — Violations of Sections 5(a), (c) and 12(1) of the 1933 act, 15 U.S.C. §§ 77e(a), (c) and 771(1).
      Count VI — Common law fraud.
      Count VII — Common law negligence.
      Count VIII — Violations of New York General Business Law § 352-c McKinney’s Con-sol.Laws, c. 20.
      Counts IV, V and VII were dismissed on June 8, 1973, as time-barred.
      In particular, appellant alleges fraud in McDonnell’s failure to disclose its noncom-plianee with the minimum capital requirements of NYSE Rule 325; in McDonnell’s brochure which falsely stated that its capital ratio was 1.435 per cent and that its after-tax profit had been maintained at 4.4 per cent of income; in McDonnell’s profit and loss statement provided appellant which showed net profits of $950,862 for the eight months ended August 30, 1968, when McDonnell in fact lost $1.8 million in the last four months of the year; and in the firm’s failing to disclose that its back office operations were in a state of total disarray so that it was not keeping current and accurate books and records in the manner required by SEC Rule 17a-3,17 C.F.R. § 240.17a-3.

      . January 6, 1969, was, of course, the day that appellant began his employment with McDonnell. On January 20, 1969, seven of McDonnell’s nine directors signed a form purportedly constituting a “consent” of the board of directors to the appointment of Laupheimer (as well as others), as a vice president of McDonnell. According to Delaware Corporation Law § 141(f), unless otherwise prohibited by the certificate or bylaws, any action requiring a meeting of the board of directors may be carried out without a meeting if all the directors consent. Appellant now claims that because all directors did not sign the consent, he never actually was appointed an officer, and thereby would not be required to submit to arbitration. Appellant, however, ignores another section of the Corporation Law, § 142(b), which allows officers to be appointed however the bylaws or directors indicate. In other words, there is no statutory requirement that officers be appointed at a meeting of the directors. The district court’s finding of fact, therefore, that appellant became an officer on January 6, 1969, is supported in the record.

      . Appellant Laupheimer was not the only person induced by the scheme to raise capital by appointing someone an officer and having him buy stock. At least one other person has already had his day in court and won on claims nearly identical to those here. See Green v. McDonnell & Co., No. 71 C 1387 (N.D.Ill. Aug. 23, 1972). In that case appellees did not attempt to seek arbitration of the claims, which they might have on the same grounds alleged here; having lost there, they may well fear application of collateral estoppel against them here unless they can have the claims referred to arbitration.

      . Lest there be any doubt, while this decision depends on the fact that the fraud began before appellant was an officer or member of the exchange, proof of the fraud finally consummated is not restricted to the representations made before appellant was an officer or member.


text:
    Virgil M. LEDFORD, Plaintiff-Appellant, v. CORPS OF ENGINEERS OF the UNITED STATES et al., Defendants-Appellees.
    No. 74-8095.
    United States Court of Appeals, Sixth Circuit.
    Decided July 16, 1974.

      Charles W. Curry, Shuffett, Kenton & Curry, Lexington, Ky., Lee B. Ledford, Harlan, Ky., for plaintiff-appellant.
    Eugene E. Siler, Jr., U. S. Atty., Lexington, Ky., for defendants-appellees.
    Before McCREE, LIVELY and EN-GEL, Circuit Judges.
   PER CURIAM.

Plaintiff-Appellant moves for a stay of the order of the district court entered May 6, 1974 dissolving a temporary restraining order (which had expired by virtue of Rule 65(b) F.R.Civ.P.), denying plaintiff’s motion for a preliminary injunction, denying a stay of the district court’s order, and dismissing the action. The district court also determined that its order of May 6, 1974 was a final ap-pealable order. We agree because it terminated the action. Plaintiff-Appellant, in the alternative, moves for a temporary restraining order or preliminary injunction pending final resolution of this appeal. He also moves this court to advance the appeal for hearing.

