author: TAMM, Circuit Judge:

text:
    HOWARD UNIVERSITY et al., Appellants, v. NATIONAL COLLEGIATE ATHLETIC ASSOCIATION. HOWARD UNIVERSITY et al., v. NATIONAL COLLEGIATE ATHLETIC ASSOCIATION, Appellant.
    Nos. 74-1166, 74-1169.
    United States Court of Appeals, District of Columbia Circuit.
    Argued Jan. 13, 1975.
    Decided March 25, 1975.

      Dorsey Edward Lane, Washington, D. C., for appellants in No. 74-1166 and appellees in No. 74-1169.
    Michael Scott and Charles F. Clarke, Cleveland, Ohio, of the bar of the Supreme Court of Ohio, pro hac vice by special leave of Court, with whom Philip B. Brown, Washington, D. C., was on the brief for appellee in No. 74-1166 and appellant in No. 74-1169.
    Before BAZELON, Chief Judge, TAMM, Circuit Judge, and RICHEY, United States District Judge for the District of Columbia.
    Opinion for the- Court filed by Circuit Judge TAMM.

       Sitting by designation pursuant to 28 U.S.C. § 292(a).

   TAMM, Circuit Judge:

Howard University (Howard) and one of its student-athletes Mori Diane, sought injunctive and declaratory relief in district court, alleging that their Constitutional rights had been abridged because certain members of the Howard soccer team, including Diane, were found by the National Collegiate Athletic Association (NCAA) to have participated in intercollegiate soccer competition and in two NCAA championships while ineligible under applicable NCAA rules; as a result, sanctions were imposed by the NCAA against Howard and, as mandated by NCAA rules, by Howard against Diane. District Court Judge Gerhard Gesell found that state action was present, that the NCAA procedures invoked did not violate due process, and that while two challenged NCAA rules passed equal protection scrutiny, a third, the foreign-student rule, violated equal protection in that it created an unjustifiable alienage classification. Howard University v. NCAA, 367 F.Supp. 926 (D.D.C.1973). On cross-appeals, we affirm.

I. Facts

Plaintiff-appellant Howard University is a private institution of higher learning. Plaintiff-appellant Mori Diane is a student at Howard and a member of its intercollegiate soccer team. Defendant-cross-appellant NCAA is a voluntary, unincorporated association of colleges, universities and other institutions of higher learning, of which approximately fifty percent are state- or federally-supported. Howard has been at all relevant times a member of this Association. A. 20-21.

The NCAA is governed by a large and detailed manual which has been made part of the record. A. 149-258. The manual contains the NCAA’s Constitution and By-laws, promulgated at the annual convention of members, and interpretations and executive actions arising from them. Between conventions, Association affairs are conducted by an eighteen-member Council, its executive committee and a paid staff. Investigators and staff attorneys interpret and enforce the large body of NCAA rulings and precedents. 367 F.Supp. at 928; see A. 194-98.

The NCAA’s basic purpose, contained in its constitution, includes initiating and stimulating intercollegiate athletic programs, encouraging member organizations “to adopt eligibility rules to comply with satisfactory standards of scholarship, sportsmanship and amateurism,” and supervising the conduct of, and establishment of eligibility standards for, events promoted by the Association. NCAA Constitution art. II §§ 1(a), (c), (f), A. 151. To implement those goals, the Association has adopted extensive rules and regulations, including those under attack here. A prerequisite to an institution’s membership in the NCAA is adherence to and enforcement of these rules. All sanctions passed by the Association are imposed on its member institutions. NCAA Constitution, art. IV §§ 1, 2, A. 158.

Howard University finished third in the 1970 NCAA soccer championship and won the national championship in 1971. The Howard team consisted totally of alien student-athletes. In January, 1972, the NCAA staff received a letter attaching a Washington Post sports article and suggesting possible inquiry into the Howard soccer program. The article featured Keith Aqui, a star of the soccer team and a 25-year-old freshman at Howard. A. 27-28. Shortly thereafter, Warren S. Brown, Secretary of the NCAA’s Committee on Infractions, initiated an exchange of correspondence with Howard’s Director of Athletics Leo F. Miles, seeking eligibility information about Mr. Aqui and other members of the soccer team. A. 29-39. On June 9, 1972, Mr. Brown forwarded the matter to the Committee on Infractions which assigned a staff investigator to the case. A. 40.

