text:
    Omer J. MILES, Plaintiff-Appellee, v. SHELL OIL COMPANY, Defendant-Appellant. SHELL PIPE LINE CORPORATION, Defendant, v. TRAVELERS INSURANCE COMPANY, Intervenor-Appellee.
    No. 73-3203.
    United States Court of Appeals, Fifth Circuit.
    Aug. 5, 1974.
    Rehearing and Rehearing En, Banc Denied Nov. 1, 1974.
    Tracy Crawford, Mike Hatehell, Tyler, Tex., for defendant-appellant.
    Russell M. Baker, Joe N. Boudreaux, Jim Foreman, Dallas, Tex., for Omer J. Miles.
    Blake C. Erskine, Longview, Tex., for Travelers Ins. Co.
    Robert J. Foreman, Dallas, Tex., for plaintiff-appellee.

      Before TUTTLE, WISDOM and GEE, Circuit Judges.
   GEE, Circuit Judge:

In this Texas diversity case, Shell Oil Company appeals from a judgment, founded on a jury verdict, in favor of an intervening workman’s compensation carrier and Omer J. Miles, who was severely injured when he grasped a winch line which had become charged with electricity by contact with Shell’s 440-volt overhead line. We conclude that Shell was entitled to judgment as a matter of law and hence reverse.

Some years before Miles’ injury, Shell had constructed the line in question to an oil pumping unit south of Eagle Trucking Company’s yard, as permitted under Shell’s oil and gas lease on the premises. The lines, installed in compliance with all relevant requirements of local ordinance and state law, intruded by three or four feet upon the airspace above the fenced yard’s southwest corner. On August 3, 1967, the date of the accident, Miles had been working at the yard for about three months as an overhaul mechanic. He was thoroughly familiar with the East Texas oil patch and its ways, having spent over thirty years there in roughnecking, construction and heavy-duty mechanical work. Based on this experience, as he candidly admitted, Miles knew that electric power lines were dangerous, regardless of the amount of energy carried by them and whether insulated or not, and that to contact them with a metal object was to court injury or death. He likewise admitted that he knew of the presence of the lines in question and their general location in the immediate vicinity where he was to work, and agreed that they were open and unconcealed for all to see. And though Miles strenuously denied knowing that the lines actually crossed airspace over the truck-yard, he admitted that had he been looking he would necessarily have seen that contact would occur in the incident which caused his injury.

This incident occurred when Miles’ superior, Jack Hart, instructed Miles and a fellow-employee, Coley, to scavenge a burned-out truck and store the salvaged parts near the fence in the southwest corner of the repair lot — under the lines. Hart testified to the same knowledge of the lines and their dangerous nature as did Miles, but added that he was aware that they crossed the yard in that corner. After cutting off the heavy-duty front bumper of the hulk, which the evidence showed weighed several hundred pounds, Miles walked to the area under the lines while Coley backed the truck mounting the A-frame from which the bumper was suspended toward the storage area — and the lines. Miles, standing under the conductors, concentrated on the hot and swinging bumper and Coley on backing the truck. As Miles reached out to steady the bumper, contact was made by the upper part of the A-frame or winch cable with the lines, and when Miles touched the energized apparatus he was badly shocked.

Texas has a well-developed body of owner-occupier liability doctrine which, under Erie, we must take and leave as we find it. We have already had occasion to consider and discuss most of the portions of it which are dispositive of this case in Kelley v. General Telephone Co., 485 F.2d 1315 (5th Cir. 1973). There we were called on to consider an injury to the employee of a subcontractor who was removing an old telephone line on the defendant’s easement when a pole fell with him. Unknown to anyone, the pole had rotted through below ground level, producing an occult defect. In the course of affirming a verdict and judgment for the employee, we said:

The duties owed in Texas by an occupier of premises to an invitee are well established. In Adam Dante Corp. v. Sharpe, 483 S.W.2d 452, 454 (Tex.1972), the Texas Supreme Court said:
* * * The duty is that which is summarized in Restatement (Second) of Torts § 343 (1965) : § 343. Dangerous Conditions Known to or Discoverable by Possessor
A possessor of land is subject to liability for physical harm caused to his invitees by a condition on the land if, but only if, he
(a) knows or by the exercise of reasonable care would discover the condition, and should realize that it involves an unreasonable risk of harm to such invitees, and
(b) should expect that they will not discover or realize the danger, or will fail to protect themselves against it, and
(c) fails to exercise reasonable care to protect them against the danger.”
485 F.2d at 1318.
As the owner of the easement on which the telephone line was located, General is an occupier under Texas law. Kelley is an invitee because he was employed by an independent contractor hired by the occupier to do work on the premises. See Smith v. Henger, 148 Tex. 456, 226 S.W.2d 425 (1950).
485 F.2d at 1318.

We then discussed Texas’ Delhi-Taylor rule :

As does our case, Delhi-Taylor concerns the liability of an occupier to an employee of an independent contractor. The independent contractor, Roy Vickers Lease Service, had been hired by Delhi-Taylor to extend the easing around Delhi-Taylor’s pipelines which were used to carry various hydrocarbons from its refinery to the docks on the ship channel. While using a drag-line to uncover the pipelines, an employee of Vickers punctured one of the lines allowing a highly flammable gas to escape. Henry, the plaintiff, was welding nearby, and he was seriously burned when the drifting gas came in contact with his welding torch.
Although Delhi-Taylor had not taken proper precautions to protect Henry, it had warned both Vickers and his foreman, Smith, “that they should treat all these lines ‘as though they were loaded’ and ‘as if they were under pressure.’ ” 416 S.W. at 393. The court noted that:
“On the basis of the evidence set out, we hold that the warning given to Vickers and his foreman that the lines should be treated ‘as though they were loaded,’ when considered with their knowledge of the condition of the premises and the dangers inherent therein, was adequate to discharge Delhi-Taylor’s duty to Vickers and his foreman. This holding brings us face to face with the question of whether an adequate warning to an independent contractor or one supervising his work will discharge the duty of the landowner or occupier to warn the employees of the independent contractor; and we hold it will.”
Id. at 393. The court went on to say that:
“While an owner owes a duty to employees of an independent contractor to take reasonable precautions to protect them from hidden dangers on the premises or to warn them thereof, an adequate warning to or full knowledge by the independent contractor of the dangers should and will be held to discharge the landowner’s alternative duty to warn the employees.”
416 S.W.2d at 394.
In Delhi-Taylor the nature of the warning to the independent contractor gave him full knowledge of the specific dangers involved. The contractor and his foreman — -the person supervising the work — both knew that the lines on which they would be working were loaded. The Texas cases which have applied the Delhi-Taylor rule have followed this pattern: (1) the contractor or his supervisor have been warned in such a manner that they either have specific knowledge of the danger involved; or, (2) the contractor or his supervisor have actual knowledge, independent of a warning from the occupier, of the dangerous condition of the premises. E. g., Koppers Co. v. Haggerty, 488 S.W.2d 600 (Tex.Civ.App., Beaumont 1972, no writ history); Keeth v. Phillips Petroleum Co., 482 S.W.2d 291 (Tex. Civ.App., Amarillo 1972, writ ref’d n. r. e.) .
485 F.2d at 1320-1322.

Turning to the Delhi-Taylor opinion itself, we find additional light:

On many projects there are a number of independent contractors, each employing scores of workmen. The identities of some of the workmen will change from day to day. To impose the duty on the owner or occupier of the premises to know and to warn every workman on the project of a dangerous condition would subject him to an impossible burden. Moreover, an independent contractor owes a duty to his employees to warn them of dangers on the premises where they are required to work which are known to him. This duty was recognized in Reinle. 113 Tex. 456, 258 S.W. 803, 805. The owner or occupier should not be required to foresee and anticipate that the contractor will not discharge his duty to his own employees, and there is no sound basis for requiring that the employees should be twice warned.

416 S.W.2d at 394.

Did we remain in doubt, the Reinle case to which the Texas court refers and which it overrules in Delhi-Taylor, was one in which an employee of an independent contractor was electrocuted when a boom he was operating struck a high-voltage wire. The opinion had held that notice to the employee was requisite, though his employer had full knowledge of the danger. Delhi-Taylor, sharpened by its overruling of Reinle, is fatal to Miles’ recovery in this case.

It is undisputed that Hart, Miles’ supervisor, was familiar with the presence of the lines over Eagle’s truck-yard in the area where he sent Miles and Coley and with the danger of contacting the lines with an A-frame such as Miles and Coley were using. There was nothing latent or hidden about the lines, as there was about the rotted pole in Kelley; indeed all hands agreed they were apparent to anyone who cared to look. Shell knew nothing of the work which Hart told Miles to do and “ . . . should not be required to foresee and anticipate that the contractor will not discharge his duty to his own employees. ...”

Miles offers various arguments designed to avoid Delhi-Taylor’s thrust. It is said that Shell, an oil-and-gas operator, is not an occupier of land to which the basic legal owner-occupier matrix explicated in Kelley applies. We long ago held to the contrary and the Texas law is clearly settled on the point. Indeed, Halpeska v. Callihan Interests, Inc., 371 S.W.2d 386 (Tex.Sup.1963), one of the basic opinions establishing the matrix, involved a gas well operator.

It is next argued that the older decision of Texas-Louisiana Power Co. v. Webster, 127 Tex. 126, 91 S.W.2d 302 (1936), establishes a different rule as to easement-holding electricity transmitters. That case involved three trespassers who lost their lives by stumbling in the night over a power line which had fallen to a point two or three feet off the ground, entirely out of the easement and below statutory minimum height. In our case, the lines were above all statutory minima, had never been the subject of complaint or prior incident, and were where Shell had a right under its lease to maintain them. Webster which makes plain that a critical condition of the liability there found was that the three victims were not trespassers as to the power company’s easement since the lines were out of it, is of no aid to Miles.

Finally, Miles argues that the Delhi-Taylor doctrine applies only to employees of independent contractors suing contracting owner-occupiers. The attempted limitation of the doctrine’s application is ingenious, but fallacious. It is true that the doctrine arose on such facts and has chiefly been applied to them, since workman’s compensation laws render irrelevant almost all negligence actions by employees against their own employers, so that the employer’s duty (or want thereof) to warn his own employees of dangers known to him (or equally to them) is seldom in issue or discussed. But the Texas court’s analysis in Delhi-Taylor is cast in terms of the broad concepts of owner-occupier and business invitee generally, reasoning from these concepts to the specifics of that case; and the doctrine has on at least one occasion been applied to employees of an owner, as in our case. Big Bend Flying Service, Inc. v. Hinojos, 489 S.W.2d 694 (Tex.Civ.App. — El Paso 1973, no writ).