Appellant filed a complaint, April 12, 1974, to enjoin defendants from proceeding to take by condemnation a certain tract of land owned by appellant in Harlan County, Kentucky. Jurisdiction was asserted under Article III, Section 2 of the United States Constitution and under 58 (sic) U.S.C. § 1358. The district court issued a temporary restraining order on April 17, 1974, but after a hearing on May 6, 1974, entered an order granting defendants-appellees’ motion to dismiss the action and denied appellant’s motion for a preliminary injunction. The district court found that a Declaration of Taking affecting the subject land had been filed on April 4, 1974 and that judgment had been entered thereon on April 5, 1974 — seven days before this action was commenced on April 12, 1974.

Appellant relies primarily upon United States v. 58.16 Acres of Land, etc., 478 F.2d 1055 (7th Cir. 1973), where Chief Judge Swygert recognized that there is a narrow exception to the general rule of judicial nonreviewability of an administrative decision to condemn a particular tract of property. However, that decision holds that a court may consider only a contention that property is not being taken for a public use. Once a court decides that the taking of property is for a public use, then the judicial function is exhausted, and the extent, amount, or title of property to be taken lies within administrative determination, subject only to the requirement that just compensation be paid. This limitation on the power of courts to review condemnation proceedings was stated by Mr. Justice Douglas for a unanimous court in Berman v. Parker, 348 U.S. 26, 35, 75 S.Ct. 98, 104, 99 L.Ed. 27 (1954):

It is not for the courts to oversee the choice of the boundary line nor to sit in review on the size of a particular project area. Once the question of the public purpose has been decided, the amount and character of land to be taken for the project and the need for a particular tract to complete the integrated plan rests in the discretion . of the legislative branch.

Accord, United States ex rel. TVA v. Two Tracts of Land, 456 F.2d 264 (6th Cir. 1972).

The complaint in this appeal concedes the public purpose of the Martins Fork Dam and Reservoir Project, but complains “[t]hat Engineers have taken and intend to take much larger areas of land than reported to the Congress and the public, contrary to regulations promulgated by the Secretary of the Army . ” and that “[t]he District Engineer arbitrarily and capriciously intends to take all of Tract 115 [containing plaintiff’s land], knowing full well that his own subordinates have recommended that only two acres of the land be condemned, that being all that is needed for the Dam and the highway construction.”

Appellant’s contentions are just the kinds that Berman v. Parker, supra, holds are to be decided by the condemning agency, not subject to review by the courts. Also, United States v. 58.16 Acres of Land, etc., supra, relied on by appellant, is distinguishable because property owners there charged that the subject property was not being taken for public use.

But there is an important procedural difference as well. In the 7th Circuit case, the property owners raised their objections to the condemnation action in their answer pursuant to Rule 71A(e), F.R.Civ.P., which provides, after permitting the filing of an answer, “A defendant waives all defenses and objections not so presented. . . . ” In the case on appeal, instead of filing an answer in the condemnation action, appellant pursued a collateral attack by filing a complaint ostensibly pursuant to 58 (sic) U.S.C. § 1358. The designation of Title 58 is obviously a typographical error, and 28 U.S.C. § 1358 was intended as the jurisdictional basis for this action. Section 1358 of Title 28 provides:

The district courts shall have original jurisdiction of all proceedings to condemn real estate for the use of the United States or its departments or agencies.

This provision of the Judiciary Act was intended as a grant of jurisdiction to the district courts of actions brought by the United States and not of actions that might have an eminent domain nexus brought against the government. Turtzo v. United States, 347 F.Supp. 336 (E.D.Pa.1972). No other basis for jurisdiction has been asserted, and it therefore appears that the appeal is not within the jurisdiction of the court.

Since we determine that the federal courts are without jurisdiction to entertain this action as filed, it is unnecessary to decide whether a declaration of taking may be collaterally attacked.

Accordingly, the appeal will be dismissed pursuant to Rule 8, Rules of the Sixth Circuit.