On November 8, 1972, after receiving investigative reports, the Committee sent to Dr. James Cheek, President of Howard University, a notice of an “Official Inquiry” alleging violations of specified provisions of the NCAA Constitution, By-laws, and Executive Regulations, and directing interrogatories to the University concerning the allegations. Dr. Cheek was advised that the Committee on Infractions would meet on December 19, 1972 and was invited to send a representative. A. 74-80. On November 17, 1972, Dr. Cheek responded by letter which designated Athletic Director Miles as Howard’s representative at the meeting. A. 83. On December 11th, Howard forwarded the requested responses to the Official Inquiry. A. 89-104.

At the December 19th meeting, the Committee reviewed evidence that Howard violated three NCAA rules. A. 114-19. In particular, evidence was offered that two student-athletes participated in the 1971 NCAA soccer championship in violation of the foreign student rule. That rule operates against an alien student-athlete who prior to his matriculation at a member institution participates after his nineteenth birthday as a representative of any team in a foreign country; for each year of such participation, the rule eliminates one year of his potential NCAA championship eligibility. Evidence also indicated that one student apparently violated the five-year rule which dictates that a student-athlete’s five potential years to complete his athletic eligibility commences when he first enrolls at a collegiate institution. Further, information was introduced that three student-athletes had received athletic-related financial aid during their freshman year without having complied with the NCAA’s 1.600 rule. The 1.600 rule mandates that member institutions limit financial aid and freshmen eligibility to student-athletes who have predicted minimum grade point averages of at least 1.600 (based upon a 4.000 scale) as determined by NCAA-approved tables.

At the hearing, Howard participated in the discussion of the issues, presented evidence rebutting the allegation that one particular .student-athlete’s participation violated the 1.600 rule, and was invited to make a statement. After Howard’s representatives departed, the Committee reviewed the evidence and found Howard in violation of the three NCAA rules. A. 114-19.

The Committee’s written report was forwarded by letter to Howard on December 22, 1972, which also indicated that the NCAA Governing Council would take up the matter on January 9th; Howard’s participation was again invited. A. 120-29. After hearing the report and a statement by Howard’s representatives, the Council adopted a resolution which found five violations by Howard of NCAA rules, including utilization of ineligible players during the 1970 and 1971 NCAA championships and imposed a one-year probation during which Howard’s soccer team would be ineligible for post-season competition. A. 133-36. Pursuant to NCAA Executive Regulation 2 — 3-(e), the Council informed Howard that its third-place finish in the 1970 and its first-place finish in the 1971 soccer championship had been vacated and requested the return of the team trophies. A. 142.

In March, 1973, the University stated its refusal to comply with the NCAA’s request and its desire to press the issues in a “higher forum”. A. 144-45. Howard was informed that it could appeal the Council’s decision to a special NCAA convention called for August, 1973. A. 146-48. No such appeal was taken before the filing of this suit.

The case was tried to Judge Gesell on a partially stipulated record of NCAA documents and the NCAA proceedings recounted above. After hearing both testimony and argument, Judge Gesell found subject matter jurisdiction under 28 U.S.C. § 1331 (1970), holding that the NCAA’s activities constituted state action. The court upheld the five-year and 1.600 rules against an equal protection challenge, finding the rationale behind the rules to be both reasonable and nondiscriminatory. However, Judge Gesell found that the foreign-student rule violated equal protection in that it created an “explicit classification according to alienage and one that is, on balance, unjustified.” Finally, the court rejected the argument that the NCAA enforcement proceedings had denied plaintiffs-appellants due process. Although enjoining further enforcement of the foreign-student rule, the court’s decision, by upholding the other rules under attack, left undisturbed the sanctions imposed by the NCAA. 367 F.Supp. at 929-31. These appeals followed.

II. Jurisdiction — The Question of Governmental Action

The district court found subject-matter jurisdiction under 28 U.S.C. § 1331 (1970):

Under all of these circumstances, while Howard is not itself a governmental institution, its athletic affairs and related educational policies are affected by the concerted action of the many state and federal institutions that participate as NCAA members in the promulgation and enforcement of the Association’s rules, regulations and procedures. This involvement by state and federal institutions is pervasive, and bears directly upon the subject matter of the complaint. The actions of these institutions, in short, caused the alleged injuries. Thus, government action is clearly shown and the Court has jurisdiction. See Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S.Ct. 856, 6 L.Ed.2d 45 (1961).

