author: STEVENS, Circuit Judge.

text:
    CONTAINER CORPORATION OF AMERICA and Montgomery Ward & Co., Incorporated, Plaintiffs-Appellants, v. ADMIRAL MERCHANTS MOTOR FREIGHT, INC., et al, Defendants-Appellees.
    No. 72-1646.
    United States Court of Appeals, Seventh. Circuit.
    Argued Oct. 25, 1973.
    Decided Dec. 11, 1973.
    Certiorari Denied March 18, 1974.
    See 94 S.Ct. 1581.
    Christopher J. Michas, Mark C. Cur-ran, Chicago, 111., for plaintiffs-appellants.

      Donald B. Levine, Chicago, 111., Alvin J. Meiklejohn, Jr., Arthur R. Hauver, Denver, Colo., for defendants-appellees.
    Before CUMMINGS and STEVENS, Circuit Judges, and CAMPBELL, Senior District Judge.

       Senior District Judge William J. Campbell of the Northern District of Illinois, sitting by designation.

   STEVENS, Circuit Judge.

This is an action in which two shippers seek to recover refunds for overcharges on shipments moving after May 20, 1968, and befoi’e September. 1, 1969, from several motor carriers. The district court thought the action barred by the one-year limitations provision of § 16(3) (f) of the Interstate Commerce Act, 49 U.S.C. § 16(3)(f). We do not agree.

Plaintiffs’ claims are authorized by § 16(2) of the Interstate Commerce Act, 49 U.S.C. § 16(2), as construed by this court in Aluminum Company of America v. Admiral Merchants Motor Freight, Inc., 486 F.2d 717 (1973). Only a few of the complex circumstances of this litigation are relevant for our decision.

The refund obligation was originally described in an order entered in Docket No. 34971, the proceeding entitled “Increased Rates and Charges From, To and Between Middlewest Territory,” on April 25, 1968. On that date, acting on a request from the carriers and certain other parties, the Commission postponed a hearing on the lawfulness of the carriers’ proposed rates conditional upon respondents’ compliance with an order “to make refunds to the shippers on any shipments moving after May 20, 1968, to the extent that the increases or any portions thereof under investigation herein are not approved by the Commission.”

After a full hearing, on June 5, 1969, the Commission found that the carriers had not sustained their burden of proving that the proposed increases were just and reasonable, ordered the rates cancelled, and, in accordance with the conditional refund order entered on April 25, 1968, further ordered that the carriers “be, and they are hereby, required to refund to shippers the charges on shipments moving after May 20, 1968, to the extent that such charges included the increases herein found not shown to be just and reasonable.”

On August 29, 1969, the Commission denied a petition by the carriers to reconsider and vacate the refund provision of the June 5, 1969, order. The August 29, 1969, order supplemented the language of the June 5 order y directing the carriers to “make refund to shippers presenting their claims to the carriers supported by paid freight bills or other appropriate evidence.” The carriers filed another petition for reconsideration which the Commission denied on October 27, 1969.

The carriers then sought judicial review of the validity of the Commission’s order. On January 26, 1970, the carriers filed a complaint in the United States District Court for the District of Colorado seeking a declaration that the Commission order was invalid, and an injunction against enforcement of the refund obligation. On June 19, 1970, that court granted a motion for a temporary restraining order; enforcement of the Commission’s order was stayed until further order of court. Except for a period of about seven weeks, a stay order was in effect until the judicial proceedings were terminated in both the United States Supreme Court and the United States Court of Appeals for the Tenth Circuit. On December 7, 1971, the Supreme Court denied rehearing of its af-firmance of the decision of the three-judge court in Colorado upholding the Commission’s order; the stay of the ICC order was lifted on December 27, 1971. On January 7, 1972, the Secretary of the Interstate Commerce Commission filed a formal notice advising interested parties that its refund order “is now fully effective and enforceable at the suit of the affected shippers.”

Section 16(3) (f) of the Interstate Commerce Act provides:

“A complaint for the enforcement of an order of the commission for the payment of money shall be filed in the district court or the State court within one year from the date of the order, and not after.”

Plaintiffs filed their complaint in the present case on April 27, 1971, well before judicial review of the Commission’s order had been completed, but more than a calendar year after the Commission had entered its order directing the refund. The question before us is, when did the Commission’s order become final for purposes of § 16(3) (f) ? The defendants argue that the date of the order is June 5, 1969, the date on which, after a full hearing, the Commission found that the carriers had not sustained their burden of proving their proposed rate increases were just and reasonable.

The plaintiffs offer alternative theories. First, they suggest that “within one year from the order, and not after” means one year from the date fixed for compliance with the Commission’s order, and not one year from the time the Commission issues its order. Since the Commission did not prescribe a date on which the carriers would become obligated to pay, specifying rather that the obligation would arise when shippers presented carriers with paid freight bills or other evidence, the dates on which they presented their bills are the determinative dates, provided that they acted within a reasonable time.

Alternatively, the plaintiffs argue, in accord with the reasoning of Judge Will in Bela Seating Co. v. Advance Transportation Co., supra that the stay of the Commission’s order granted in Colorado tolled the statute of limitations, because the Commission’s order was unenforceable during the pendency of the stay.

We think that none of those arguments offers the most reasonable interpretation of the statute in the circumstances of this case. In our opinion the “date of the order” within the meaning of § 16(3) (f) is the date on which the litigation prosecuted by the carriers to obtain judicial review of the Commission’s order was completed. For that litigation was in effect a continuation of the carriers’ efforts to persuade the Commerce Commission itself to modify or set aside its original refund order.

In this case, the judicial proceedings did not result in any material change in the Commission’s order. However, it was possible that the carriers might persuade the reviewing court to set aside, annul, or sustain, in whole or in part, the order of the Commission. Had the order been changed, an aggrieved party might not even have been able to prepare or file a proper action until after the court’s decision became final. It would be anomalous to hold that a Commission order is final before judicial review is completed if, but only if, review leaves the Commission’s order undisturbed.

No statutory policy would be served by requiring shippers to incur the expense and inconvenience of filing protective suits prior to the termination of the judicial proceedings initiated by the carriers to review the legality of the Commission’s order. This conclusion is buttressed by the basic policy to ensure uniformity in treatment of shippers. See Midstate Horticultural Co. v. Pennsylvania Railroad Co., 320 U.S. 356, 361, 64 S.Ct. 128, 88 L.Ed. 96. This policy would not be served by allowing recovery to shippers who were prudent enough to file claims during the period of uncertainty, and denying recovery to those who justifiably awaited the final determination of the order’s validity and enforceability.

It might be suggested that, since an order of the Commission does achieve a finality to which the statute of limitations applies if judicial review is not taken, time should be computed from the date of the Commission’s order and judicial review should merely toll the statute for the period of its pendency. Such a rule would effectively shorten the time Congress has authorized for plaintiffs to prepare and file their lawsuits. During the pendency of judicial review, which, as this case demonstrates, may last for a period of years, a suit which had been partially prepared may atrophy: employees change jobs, different counsel may be retained, and pertinent records may be refiled or needed for other purposes. To require plaintiffs in complex matters either to commence protective litigation, or to act within a matter of months or weeks, is inconsistent with the congressional decision to allow shippers one year in which to file suit to enforce a final order of the Commission. In our opinion, the carriers’ obligation to refund the excess charges did not “begin to enjoy the shelter of the statute of limitations” while they were prosecuting an action under 28 U.S.C. § 1336(a) to set aside or annul, in whole or in part, the Commission’s order. We therefore hold that § 16(3) (f) did not begin to run until the judicial review sought by the carriers was concluded and the stay which had been entered by the district court in Colorado was lifted.

It follows that the instant case was filed by plaintiffs even before the applicable statute of limitations began to run. The order dismissing the complaint is reversed and'the case remanded for further proceedings.

      . Section 16(2) provides, in part:
      “If a carrier does not comply with an order for the payment of money within the time limit in such order, the complainant, or any person for whose benefit such order was made, may file ... a complaint setting forth briefly the causes for which he claims damages, “and the order of the commission in the premises.”