Dismissed.


author: PER CURIAM:

text:
    MOVEMENT AGAINST DESTRUCTION et al., Appellants, v. John A. VOLPE et al., Appellees.
    No. 73-2136.
    United States Court of Appeals, Fourth Circuit.
    Argued Feb. 2, 1974.
    Decided March 19, 1974.
    Rehearing Denied May 7, 1974.
    John C. Armor, Baltimore, Md., for appellants.
    Terrence L. O’Brien, Atty., U. S. Dept, of Justice, and Lawrence F. Ro-dowsky, Baltimore, Md. (Wallace H. Johnson, Asst. Atty. Gen., George Beall, U. S. Atty., Jean G. Rogers, Sp. Asst. U. S. Atty., and George R. Hyde, Irwin L. Schroeder, Attys., U. S. Dept, of Justice, on brief for Secretary of Transportation; Francis B. Burch, Atty. Gen. of Md., Lloyd J. Hammond, Sp. Atty., Baltimore, Md., Randy H. Lee, Asst. Atty. Gen., on brief for state appellee; George L. Russell, Jr., City Sol., and Frank, Bernstein, Conaway & Goldman, Baltimore, Md., on brief for city appellees), for appellees.
    Before BRYAN, BUTZNER and WIDENER, Circuit Judges.
   PER CURIAM:

The Movement Against Destruction (MAD) along with other community associations and individuals prayed an injunction and declaratory judgment from the District Court in October 1972, to bar further construction of the “3-A System”, or segments thereof, of the Federal Aid Interstate System in Baltimore, Maryland, until the defendants— the Secretary of the Department of Transportation of the United States and the Chief of the Interstate Division for Baltimore — had satisfied the Court that they were complying with the aims and exactions of: The National Environmental Policy Act (NEPA), 42 U.S.C. § 4331 et seq., The Federal-Aid Highway Act, as amended, 23 U.S.C. § 101 et seq., The Clean Air Amendments of 1970, particularly 42 U.S.C. § 1857 et seq., and The Department of Transportation Act, as amended, 49 U.S.C. § 1651 et seq.

A class action was made of the suit by order of February 28, 1973, admitting as plaintiffs certain persons seeking to represent those citizens of Baltimore directly or adversely affected by such construction. The City was also allowed to intervene. Eventually, the suit was consolidated with two others which posed some of the questions presented in the master cause. The order of February 28, 1973 also framed the issues at stake.

The consolidated litigation was heard by District Judges Thomsen and Miller, sitting together. Their findings and conclusions are stated in an opinion filed June 22, 1973 and reported as Movement Against Destruction v. Volpe, D.C., 361 F.Supp. 1360. It comprises a strikingly comprehensive compendium of the multi-factual context of the suit, with lucid resolution of the many legal complications.

By a final order dated June 26, 1973 injunctive relief was denied in each of the combined actions. Also, the Court refused a declaratory judgment of violation by the defendants of any of the statutes heretofore listed. The two suits joined with the MAD action were left upon their respective calendars for adjudication as to issues not decided in the consolidated cause. Further, a reservation appears in the final order as follows:

“The Complaint in Movement Against Destruction, et al. v. John A. Volpe, Secretary of Transportation, et al., Civil No. 72-1041-M, be and the same is hereby dismissed, without prejudice to the right of the Plaintiffs originally named therein, or any of them, to file an Amended Complaint on or before November 1, 1973, with respect to any of the roads or segments in the 3-A configuration, raising any points which have not been theretofore decided.”

On this appeal from the final order we affirm upon the opinion of the District Court. We decline to award plaintiffs counsel fees and we deny the petition for an injunction pending appeal which had been deferred for hearing along with the final argument of the appeal.

In oral argument appellant’s counsel noted that since the entry of the final order, officials of the Federal Executive Department have promulgated regulations, and the Maryland legislature has passed laws, that might affect certain aspects of the proposed means of transportation in Baltimore. See e. g.: Presidential Executive Order No. 11,748, December 4, 1973, and Environmental Protection Agency’s revised regulations, 39 Fed.Reg.No. 10, Part 3, Jan. 15, 1974; 41 Maryland Code Anno. 15B, as amended November 13, 1973; Executive Order, Governor of Maryland, effective February 12, 1974. Defendants, in this connection, refer to the Emergency Highway Energy Conservation Act, Pub.L. 93-239, § 3, 87 Stat. 1046, 42 USLW 21 (1974), and to Presidential messages reported as 10 Pres.Docs. 72, 122, 140, 161 and 165. The District Court, of course, did not consider these matters and we express no, opinion upon their relevancy to the issues presented on this appeal.

Affirmed.