In short, Delhi-Taylor applies, controls, and is fatal to Miles’ recovery. It appears likely, as well, that a Texas court would hold as a matter of law that Miles assumed the risk involved here, but the clear applicability of Delhi-Taylor renders a decision of that matter unnecessary. The motions of Shell for judgment on the law should have been granted.

Reversed and rendered.

      . The evidence seems to indicate without dispute that the A-frame, which was easily adjustable, could have lifted and carried the bumper while set at a height which would have cleared the lines.

      . Delhi-Taylor Oil Corp. v. Henry, 416 S.W. 2d 390 (Tex.Sup.1967).

      . Gulf Oil Corp. v. Bivins, 276 F.2d 753 (5th Cir. 1960).

      . Miles advances essentially two factors in the accident as negating the volenti or assumed risk defense: inattention and distraction on his part. The first stems from the fact that the wires were above and perhaps behind him as Coley’s backing truck approached, out of sight and out of mind. The second is based on the approach of the hot and dangling bumper. Several recent Texas intermediate court decisions give short shrift to strikingly similar factors. Stephens v. Texas, Electric Service Co., 436 S.W.2d 572 (Tex.Civ.App. — Eastland 1969, writ ref’d n. r. e.) (goal post contacted overhead line known to decedent.; summary judgment) ; Howard v. Jackson Electric Cooperative, Inc., 430 S.W.2d 689 (Tex.Civ.App. — Waco 1968, writ ref’d n. r. e.) (employee of drilling equipment repair park climbed on rig contacting lessor’s line, which employee knew was up there; summary judgment) ; Montez v. Bailey County Electric Co-op., 397 S.W.2d 108 (Tex.Civ.App. — Amarillo 1965, writ ref’d n. r. e.) (power line over irrigation well; summary judgment).
      Illustrative of the courts’ reasoning is this passage from Stephens discussing Montez:
      The facts of the Montez v. Bailey County Electric Co-operative, supra, are very similar to those of the instant case. The proof in the Montez case showed that the plaintiff knew electricity was dangerous, knew that the power lines around and in the vicinity of the irrigation wells were dangerous, and were dangerous if contact was made with them. A summary judgment was there sustained although the plaintiff showed by his affidavit that he did not know the voltage of the electric lines, that he thought the lines were insulated, that he did not know that the lines could be blown out of place, that he was concentrating on his work and did not realize that the boom was close to the lines or that the lines were blowing. 436 S.W.2d at 576.


source: Caselaw Access Project

author: DYER, Circuit Judge:

license: Public Domain

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Robert SEELIG, a/k/a Robert Reynolds, and Michael Kleinman, Defendants-Appellants.
    No. 73-3840.
    United States Court of Appeals, Fifth Circuit.
    Aug. 8, 1974.
    Rehearing Denied Sept. 11, 1974.

      Arthur B. Stark, Miami, Fla., for Seelig.
    Gerald Kogan, Jack R. Blumenfeld, Miami, Fla., for Kleinman.
    Robert W. Rust, U. S. Atty., Michael P. Sullivan, Kerry J. Nahoom, Asst. U. S. Attys., Miami, Fla., for plaintiff-appellee.
    Before BROWN, Chief Judge, and RIVES and DYER, Circuit Judges.
   DYER, Circuit Judge:

Seelig and Kleinman appeal from their convictions for conspiracy to possess with intent to distribute cocaine in violation of 21 U.S.C.A. § 846. In addition, Kleinman appeals individually from his conviction for the substantive offense of possession with intent to distribute the contraband in violation of 21 U.S.C.A. § 841(a)(1). Kleinman challenges the latter conviction on the basis of insufficient evidence, and Seelig contends that he could not be convicted for conspiracy since he was acquitted of the substantive charge of possession. Both appellants further raise the following points: (1) that the conspiracy count must fall since an essential participant in the conspiracy was a government informant; (2) that the federal agent's lacked probable cause to make warrant-less arrests; and (3) that the agents’ forcible entry into a co-conspirator’s apartment was an unlawful intrusion under 18 U.S.C.A. § 3109. We affirm.

During the summer of 1973, Martino, a confidential informant for the Bureau of Narcotics and Dangerous Drugs (BNDD) in California, placed a number of calls to Seelig on the East Coast in an attempt to purchase cocaine. Most of the calls were made from a BNDD office and were tape-recorded. In one of their conversations, Seelig informed Martino that a shipment of cocaine had arrived in Miami and was available for sale, whereupon Martino flew to Miami to consummate the deal. Upon arrival, Martino was met by Special Agents Martin and Sweat of the BNDD’s Miami office. After discussing the anticipated transaction with the two agents, Martino made a phone call in the presence of Agent Martin to a motel in Miami Beach, and was invited by Seelig to the motel to inspect a sample of cocaine prior to delivery. At the motel Martino was introduced for the first time by Seeling to Kleinman and was allowed to examine a small quantity of cocaine. After Martino agreed to purchase five pounds of the drug, Kleinman explained that they would have to go to the North Miami Beach apartment of his contact, Cliff Perry, to complete the sale. Martino then telephoned Martin, who was posing as his partner in the transaction, told the agent that he would be travel-ling with Seelig and Kleinman to Perry’s apartment, and instructed Martin to follow their car.

At the apartment Perry brought out a one-pound bag of cocaine, and after some negotiations, went next door to obtain four more pounds of the drug. During Perry’s absence Kleinman slit open the bag and offered a small sample to Martino. When Perry returned he and Martino went down to the lobby of the apartment building, supposedly to get the money from Martin to make the pui’chase. While Perry waited in the lobby Martino informed Agent Martin, who had been waiting in his car in the parking lot, that he had observed five pounds of cocaine on the coffee table in the living room of Perry’s apartment. Martin relayed this message by radio to other agents who were waiting nearby. Shortly thereafter Perry approached Martin, believing him to be Martino’s partner, and asked him if he “had the money.” At that point Perry was arrested.

Three federal agents then proceeded up to Perry’s apartment. They knocked at the door, and Kleinman responded by-asking who was there. One of the agents answered very quietly, “Cliff.” Kleinman opened the door slightly and again asked who was there. This time the agent replied, “Federal agents,” showed his badge through the partly open door, then shoved the door completely open and entered. Kleinman and Seelig were arrested and the cocaine was seized.

We first consider Kleinman’s contention that the evidence was insufficient to convict him of possession. His arguments that he was only a “casual facilitator of a sale,” United States v. Jones, 2 Cir. 1962, 308 F.2d 26, 30, and that constructive possession cannot be inferred from “mere presence in the area ... or mere association with the person who does control the drug,” United States v. Stephenson, 5 Cir. 1973, 474 F.2d 1353, 1355, are undercut by the facts of this case. Perry, the undisputed dealer, was not merely a friend of Kleinman, but the two had a business relationship in dealing in drugs. Although Martino made the initial contact not with Kleinman but with Seelig, Perry had contacted Kleinman to inform him that cocaine was available for sale. Moreover, Kleinman’s dominion and control of the contraband were conclusively demonstrated when he opened the bag of cocaine in Perry’s apartment for Martino’s inspection. Based on these facts, the district court could reasonably infer that Kleinman was in constructive possession of the cocaine during Perry’s absence from the apartment. United States v. Stephenson, supra, at 1355.

We find equally little merit in Seelig’s contention that he could not be convicted of conspiracy since he was acquitted of the substantive offense. That argument was specifically rejected in United States v. Carlton, 5 Cir. 1973, 475 F.2d 104, 106, cert. denied, 414 U.S. 842, 94 S.Ct. 100, 38 L.Ed.2d 80.

The first common assertion of Seelig and Kleinman is that they could not be convicted of conspiracy since a government agent was an essential party to the planned distribution of concaine. Their argument is that since Martino was supposed to take the contraband back to California for distribution, and since he had no intention of carrying through with the scheme, they cannot be convicted of conspiring to distribute cocaine.

Sears v. United States, 5 Cir. 1965, 343 F.2d 139, relied upon by appellants, is wholly inapplicable to the case now before us. In Sears we held that there can be no indictable conspiracy when the only other supposed co-conspirator is a government informant. In the case sub judice, four persons were indicted and three convicted for conspiracy, hence the appellants lack the requisite factual basis for reliance on Sears.

We are also unpersuaded that we should adopt the rationale of King v. State, Fla.1958, 104 So.2d 730, and Woo Wai v. United States, 9 Cir. 1915, 223 F. 412, as the appellants so strongly suggest. These cases contain broad language to the effect that a conspiracy conviction cannot result where an “essential” act to the consummation of the substantive offense is to be performed by a government agent. Such an approach, we think, is inconsistent with the basic principle that a conspiracy is proved when it is established that two or more persons agreed to commit an offense and one of them engaged in an overt act in furtherance of the agreement. See, e. g., United States v. Falcone, 1940, 311 U.S. 205, 61 S.Ct. 204, 85 L.Ed. 128. To the extent that King and Woo Wai are incompatible with this statement of the law, we decline to follow them. In this case the evidence conclusively demonstrates that Seelig and Kleinman agreed to supply cocaine to Martino for distribution, and subsequently took steps to carry out the scheme. The fact that a government informant was to effect the actual distribution of the drug does not extirpate their liability for conspiring to violate the law.