      . For a further description of the factual background of the litigation see Judge Will’s opinions in Bela Seating Co. v. Advance Transportation Co., 344 F.Supp. 854 (D.C. 1972), and Aluminum Co. of America v. Admiral Merchants Motor Freight, Inc., 337 F.Supp. 674 (D.C.1972). See also Admiral Merchants Motor Freight, Inc. et al. v. United States, 321 F.Supp. 353 (D.Colo.1971), affmd. 404 U.S. 802, 92 S.Ct. 51, 30 L.Ed.2d 37, rehearing denied 404 U.S. 987, 92 S.Ct. 443, 30 L.Ed.2d 371.

      . At oral argument, counsel for the plaintiffs stated that the carriers agreed to this condition in order to obtain a continuance of the hearing date which had originally been set for May 20, 1968.

      . See final paragraph of the order which is attached to the complaint as Exhibit 1.

      . 335 ICC 142, 151 (Ex. 2 to the complaint).

      . In our opinion in Alcoa, supra, we described the August 29, 1969, order as the Commission’s “final order.” That reference was merely descriptive and did not purport to resolve a dispute as to the date the carriers’ obligation became enforceable for purposes of the statute of limitations. Similarly, our decision in the present case on the date of finality of the Commission’s order for limitations purposes does not decide the date upon which interest commenced to accrue on the refunds.

      . The bills were presented early in 1971. Brief for appellants at 4.

      . We are advised that a similar decision was rendered in an unpublished opinion in Container Corporation of America and Montgomery Ward & Co., Inc. v. Hart Motor Express, Inc., D.Minn., November 20, 1972. Reply brief for appellants, at 1--4.

      . At oral argument, counsel for the plaintiffs offered a third argument. They suggested that the statute of limitations was tolled by the filing of a class action on June 15, 1970, in Appleton Electric Co. v. Advance United Expressways in the District Court for the Northern District of Illinois.

      . Cf. 28 U.S.C. § 1336(a).

      . In support of their motion for a stay of the Commission’s order pending appeal to the United States Supreme Court, the carriers made the following statement:
      “The stay sought herein is- necessary also, in order to prevent irreparable injury and damage to that portion of the shipping public with which the Plaintiffs were doing business between the dates of May 20, 1968, and September 1, 1969. These shippers would, otherwise, have to calculate and file claims for the respective amounts due them pursuant to the Commission Order, and, in the event that the Commission Order were ultimately found invalid, would have to repay those amounts to the carriers involved; both such actions by the shippers would, of course, involve considerable expense not recoupable by them from any source.”
      See pages 3-4 of Motion for Stay filed on March 5, 1971, in the United States District Court for the District of Colorado in Civil Action No. C-2030.

      . The quotation is from Woods v. Stone, 333 U.S. 472, 474, 68 S.Ct. 624, 625, 92 L.Ed. 815.

      . The policy of § 16 to secure promptness in collection claims is entirely consistent with our conclusion. The carriers’ adamant resistance to performance of their obligation to refund the over-charges rendered inapplicable any statutory concern with “promptness in collection” prior to the determination of judicial proceedings. Inaction of the shippers prior to that date did not result in any postponement of the time when the refunds would actually be collectible.


source: Caselaw Access Project

author: CUMMINGS, Circuit Judge.

license: Public Domain

text:
    Charles and Charlene BAKER et al., Plaintiffs-Appellees, v. F & F INVESTMENT COMPANY et al., Defendants, Federal Housing Administration et al., Defendants-Appellants.
    No. 72-2036.

    United States Court of Appeals, Seventh Circuit.
    Argued Oct. 25, 1973.
    Decided Dec. 6, 1973.
    As Modified Dec. 21, 1973.

      1 James R. Thompson, U. S Atty., William T. Huyek, Lawrence J. Cohen, Asst. U. S. Attys., Merrill Shepard, Chicago, 111., for defendants-appellants.
    Thomas P. Sullivan, Richard T. Franch, Thomas J. Boodell, Jr., Chicago, 111., for plaintiffs-appellees.
    Before CUMMINGS and STEVENS, Circuit Judges, and CAMPBELL, Senior District Judge.

      Senior District Judge William J. Campbell of the Northern District of Illinois is sitting by designation.

   CUMMINGS, Circuit Judge.

In their complaint, the Negro plaintiffs alleged that they were charged excessive and discriminatory prices for their homes. Their suit was based on asserted violations of the Fifth, Thirteenth and Fourteenth Amendments and the Civil Rights Acts (42 U.S.C. §§ 1981, 1982, 1983 and 1985(3)). In view of District of Columbia v. Carter, 409 U.S. 418, 93 S.Ct. 602, 34 L.Ed.2d 613, plaintiffs no longer rely on the Fourteenth Amendment or 42 U.S.C. § 1983. Jurisdiction was predicated on 28 U.S. C. § 1343(4). The pertinent provisions are reproduced in the Appendix hereto. The original defendants were real estate sellers, their assignees, and savings and loan associations.

According to the complaint, the defendant-sellers were real estate speculators who purchased residences from white owners through “block busting” in areas near black neighborhoods. They then resold the properties to plaintiffs under installment sale contracts at excessive prices. The defendant savings and loan associations allegedly made loans to the sellers based on false and excessive appraisals.

The district court held that a cause of action had been stated under Section 1 of the Civil Rights Act of 1866 (42 U.S. C. § 1982) and under the federal and Illinois antitrust laws. Contract Buyers League v. F & F Investment, Inc., 300 F.Supp. 210 (N.D.Ill.1969). This decision occurred after the United States filed an amicus brief agreeing with plaintiffs’ construction of the 1866 statute.

On August 11, 1970, the plaintiffs added Count 7 to their complaint, making a federal official and certain federal agencies parties defendant. They were the Secretary of the Department of Housing and Urban Development (HUD), the Federal Housing Administration (FHA), the Veterans Administration (VA), the Federal Savings and Loan Insurance Corporation (FSLIC), and the Federal Home Loan Bank Board, hereinafter sometimes termed the federal defendants. A month later the VA Administrator was added as a defendant. The district court granted the Federal Home Loan Bank Board’s motion to dismiss it as a defendant on the ground that Congress had limited its consent to suits against that Board to federal savings and loan associations and directors and officers thereof. 12 U.S.C. § 1464(d)(1). However, the court refused to dismiss the remaining five federal defendants from the suit. We granted leave to appeal from the interlocutory order denying their motions to dismiss.

Count 7 charged that the former Secretary of HUD had responsibility for implementing the home mortgage insurance program administered by the FHA. Until 1967 that agency is said to have supported racially discriminatory market conditions in Chicago through the administration of its home mortgage insurance programs, thus depriving plaintiffs of an equal opportunity to purchase homes. Since the FHA eliminated the availability of mortgage financing to Negroes in Chicago, plaintiffs allegedly had to purchase homes in segregated areas from real estate speculators and block busters under installment contracts at exorbitant prices.

The VA assertedly followed the same discriminatory policies practiced by the FHA and enabled defendant-sellers similarly to extract excessive prices from plaintiffs.

The FSLIC is described as the successor-in-interest to several defunct defendant-lender savings and loan associations. The complaint predicated the liability of the FSLIC on the illegal activities of those defendant-lenders and on the FSLIC’s status as the mortgagee or title holder of properties sold to plaintiffs by defendant-sellers.

Plaintiffs charged that the actions of the federal defendants willfully and wrongfully deprived them of their constitutional rights in violation of 42 U.S. C. §§ 1981 and 1982 and the Fifth and Thirteenth Amendments. Plaintiffs sought actual and consequential damages and punitive damages, as well as reasonable attorneys’ fees and costs. They also sought a declaration that the mortgages of the defendant-lenders and the FSLIC are void and unenforceable.

In its unreported opinion, the district court held that §§ 1981 and 1982 of the Civil Rights Acts were founded on the Thirteenth Amendment and applied to acts committed under color of federal law since they prohibit racial discrimination by all persons. The court held that the sue and be sued clauses contained in the enabling legislation governing the defendant agencies constituted a waiver of immunity to suit under the Civil Rights Acts. The court noted that the two individual federal defendants were only “named in their official capacity to meet the requirements set forth in the statutes to properly sue the F.H.A. and the V.A., respectively,” with personal liability not being asserted against them.

The FSLIC was held to be a proper defendant because if the defendant savings and loan associations discriminated, the FSLIC would be liable as a successor-in-interest to their liabilities.