ORDER DENYING PETITION FOR REHEARING

Upon consideration of the petition of the appellants, Movement Against Destruction, et al., for a rehearing, the Court concludes that it presents no ground warranting modification of the original decision and opinion herein, and the petition should be and is hereby denied. This order does not foreclose the District Court, should it be so advised, from considering the effect, if any, in this case of any laws and regulations enacted and promulgated while this appeal was pending.

BUTZNER and WIDENER, Circuit Judges, concur.


text:
    Andrew DiMICELI, Plaintiff-Appellant, v. NATIONAL MARINE ENGINEERS BENEFICIAL ASSOCIATION et al., Defendants-Appellees.
    No. 73-1073.
    United States Court of Appeals, Ninth Circuit.
    June 19, 1974.
    Robert E. Cartwright of Cartwright, Saroyan, Martin & Sucherman, San Francisco, Cal., for plaintiff-appellant.
    McCarthy, Johnson & Miller, San Francisco, Cal., for defendants-appellees.
    Before DUNlWAY, WRIGHT and CHOY, Circuit Judges.
   OPINION

PER CURIAM:

Appellant DiMiceli, a member of ap-pellee Unions, brought this action in California Superior Court. He purported to sue on behalf of all other members similarly situated. The case was removed to the district court. The Unions then moved to dismiss for improper venue. The motion was granted and the action was dismissed. DiMiceli appeals and we reverse.

The Unions adopted a resolution reading in pertinent part as follows:

Be it resolved, that effective January 1, 1971, in addition to the current dues rate, each member shall pay an amount equal to 6% of the gross amount of each vacation benefit payment he shall receive from any jointly-administered MEBA plan, or from the Union, as dues to District No. 1 —Pacific Coast District, MEBA. Such payment shall be due and payable on the date he receives said vacation benefit payment.

DiMiceli claims that the 6% applies only to vacation payments earned after January 1, 1971; the Union says that it applies to payments received after that date, regardless of when earned. The parties agree that DiMiceli paid $268.03, under protest, on account of payments earned before January 1, 1971. DiMiceli does not claim that the Union’s procedure in adopting the resolution was in any way improper.

Dismissal was on the ground that 29 U.S.C. § 412 (a part of the Labor-Management Reporting and Disclosure Act) places venue either in the Southern District of New York, where the Unions have their principal offices, or perhaps in the District of Texas (Corpus Christi), where DiMiceli paid the $268.03.

The question is whether the action is for a violation of “this subchapter” (the Act). The Unions argue, and the trial court agreed, that it is — that it is for a violation of 29 U.S.C. § 411(a)(3). Nowhere in his complaint does DiMiceli assert a violation of § 411(a)(3). He concedes that the resolution was adopted in conformity with that subsection. His claim is based only on the construction of the resolution. He urges, first, that his construction of it is correct, and second, that if the Union’s construction is correct, the resolution is invalid because it would deprive him of equal protection. We express no views as to the validity of these arguments. We mention them only to show the nature of DiMiceli’s ease.

The question presented appears to be one of first impression. In every case cited by the Unions, there was an attack on the manner in which the increase in dues was adopted, thus bringing the case squarely within the provisions of § 411(a)(3). See: Local No. 2, International Brotherhood of Telephone Workers v. International Brotherhood of Telephone Workers, 1 Cir., 1966, 362 F.2d 891; Ranes v. Office Employees International Union, Local No. 28, 7 Cir., 1963, 317 F.2d 915; Rota v. Brotherhood of Railway, Airline & Steamship Clerks, E.D.Pa., 1972, 338 F.2d 1176; King v. Randazzo, E.D.N.Y., 1964, 234 F.Supp. 388, aff’d, 2 Cir., 1965, 346 F.2d 307; Sawyers v. Grand Lodge, International Ass’n of Machinists, E.D.Mo., 1967, 279 F.Supp. 747; Painters Union Local No. 127 v. District Council of Painters No. 16, N.D.Cal., 1968, 278 F.Supp. 830, aff’d, 9 Cir., 1969, 415 F.2d 1121.

In some of these cases the court also had to decide whether there had been an increase in “the rates of dues and initiation fees,” because, if there were not, § 411(a)(3) would not apply. But the fact that there is such an increase, standing alone, does not state a claim for relief under the act. Here, no violation of the act is charged, and the special venue provision of § 412 does not apply.