The appellants next contend that the agents lacked probable cause for the warrantless intrusion into the apartment. This argument is premised on the assertion that since the Miami agents had not previously used Martino as a confidential informant, the information obtained from him failed to meet the requirements of reliability established in Spinelli v. United States, 1969, 393 U.S. 410, 89 S.Ct. 584, 21 L.Ed.2d 637, and Aguilar v. Texas, 1964, 378 U.S. 108. 84 S.Ct. 1509, 12 L.Ed.2d 723. Assuming, without deciding, that the standard of reliability for a confidential informant is the same in the context of an entry for an arrest as for a search, we have previously pointed out that “[p]roof of past reliability is but one way of buttressing an informant’s credibility.” United States v. Squella-Avendano, 5 Cir. 1971, 447 F.2d 575, 582, cert. denied, 404 U.S. 985, 92 S.Ct. 450, 30 L.Ed.2d 369. In this ease the Miami agents knew that Martino’s calls to Seelig were from the California office of the BNDD and had been tape-recorded. They had also discussed the case with him for some time after his arrival in Miami, and had listened to his part of the conversation with Seelig to arrange the final details of the transaction. Martino’s reliability was further corroborated by Perry’s question about “money” to Agent Martin in the lobby of the apartment building. We conclude that these facts satisfied the Aguilar-Spinelli requirements of reliability, and that the information supplied by Martino established probable cause for the warrantless entry into the apartment.

Appellants’ final and most substantial contention is that even if the agents had probable cause, they failed to comply with 18 U.S.C.A. § 3109, which provides in pertinent part:

The officer may break open any outer or inner door or window of a house, or any part of a house, or anything therein, to execute a search warrant, if, after notice of his authority and purpose, he is refused admittance.

Although the statute facially applies only to searches effected pursuant to a warrant, the district court correctly held the statute applicable to this warrantless intrusion. Miller v. United States, 1958, 357 U.S. 301, 309, 78 S.Ct. 1190, 2 L.Ed.2d 1332. We also agree that the force used by the officers to gain entry in this instance invoked the provisions of section 3109. Although the agents employed a ruse to cause the door to be opened slightly, it is clear that force was used to physically enter the apartment. See Sabbath v. United States, 1968, 391 U.S. 585, 88 S.Ct. 1755, 20 L.Ed.2d 828; Smith v. United States, 5 Cir. 1966, 357 F.2d 486, 488 n. 1.

Both the appellants and the Government assert that Miller v. United States, supra, is authority for their respective positions. That is, Seelig and Kleinman argue that since the agents announced only their identity and not their purpose as well, the officers failed to comply with the requirements of section 3109 and that, therefore, Miller requires a reversal of their convictions because of the admission of evidence obtained as a result of the illegal entry. The Government concedes that the statutory requirements were not met, but contends that compliance was excused because of an exception recognized in Miller. We agree with the Government.

The Miller Court noted that a failure to give an express announcement of purpose could be excused if “the facts known to officers would justify them in being virtually certain that the [occupant] already knows their purpose so that an announcement would be a useless gesture.” Id. at 310 of 357 U.S., at 1196 of 78 S.Ct. The “useless gesture” exception depends on the existence of particular facts which excuse compliance with the statute. United States v. Wylie, 1972, 149 U.S.App.D.C. 283, 462 F.2d 1178; Der Garabedian v. United States, 5 Cir. 1966, 372 F.2d 697. Our consideration of the exception begins with the facts of the Miller decision, since the Court there concluded that failure to meet the statutory requirements could not be excused.

Miller was a narcotics dealer who had been given marked money by a government informant in a drug transaction. When the police came to arrest Miller at his apartment, he was unaware that he possessed marked money, and therefore the police had no reason to believe that Miller knew why they were at his door. The mere announcement of police identity was insufficient to apprise Miller of the purpose of the visit, hence an announcement of purpose in those circumstances would not have been a “useless gesture.” By contrast, in the case sub judiee the agents had information from a reliable informant that Kleinman and Seelig were in the midst of a drug transaction. Everyone, the agents and the appellants, knew that a substantial quantity of cocaine was located on the table in the living room of the apartment. Under these circumstances the agents were justified in being virtually certain that the occupants of the apartment would know the purpose of the visit as soon as the persons at the door identified themselves as federal agents. We conclude that this case is one in which compliance with the announcement-of-purpose provision of section 3109 must be excused as a useless gesture.

The judgment of conviction is free of error and is

Affirmed.

      . Also present at the motel was James Perrara, who was named in the same indictment as Seelig and Kleinman. He was acquitted by the district court.

      . Perry was also named in the indictment, see note 1, supra, and he later pleaded guilty to the charges,

      . Only the one-pound bag of cocaine which was still on the table was admitted into evidence. The remainder which was found by the agents' in a hall closet was suppressed by the district court.


text:
    Genoveva R. SOSA, Plaintiff-Appellant-Cross Appellee, v. David FITE, d/b/a Specialty Sales & Service Co., et al., Defendants, Tropical Savings and Loan Association, Defendant-Appellee-Cross Appellant, Esperanza Sosa Hernandez et al., Intervenors.
    No. 73-3856.
    United States Court of Appeals, Fifth Circuit.
    Aug. 1, 1974.
    Rehearing Denied Aug. 29, 1974.

      J. L. Covington, Edinburg, Tex., Gordon L. Briscoe, Harlingen, Tex., for plaintiff-appellant.
    Ralph L. Alexander, John F. Rowin, Edinburg, Tex., for defendant-appellee.
    Carlos F. Vela, Harlingen, Tex., for Esperanza Sosa Hernandez, et al.
    Curtis Bonner, Harlingen, Tex., for Cabco, Inc.
    Before BROWN, Chief Judge, and RIVES and DYER, Circuit Judges.
   DYER, Circuit Judge:

Genoveva Sosa appeals from the district court’s judgment permitting her to rescind a home improvement contract violative of the Truth-in-Lending Act, 15 U.S.C.A. § 1601 et seq., but imposing an award against her for the balance owing on the invalid contract and impressing a judgment lien to secure the outstanding indebtedness. In a cross-appeal the lending institution which financed the home improvement contract, Tropical Savings and Loan, contests the court’s award to Sosa of $750.00 in attorneys’ fees. We affirm the granting of rescission and the award of attorneys’ fees, but reverse the monetary judgment against Sosa and accompanying judgment lien on her realty.

The unnecessarily lengthy history of this litigation began unremarkably in August 1969 when David Fite, a home improvement contractor of dubious repute, entered into a contract with Mrs. Sosa to provide and install aluminum siding on her house. Included in the various contract documents, none of which Sosa grasped as she was unversed in the English language, was an instrument creating a deed of trust in favor of Tropical to secure Sosa’s payment of the total sales price. The secured nature of this transaction triggered the operation of section 1635 of the Truth-in-Lending Act, which grants consumers who suffer the creation of any security interest with respect to realty used as a residence an absolute right of rescission in instances where the creditor fails to make detailed disclosures of credit- terms required by the Act. Much to their subsequent dismay, neither Fite nor Tropical ever provided Sosa with the full panoply of statutorily required information, either before or after the work was undertaken. Despite her creditors’ fatal omissions, Sosa faithfully remitted monthly payments to Tropical over a considerable period of time, until her disenchantment with Fite’s shoddy craftsmanship culminated in June 1971 in her refusal to make further payments. Tropical then foreclosed against Sosa’s interest in the realty under the trust deed and sold the property at a foreclosure sale to a third party. At this point Sosa invoked her statutory right of rescission with respect to the original contract by directing letters to this effect to both Fite and Tropical in 1971. When no responsive steps were taken by any of the creditors to undo the transaction, Sosa filed suit in the court below to enforce her election to rescind the contract. The court erroneously concluded at first that it lacked jurisdiction over the subject matter, but after this misimpression was corrected on appeal, Sosa v. Fite, 5 Cir. 1972, 465 F.2d 1227, the court upheld her election of rescission and accordingly invalidated the foreclosure sale, but then entered judgment in favor of the creditors for $864.86 and impressed a judgment lien on Sosa’s realty interest to secure this amount. Unhappy with what she perceives as half a loaf, Sosa is before us again and strenuously argues that the court’s judgment against her is at odds with the express directions of the Truth-in-Lending Act. We agree.

RIGHT OF RESCISSION

With rigorous regard for providing consumers with full disclosure of the terms and conditions of credit purchases, Congress fashioned an elaborate system of remedies and penalties to effectuate compliance with the Truth-in-Lending Act and to redress grievances stemming from its violation. Our concern with this detailed remedial machinery is limited, however, to the rescission device created by section 1635 of the Act. In substance, section 1635 vests a continuing power of rescission in the credit purchaser until three days following delivery of statutorily prescribed disclosures whenever as an incident of the credit transaction a security interest is acquired in the debtor’s realty which he uses as his residence. The open-ended nature of the rescission right is clearly illustrated in the present case, since by the time Sosa sought to abrogate the transaction Fite had long since completed his handiwork and, indeed, Sosa’s interest had been sold out from under her by the trustee upon her default. Notwithstanding this display of patience with the ill-advised transaction, Sosa was at liberty to rescind the contract at her pleasure so long as the requisite disclosures of credit terms were not forthcoming. See, e. g., Wachtel v. West, 6 Cir. 1973, 476 F.2d 1062, 1065; Charnita, Inc. v. F.T.C., 3 Cir. 1973, 479 F.2d 684, 687; Palmer v. Wilson, N.D.Cal.1973, 359 F.Supp. 1099, 1102. This much is generally agreed to by everyone, although Tropical lamely protests that Sosa’s belated rescission, by failing to cite chapter and verse as to specific Truth-in-Lending violations, was not a “good faith” rescission. The difficulty arises in regard to the respective obligations of creditor and debtor when the latter invokes the ultimate consumer remedy of rescission. In the present case, the district court was of the view that Sosa, albeit entitled to rescission, was nonetheless obligated to pay the creditors an additional $864.86.

Under the provisions of section 1635(b), when the debtor exercises the rescission right, he is no longer liable for any finance or other charge, and any security interest acquired by the creditor in the debtor’s residential realty becomes void. At this juncture, the creditor incurs several responsibilities. Within ten days after receipt of a rescission notice, the creditor is obligated, first, to return any downpayment or earnest money and, second, to take any appropriate steps to reflect the termination of the security interest. According to the statute, “[u]pon the performance of the creditor’s obligations” in this regard, the debtor shall tender to the obligee either the property or the reasonable value thereof if return of the property would be inequitable or impracticable. The debtor’s duty to tender is not limitless, however, for the property vests in the debtor without any obligation to pay if the creditor fails to take possession of the property within ten days of tender.