Applying our opinion in Baker v. F & F Investment, 420 F.2d 1191 (7th Cir. 1970), certiorari denied, 400 U.S. 821, 91 S.Ct. 40, 27 L.Ed.2d 49, the district court held that the five-year Illinois catchall statute of limitations applies. Although the Government argued that there was no continuing contractual relationship between the plaintiffs and the federal defendants, so that the statute of limitations had run as to them, the court rejected their argument as follows:

“The plaintiffs are alleging that the federal defendants have discriminated against them by establishing policies which were discriminatory in nature and were in effect throughout the period in question. If these defendants did initiate discriminatory policies, they not only affected the plaintiffs when they first purchased their homes, but also during this entire period when they might have wanted to refinance their homes. Therefore, just as there is a continuing relationship which allows the plaintiffs to maintain this action against the defendant-sellers and lenders, there is the same type of continuing relationship between the plaintiffs and the federal defendants, so that the statute of limitations would not serve as a bar to this action.”

We affirm, except as to the FSLIC. As to the FSLIC, we affirm in part and reverse in part.

Governmental Liability for Violations of Civil Rights Acts

Blinding itself to landmark decisions of the Supreme Court, the Government urges that neither it nor its instrumentalities are subject to suits for damages under 42 U.S.C. §§ 1981 and 1982 for violations of the Fifth and Thirteenth Amendments. We cannot turn back the clock to accept such a position.

As far back as 1948 it was decided that federal action is covered by 42 U.S. C. § 1982. Hurd v. Hodge, 334 U.S. 24, 68 S.Ct. 847, 92 L.Ed. 1187. That case held that a Negro citizen denied the opportunity to purchase the home of his choice solely because of his race and col- or suffered the kind of injury that Section 1 of the 1866 Civil Rights Act (42 U.S.C. § 1982) was designed to prevent. It was held a violation of that Section for an arm of the federal government, a district court, to assist in the enforcement of restrictive covenants. Hurd emphasized that Section 1982 was “directed * * * [at] governmental action.” 334 U.S. at 31, 68 S.Ct. 847.

In Jones v. Mayer Company, 392 U.S. 409, 88 S.Ct. 2186, 20 L.Ed.2d 1189, a suit for damages and other relief, the breadth of Section 1982 was reemphasized and applied to purely private discrimination. In a sweeping holding, the Court held that Section 1982 prohibits “all discrimination against Negroes in the sale or rental of property — discrimination by private owners as well as discrimination by public authorities.” 392 U.S. at 421, 88 S.Ct. at 2194. Eighteen months thereafter, in Sullivan v. Little Hunting Park, Inc., 396 U.S. 229, 90 S. Ct. 400, 24 L.Ed.2d 386, damages were expressly held to be recoverable under Section 1982. Then last Term in District of Columbia v. Carter, 409 U.S. 418, 422, 93 S.Ct. 602, 34 L.Ed.2d 613, the Court unanimously reiterated that like the Thirteenth Amendment upon which it was based, Section 1982 is an absolute bar to all racial discrimination in the sale or renting of property, “private as well as public, federal as well as state.” Justice Brennan’s opinion for the Court then stated:

“the same considerations that led Congress to extend the prohibitions of § 1982 to the Federal Government apply with equal force to the District [of Columbia], which is a mere instrumentality of that Government.”

In the face of such settled judicial construction of Section 1982, we must reject the Government’s argument that it and its instrumentalities are subject only to equitable relief and are not liable for damages under Section 1982. The Section applies to the Government and it provides for damages. If the Government is not liable for damages, it is not because of any limitations inherent in Section 1982 but because of a general doctrine of sovereign immunity, a possibility to which we turn in the next part of the opinion.

The same rule applies to Section 16 of the 1870 Civil Rights Act (42 U.S.C. § 1981), for, as explained in Tillman v. Wheaton-Haven Recreation Association, Inc., 410 U.S. 431, 439-440, 93 S.Ct. 1090, 35 L.Ed.2d 403, it is based on the Thirteenth Amendment as well as the Fourteenth. Indeed, both present Sections 1981 and 1982 were originally part of Section 1 of the 1866 Act, but were broken into two Sections in the 1870 reenactment. See Hurd v. Hodge, 334 U.S. at 30-31, n. 7, 68 S.Ct. 847. Thus they are not to be construed differently. Tillman, supra, at 440, 93 S.Ct. 1090.

Suability of Defendant Federal Agencies

The Government next urges that the defendant federal agencies are not amenable to suit in view of sovereign immunity. However, with respect to each of these agencies, consent of the Government to suit is found in the applicable sue and be sued provisions. See 12 U.S.C. § 1702 as to the FHA, 38 U.S.C. § 1820 as to the VA, and 12 U.S.C. § 1725(c) as to the FSL1C. The Government advances the theory that despite such clauses the federal defendants are not liable because the doctrine of apparent authority does not apply to their agents. The cases relied on by the Government to support this theory have no relationship to tort suits. For example, Reconstruction Finance Corp. v. Martin Dennis Co., 195 F.2d 698 (3d Cir. 1952), is typical of cases holding that a governmental agency is not estopped when an agent purports to waive its rights. Federal Crop Insurance Corp. v. Merrill, 332 U.S. 380, 68 S.Ct. 1, 92 L.Ed. 10, announces the related principle of government contract law that the Government is not bound on a contract signed by an agent without actual authority to do so.

We have no quarrel with these cases; we simply find them irrelevant. The Government’s attempt to extract from them a principle that government corporations are liable only for the authorized torts of their agents is untenable. If the Government means that the agencies are not liable for the torts of lower level officials unless their conduct is authorized by policy-making officials, it is a sufficient answer to note that Count 7 alleges that the agents of these federal instrumentalities were acting in accordance with agency policy rather than contrary thereto. If the Government’s theory is based on the view that no government agent, however high, is authorized to commit illegal acts, it is even weaker. Such a theory would mean that government instrumentalities, which can act only through their agents, would never be liable in tort. Yet “It is well settled that the authority to sue and be sued contained in the charter of a government corporation includes suits in tort, [citing cases].” B. C. Morton International Corp. v. Federal Deposit Insurance Corp., 305 F.2d 692, 694-695, n. 2 (1st Cir. 1962).

We conclude that even if the conduct were authorized neither by law nor by high officials, these instrumentalities cannot escape liability under the sue and be sued clauses. Thus in Keifer & Keifer v. Reconstruction Finance Corp., 306 U.S. 381, 59 S.Ct. 516, 83 L.Ed. 784, the defendant had not authorized its agents to damage plaintiff’s livestock and was nonetheless held suable for damages in tort. A similar suit was allowed in Gulf Oil Corp. v. Panama Canal Co., 407 F.2d 24 (5th Cir. 1969), though no one had authorized defendant’s pilot to damage plaintiff’s ship. In Powelton Civic Home Owners Association v. Department of Housing and Urban Development, 284 F.Supp. 809, 834 (E.D.Pa.1968), HUD allegedly denied plaintiffs’ procedural relief in violation of the Constitution. The Department was nonetheless held suable because “The Housing Act explicitly waives the sovereign immunity defense and consents to suit.” We approved Powelton in Gautreaux v. Romney, 448 F.2d 731 (7th Cir. 1971), where we held that sovereign immunity does not bar a suit which is challenging alleged unauthorized unconstitutional conduct by a federal officer.

The Government argues that Powelton and Gautreaux are inapt because those plaintiffs did not seek damages. But damages were sought in Keifer & Keifer and in Gulf Oil, supra Furthermore, the Supreme Court’s opinions make clear that sue and be sued clauses do not make distinctions between different kinds of relief. “[T]he words ‘sue and be sued’ normally embrace all civil process incident to the commencement or continuance of legal proceedings * * Reconstruction Finance Corp. v. Menihan Corp., 312 U.S. 81, 85, 61 S.Ct. 485, 487, 85 L.Ed. 595; FHA v. Burr, 309 U.S. 242, 245, 60 S.Ct. 488, 84 L.Ed. 724. As pointed out in Keifer & Keifer, supra, if Congress had chosen to restrict its consent to suits, it would have done so. 306 U.S. at 395, 59 S.Ct. 516. It follows that restrictions on the authority of a federal agency to be sued are not to be lightly implied. FHA v. Burr, 309 U.S. at 245, 60 S.Ct. 488.