The judgment is reversed and the case is remanded for further proceedings consistent with this opinion.

      . § 4.12 provides :
      Any person whose rights secured by the provisions of this subchapter have been infringed by any violation of this subchapter may bring a civil action in a district court of the United States for such relief (including injunctions) as may be appropriate. Any such, action against a labor organization shall be brought in the district court of the United States for the district where the alleged violation occurred, or where the principal office of such labor organization is located.

      . § 411(a) (3) provides:
      . . . the rates of dues and initiation fees payable by members of any labor organization in effect on September 14, 1959 shall not be increased, and no general or special assessment shall be levied upon such members, except—
      (A) in the case of a local labor organization, (i) by majority vote by secret ballot of the members in good standing voting at a general or special membership meeting, after reasonable notice of the intention to vote upon such question, or (ii) by majority vote of the members in good standing voting in a membership referendum conducted by secret ballot; or
      (B) in the ease of a labor organization, other than a local labor organization or a federation of national or international labor organizations (i) by majority vote of the delegates voting at a regular convention, or at a special convention of such labor organization held upon not less than thirty days’ written notice to the principal office of each local or constituent labor organization entitled to such notice, or (ii) by majority vote of the members in good standing of such labor organization voting in a membership referendum conducted by secret ballot, or (iii) by majority vote of the members of the executive board or similar governing body of such labor organization, pursuant to express authority contained in the constitution and bylaws of such labor organization: Provided, That such action on the part of the executive board or similar governing body shall be effective only until the next regular convention of such labor organization.


author: PER. CURIAM:

text:
    UNITED STATES of America, Appellee, v. Pedro MEZA-CAMPOS, Appellant.
    No. 74-1246.
    United States Court of Appeals, Ninth Circuit.
    July 5, 1974.
    Donald L. Ungar (argued), of Simmons & Ungar, San Francisco, Cal., for appellant.
    James L. Browning, U. S. Atty., San Francisco, Cal., J. H. Daffer, Asst. U. S. Atty., for appellee.
    Before ELY and WALLACE, Circuit Judges, and LYDICK, District Judge.

       Honorable Lawrence T. Lydick, United States District Judge, Los Angeles, California, sitting by designation.

   OPINION

PER. CURIAM:

The appellant was convicted of having violated 8 U.S.C. § 1326. The statute prohibits the entry into this country of an alien who has previously been arrested and deported, unless the alien has obtained permission to re-enter from the Attorney General of the United States.

The only issue here presented is whether the arrest of the appellant was valid. The arrest was made by an officer of the Immigration and Naturalization Service without warrant. A rather unique statutory provision, 8 U.S.C. § 1357(a) (2), is involved. It authorizes the arrest of an alien such as the appellant without warrant, but only if the arresting officer, at the time of the arrest, had “reason to believe” that the alien was likely to escape before a warrant could be procured. It is argued that the evidence was insufficient to justify the officer’s alleged belief that the appellant was likely to escape. The contention has some persuasion, but we reject it.

When the appellant was stopped for interrogation, he appeared, according to the testimony of the arresting officer, to be one whom the officer had previously observed in the custody of the Immigration Service. The officer testified that the appellant was extremely nervous, was “looking around to the left and right past me,” and that he, the officer, “felt that he was looking for an opportunity to run.” The appellant admitted to the officer that he was an alien and that he had no immigration papers.

Following the appellant’s argument to its logical conclusion, it would seem that an arresting immigration officer could never have reason to believe that the ar-restee was likely to escape, absent an on-the-scene admission of the arrestee to that effect. We cannot apply such an unreasonably restrictive interpretation to the pertinent statute. Being unable to look into the appellant's mind, the officer could do no more than to draw his own inferences from the objective circumstances. From the circumstances we have above described, we conclude that they were sufficient to support the determination that the arresting officer’s inferences were not unreasonable and that they were thus adequate to warrant his expressed “reason to believe” that, if not immediately arrested, the appellant was likely to escape. Cf. United States v. Mallides, 473 F.2d 859 (9th Cir. 1973); United States v. Alvarado, 321 F.2d 336 (2d Cir. 1963); Taylor v. Fine, 115 F.Supp. 68 (S.D.Cal.1953).