In view of this statutory scheme, several facts with respect to the SosaFite transaction take on particular relevance. First, included in Sosa’s notice of rescission was an express offer to return the aluminum siding, an overture which elicited no response whatsoever from the creditors. Second, neither Fite nor Tropical, both of whom were statutory “creditors,” see 15 U.S.C.A. § 1602(f), ever performed their statutory obligations imposed by section 1635(b) since, for one, they utterly failed to take any steps to reflect termination of the security interest in Sosa’s property. The significance of Sosa’s proffered return and the creditors’ failure to comply with clear statutory directives is that Sosa did in fact attempt to make a tender, even though under a literal reading of the statute the creditors were unentitled to any tender at all by virtue of their failure to perform their express obligation of expurgating records of references to the invalidated security interest. See Palmer v. Wilson, supra. at 1102.

It is true that the statute contemplates an orderly progression of specific events, culminating in the debtor’s tender and the creditor’s recoupment, which never came to pass in this case. Specifically, section 1635(b) envisions responsive action on the creditor’s part to a rescission notice, after which the debtor then becomes obligated to tender either the property or a sum reflecting its reasonable value. This precise statutory scheme was abhorted in this case due to the creditors’ failure to comply with statutory requirements, hence Sosa’s responsibility to make the specific statutory tender was excused by the creditors’ omissions.

To hold otherwise would create a gross anomaly, for no tender in the exact scheme envisioned by the statute could ever be effected by a debtor in the most egregious of circumstances, namely when a creditor steadfastly refuses to perform his express obligations upon receiving the notice of rescission. Congress scarcely could have contemplated such a disruptive commercial stand-off. We therefore conclude that under the circumstances of this case the debtor’s obligation to restore the creditor to the status quo ante was discharged by an offer accompanying notice of rescission, since the creditor within ten days of notification failed to return all monies previously paid by the debtor or to reflect dissolution of the security interest.

Our disposition of this case is not altered by the recent decision in Ljepya v. M. L. S. C. Properties, N.D.Cal. 1973, 353 F.Supp. 866. In that ease, the court permitted a borrower to rescind a tainted loan transaction violative of Truth-in-Lending on condition of repaying the principal, without interest, to the creditor within ten days of judgment. There is no indication in that case that the borrowers had ever attempted to return the proceeds of the loan, but instead the debtors were seeking simply to extricate themselves from the unwanted transaction. In that situation, it would have been consonant with the statute only for the debtors to remit to the creditor the loan proceeds in order to rescind the agreement, inasmuch as section 1635(b) is clearly designed to restore the parties as much as possible to the status quo ante. But in the case sub judice, Sosa’s express offer of restoration fell on deaf ears, thereby rendering applicable, upon the creditor’s failure to comply with section 1635(b), the plain directive of the statute: “If the creditor does not take possession of the property within ten days after tender by the obligor, ownership of the property vests in the obligor without obligation on his part to pay for it.” 15 U.S.C.A. § 1635(b) (emphasis supplied).

Congress’ intended operation of the statute, as evidenced by the 1635(b) creditor-forfeiture provision, therefore clearly calls for a debtor windfall if the creditor does not set about to rectify his earlier nondisclosures in the manner envisaged by the statute. In fact, the Act flatly provides that if his creditor continues in his untoward ways, the debtor incurs no obligation to pay for property which he is at the same time entitled to keep. That this result was intended is clear beyond peradventure, for one of the measure’s principal sponsors in the House stated: “[I]f the seller does not come back to pick up [his property] after a 10-day period [following the notice of rescission], the buyer can keep this item and he does not even have to pay for it. . . .” 114 Cong.Rec. 14398 (1968) (remarks of Congresswoman Sullivan) .

But reaching this conclusion does not end our analysis. With respect to the Sosa-Fite transaction, the district court’s judgment left intact all that had gone before, in addition to imposing a new, independent monetary obligation on the debtor. At the time of rescission Sosa had already paid a total of $1,335. 14 to Fite and Tropical under the contract. Statutory rescission clearly envisions the creditors’ return of this entire amount to the debtor within ten days of notification of rescission, at which point the debtor then becomes obligated to tender the property or its “reasonable value.” The Act provides in pertinent part: “Within ten days after receipt of a notice of rescission, the creditor shall return to the obligor any money given as earnest money, downpayment, or otherwise. . . .” (Emphasis supplied). This particular language suggests, of course, Congress’ assumption that rescission would be effected at a relatively early stage of the transaction when the debtor’s only payments to the creditor were in some form of downpayment or earnest money deposit. Nonetheless, section 1635(b) explicitly allows rescission indefinitely until such time as the requisite disclosures are actually made, and it is in light of this continuing power of rescission that the phrase “or otherwise” must be interpreted. For if a hypothetical debtor rescinded an agreement after tendering a down-payment and making two monthly installments, an interpretation of the provision to the effect that the debtor was entitled only to a return of his downpayment, whereas his two installments would be forfeited, would do grave violence to the statutory language, particularly if the debtor elected to return the property and if such would be fair and practicable. The only distinction between Sosa and this hypothetical debtor is, of course, that Sosa delayed longer in deciding to invoke the rescission right. There is, however, no difference in principle. Therefore, upon being notified of her rescission, Fite and Tropical were obligated to return all monies Sosa had paid, with the statutorily embodied expectation that upon their further compliance with 1635(b), Sosa would indisputably be obligated to tender either the property or its reasonable value. The creditors, of course, failed to carry out any of their statutory duties, and thus their lament of any inequity being visited upon them is utterly unpersuasive, for the power was completely theirs to prevent this parade of creditor horribles from ever occurring.

Indeed, Fite and Tropical are by no means the unsuspecting victims of some complex regulatory entrapment, for they were at all times on clear notice of the possible forfeiture of both money and property resulting from their pattern of continuous misconduct. Regulations promulgated by the Federal Reserve Board expressly provide that no performance of a consumer credit contract should be undertaken until the creditor has reasonably satisfied himself that the customer has not exercised his right of rescission. 12 C.F.R. § 226.9(c) (1974). Moreover, the legislative history suggests Congress’ awareness that a contractor would “ordinarily be taking a risk” if he undertook performance of the contract before full disclosure was made. 114 Cong.Rec. 14388 (1968) (remarks of Congresswoman Sullivan).

We therefore conclude that Sosa cannot lawfully be required to make further payments, and thus the lien impressed by the district court to secure this supposed indebtedness must fall as well, and that she is entitled to full restitution of all amounts previously paid to Fite and Tropical pursuant to the contract.

ATTORNEYS’ FEES

In cross-appealing from the district court’s award of attorneys’ fees, Tropical urges us to overturn the court’s judgment in this respect on the two-pronged basis that congressional silence concerning attorneys’ fees in rescission actions is of controlling significance and that the judiciary should therefore not legislate interstitially where Congress has failed to act. Tropical strenuously argues that Congress’ express allowance of attorneys’ fees in actions under the civil penalty provision of section 1640(a)(2) of the Act, a section clearly inapplicable to this case, compels application of the maxim of statutory construction, “Expressio unius est exclusio alterius.” We do not think that merely verbalizing this sound principle of construction ends our investigation.

Instead, we begin with the settled proposition that congressional goals underlying the Truth-in-Lending Act include the creation of “a system of ‘private attorney generals’ who will be able to aid the effective enforcement of the Act.” Thomas v. Myers-Dickson Furniture Company, 5 Cir. 1973, 479 F.2d 740, 748. See also Ratner v. Chemical Bank New York Trust Company, S.D.N.Y.1971, 329 F.Supp. 270, 280. Thus, an individual suit on a private cause of action under Truth-in-Lending may nonetheless have public dimensions, since successful efforts directed toward vindicating private rights will aid in bringing about compliance with the regulatory scheme. See Buford v. American Finance Company, N.D.Ga.1971, 333 F.Supp. 1243, 1248. Additional public-related benefits are provided by the stare decisis effect successful litigation may have entitling others to statutorily provided relief. See Sprague v. Ticonic National Bank, 1939, 307 U.S. 161, 166, 59 S.Ct. 777, 83 L.Ed. 1184. Sosa has therefore effectuated a strong congressional policy and is entitled to attorneys’ fees, in the exercise of the court’s discretion, even though the statute sued under does not expressly provide for such an award. See, e. g., Mills v. Electric Auto-Lite Co., 1970, 396 U.S. 375, 390, 90 S.Ct. 616, 24 L.Ed.2d 593; Long v. Georgia Kraft Co., 5 Cir. 1972, 455 F.2d 331, 336; Lee v. Southern Home Sites Corp., 5 Cir. 1971, 444 F.2d 143; Sims v. Amos, M.D.Ala.1972, 340 F.Supp. 691, 693, aff’d, 1972, 409 U.S. 942, 93 S.Ct. 290, 34 L.Ed.2d 215. Moreover, the fact that other parts of the same statute do provide for attorneys’ fees does not foreclose an award under provisions which are silent on the matter, so long as the suit is one which vindicates congressional policy. Mills, supra, 396 U.S. at 390-391, 90 S.Ct. 616; Smolowe v. Delendo Corporation, 2 Cir. 1943, 136 F.2d 231, 241, cert. denied, 1943, 320 U.S. 751, 64 S.Ct. 56, 88 L.Ed. 446.

Indeed, it is unsurprising that the rescission provision of the Truth-in-Lending Act does not address the issue of attorneys’ fees, for that section, unlike the civil penalty provision of section 1640 which does allow for such fees, does not even contemplate the necessity of judicial intervention to effect rescission. On the contrary, the section creates legal remedies which have binding legal effect absent any court action. Thus, under section 1635, a debtor’s notice of rescission operates ipso facto to abrogate the contract, without the necessity for judicial acquiescence or ratification. Section 1640, on the other hand, provides for a system of monetary penalties which can only be implemented by the courts, hence the relevance of litigation costs in enforcing civil penalties was abundantly clear to Congress. In sum, Sosa has been forced to resort to federal court only because the creditors refused to recognize and abide by the plain operation of the rescission remedy, which should have been afforded self-operating effect without the need for judicial involvement.

Finally, in light of Sosa’s successful prosecution of this cause, we are mindful that the district court may also award additional attorneys’ fees for a meritorious appeal in Truth-in-Lending litigation, Thomas v. Myers-Dickson Furniture Company, supra, 479 F.2d at 748. Any additional award which may be made should be determined by the district court upon remand.

Affirmed in part; reversed in part; and remanded.

      . Neither Fite nor Tropical lias cross-appealed the district court’s findings of Truth-in-Lending violations in connection with the underlying transaction. See Killings v. Jeff’s Motors, Inc., 5 Cir. 1974, 490 F.2d 865, 866.