Exclusivity of Federal Tort Claims Act

The federal defendants offer an elaborate argument in support of their contention that the Federal Tort Claims Act (the FTCA; 28 U.S.C. §§ 1346(b) and 2671 et seq.) affords the only mode of suit against them for tortious conduct and supersedes 42 U.S.C. §§ 1981 and 1982 and the relevant sue and be sued provisions. As we understand the argument, it proceeds in four steps:

1. “The authority of any federal agency to sue and be sued” shall not be construed to authorize suits which could be brought under the Federal Tort Claims Act. 28 U.S.C. § 2679(a).

2. The FTCA provides for district court jurisdiction over civil actions on claims against the United States, for money damages, for injury caused by the negligent or wrongful act or omission of any federal employee “under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.” 28 U.S.C. § 1346(b).

3. This is such a suit because plaintiffs could have alleged the state tort of interference with contract rights.

4. Had they done so, the suit would be cognizable under the FTCA, and recovery would be barred by 28 U.S.C. § 2680(h).

This argument is inherently suspect, because the purpose of the FTCA was to expand government liability, not decrease it. The fatal flaws lie in the third and fourth steps.

Plaintiffs’ claim against these defendants is based on federal law. The complaint does not allege, and the federal defendants do not concede, that the United States, if a private person, would be liable to plaintiffs in accordance with Illinois law. Since the complaint is based exclusively on federal law, the FTCA is inapplicable. See Feres v. United States, 340 U.S. 135, 146, 71 S.Ct. 153, 95 L.Ed. 152. As Judge Tuttle pointed out in United States v. Smith, 324 F.2d 622, 625 (5th Cir. 1963), the attempt to vindicate a right dependent, as here, upon federal statutes is not within the ambit of the FTCA.

There is no known parallel state liability “under [the] circumstances” (28 U.S.C. § 1346(b)), for the Government has cited no Illinois law comparable to §§ 1981 and 1982. Plaintiffs are not obligated to forego the broad protections of the federal Civil Rights Acts, specifically intended to provide remedies for racial discrimination, and follow the federal defendants’ suggestion of suing instead under a racially neutral state tort law hemmed in with privileges and other limitations. The Supreme Court dealt with a similar situation in Feres v. United States, 340 U.S. 135, 71 S.Ct. 153, 95 L.Ed. 152, where a soldier had been injured by the malpractice of an Army surgeon. Justice Jackson pointed out:

“It is true that if we consider relevant only a part of the circumstances and ignore the status of both the wronged and the wrongdoer in these cases we find analogous private liability. In the usual civilian doctor and patient relationship, there is of course a liability for malpractice. * * * But the liability assumed by the Government here is that created by ‘all the circumstances,’ not that which a few of the circumstances might create.” 340 U.S. at 142, 71 S.Ct. at 157.

The Court concluded that malpractice by an Army surgeon while treating a soldier was governed by federal law and that suit therefore did not lie under the FTCA. Similarly here, the federal defendants cannot recast this suit in FTCA terms by demanding that plaintiffs ignore the circumstance that they were allegedly discriminated against because of their race.

We turn now to the fourth step of the federal defendants’ argument. They have fundamentally misread 28 U.S.C. § 2680(h), which provides: “The provisions of this chapter and section 1346(b) of this title [together, the FTCA] shall not apply to * * * (h) Any claim arising out of * * * interference with contract rights.’’ It is contended that this means that no suit which could have been pleaded as interference with contract rights may be brought against the Government, citing Dupree v. United States, 264 F.2d 140 (3d Cir. 1958). But Dupree was a suit against the United States, and there was no relevant sue and be sued clause. There having been no consent to suit before the FTCA, and the FTCA being inapplicable, there was still no consent to suit, and the suit was dismissed. The United States is not named as a defendant in this case. We have held supra that before the 1946 enactment of the FTCA, the federal defendants were sua-ble in tort for damages under their sue and be sued clauses. Were we to accept their contention that this is really a suit for interference with contract rights, then the FTCA would “not apply” and the sue and be sued clauses would not be limited by § 2679(a), and the pre-FTCA consent to suit would not be affected. It follows that whether this suit is properly based on the Civil Rights Acts, as we conclude, or on state tort law as the federal defendants contend, it is not barred by the FTCA.

The Illinois Statutes of Limitations

The FHA, VA, and their officers agree that the Illinois five-year statute of limitations applies to them. Ill.Rev.Stats.1971, ch. 83, § 16. However, these defendants contend that “the blow was struck” when plaintiffs were denied federal mortgage insurance, or at the latest when they signed their respective installment contracts, so that the statute of limitations ran from that date. The district court relied on our earlier opinion, Baker v. F & F Investment, 420 F.2d 1191, 1200 (7th Cir. 1970), certiorari denied, 400 U.S. 821, 91 S.Ct. 40, 27 L.Ed.2d 49 (Baker I), in which we held that as against the private defendants, the statute of limitations did not begin to run until the respective installment contracts were completely performed. We are urged to distinguish Baker I on the ground that no continuing contractual relationship existed between plaintiffs and the federal defendants. But the touchstone of Baker I was “a prolonged and continuing invasion of the rights of the purchasers.” 420 F.2d at 1200. The three key facts in Baker I are also alleged to be present here: The defendants’ wrongful conduct continued after the installment contracts were signed; injury to plaintiffs continued to accrue after the installment contracts were signed; and, had defendants at any time ceased their wrongful conduct, further injury to plaintiffs could have been avoided. The private defendants could have avoided further injury to plaintiffs by offering to rescind the contracts and negotiate fairer terms. Judge McGarr concluded that the federal defendants could have avoided further injury to plaintiffs because if they had offered mortgage insurance at any time during the life of the installment contracts, plaintiffs could have refinanced the purchase of their homes, possibly reducing further finance charges and ending exposure to other unfavorable terms of the installment' contracts. If these claims are proven, it would follow that a new injury was inflicted on plaintiffs each day until the federal defendants abandoned their discriminatory policies or the respective installment contracts were completely performed, whichever occurred first. Consequently, a new limitations period began to fun each day as to that day’s damage. Plaintiffs allege that the discriminatory policies continued at least through 1967, and the federal defendants seem to admit that they were in effect until 1969 (Br. p. 32; cf. Br. p. 31). The complaint against the FHA, VA and their officers, filed August 11, 1970, is. thus well within the limitations period. Of course, plaintiffs cannot recover against them any items of damage which accrued before August 11, 1965. And they must prove that continuation of the discrimination after that date actually harmed them. It may be, for example, that a non-discriminatory mortgage at the high interest rates of the late sixties would have cost plaintiffs more than their discriminatory installment contracts entered into in the fifties.

Our prior decision most relied upon by the Government is Baldwin v. Loew’s Inc., 312 F.2d 387 (7th Cir. 1963). In that case, as here, defendants’ conspiracy forced plaintiffs to enter into a disadvantageous contract with a third party. Plaintiff Baldwin first signed a five-year lease with a third party in 1940, and thereafter there was no contractual relationship between Baldwin and the defendants. In 1945 the lease was renewed because the continuing conspiracy still made it impossible for Baldwin to operate the business profitably himself. In the renewed lease, Baldwin gave his lessee a five-year tenancy and three five-year options, committing himself for twenty years. He sued defendants in 1953. We held the suit barred because the “statute of limitations begins to run at the time that injury is inflicted. In this case that date was when the lease was executed between plaintiffs and the lessee in 1945.” 312 F.2d at 390. If a contractual relationship were necessary to make a continuing wrong for limitations purposes, the statute would have commenced running in 1940. Instead, it ran from the last date on which, but for the continuing conspiracy, plaintiff could have refused to sign the lease and avoided further injury. Once he was committed for twenty years, termination of the conspiracy would not have helped him, so that the limitations period commenced running in 1945. Baldwin is therefore entirely consistent with our resolution of this case. See Judge Will’s careful discussion of Baldwin in Contract Buyers League v. F & F Investment, 300 F.Supp. 210, 219-220 (N.D.Ill.1969) affirmed in Baker I.