Affirmed.


author: EDWARDS, Circuit Judge.

text:
    RAILWAY LABOR EXECUTIVES’ ASSOCIATION, BROTHERHOOD OF LOCOMOTIVE ENGINEERS AND CONGRESS OF RAILWAY UNIONS, Plaintiffs-Appellants, v. Thomas F. PATTON and Ralph S. Tyler, Jr., Trustees of the Erie Lackawanna Railway Company, Debtor, Defendants-Appellees.
    No. 73-1713.
    United States Court of Appeals, Sixth Circuit.
    Argued Jan. 28, 1974.
    Decided July 5, 1974.

      Harold A. Ross, Cleveland, Ohio, for plaintiffs-appellants; Ross & Krau-shaar, Cleveland, Ohio, Edward J. Hickey, Jr., William J. Hickey, Geoffrey N. Zeh, Mulholland, Hickey & Lyman, James L. Highsaw, William G. Mahoney, Highsaw & Mahoney, Washington, D. C., on brief.
    Richard F. Stevens, Cleveland, Ohio, for defendants-appellees; J. Richard Hamilton, Gary L. Bryenton, Baker, Hostetler & Patterson, Cleveland, Ohio, on brief.
    Before PHILLIPS, Chief Judge, and EDWARDS and PECK, Circuit Judges.
   EDWARDS, Circuit Judge.

This is an appeal by various of the railway labor unions from an ex parte order, subsequently reaffirmed after hearing, entered by a District Judge in the United States District Court for the Northern District of Ohio, Eastern Division, acting as a Reorganization Court. This order provided for the suspension of previously negotiated employee protection agreements and the impoundment of funds which would have otherwise been paid to the employees.

This action was taken on petition of the Trustees of the debtor (Erie Lacka-wanna Railway). The Trustees had previously filed for reconsideration and suspension of these agreements before the Interstate Commerce Commission. Since the District Court’s action, the ICC has now heard and decided this petition, finding that “The record in this proceeding fails to provide a basis upon which the Trustees’ petition may be granted.” -I.C.C.-, Finance Docket No. 21510 (decided April 29, 1974). This decision undercuts the basis upon which the District Court order was entered.

A brief history of this matter indicates that on June 9, 1967, the Erie Lackawanna Railway Company was authorized to be included in the Norfolk and Western Railway Company System by an order issued by the ICC. Subsequently, the Erie. Lackawanna Railway Company (debtor) and the bargaining representatives of its employees entered into protection agreements on August 19 and August 29, 1968, which required the debtor to guarantee that none of its employees would be deprived of employment or placed in a worse position with respect to compensation, rules, working conditions, fringe benefits or rights and privileges pertaining thereto at any time during their employment. The unions argue that these agreements were quid ;pro quo for certain changes of operating conditions as a result of the merger with the Norfolk and Western which would have the effect of more economical operation with less manpower for the Erie Lackawanna.

Subsequently, on June 26, 1972, the debtor filed a reorganization petition under § 77 of the Bankruptcy Act, 11 U.S.C. § 205 (1970), and on March 20, 1973, the Trustees of the debtor filed a petition for reconsideration of the employee protection agreements before the ICC and the petition before the District Court for the suspension of wage payments required by those agreements.

At oral argument of this appeal the Trustees claimed that their petition before the District Court was designed to preserve the status quo pending determination by the ICC of the petition to reconsider and suspend the protection agreements. Now, however, the Trustees assert their intention to seek reconsideration of the adverse decision of April 29, 1974, of the ICC and seek delay of this court’s action on this appeal.

Section 77(n) of the Bankruptcy Act, 11 U.S.C. § 205(n) (1970), says in part:

“No judge or trustee acting under this title shall change the wages or working conditions of railroad employees except in the manner prescribed in sections 151 to 163 of Title 45, as amended June 21, 1934, or as they may be hereafter amended.”

Clearly, the prescribed procedure was not followed in this case.