      . This figure was apparently derived on the basis of Sosa’s understanding of what the total contract price was, namely $2,200. The written agreement, however, provided for a total price of $5,324.16, payable in 96 monthly installments of $55.46 each. Notwithstanding the written agreement, the court entered a monetary judgment reflecting the difference between what Sosa had actually paid and the amount she originally thought was owing on the contract.

      . Section 1635 provides in pertinent part:
      (a) Except as otherwise provided in this section, in the case of any consumer credit transaction in which a security interest is retained or acquired in any real property which is used or is expected to be used as the residence of the person to whom credit is extended, the obligor shall have the right to rescind the transaction until midnight of the third business day following the consummation of the transaction or the delivery of the disclosures required under this section and all other material disclosures required under this part, whichever is later by notifying the creditor, in accordance with regulations of the Board of his intention to do so. The creditor shall clearly and conspicuously disclose, in accordance with regulations of the Board, to any obligor in a transaction subject to this section the rights of the obligor under this section. The creditor shall also provide, in accordance with regulations of the Board, an adequate opportunity to the obligor to exercise his right to rescind any transaction subject to this section.
      (b) When an obligor exercises his right to rescind under subsection (a) of this section, he is not liable for any finance or other charge, and any security interest given by the obligor becomes void upon such a rescission. Within ten days after receipt of a notice of rescission, the creditor shall return to the obligor any money or property given as earnest money, downpayment, or otherwise, and shall take any action necessary or appropriate to reflect the termination of any security interest created under the transaction. If the creditor has delivered any property to the obligor, the obligor may retain possession of it. Upon the performance of the creditor’s obligations under this section, the obligor shall tender the property to the creditor, except that if return of the property in kind would be impracticable or inequitable, the obligor shall tender its reasonable value. Tender shall be made at the location of the property or at the residence of the obligor, at the option of the obligor. If the creditor does not take possession of the property within ten days after tender by the obligor, ownership of the property vests in the obligor without obligation on his part to pay for it.

      . One court lias suggested that since rescission is an equitable remedy, the defense of laches may be available to a creditor if the debtor who enjoys the use of the property exchanged in the transaction sleeps on his statutory rights. Wachtel v. West, 6 Cir. 1973, 476 F.2d 1062, 1065,. cert. denied, 1973, 414 U.S. 874, 94 S.Ct. 161, 38 L.Ed.2d 114. Without addressing this issue, we simply note that in any event there is no indication that this potential defense was ever interposed by the creditors, nor do they press such an argument on appeal.

      . Ironically, Tropical itself fails to cite authority for this attempted engrafting of new requirements with respect to the section 1635 notice of rescission, an unsurprising failure Since no such authority exists.

      . By so holding, we do not suggest that ordinarily a debtor’s tender may accompany notice of rescission and thereby begin the ten-day period within which the creditor can recover the property or its reasonable value. As previously indicated, the statute contemplates a tender by the debtor after the creditor has performed his duties, within ten days, of returning all payments and reflecting the lien’s termination. But here the creditor never discharged these responsibilities, much less within ten days, and therefore, assuming arguendo that a debtor must nonetheless at least offer to restore the creditor to the status quo (an assumption which is by no means necessarily correct, see Palmer v. Wilson, supra, at 1102), this responsibility is amply fulfilled by an initial tender accompanying notice of rescission, unless the creditor within a ten-day period complies with § 1635(b). In the latter event, the creditor then may well be entitled to the precise statutory tender, or at least to another ten-day period within which to recover the property or demand its reasonable value.

      . Again, under the precise wording of the statute the debtor becomes obligated to tender the property or its reasonable value only “[u]pon the performance of the creditor’s obligations. . . .” 15 U.S.C.A. § 1635(b). See Palmer v. Wilson, supra, 359 F.Supp. at 1102.

      . Section 1640(a) provides:
      (a) Except as otherwise provided in this section, any creditor who fails in connection with any consumer credit transaction to disclose to any person any information required under this part to be disclosed to that person is liable to that person in an amount equal to the sum of
      (1) twice the amount of the finance charge in connection with the transaction, except that the liability under this paragraph shall not be less than $100 nor greater than $1,000 ; and
      (2) in the case of any successful action to enforce the foregoing liability, the costs of the action together with a reasonable attorney’s fee as determined by the court.

      . Section 1640(e) provides for a one-year statute of limitations, which bars any prayer by Sosa thereunder, inasmuch as the transaction was consummated more than one year prior to suit. Chevalier v. Baird Savings Ass’n, E.D.Pa.1974, 371 F.Supp. 1282, 1284.


author: PER CURIAM:

text:
    Joyce R. JACK, Plaintiff-Appellant, v. AMERICAN LINEN SUPPLY COMPANY, Defendant-Appellee.
    No. 73-2840
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    July 29, 1974.

      Thomas J. Long, Gulfport, Miss., for plaintiff-appellant.
    Frederick A. Kullman, Michael S. Fawer, New Orleans, La., W. Rayford Jones, Gulfport, Miss., for defendant-appellee.
    Before BROWN, Chief Judge, and THORNBERRY and AINSWORTH, Circuit Judges.

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

   PER CURIAM:

Appellant Joyce R. Jack sued the American Linen Supply Co., both as an individual and as a class representative, alleging racial discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C.A. § 2000e et seq. The district court ruled that the plaintiff had failed to show qualification of the suit as a class action under F.R.Civ. P. 23 and ordered the suit to proceed solely as an individual action.. After a hearing the court entered an opinion holding against Jack in every respect and rendered judgment for American Linen. We affirm the judgment regarding the individual claim but vacate and remand with regard to the class action.

At the time she was fired Mrs. Jack was working in American Linen’s flat ironing department as part of a four woman crew operating flatiron number two. On February 4, 1971, Thomas Reed, the company’s production manager, instructed the four women, as he had in the past, to follow the ironing procedures previously established by experts hired by American Linen. Mrs. Jack argued with Mr. Reed, contending that her method of doing the work was better than the company’s method. After a heated discussion in which, by her own admission, Mrs. Jack used some obscene language, Mr. Reed told Mrs. Jack she could either do the work as she. was instructed to do it or punch the clock. Electing the latter alternative, she departed the premises.

After investigating the incident and the overall question of racial discrimination at the American Linen plant, the Equal Employment Opportunity Commission determined that there was reasonable cause to believe that American Linen maintains racially segregated job categories but no reasonable cause to believe that Mrs. Jack was discharged because of her race nor to believe that American Linen harasses blacks because of their race. The district court essentially agreed, finding that Mrs. Jack’s discharge was not for racial reasons and that the alleged racial discrimination in job classification was irrelevant to Mrs. Jack’s individual claims because she had never applied for a “white” job in either the office or the transportation department. There is ample evidence, in the form of testimony from Mr. Reed and from Mrs. Jack herself, to support the finding that Mrs. Jack’s dismissal was not due to her race but rather because of her repeated refusals to do her work as instructed and her insubordinate, aggressive conduct on the day of her dismissal. The finding is not clearly erroneous, and we therefore affirm the dismissal of Mrs. Jack’s individual claim.

Mrs. Jack attempted to represent the class of present and potential future black employees of American Linen who have been and will continue to be affected by the alleged discriminatory practices. In response to the district court’s request, Mrs. Jack submitted affidavits in support of class action maintainability, but those affidavits have not been included in the record. The court ruled that the affidavits did not support the maintenance of a class action without explaining which of the requirements of a class action under F.R.Civ.P. 23 were unmet.

The only hint of the reasoning behind the dismissal of the class action is the court’s statement in its opinion dismissing the individual action that “[t]here are no numerous members of any alleged class which could possibly be represented by this plaintiff in this case.” This might indicate either that the district court felt that the alleged class is not so numerous that joinder of all members is impracticable, as required by Rule 23(a)(1), or that the court felt that Mrs. Jack was not a proper representative of the class as required by Rule 23(a)(4). However, if the figures in the report of the Equal Employment Opportunity Commission are accurate, there are fifty-one blacks presently employed by American Linen. The alleged class also includes unnamed, unknown future black employees who will be affected by American Linen’s discriminatory policies, and joinder of unknown individuals is certainly impracticable. Thus the requirements of Rule 23(a)(1) would appear to be met here. 7 C. Wright & A. Miller, Federal Practice and Procedure: Civil § 1762. Also, as a former black employee, Mrs. Jack would appear to be a member of the alleged class and a proper representative to press a Title VII racial discrimination claim, despite the fact that her own individual claim is not a winning one. Huff v. N. D. Cass Co., 5 Cir. 1973, 485 F.2d 710 (en banc). Thus neither of the hinted reasons for the district court’s dismissal of the class action appear to be adequate.

We suffer from a lack of information here. The factual basis for the class action is not clear, since plaintiff’s affidavits are not in the record. The reasons for the district court’s dismissal of the class action are not made explicit, and the hinted reasons are not sufficient to support an affirmance of his action. In our view the only just disposition is to vacate the dismissal of the class action and remand to the district court for reconsideration, as we did in Huff v. N. D. Cass, supra.

Affirmed in part, vacated and remanded in part.


author: McENTEE, Circuit Judge.

text:
    NATICK PAPERBOARD CORP. and Crown Paperboard Co., Inc., Plaintiffs, Appellants, v. Caspar W. WEINBERGER, Secretary of Health, Education and Welfare, and Alexander M. Schmidt, Commissioner of Food and Drugs, Defendants, Appellees.
    No. 74-1035.
    United States Court of Appeals, First Circuit.
    Heard May 6, 1974.
    Decided June 3, 1974.
    Robert J. DeGiacomo, Washington, D. C., with whom Endicott Peabody, John T. Schell, Christopher A. Hart, and Peabody, Rivlin, Lambert & Dennison, Washington, D. C., were on brief, for appellants.
    Robert V. Allen, Atty., Consumer Affairs Section, Dept, of Justice, with whom Thomas E. Kauper, Asst. Atty. Gen., Antitrust Div., Dept, of Justice, Gregory B. Hovendon, Chief, Consumer Affairs Section, Dept, of Justice, Peter Barton Hutt, Asst. Gen. Counsel, Food and Drug Div., Dept, of H.E.W., and Charles J. Raubicheck, Atty., Food and Drug Div., Dept, of H.E.W., for appellees.
    Before COFFIN, Chief Judge, Mc-ENTEE and CAMPBELL, Circuit Judges.
   McENTEE, Circuit Judge.