As to the FSLIC, the relevant statute of limitations is Ill.Rev.Stats.1971, ch. 32, § 906. That statute provides that liquidators of savings and loan associations shall fix a time for persons to present their claims and that claims filed thereafter shall be barred. Plaintiffs presumably did not file their claims with the liquidators within the time fixed. The case is therefore much like Pufahl v. Estate of Parks, 299 U.S. 217, 57 S.Ct. 151, 81 L.Ed. 133. That was a suit by the Comptroller of the Currency against the estate of a stockholder of a national bank to enforce a federal statutory liability. An Illinois statute barred all claims against estates not filed within one year from the issuance of letters testamentary. That statute was applied to bar the Comptroller’s claim, even though the claim did not come into existence until after the year had passed, and the limitations period which would have applied to a parallel claim against a living stockholder therefore could not possibly have elapsed.

Plaintiffs argue that the five-year catchall statute of limitations was incorporated into civil rights actions in Illinois in Baker I, and that it must be applied to all such actions. Baker 1 held only that if no specific facts of a civil rights suit bring it within some other statute of limitations, then IlI.Rev. Stats.1971, eh. 83, § 16, applies. But all the relevant elements of each lawsuit must be considered before characterizing it for statute of limitations purposes. Thus in Jones v. Jones, 410 F.2d 365 (7th Cir. 1969), we applied the two-year limitations period of Ill.Rev.Stats.1971, ch. 83, § 15, to an action under 42 U.S.C. § 1983. Although the complaint in that case was brought under the Civil Rights Act and charged that defendants acted under color of law, the underlying wrong alleged was in the nature of malicious prosecution, and therefore the malicious prosecution statute of limitations was applied. Similarly, the fact that this civil rights claim is brought against a defunct savings and loan association brings it within the scope of § 906.

In applying state statutes of limitations to federal claims, we are admonished not to discriminate in favor of federal claims or to “limit the defences to which the defendant would otherwise be entitled [.]” Campbell v. Haverhill, 155 U.S. 610, 616, 15 S.Ct. 217, 219, 39 L.Ed. 280. '“[T]here is no reason to reject the characterization that state law would impose unless that characterization is unreasonable or otherwise inconsistent with national * * * policy.” Automobile Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 706, 86 S.Ct. 1107, 1113, 16 L.Ed.2d 192. Although the Illinois Supreme Court has evidently not yet construed § 906, it is apparent that it would apply § 906 to this case. The patent purpose of § 906 is to complete liquidation proceedings promptly so that depositox*s can be paid, and this purpose would be thwarted by any dilatory money claims. This is a legitimate state purpose and is not unreasonable or inconsistent with national policy. The case is therefore, different from Mc-Allister v. Magnolia Petroleum Co., 357 U.S. 221, 78 S.Ct. 1201, 2 L.Ed.2d 1272 and Donovan v. Reinbold, 433 F.2d 738 (9th Cir. 1971), whei'e courts refused to apply short statutes of limitations to federal claims. Accordingly, the claims for money damages against the FSLIC should be dismissed on remand unless plaintiffs make a prompt offer to prove compliance with § 906. Newberg v. Federal Savings and Loan Insurance Corp., 317 F.Supp. 1104, 1107 (N.D.Ill.1970)

However the equitable claims against the FSLIC should not be dismissed. The FSLIC is said to hold mox'tgages on some of plaintiffs’ homes, and where defendant-seller-mortgagors have defaulted, to own homes subject to plaintiffs’ installment contracts. The complaint asks the court to reform or void these contracts and mortgages, and we are not bound to apply state statutes of limitations to federal equitable claims. Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743. Furthermore, if the FSLIC ever attempted to foreclose the mortgages at issue and repossess plaintiffs’ homes under the installment contracts, plaintiffs could attack the validity of the mortgages and installment contracts in defense or by counterclaim. Ill.Rev.Stats.1971, ch. 83, § 18. In the interests of judicial economy those claims should be resolved in this proceeding.

FSLIC’s Liability as a Successor to Savings and Loan Associations

Finally the FSLIC argues that it was a purchaser- of mortgages of the four savings and loan associations involved and under Illinois law was therefore not subject to latent equities in favor of plaintiffs. However, plaintiffs deny that the FSLIC was a mere purchaser and the district court held that it was named as a defendant “because of its role as conservator of the liquidated savings and loan associations who discriminated in making mortgages to the plaintiffs.” The court concluded that the FSLIC would be liable as successor-in-interest to the liabilities of the defunct lenders if a trial on the merits showed that those lenders had discriminated. That question cannot be decided on the present record, for an unresolved question of fact lies at the threshold of the dispute between the parties. Exactly how did the FSLIC come to own the assets of the defunct savings and loan associations ? It could have proceeded as a liquidator under 12 U.S.C. § 1729(d), with responsibility to “settle, compromise or release claims * * * against the insured institutions.” Or it could have purchased the assets under 12 U.S.C. § 1729(f). If the latter, it may or may not have voluntarily assumed any liabilities. Taking the allegations of Count 7 as tr.ue, as we must on motions to dismiss, it appears that the FSLIC stands in the shoes of the defunct institutions with respect to plaintiffs’ claims against their assets. As indicated above, the FSLIC is said to hold mortgages on some of plaintffs’ homes, and to own other homes subject to plaintiffs’ installment contracts. Since the complaint asks the court to reform or void these contracts and mortgages, the FSLIC may be a necessary party for the giving of complete relief. For all of these reasons, we are unwilling to dismiss the complaint against it at this stage.

Except with respect to the FSLIC, the order of the district court denying the motions of the five federal defendants to dismiss is affirmed, with costs to plaintiffs.

APPENDIX

The Thirteenth Amendment provides:

“Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

“Section 2. Congress shall have power to enforce this article by appropriate legislation.”

Section 16 of the Civil Rights Act of 1870 provides:

“All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other.” (42 U. S.C. § 1981).

Section 1 of the Civil Rights Act of 1866 provides:

“All citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and personal property.” (42 U.S.C. § 1982).

Section 1843(4) of the Judicial Code provides:

“The district courts shall have original jurisdiction of any civil action authorized by law to be commenced by any person:
******
“(4) To recover damages or to secure equitable or other relief under any Act of Congress providing for the protection of civil rights, including the right to vote.” (28 U.S.C. § 1343(4)).


author: TALBOT SMITH, Senior District Judge.

text:
    Therle OLDENBURG, Plaintiff-Appellee, v. Boyce Robertson CLARK et al., Defendants-Appellants.
    No. 73-1398.
    United States Court of Appeals, Tenth Circuit.
    Argued and Submitted Oct. 15, 1973.
    Decided Jan. 3, 1974.

      Gregory Fess, Denver, Colo. (Hatch, McRae & Richardson, Salt Lake City, Utah, on the brief) for plaintiff-appel-lee.
    H. Wayne Wadsworth, Salt Lake City, Utah (Hanson, Brandt & Wadsworth, Salt Lake City, Utah, on the brief) for defendants-appellants.
    Before HILL and BARRETT, Circuit Judges, and TALBOT SMITH, Senior District Judge.

       Hon. Talbot Smith, United States Senior District Judge, Eastern District of Michigan, sitting by designation.

   TALBOT SMITH, Senior District Judge.

The appellants in this diversity action, defendants in the trial court, seek reversal of the lower court judgment declaring them liable to the appellee for certain special and general damages resulting from a fall appellee suffered in a building owned and maintained by the appellants.

In 1968 the appellants acquired the multi-storied structure located at 610 East South Temple in Salt Lake City, and shortly thereafter remodeled the lower level of the building in order to rent out the area. Included in the remodeling was the construction of a wooden banister along the staircase leading to the lower level. The banister extended from the top of the stairs to a point halfway down the staircase, where the stairs made a ninety degree turn before continuing down to the lower level. At the turn a wooden post was installed, and the banister then continued at a right angle down the length of the second half of the steps. The stairs angled around the turn with two wedge-shaped steps.

On October 7, 1970, the appellee, a field representative for the American Cancer Society, was in the building assisting the local chapter of the society, which had rented space on the lower level. At one point, the appellee went up the stairs to the main floor and a moment later started to come back downstairs to the society’s offices. As she came to the turn in the stairs, the appel-lee slipped and fell, suffering a Colies fracture of the left forearm. Later in the day she was hospitalized, complaining of nausea and rapid heartbeat. Subsequently appellee filed suit against the appellants, alleging that she had sustained permanent injuries in the fall, and charging appellants with negligence in the construction and maintenance of the stairway.