Further, the District Judge took no testimony on the question of irreparable harm either from the railroad trustees, who proffered none, or from the labor unions, which did. We do not believe that the District Court could properly wield its equitable powers (assuming they were not restricted by § 77 (n)) without having heard testimony on such problems bearing on equity as what represented the status quo and what the effect of suspension of the agreements would be. In two recent cases this court has reversed orders entered under the court’s equitable powers for failure to take evidence and make findings of fact on irreparable injury. Detroit Newspaper Publishers Ass’n v. Detroit Typographical Union, 471 F.2d 872 (6th Cir. 1972), cert. denied, 411 U.S. 967, 93 S.Ct. 2149, 36 L.Ed.2d 687 (1973); North American Coal Corp. v. Local 2262, UMW, 497 F.2d 460 (6th Cir. 1974) (Decided May 10, 1974).

“The fatal defects in the decision of the District Court were: (1) its failure to weigh the equities between the parties and to determine whether the employer would suffer more from the granting of the injunction than the Union from its denial, as required by Boys Markets, Inc. v. Retail Clerks Union, Local 770, 398 U.S. 235, 254, 90 S.Ct. 1583, 26 L.Ed.2d 199 (1970) ; and (2) the absence of a showing of irreparable harm to employees as mandated by Boys Markets.” Detroit Newspaper Publishers Ass’n v. Detroit Typographical Union, supra at 875.

Note a similar holding in North American Coal, supra, where the parties were reversed.

The judgment of the District Court is reversed and Orders No. 71 and 101 of the Reorganization Court are vacated.


text:
    Robert BINNER et al., Appellees, v. M. C. CALLAHAN et al., Appellants.
    No. 73-2175.
    United States Court of Appeals, Fourth Circuit.
    Argued May 8, 1974.
    Decided July 19, 1974.

      Henry W. Underhill, City Atty., Charlotte, N. C. (W. A. Watts, City Atty., Charlotte, N. C., on brief), for appellants.
    Walter H. Bennett, Jr., Charlotte, N. C. (George S. Daly, Jr., Charlotte, N. C., on brief), for appellees.
    Before BOREMAN, Senior Circuit Judge, and CRAVEN and BUTZNER, Circuit Judges.
   PER CURIAM:

Plaintiffs below (appellees here), partnership proprietors of the Crazy Horse Bookstore in Charlotte, North Carolina, brought an action against defendants below (appellants here), three Charlotte policemen, alleging that defendants had fired projectiles from an air gun into the store’s front windows in the dark of night. Filing their action pursuant to the provisions of 42 U.S.C. §§ 1983 and 1985, plaintiffs claimed the policemen conspired together to, and did, deprive the store proprietors of their constitutional rights guaranteed under the first, fourth, fifth, ninth, and fourteenth amendments. Jurisdiction was asserted under 28 U.S.C. §§ 1343(3) and (4), 2201, and 2202. The case was tried by the court without a jury.

In making its findings of fact the district court concluded that the policemen had acted in concert to intentionally damage the glass windows at the front of the store by causing them to be struck by some type of projectile. The court found this conduct of the police officers severely alarmed and frightened plaintiffs Binner and Rupert, occupants of the store at the time of the incident. Citing Monroe v. Pape, 365 U.S. 167, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961), and Lynch v. Household Finance Corp., 405 U.S. 538, 92 S.Ct. 1113, 31 L.Ed.2d 424 (1972), the court determined as a matter of law that it had jurisdiction by virtue of 28 U.S.C. § 1343(3). While recognizing that the policemen had abused the authority of their offices, the court held that they were acting “under color” of law. Adickes v. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Monroe v. Pape, 365 U.S. 167, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961); Screws v. United States, 325 U.S. 91, 65 S.Ct. 1031, 89 L.Ed. 1495 (1945); United States v. Classic, 313 U.S. 299, 61 S.Ct. 1031, 85 L.Ed. 1368 (1941). The court concluded that the officers, by their actions, had deprived the store proprietors of “their due process right to be free from arbitrary governmental invasion of their property,” as guaranteed by the fourteenth amendment. Plaintiffs were awarded compensatory damages in the sum of ten dollars.

Upon consideration of the record, briefs and oral arguments we are unable to say that the court’s findings of fact are clearly erroneous. Having accepted those findings we agree with the court’s conclusions of law for the reasons stated in its memorandum decision of August 9, 1973. Accordingly the judgment is affirmed.

Affirmed.