On July 6, 1973, the Commissioner of Food and Drugs published a new regulation intended to limit the presence in human and animal foods of certain toxic chemicals known collectively as poly-chlorinated biphenyls (PCB’s). Among other things, the new regulation prohibited PCB residues of more than ten parts per million (ppm) in most paper food-packaging materials. 38 Fed.Reg. 18096, 18101-02, (1973) (to be codified at 21 C.F.R. § 122.10(a)(9).

Appellants are manufacturers of paper food-packaging materials. They and others filed objections to the new regulation insofar as it affected their product. By statute, see 21 U.S.C. § 371(e) (2) (1970), the filing of the objections automatically stayed enforcement of the challenged portion of the regulation. However, the Commissioner then announced that until he reached a final decision on the objections he would attempt to enforce de facto compliance with the new regulation by recommending the seizure of any paper food-packaging materials shipped in interstate commerce after September 4, 1973, which contained more than ten ppm of PCB’s, on the ground that they were “adulterated.” 38 Fed.Reg. 22794 (1973). A separate statute grants the Commissioner authority to recommend such seizures in specified circumstances. 21 U.S.C. § 334 (1970).

Appellants brought the instant action seeking injunctive and declaratory relief against the announced seizures. They contended that their paper food-packaging materials were not “food” within the meaning of the Federal Food, Drug, and Cosmetic Act, and therefore the Commissioner had no authority to seize the materials, whatever his reasons. The district court did not reach this issue. Instead, it held that it lacked jurisdiction to grant either the injunctive or declaratory relief sought, and on that basis dismissed the complaint. 367 F.Supp. 885 (D.Mass.1973). For the reasons that follow, we affirm as to injunctive relief but reverse as to declaratory relief.

In holding that it lacked jurisdiction to enjoin the recommended seizures, the district court correctly relied upon the Supreme Court’s decision in Ewing v. Mytinger & Casselberry, Inc., 339 U.S. 594, 70 S.Ct. 870, 94 L.Ed. 1088 (1950), rev’g 87 F.Supp. 650 (D.D.C. 1949). There, a three-judge district court had enjoined the government from carrying out recommended seizures of a product which FDA scientists deemed “misbranded.” The Supreme Court reversed, holding that under § 334 the district court lacked jurisdiction to review the FDA’s administrative findings prior to the actual institution of seizure proceedings. Id. at 600-602. The Court based this conclusion on the terms of the statute and the policy behind it:

“The purpose of the multiple seizure provision is plain. It is to arrest the distribution of an article that is dangerous, or whose labeling is fraudulent or misleading, pending a determination of the issue of adulteration or misbranding. The public therefore has a stake in the jurisdictional issue before us. If the District Court can step in, stay the institution of seizures, and bring the administrative regulation to a halt until it hears the case, the public will be denied the speedy protection which Congress provided by multiple seizures.”

Id. at 601. The Ewing Court further held that the statutory scheme, thus construed, did not violate the due process clause because the FDA’s determination that seizures should be effected was merely a “preliminary stage” in the statutory process. Id. at 598.

“Whether a suit will be instituted depends on the Attorney General, not on the administrative agency. He may or may not accept the agency’s recommendation. If he does, seizures are made and libels are instituted. But the seizures and suits are dependent on the discretion of the Attorney General.”

ld. at 599. See also Developments in the Law — The Federal Food, Drug, and Cosmetic Act, 67 Harv.L.Rev. 632, 705 n. 590 (1954).

Appellants contend that Ewing is distinguishable from the instant case and that in any event its authority has been undercut by the Supreme Court’s more recent decision in Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967). We disagree as to both contentions.

First, although there are some differences between Ewing and the instant case, these do not warrant a different outcome. Appellants stress that in Ewing the plaintiffs challenged only the scientific findings of the FDA whereas here they challenge the FDA’s statutory authority even to consider the dangerousness of their product. Although this is so, we think that the fundamental purpose of § 334 recognized in Ewing— speedy protection of the public from dangerous articles in interstate commerce — similarly requires that no seizure be halted pending judicial resolution of the definitional issue. Indeed, the policy consideration is even more compelling in the instant ease than in Ewing because here the product has been alleged to be toxic, see note 1 supra, while in Ewing no one contended the product was harmful to health. See 339 U.S. at 596.

Second, the Abbott Laboratories decision, far from undercutting Ewing, expressly reaffirmed this earlier decision as “quite clearly correct.” 387 U.S. at 147. The several distinctions noted by the Court between the promulgation of industry-wide regulations at issue in Abbott Laboratories and the recommendation of seizure proceedings under § 334 need no further elaboration here. See id. at 146-148. Therefore, we con-elude that the district court lacked jurisdiction to grant injunctive relief. Cf. Merritt Corp. v. Folsom, 165 F.Supp. 418 (D.D.C.1958).

We now turn to the district court’s holding that it lacked jurisdiction to grant declaratory relief. The court did not rely on Ewing for this part of its decision. Instead, it relied on 21 U.S.C. § 348(g)(1) (1970), which it construed as vesting exclusive jurisdiction in the courts of appeals on this aspect of the case. 367 F.Supp. at 889. This was error. Section 348(g)(1) applies only to regulations on food additives and thus was an improper basis for the court’s decision that it lacked jurisdiction with respect to seizures under § 334.

This does not necessarily end the matter. The question remains whether § 334 itself, as construed in Ewing, precludes jurisdiction in the district court to grant the declaratory relief sought by appellants in the same way that it bars pre-seizure injunctive relief. This is a difficult issue, in which we must accommodate the conflicting policies of two relevant Supreme Court decisions, Ewing and Frozen Food Express v. United States, 351 U.S. 40, 76 S.Ct. 569, 100 L.Ed. 730 (1956).

We hardly need to elaborate again the fundamental Ewing policy of promptly protecting the public from dangerous articles in interstate commerce. It is for that reason we hold supra that the statute deprives district courts of jurisdiction to grant pre-seizure injunctive relief even when the question raised is whether the particular product is covered at all by the regulatory statute. On the other hand, it must also be recognized that appellants may be affected in many ways other,, than by the proposed seizures by the' implicit conclusion in the FDA’s seizure announcement that their product is now considered “food” within the meaning of the Act. On this aspect of the case, the Frozen Food decision is relevant. There, the Interstate Commerce Commission issued an “order” which simply stated that certain commodities were within its regulatory province. The Supreme Court held that a carrier who transported such commodities could immediately obtain district court review of the ICC’s announced conclusion, even though no specific ICC action had yet been brought against the plaintiff carrier. In reaching this conclusion, the Court relied strongly on the “immediate and practical impact” the ICC’s announcement would have on the day-to-day business operations of the affected carriers. 351 U.S. at 43-45. In general, Frozen Foods stands for the proposition that where an agency has determined that a particular product or entity falls within its statutory province, the affected private interests are then entitled to judicial review of that decision. The Court repeated this conclusion during its last term in CIBA Corp. v. Weinberger, 412 U.S. 640, 644, 93 S.Ct. 2495, 37 L.Ed.2d 230 (1973).

In the instant case, it seems clear that if the FDA had simply announced its conclusion that henceforth paper food-packaging materials would be considered “food” within the meaning of the Act, the policies expressed in Frozen Food would entitle appellants to immediate district court review of that decision. But FDA did more than make a simple announcement. Instead, it linked its definitional conclusion with the further announcement that it will hereafter seize under § 334 certain food-packaging materials containing more than 10 ppm of PCB’s. Hence, the policies of Ewing come into play as well.

We think the best accommodation of these conflicting policies is to construe § 334 as not precluding district court jurisdiction to decide the definitional question within the context of an action solely for declaratory relief. At the same time, we want to make clear that the existence of this limited jurisdiction does not permit the district court to halt in any way the seizure of appellants’ food-packaging materials while the definitional issue is being resolved. We think the latter conclusion is compelled by Ewing and by the purpose of § 334. Cf. Abbott Laboratories v. Gardner, supra at 156. We recognize that the government may voluntarily delay the institution of seizures pending the district court’s decision on the declaratory action. However, that is in no way suggested by this opinion. If, as FDA has determined, there is a threat to public health caused by PCB’s in food-packaging materials, § 334 authorizes immediate seizure uninterrupted by the courts, at least until such time that a district court may decide that the materials are beyond the FDA’s statutory authority. The interest of protecting the public health is plainly paramount to the business interests of the appellants.

Finally, it has been proposed that we decide the definitional issue on the merits at this time. Although we understand the parties’ desire for speedy resolution of this question, we nevertheless prefer to wait until we have the considered decision of the district court before us. Cf. Abbott Laboratories v. Gardner, supra at 156. Therefore, we reverse the district court’s judgment only with respect to declaratory relief jurisdiction and remand the case to that court for further proceedings not inconsistent with this opinion. Nothing in this opinion shall be deemed to bar the institution of seizures in the interim under § 334.

It is so ordered.

      . The regulation provides in pertinent part:
      “§ 122.10 Temporary tolerances for poly-chlorinated biphenyls (PCB’s).
      (a) Polychlorinated biphenyls (PCB’s) are toxic, industrial chemicals. Because of their widespread, uncontrolled industrial applications, PCB’s have become a persistent and ubiquitous contaminant in the environment. As a result, certain foods and animal feeds, principally those of animal and marine origin, contain PCB’s as unavoidable, environmental contaminants. PCB’s are transmitted to the food portion (meat, milk and eggs) of food producing animals ingesting PCB contaminated animal feed. In addition, a significant percentage of paper food-packaging materials contain PCB’s which may migrate to the packaged food. The source of PCB’s in paper food-packaging materials is primarily of certain types of carbonless copy paper (containing 3 to 5 percent PCB’s) in waste paper stocks used for manufacturing recycled paper. . . . The temporary tolerances for residues of POB’s are as follows:
      * * * * *
      (9) 10 parts per million in paper food-packaging material intended for or used with human food, finished animal feed and any components intended for animal feeds. The tolerance shall not apply to paper food-packaging material separated from the food therein by a functional barrier which is impermeable to migration of POB’s.”