After the presentation of all the evidence at trial, the District Court judge granted a motion by the appellee for a directed verdict on the issue of liability, finding that the appellants had been negligent in their maintenance of the stairs and that the appellee had been free of contributory negligence when she fell down the stairs. Only the issue of damages was submitted to the jury, which returned a verdict for the appellee for $952.96 in special damages and $24,000 in general damages. Appellants’ motion for a new trial was denied.

Appellants make three contentions on appeal. First, they urge that the trial court erred in directing a verdict on the issues of negligence and. contributory negligence. Second, they assert that the trial judge committed reversible error in his instructions to the jury on damages by making certain allegedly prejudicial statements. Finally, appellants contend that the award of $24,000 in general damages was excessive.

At the outset we note that in this circuit the sufficiency of the evidence to go to the jury in a diversity case is a matter of federal law, *as is the grant or refusal of a new trial. In considering the motion for a directed verdict the trial court should view all of the proper evidence in the record, and in the light most favorable to the party against whom the motion is made, Weeks v. Latter-Day Saints Hospital, 418 F.2d 1035 (10th Cir. 1969). Such, as well, is the duty of the appellate court reviewing the action. Gulf Ins. Co. v. Kolob Corp., 404 F.2d 115 (10th Cir. 1968).

The standard employed upon review we expressed in Taylor v. National Trailer Convoy, Inc., 433 F.2d 569 (10th Cir. 1970), in the following terms:

“It is proper for a court to withdraw a case from the jury and direct a verdict only in limited circumstances. A directed verdict is proper only where the evidence and all the inferences to be drawn therefrom are so patent that minds of reasonable men could not differ as to the conclusions to be drawn therefrom.” 433 F.2d at 571-572.

See also Kiner v. Northcutt, 424 F.2d 222 (10th Cir. 1970) (direct verdict when evidence “so overwhelmingly preponderant . . . as to permit no other rational conclusion”); Weeks v. Latter-Day Saints Hospital, 418 F.2d 1035 (10th Cir. 1969) (direct verdict “unless reasonable fair-minded persons could form different conclusions”); Adams v. Powell, 351 F.2d 273 (10th Cir. 1965) (determine whether evidence would “cause reasonable minds to honestly differ”); Miller v. Brazel, 300 F.2d 283 (10th Cir. 1962) (deny motion when “fair minded persons may form different opinions and draw different conclusions”); Transcontinental Bus System, Inc. v. Taylor, 265 F.2d 913 (10th Cir. 1959) (deny motion when “reasonable minded persons may reach different conclusions”).

We recognize, of course, that the rule thus easily stated is, in its application, “always perplexing and necessarily subject to the human equation,” and it is in such context and against such background that we review the record in the light of appellants’ claim that they were improperly denied their right to trial by jury.

The testimony taken, and the inferences properly drawable therefrom, involve the type of disputation frequently encountered in the slip and fall cases, where each of the elements of proof is challenged or contradicted, either on the testimonial showings, the physical facts, or both, together with inferences flowing therefrom, all leading to opposing conclusions. Here the testimony principally concerned the handrail on the stairs, the carpeting, the lighting and the configuration and width of the stairs themselves.

The handrail, or banister, did not run down the continuous length of the stairs, as required by the local Building Code, and the interruption allegedly contributed to appellee’s fall. The appellants, however, stress that where the handrail was interrupted, the newel post (constituting the interruption) itself provided “ample support for someone negotiating the stairs either up or down”. They contend that the violation, if such, was thus “technical” only, and that the interruption was not a proximate cause of the fall. The appellee also introduced the testimony of three female co-employees of the appellee who had suffered falls on these stairs, and a mail carrier, who had nearly fallen. Falls and near-falls had been brought to the attention of the appellants, as well as an insurance company recommendation that the stairs be modified in certain particulars. Appellants sought to counter these showings with testimony of another tenant of the building, one Marilyn P. Harvey, the first tenant in this rental area, that she not only had never experienced difficulty in using the stairway, but she had never received such complaints from any of her clients, despite the fact that on one occasion (a Christmas “open house”) some hundred fifty to two hundred people had used the stairway in question.

Charges, and counters thereto, were also made with respect to the carpeting. Appellee pointed out that it was all of one color and therefore allegedly deceptive; appellants argued that such mono-color is usual and customary in stair carpeting. Also, with respect to the carpeting, appellee asserted that she “slipped” off the edge of one of the stairs at the turn; but it was appellants’ showing that it was a tight-woven carpet, “considered a safe type of material for that type of installation” thus seeking to convince the jury that appel-lee presumably did not “slip” off the edge but rather failed to place her foot properly on the stair because she was not watching where she was going.

As to appellee’s contributory negligence, appellee testified that she descended the steps with care but they narrowed somewhat at the turn, and that, as we have noted, the carpet was slippery and was “a difficult color to see the edge of the stairs” (it was a bright red), particularly since the lighting was not good. Appellants argued, however, while not conceding deficiencies in stairs, carpeting, or lighting, that whatever the conditions were, appellee was completely familiar with them, since she had ascended the stairs in safety only a few moments before. Appellants also argued that it was clear from the photographs in evidence that the steps, although narrowed at the turns, remained as wide as the tread of the other steps, and that there was adequate place “to put your feet if you look.” In addition it was pointed out that had appellee felt any apprehension about the turn at the stairs, she knew from her recent previous ascent thereof that there was ample space for the placing of her feet at the other (or wall side) of the stairs, which space she did not attempt to employ. Appellants’ argument may be summarized as being that a jury might well find upon the evidence before it, “that a reasonable person could negotiate that stairway without any problem.”

From this review of the physical facts, the testimony with respect thereto, and the inferences reasonably to be drawn therefrom, all viewed in the light most favorable to the appellants, we are satisfied that reasonable persons exercising impartial judgment could have reached differing conclusions. Obviously, Marilyn P. Harvey’s testimony was probative on the basic general issue of the safety of the stairs and, if given credence by the jury, might well have rebutted the inferences to be drawn from the appellee’s evidence, particularly that of appellee’s co-employees and the mail carrier. It was error thus to withdraw the case from the jury.

The appellants complain, as well, of several aspects of the court’s instruction on damages. We will, since the case must be re-tried, comment only on those that may reoccur.

It is complained that the court erred in mentioning to the jury the amount of damages claimed in the ad damnum. The federal cases addressing this issue have held that it is not improper for the trial judge to advise the jury that the damages awarded may not exceed the specified amount of the prayer, provided it is made clear that the sum is not suggestive of a proper award, but is a limit beyond which the jury cannot go. Chesapeake & O. R. v. Carnahan, 241 U.S. 241, 36 S.Ct. 594, 60 L.Ed. 979 (1916); Dowell, Inc. v. Jowers, 182 F.2d 576 (5th Cir. 1950); Annot., 2 A.L.R.2d 454.

Appellants urge also that the illustrations used by the trial judge in explaining the process for determining money damages evoked prejudice against the appellants. The issue here is whether the jurors would associate the gravity of these injuries used as illustrative examples of the difficulty of assessing money damages for personal injuries with the injuries suffered by the appellee. Reading the instructions as a whole, we find it unlikely that the jury would be so misled or confused. We find no error in the instructions given.

Reversed and remanded for new trial.

      . Kinder v. Northcutt, 424 F.2d 222, 223 (10th Cir. 1970); 9 Wright and Miller, Fed.Prac. and Proced. § 2525, at 551-554 (1971). See also Byrd v. Blue Ridge Electric Cooperative, 356 U.S. 525, 538, 78 S.Ct. 893, 901, 2 L.Ed.2d 953 (1958): “It cannot be gainsaid that there is a strong federal policy against allowing state rules to disrupt the judge-jury relationship in federal courts.” Per contra, Moskowitz v. Peariso, 458 F.2d 240 (6th Cir. 1972). The state-federal point is not critical in this case in view of the holdings of the Utah court in Flynn v. W. P. Harlin Const. Co., 29 Utah 2d 327, 509 P.2d 356 (1973); Hindmarsh v. O. P. Skaggs Foodliner, 21 Utah 2d 413, 416 P.2d 410 (1968).

      . Holmes v. Wack, 464 F.2d 86 (10th Cir. 1972); 6A Moore on Federal Practice ¶ 59.04 [1] (1973).