      . § 334. Seizure — Grounds and jurisdiction (a) (1) Any article of food, drug, device, or cosmetic that is adulterated or misbranded when introduced into or while in interstate commerce . . . shall be liable to be proceeded against while in interstate commerce, or at any time thereafter, on libel of information and condemned in any district court of the United States or United States court of a Territory within the jurisdiction of which the article is found : . . . ”

      . All parties in Ewing appear to have agreed that the product involved there was a “drug” within the meaning of the statute.

      . Similarly, the Court has repeatedly referred to the continuing vitality of Ewing, he-cause of the exceptional public policy it involves, in all the major due process decisions of recent years. See Calero-Toledo v. Pearson Yacht Leasing Co., 42 U.S.L.W. 4693, 4697, - U.S. -, 94 S.Ct. 2080, 40 L.Ed.2d 452 (U.S. May 15, 1974) ; Mitchell v. W. T. Grant Co., 42 U.S.L.W. 4671, 4675 & n. 11, 416 U.S. 600, 94 S.Ct. 1895, 40 L.Ed.2d 406 (U.S. May 13, 1974) ; Board of Regents v. Roth, 408 U.S. 564, 570 n. 7, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972) ; Fuentes v. Shevin, 407 U.S. 67, 91-92, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972) ; Bell v. Burson, 402 U.S. 535, 542, 91 S.Ct. 1586, 29 L.Ed.2d 90 (1971) ; Boddie v. Connecticut, 401 U.S. 371, 379, 91 S.Ct. 780, 28 L.Ed.2d 113 (1971) ; Goldberg v. Kelly, 397 U.S. 254, 263 & n. 10, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970) ; Sniadach v. Family Finance Corp., 395 U.S. 337, 339, 89 S.Ct. 1820, 23 L.Ed.2d 349 (1969).


author: WINTER, Circuit Judge:

text:
    The COMMONWEALTH OF VIRGINIA, Petitioner, v. CIVIL AERONAUTICS BOARD, Respondent. DEPARTMENT OF TRANSPORTATION OF the STATE OF MARYLAND (successor in interest to the Mayor and City Council of Baltimore, Maryland, originally named as a Complainant before the Civil Aeronautics Board), et al., Petitioners, v. CIVIL AERONAUTICS BOARD, Respondents.
    Nos. 73-2070, 73-2076.
    United States Court of Appeals, Fourth Circuit.
    Argued March 7, 1974.
    Decided June 6, 1974.

      Paul L. Reiber, Boston, Mass. (Andrew P. Miller, Atty. Gen., of Va., Vann H. Lefcoe and Henry M. Massie, Jr., Asst. Attys. Gen. of Virginia, on brief), for petitioner in No. 73-2070.
    Frederick A. Ballard, Washington, D. C. (Francis B. Burch, Atty. Gen. of Maryland, J. Michael McWilliams and William M. Huddles, Asst. Attys. Gen. of Maryland, J. Cookman Boyd, Jr., John C. Smuck and Ballard & Beasley, Washington, D. C,, on brief), for petitioners in No. 73-2076.
    Alan R. Demby, Atty., Civil Aeronautics Board (O. D. Ozment, Deputy Gen. Counsel, Glen M. Bendixsen, Associate Gen. Counsel, Litigation and Research, Robert L. Toomey, Atty., Civil Aeronautics Board, Thomas E. Kauper, Asst. Atty. Gen., Carl D. Lawson, Atty., U. S. Dept, of Justice, Richard Littell, Gen. Counsel, Civil Aeronautics Board, on brief), for respondents in Nos. 73-2070 and 73-2076.
    Nicholas Panarella, Jr., Asst. City Solicitor (Herbert Smolen, Asst. City Solicitor, John Mattioni, Deputy City Solicitor, Martin Weinbert, City Solicitor for the City of Philadelphia, on brief), for intervenor City of Philadelphia, in Nos. 73-2070 and 73-2076.
    Herman F. Scheurer, Jr., Washington, D. C. (John J. McLaughlin, III and Shanley & Fisher, Washington, D. C., on brief), for intervenor Metropolitan Washington Board of Trade in Nos. 73-2070 and 73-2076.
    Patrick W. Lee, Washington, D. C. (Jerry W. Ryan, James M. Burger, Reavis, Pogue, Neal & Rose, Washington, D. C., on brief), for joint intervenors Pan American World Airways, Inc. and Trans World Airlines, Inc. in Nos. 73-2070 and 73-2076.
    Harold E. Spencer, Chicago, 111. (Thomas F. McFarland, Jr., Michael M. Glusac, Detroit, Mich., Richard L. Curry, Robert L. Hankin, Chicago, 111., John P. Cushman, James J. Tedesco, Jr., Detroit, Mich., Belnap, McCarthy, Spencer, Sweeney & Harkaway, Chicago, III., on brief), for intervenors Chicago and Detroit Interests in Nos. 73-2070 and 73-2076.
    Laidler B. Mackall, Richard P. Taylor, John W. Arata and Steptoe & Johnson, Washington, D. C., on brief for intervenors Massachusetts Port Authority and Greater Boston Chamber of Commerce in Nos. 73-2070 and 73-2076.
    Francis A. Mulhern, Deputy Gen. Counsel, Newark, N. J., on brief for intervenors The Port Authority of New York and New Jersey in Nos. 73-2070 and 73-2076).
    Before WINTER, BUTZNER and FIELD, Circuit Judges.
   WINTER, Circuit Judge:

Virginia’s and Maryland’s petitions to review an order of the Civil Aeronautics Board (Board), a proceeding in which two carriers — Pan American World Airways, Inc., and Trans World Airways, Inc. — and numerous affected localities —Philadelphia, Washington, Chicago, Detroit, Boston, Metropolitan New York-New Jersey — have been permitted to intervene, raises the basic question of whether the Board exceeded its statutory powers or acted arbitrarily or unreasonably in prescribing the formula for fixing new transatlantic cargo rates after it concluded that the then existing rate unduly preferred New York and prejudiced Boston, Philadelphia, Baltimore, Washington, Cleveland, Detroit and Chicago. Specifically, the Board' found that cargo rates to United States gateway cities other than New York, constructed by adding the domestic rate from gateway city to New York to the New York-European rate, irrespective of whether the shipment was in fact flown through New York, was unduly preferential to New York and unduly prejudicial to the other gateway cities. ******None of the parties contests the correctness or lawfulness of this conclusion.

Having concluded that the then existing rates were unlawful, the Board directed the establishment of rates computed by multiplying the mileage, by the shortest point-to-point route from European points to the various United States gateway points, by the New York-European rate per mile. It rejected the recommendation of the Administrative Law Judge that the best way to remedy the prejudicial rate structure was to prescribe a common rate, i. e., the same rate, for the gateways of Boston, New York, Philadelphia, Baltimore and Washington. In these petitions for review, Baltimore and Washington, joined by Philadelphia, contend that the Board erred in failing to prescribe a common rate for the Northeast Corridor cities with New York.

From our review of the record, we conclude that the Board did not exceed its statutory authority or act arbitrarily or unreasonably in prescribing the mileage rate. We affirm the Board’s order.

I.

While the Board has authority to prescribe rates, fares and practices in domestic air transportation, 49 U.S.C. §. 1482(d), its authority over rates and fares for international air transportation is more limited. This is so because of Congressional recognition that the rate-making authority of one nation in international air transportation necessarily can be exercised only with the acquiescence of another nation to which traffic is destined or from which it originates. Thus, except for the recently granted limited power to suspend or reject unjust or unreasonable rates and fares in international transportation but not to prescribe just and reasonable new rates or fares, the rate-making authority of the Board in a case like the instant one is limited to a determination of whether a rate, fare or charge “is or will be unjustly discriminatory, or unduly preferential, or unduly prejudical,” and if so, “ [to] alter the same to the extent necessary to correct such discrimination, preference, or prejudice . . . .” 49 U.S.C. § 1482(f).

Both Virginia and Maryland advance two overall contentions why the Board’s order should be set aside: first, that as a matter of law the Board was required to prescribe a common rate for all United States gateway cities, and, second, that the milage rate prescribed by the Board continues the previously existing undue preference to New York and undue discrimination against the other cities, especially Washington and Baltimore. These overall contentions involve a number of subsidiary arguments which we will treat seriatim. Additional facts will be stated where they are pertinent.

II.

The argument that, as a matter of law, the Board was required to prescribe a common rate is in part factual and in part legal. Both the Administrative Law Judge and the Board found that New York handles eighty percent of the nation’s international air cargo; that, as a result of this volume, New York experiences the highest rate of pilferage from shipments of any other terminal in the United States; that congestion and delays result from the proliferation of traffic through New York; that non-transport expenses are greater at New York; and that shippers in places other than New York are encouraged by New York’s then existing preferential rate to employ surface transportation (trucks) to and from New York rather than through air transportation to points of origin and destination in the gateway city nearest to the shipper. It is argued that since there is a strong national interest in avoiding a monopoly of imports and exports in a single port, the way to achieve equality of opportunity — indeed, the only way as prescribed by Congress • — is to prescribe a common rate, notwithstanding that New York is 190 miles closer to European cities than Baltimore-Washington. Heavy reliance is placed upon the provisions of the Interstate Commerce Act, 24 Stat. 379, and I.C.C. and court decisions interpreting it to permit or require common-rating in certain instances, because it is asserted that such Act served as a model for the anti-discrimination provisions of the Federal Aviation Act of 1958, and therefore the latter should receive a like interpretation.

We think that there are several reasons to reject this argument. First, there can be little doubt that, in fashioning a remedy where undue preference and undue discrimination have been found to exist, an administrative agency possesses a large measure of discretion in choosing measures to remedy the discrimination. Its exercise of this discretion will not be disturbed -absent a showing that its order lacks evidentiary support, transgresses some constitutional limit, or otherwise amounts to an abuse of power. Board of Trade v. United States, 314 U.S. 534, 546, 62 S.Ct. 366, 86 L.Ed. 432 (1942) ; Ayshire Collieries Corp. v. United States, 335 U. 5. 573, 593, 69 S.Ct. 278, 93 L.Ed. 243 (1948).