      . Boeing Company v. Shipman, 411 F.2d 365 (5th Cir. 1969); Young v. Vincent, 310 F.2d 709 (10th Cir. 1962); 5A Moore on Federal Practice ¶ 50.02 [1] (1971); 9 Wright and Miller, Federal Prac. and Proced. § 2529, at 571-573 (1971), and cases therein cited.

      . Kiner v. Northcutt, supra, quoting High Voltage Engineering Corp. v. Pierce, 359 F.2d 33, 38 (10th Cir. 1966).

      . Tr. 178.

      . In commenting on the difficulty of placing a dollar value on personal injuries the court observed, “Sometimes plaintiffs come in here with a leg off or both arms off or a loss of vision in one eye, all sorts of injuries we have coming through here.” Tr. 201.


author: MULLIGAN, Circuit Judge:

text:
    George H. NURNBERG, Petitioner-Appellee, v. Robert F. FROEHLKE, Secretary of the Army, and Louis J. Prost, Commanding Officer of the United States Army Reserve Components Personnel and Administration Center, St. Louis, Missouri, Respondents-Appellants.
    No. 92, Docket 73-1538.
    United States Court of Appeals, Second Circuit.
    Argued Nov. 20, 1973.
    Decided Dec. 28, 1973.

      Joan Goldberg, New York City (Rabin-owitz, Boudin & Standard, New York City), for petitioner-appellee.
    David P. Land, Asst. U. S. Atty. (Paul J. Curran, U. S. Atty., Southern District of New York, Joseph P. Marro, Asst. U. S. Atty., of counsel), for respondents-appellants.
    Before LUMBARD, MANSFIELD and MULLIGAN, Circuit Judges.
   MULLIGAN, Circuit Judge:

George H. Nürnberg was born in Munich, Germany in 1942. His father was Catholic, his mother was Jewish, and he was brought up in the Jewish faith. His family was persecuted by the Nazis during World War II. They lived in fear and terror of Gestapo apprehension but finally managed to reach the United States in 1949. His education was in the public school system of New York. He graduated from Queens College in 1964, and from the Upstate Medical Center in Syracuse, New York, in 1968. Dr. Nürnberg interned from June, 1968, until July, 1969, at the Cornell North Shore Memorial Hospital in Manhasset, New York. From July, 1969, to July, 1971, he was a resident psychologist at St. Vincent’s Hospital in New York City. He later practiced medicine privately. During his internship in February, 1969, at the age of 27, Nürnberg voluntarily enlisted in the United States Army Reserve, receiving a commission as a Lieutenant, pursuant to the Berry Plan. The Berry Plan is a military program made available to medical students which permits them to join the Army Reserve as commissioned officers and to postpone active duty until medical studies are completed.

In July, 1971, Nürnberg completed his studies and in October, 1971, applied for discharge as a conscientious objector. His application was finally denied by the Conscientious Objector Review Board (Board) in September, 1972, and he was ordered to active duty beginning January 8, 1973. The basis for denial was not that petitioner was not a conscientious objector, but that his conscientious objector beliefs had become crystallized and were fixed prior to his voluntary enlistment in the Army in February, 1969. Paragraph 5(c) of Army Regulation 135-25 provides that consideration will not be given to requests for discharge based solely on conscientious objection which existed, but was not claimed, prior to the member’s initial entry into military service.

On January 3, 1973, Dr. Nürnberg filed a petition for a writ of habeas corpus and an order to show cause why a preliminary injunction should not issue, staying his orders to report for active duty as a physician with the United States Army. The motion for a preliminary injunction was heard on January 5, 1973, before Hon. Robert L. Carter, United States District Judge, Southern District of New York. By memorandum decision dated January 8, 1973, a preliminary injunction was issued. The respondents submitted a written memorandum in opposition to the petition, and the writ was granted by Judge Carter on February 9, 1973 (355 F.Supp. 1187). No evidentiary hearing- was held. This is an appeal by the respondents seeking that the order below be vacated and that the petition for writ of habeas corpus be dismissed.

I

In support of His application for conscientious objector status, Dr. Nürnberg, pursuant to regulation, filed a written statement in which he set forth his religious training and beliefs, and provided letters of reference from his mother, two doctor friends and a Rabbi. In February and June, 1972, he was interviewed at Fort Totten, New York, by a chaplain, Captain Donald N. Martin, who concluded that he was sincere in his conscientious objector beliefs and that these convictions were based “on the ethics and morals of the Jewish religion.” A psychiatrist, Captain B. I. Feinberg, found that the petitioner had no psychiatric disorder and that his “current life style is seemingly consistent with his beliefs.” On June 7, 1972, Major Thomas J. Reddington, the Investigating Officer, interviewed Dr. Nürn-berg in the presence of his counsel, who has represented him throughout the proceedings in the federal courts. Major Reddington’s report, dated July 21, 1972, states in part:

I do not think that applicant is sincere in his beliefs. I am convinced that applicant’s beliefs crystallized prior to his entry into service. This is evident, both from an analysis of his testimony at the hearing, and from his application and supporting papers.

Major Reddington’s conclusion was based on the following evidence:

1. Petitioner stated at the hearing that both his grandfather and father were conscientious objectors, that they had influenced his mother and her beliefs, and that they in turn had affected his.

2. Dr. Nürnberg further stated that during college he had achieved an intellectual realization of his feelings which “became concrete at that time.”

3. While in college, he was actively involved in the “ban the bomb” movement, was opposed to military involvement in Southeast Asia and participated in peace marches and fund raising for peace groups in April and May of 1968.

4. The letter from Dr. Nurnberg’s mother stated that her son had been upset from the time he had registered for the draft (presumably in 1961) because “he cannot possibly serve in the military.” She further stated that “he was brought up by his parents as being opposed to the military and to stick to his beliefs and conscience.”

5. The letter from Dr. Hanin, Director of Psychiatric Training at St. Vincent’s Hospital, stated: “I can assure you that his negative feelings with regard to military service . . . and war are deeply felt and long standing.”

6. The letter of Rabbi Joachim Prinz stated that he had known the applicant since his childhood and further stated that the applicant “was always opposed to any kind of warlike involvement. As things developed in Vietnam, he became much more profoundly convinced that he would not be able to serve within the military system.”

Major Reddington’s report concluded:

From the answers given by applicant at the hearing, from his own statements in his application and from his supporting references, I can only conclude that his objection developed and existed prior to applicant’s entry into military service.

I recommend denial of any classification as a conscientious objector for the reason that applicant is not sincere in his beliefs. In my judgment, applicant’s beliefs became fixed and definite prior to his entry into service.

A copy of Major Reddington’s report was forwarded to petitioner’s counsel who submitted a reply memorandum to the Department of Defense.

On August 22, 1972, Captain John L. Locke, Personnel Actions Division, in a one-page report, concurred with the recommendation of the Investigating Officer on the basis of the evidence that Nürnberg was opposed to the military, and that his conscientious objector beliefs had existed prior to his initial appointment. On September 27, 1972, the Conscientious Objector Review Board unanimously recommended disapproval of Nurnberg’s application.

In addition to the evidence already indicated, the Board made reference to Nurnberg’s application for C.O. status in which he stated:

Confrontation with military service again produced the nightmares, depression and anxiety I felt as a child. I hoped for alternate service by [sic] the Public Health Service, but was not chosen. I enlisted in the Berry Plan. I had the unrealistic hope that I might not be called.

By letter dated November 2, 1973, Nürn-berg was advised of the decision of the Board, and was given orders to report for active duty at Fort Sam Houston, Texas, on January 8,1973.

II

The court below set forth the proper test to be applied in reviewing the determination of the Board: “[W]hether on this record there is a basis in fact for disbelieving petitioner’s claim that his conscientious objector beliefs became fixed only when faced with the call to active service.” 355 F.Supp. at 1197. This is admittedly a narrow test. Ames v. Laird, 450 F.2d 314, 315 (9th Cir. 1971) (per curiam); United States v. Corliss, 280 F.2d 808, 810 (2d Cir.), cert. denied, 364 U.S. 884, 81 S.Ct. 167, 5 L.Ed.2d 105 (1960). A court is not to substitute its judgment on the weight of the evidence for that of the designated agency. Witmer v. United States, 348 U.S. 375, 380-381, 75 S.Ct. 392, 99 L.Ed. 428 (1955). If there is objective evidence, even though not preponderant or substantial, the finding must be sustained. United States ex rel. Donham v. Resor, 436 F.2d 751, 753 (2d Cir. 1971).

Although the court below announced in its opinion that the proper standard of review was the “basis in fact” test, it went on to state:

Since the Board does not question the sincerity of petitioner’s belief, he has made out a very strong prima facie case. National policy clearly favors allowing those with truly held conscientious objector beliefs to avoid military service. What is involved here, therefore, is in essence a technical issue — did petitioner waive his right to exemption from military service as a conscientious objector by making his assertion too late. Under these circumstances the Army is required to support its denial of the application with objective facts that strongly and persuasively support the conclusion that a waiver took place.

355 F.Supp. at 1198.

The conclusion of the court below that the Army has the burden of strongly and persuasively establishing that the petitioner had waived his C.O. status by not claiming it when he enlisted, lacks support in any cited authority and we have not found any. Compare Ward v. Volpe, 484 F.2d 1230, 1235 (9th Cir. 1973). In fact, it is a repudiation of the “basis in fact” test, which has been traditionally applied in late crystallization cases as it has in all other conscientious objector cases. See, e. g., Polsky v. Wetherill, 455 F.2d 960, 962 (10th Cir. 1972); Grubb v. Birdsong, 452 F. 2d 516, 519 (6th Cir. 1971); Morrison v. Larsen, 446 F.2d 250, 256 (9th Cir. 1971); Bolen v. Laird, 443 F.2d 457, 460 (2d Cir. 1971); Helwick v. Laird, 438 F.2d 959, 965 (5th Cir. 1971). The statement that the Board does not question the sincerity of petitioner’s belief is somewhat ambiguous. The Board, of course, concluded that Nürnberg was a conscientious objector but that he hid his beliefs in order to gain the advantages of the Berry Plan, and that therefore he was not sincere in stating that he was not a conscientious objector when he enlisted in the Reserve. This is what the case is all about. There is no “national policy” that we know of which permits the true conscientious objector to hide his beliefs in order to obtain the advantages of a commission, and then when called to serve, suddenly to advert to his conscience. The obligation of the conscientious objector is to give timely notice of his reservations and this is provided for in the regulations. A.R. 135-25; Grubb v. Birdsong, supra, 452 F.2d at 519; Morrison v. Larsen, supra, 446 F.2d at 253-256; see Ehlert v. United States, 402 U.S. 99, 101-104 & n. 7, 91 S.Ct. 1319, 28 L.Ed.2d 625 (1971); United States v. Kline, 354 F.Supp. 931, 938 (M.D.Pa.), aff’d, 474 F.2d 1337 (3rd Cir. 1972). We find that there was ample basis in fact to support the finding that the petitioner’s conscientious objector views had matured and had become fixed sometime prior to his enlistment, and, further, that the court below committed error in applying a standard which would impose the burden on the Army to establish this fact “strongly and persuasively.”

The basis in fact consists of the petitioner’s statements, as well as those of his references, which are set forth in Major Reddington’s report and the decision of the Board. While petitioner makes the self-serving statement that his views did not become fixed until he was faced with the prospect of active service, he also expressed the view that when he enlisted, he “had the unrealistic hope that he might not be called.” This, together with the fact that he points to no event or experience (such as combat training or firearms instruction) during his Berry Plan shelter period which triggered a crystallization, strongly suggests that the C.O. status of Nürnberg had blossomed long before enlistment. His childhood memories and religious upbringing would support an earlier maturation than Nürnberg now claims. We cannot ignore the opinions of those who knew the petitioner best, who have no motive to dissimulate and who sincerely believed that his conscientious objector views were long standing.

Ill

Petitioner claims that the Army failed to follow its own regulations and denied him procedural due process because, inter alia, it failed to forward to him the report of Captain Locke, who is deemed to be his Commanding Officer for the purposes of the regulations (see Friedberg v. Resor, 453 F.2d 935, 936 & n. 1 (2d Cir. 1971)). The Army does not contest what it terms a “procedural irregularity.” The court below found that the petitioner was afforded a full and fair opportunity to present the merits of his claim and that all procedures met appropriate standards of fairness. 355 F. Supp. at 1193. The court below did, however, find a violation of due process standards in the failure to submit to the petitioner a copy of the Locke report. 355 F.Supp. at 1193. We cannot agree. It is basic that the petitioner here must establish harm or prejudice as a result of the failure to apprise him of the content of Locke’s report. United States v. Bellmer, 404 F.2d 132, 135 n. 6 (3d Cir. 1968); see United States v. Ford, 478 F.2d 169, 174-175 (1st Cir. 1973); Antonuk v. United States, 445 F.2d 592, 597-598 (6th Cir. 1971). This Nürn-berg has failed to do. The Locke report was substantially based on the hearing and report of Major Redding-ton, which was supplied to him and to which a rebuttal was entered. While the decision of the Board did refer to the fact that it considered the Locke letter, its recommendation of denial was grounded upon the evidence summarized in Major Reddington’s report. There is no point raised in the Board’s decision which relied on the letter of Captain Locke or which was not known to the petitioner here.

The only data found in Captain Locke’s report which was not covered in Major Reddington’s report was that the Army had been liberal in granting Nürnberg additional delays to complete his full residency program, that his application for discharge had not been submitted until no further delay was authorized, and that there was no record on file of his declination of promotion. Petitioner has raised no issue as to the Army’s liberality in extending his Berry Plan deferment or the timing of his application. In his written statement for C.O. status, however, Nürnberg stated: “Recently, I have rejected on two occasions promotion in the military reserves.” But, as we previously mentioned, the Board did not advert to his acceptance of promotion as any indication of his lack of sincerity. The issue is thus of minor, if any, significance. We find therefore no reasonable possibility that the petitioner was harmed by his failure to receive Captain Locke’s report.

IV

Petitioner claims that there is a violation here of his constitutional right to equal protection of the laws because AR 135-25, which is applicable to Army Reservists, requires that the conscientious objector make his views known at the time of his induction or enlistment, while it is not necessary for the Selective Service conscientious objector to seek exemption at the time of his registration. The contention is frivolous. We cannot seriously entertain the argument that an 18 year-old who is required to register for the draft is to be equated with a volunteer who joins the Army Reserve Corps and is immediately commissioned as an officer in the Reserve. In any event, Nurnberg’s loss of any rights he may have had as a Selective Service conscientious objector is directly attributable to his own decision voluntarily to enlist in the Reserve.

The further argument that the petitioner here is denied First Amendment rights because he is being required to serve in the military despite his religious beliefs is not persuasive. It has long been the rule that the “ [discharge [of a conscientious objector] from military service is available only because of a privilege granted by the executive branch of the federal government and not as a constitutional right. See In re Summers, 325 U.S. 561, 65 S.Ct. 1307, 89 L.Ed. 1795 (1945); United States v. MacIntosh, 283 U.S. 605, 51 S.Ct. 570, 75 L.Ed. 1302 (1931).” DeWalt v. Commanding Officer, 476 F.2d 440, 442 (5th Cir. 1973); see Brooks v. United States, 147 F.2d 134 (2d Cir.) cert. denied, 324 U.S. 878, 65 S.Ct. 1027, 89 L.Ed. 1430 (1945).

For the reasons given, the order appealed from is vacated and the petition for a writ of habeas corpus is dismissed.

       It is understandable that Nürnberg has urged on appeal that we in fact reject this narrow criterion of review :
      It is time to discard the “basis in fact” • standard. It is an anacronism [sic] that is sometimes used to deny a claim when the court itself recognizes the insufficiency of the Army basis.
      We decline the invitation and do not believe the criticism to be valid. Proper application of the basis in fact standard requires courts to strike down unsupported and conclusory determinations of an official or board (See Ferrand v. Seamans, 488 F.2d 1386 (2d Cir., 1973)), but at the same time, it serves the salutary purpose of precluding the courts from sitting as de novo tribunals (see United States v. Orr, 474 F.2d 1365, 1368 (2d Cir.), cert. denied, 414 U.S. 871, 94 S.Ct. 95, 38 L.Ed.2d 90 (1973)).