Factually, the premise of the Board’s order that “the most equitable and practical rate structure is one based on mileage” has substantial evidentiary support. The record shows that major costs for air transportation tend to vary with miles flown. It is, of course, true that the anti-discrimination provisions of the Federal Aviation Act are closely modeled on their counterparts in the Interstate Commerce Act, but that is not to say that the decisional precedents of one statute can be indiscriminately imputed to another. Substantial differences in the operations of rail and air transportation may well warrant a different regulatory approach to each industry. Chicago & Southern Air Lines, Inc. v. Waterman S.S Corp., 333 U.S. 103, 108, 68 S.Ct. 431, 92 L.Ed. 568 (1948); Las Vegas Hacienda, Inc. v. C.A.B., 298 F.2d 430 (9 Cir. 1962). Unit costs of railroad operations do not tend to increase with distance nearly as much as in air carrier operations. Thus, decisions approving or imposing common-rating on rail carriers would not depart from the cost of service approach of rate-making to the same extent as would common-rating for air transportation. It follows, we think, that the C.A.B. is not bound by the common-rating decisions applicable to railroads, and the C. A.B. has broader discretion than the I. C.C. to require that differences in distances be reflected in differences in rates.

More importantly, the anti-discrimination provisions of neither Act were intended to deprive a locality of the natural advantages of its geographic location. United States v. Illinois Central Ry., 263 U.S. 515, 524, 44 S.Ct. 189, 68 L.Ed. 417 (1924); Alabama G.S.R. Co. v. United States, 340 U.S. 216, 71 S.Ct. 264, 95 L.Ed. 225 (1951). New York is closer to European cities than Baltimore and Washington, by an average distance of 190 miles, and this fact alone should support a higher overall rate differential for the latter.

The instances in which the Board has approved common rates do not persuade us that the Board acted arbitrarily or capriciously in rejecting them here. Nearly all domestic rates and fares reflect distance and among domestic points common-rating is rare. The majority of rates for international transportation is not common-rated. The Board has, nevertheless, given approval to some international common-rating, but it has apparently done so because of “special circumstances” not present here, or because of the need for cooperation and agreement among nations engaged in air transportation. See IATA Transatlantic Cargo Rates, Opinion on Remand, Order 73-10-55, October 15, 1973. At the same time, the Board has consistently emphasized that international air fares should be priced' according to costs and related to distances. Statement of C.A.B. on North Atlantic and Mid-Atlantic Fare Matters to be Negotiated at the IATA Traffic Conference in Montreux, July, 1972; IATA Transatlantic Fares Agreement, Order 72-3-104, March 30, 1972; IATA Transatlantic Fares Agreement, Order 73-4-64, April 13, 1973; Hawaiian Common Fares Case, 10 C.A.B. 921 (1949).

Finally, the reasonableness of the Board’s exercise of its discretion to require mileage rates can also be demonstrated by the discriminatory effect that the common-rating advocated by Baltimore and Washington would have and the economic impact of common-rating on affected carriers. It should be remembered that the Board’s rate-making powers in the instant case are exercisable only in the limited context of removing undue preferences and undue discrimination. The Board would hardly carry out its statutory duty if it created new and different undue preferences or undue discrimination. And yet common-rating Baltimore, Washington, Philadelphia, and Boston with New York would create preferences and discrimination that could properly be deemed “undue.” Under such a scheme, Boston, which is nearer to most European cities than New York, and New York, which is nearer than Philadelphia, Baltimore or Washington, would both lose the economic advantage of their geographic locations. They would be discriminated against. Conversely, Philadelphia, Baltimore and Washington would be preferred. Cleveland, Chicago and Detroit would also be adversely affected. For example, air mileage from Cleveland to London is only 3.2% greater than that from Baltimore to London. Yet, if Baltimore were common-rated with New York, Cleveland’s rates would be 12.3% greater than Baltimore’s rates.

The level of rates, ver se, was not an issue in the proceedings before the Board. Nonetheless, we think that the Board properly considered the economic impact of common-rating on the carriers affected. In this regard, the Board found that common-rating would result in a two-fold reduction in revenues, viz. revenues on freight originating at or destined for gateways other than New York, and revenues to the transatlantic carrier for goods originating at or destined for gateways other than New York which are routed over domestic carriers via New York for which pro-rating of revenues with the domestic carrier is required. Inferentially, common-rating could bring about higher rates — a result which the Board ought not to encourage if it has a choice in the matter.

For all of these reasons, we conclude that the Board was not required as a matter of law to prescribe common rates, and its exercise of its discretion not to prescribe common rates should not be disturbed.

III.

We turn to the contention that the mileage rate prescribed by the Board continues the previously existing undue preference to New York and undue discrimination against the other cities, especially Baltimore and Washington.

In support of this conclusion, Maryland argues that the Board’s mileage formula is intrinsically invalid and discriminatory because only about 55% of the North Atlantic air freight rate is accounted for by costs which vai’y by mileage. It is argued, therefore, that it is preferential to New York and prejudicial to Baltimore to require Baltimore shippers and importers to pay a differential based on application of the mileage difference to 100% of the rate. We are not persuaded. First, there is evidence in the record that the relationship between costs and mileage may be higher than 55%. The reason for this is that there is a point in projecting a long-range direct flight that the carrier must sacrifice payload weight for fuel to complete the voyage. Additionally, as found by the Board, some indirect costs also increase with mileage. For example, servicing costs are generally treated as indirect costs, and servicing is more frequent when equipment is flown greater distances. More importantly, the object of the instant proceedings was to determine the relationship among rates to the various cities involved and not the precise level of those’rates. We do not believe that the Board, having provided a formula which permits Baltimore to compete with New York commensurate with its geographic location without “undue” discrimination, was required to compute and impose a rate differential in terms of precise costs.

Virginia asserts that the Board’s mileage-based formula is intrinsically invalid and discriminatory because the per-mile rate between a given United States gateway city and a given European city is not always the same as the rate between that United States gateway city and another European city. To illustrate, Virginia points out that New York shippers get 4,004 miles of air transportation to Milan, Italy, for 78 cents per pound; but for 3,646 miles of air transportation to London — almost 400 miles less — Dulles airport shippers must pay 79 cents per pound. This example, Virginia contends, demonstrates that the New York shipper is unduly preferred and the Dulles shipper is unduly discriminated against.

The short answer to the argument, however, is that Virginia seeks to compare apples with oranges. There is common-rating of points in Europe, usually at the instance of European governments, and this is a matter beyond the regulation or control of the Board. But the fact is that to any particular European city the mileage rate from New York or any other United States gateway city is precisely the same, and, hence, there is neither preference to New York nor discrimination against the other United States gateway cities. For example, if, as a result of common-rating in Europe, the mileage rate from New York to a given city in Europe is two cents more or less than the rate from New York to London, it is the same two cents more or less than the rate from any other United States city to London.

Virginia also argues that New York is preferred because specific through rates are published from New York, while the rates to the other gateways are computed pursuant to a conversion table reflecting the mileage differential over New York applicable to each of the other gateways. We do not deem this a preference. The computation to find the rate to another gateway city is merely the multiplication of the percentage mileage differential over New York by the New York rate. We do not think that the task is so difficult that it would affect a shipper’s selection of gateways.

Finally, Maryland argues that the common-rating for Baltimore and Washington should be the mileage to Baltimore, and not the average of the mileages to Baltimore and Washington, in order to prevent creation of a new discrimination against Baltimore area shippers. We do not agree. The Board found that because of the close geographical proximity of the two cities and the virtual overlap of the service areas of their respective international airports, a common rate was virtually essential and use of the mid-point mileages as a basis for the common rate represented a fair balancing of the interests of shippers in both cities. In this, we think the Board eminently correct; certainly it did not abuse its discretion.

For all of these reasons, the order of the Board is

Affirmed.

      . European air cargo rates consist of general commodity rates, specific commodity rates, and container or “bulk utilization” rates. The majority of cargo moves under specific commodity rates and an increasing amount under container rates.
      The proceeding was begun in 1968 at the instance of the City of Baltimore. At that time, all rates to gateway cities other than New York were computed as stated in the text. In 1969, however, general commodity rates to all cities and specific commodity rates to Philadelphia and Baltimore-Washington were altered to require the addition of flat add-ons (known as “arbitrarles”) in lieu of the domestic rate to the New York-European rate. These arbitrarles were somewhat lower than the domestic rate from New York to the other gateway city, but they still produced an overall rate significantly higher than an amount related to the mileage - differential between a European point and New York as compared to the mileage between a European point and another United States gateway point. Eor example, although the Baltimore-Paris mileage is only 4.9% greater than the New York-Paris mileage, the specific commodity rate for data processing systems from Baltimore-Paris ranged from 7.5-12% above the New York-Paris rate.

      . The Board did prescribe a common rate for Baltimore and Washington in recognition of the fact that the Baltimore-Washington International Airport, located between the two cities, and Dulles Airport, located in Northern Virginia, serve both communities. This common rate is the average of the two rates for each class of cargo to each of the two cities.

      . Philadelphia did not petition to review the Board’s order; rather, it intervened in this proceeding and supports the position of Virginia and Maryland. As a consequence, the Board questions our jurisdiction to grant relief to Philadelphia even if relief should otherwise be indicated. In the view that we take of the proper disposition of the petition for review, we find it unnecessary to decide the jurisdictional question. In our discussion, we will speak only of Virginia and Maryland.

      . As a concomitant to the need for international cooperation in rate-making, international air fares and rates are generally established through the traffic conference machinery of the International Air Transport Association (IATA). For a description of the process, see National Air Carrier Ass’n v. C. A. B., 141 U.S.App.D.C. 31, 436 F.2d 185,186 (1970).

      . P.L. 92-259, March 22, 1972; 49 U.S.C. §§ 1374(a), 1461 and 1482 (j).

      . Even under the Interstate Commerce Act, the I.C.C. has given full recognition to distance as a significant factor supporting rate disparities. For some examples, see Board of Trade v. Ill. Cent. R. Co., 344 I.C.C. 818 (1973) ; Canaveral Port Authority v. Ahnapee & W. Ry. Co., 337 I.C.C. 681 (1970) ; Maritime Association, Boston Chamber of Commerce v. A. A. R. R. Co., 95 I.C.C. 539 (1925).

      . Hawaiian Common Fares Case, 37 C.A.B. 269 (1962) ; Northwest-Alaska Tariff Investigation, 17 C.A.B. 903 (1953) ; West Coast Common Fares Case, 15 C.A.B. 90 (1952).