367 F.Supp. at 929 (footnote omitted). In its cross-appeal, the NCAA vigorously disputes the correctness of this holding and argues that the case should be dismissed for lack of jurisdiction.

It is axiomatic that only governmental, not private action is subject to the constitutional restraints of the fifth and fourteenth amendments. See, e. g., Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 172, 92 S.Ct. 1965, 32 L.Ed.2d 627 (1972); Shelley v. Kraemer, 334 U.S. 1, 13, 68 S.Ct. 836, 92 L.Ed. 1161 (1948); Bryant v. Jefferson Federal Savings and Loan Ass’n, 166 U.S.App.D.C. -, -, 509 F.2d 511, 513-, (1974). However, “[cjonduct that is formally ‘private’ may become so entwined with governmental policies or so impregnated with a governmental character as to become subject to the constitutional limitations placed upon state action.” Evans v. Newton, 382 U.S. 296, 299, 86 S.Ct. 486, 488, 15 L.Ed.2d 373 (1966). In determining whether “significant government involvement” exists so that the challenged action may be measured against the constitutional protection, see Moose Lodge, supra, 407 U.S. at 173, 92 S.Ct. 1965, courts must make a particularized inquiry into the circumstances of each case and reach this decision by “sifting facts and weighing circumstances.” Burton v. Wilmington Parking Authority, 365 U.S. 715, 722, 81 S.Ct. 856, 860, 6 L.Ed.2d 45 (1961). The government may have “so far insinuated itself into a position of interdependence . that it must be recognized as a joint participant in the challenged activity .. . i” Id. at 725, 81 S.Ct. at 862. Moreover, the government’s involvement need not be either exclusive or direct; governmental action may be found even though the government’s participation “was peripheral, or its action was only one of several co-operative forces leading to the constitutional violation.” United States v. Guest, 383 U.S. 745, 755-56, 86 S.Ct. 1170, 1177, 16 L.Ed.2d 239 (1966).

We recognized that we are not the first court, nor the first circuit court to confront the question of the applicability of constitutional restraints to the NCAA. The Ninth Circuit in Associated Students, Inc. v. NCAA, 493 F.2d 1251, 1254-55 (9th Cir. 1974), found state action, adopting the analysis of the district court in Parish v. NCAA, 361 F.Supp. 1214, 1219 (W.D.La.1973), which reached its conclusion on an entanglement theory. Recently, the Fifth Circuit affirmed the district court decision in Parish. 506 F.2d 1028 (5th Cir. 1975). The Fifth Circuit noted that “state-supported educational institutions and their members and officers play a substantial, although admittedly not pervasive, role in the NCAA’s program,” id. at 1032 (footnote omitted), and that such state participation in a nominally private activity “is a well recognized basis for a finding of state action.” Other courts facing the issue have also held that state action was present.

Moreover, the affairs of ostensibly private organizations in several states which regulate high school athletic programs and other extracurricular activities have consistently been found to constitute governmental action. While the first holdings involved cases alleging racial discrimination, see, e. g., Louisiana High School Athletic Ass’n v. St. Augustine High School, 396 F.2d 224 (5th Cir. 1968), state action has also been found in cases challenging clearly non-racial athletic eligibility and discipline rules, see, e. g., Wright v. Arkansas Activities Ass’n, 501 F.2d 25 (8th Cir. 1974) (off-season football practices); Mitchell v. Louisiana High School Athletic Ass’n, 430 F.2d 1155 (5th Cir. 1970) (eight-semester rule), sex discrimination, see, e. g., Brenden v. Independent School Dist. 742, 342 F.Supp. 1224 (D.Minn.1972), aff’d, 477 F.2d 1292 (8th Cir. 1973); Reed v. Nebraska School Activities Ass’n, 341 F.Supp. 258 (D.Neb.1972), and regulation of non-athletic activities, see Baltic Independent School Dist. No. 115 v. South Dakota High School Activities Ass’n, 362 F.Supp. 780 (D.S.D.1973) (high school debate tournaments). In all these cases, the courts recognized that the organizations were private, voluntary associations, yet found state action by focusing on the facts that membership consisted substantially of public high schools which provided personnel, facilities and financial support, that the organizations’ rules were promulgated by vote of the members, including the public schools, and that the private organizations significantly regulated and affected the programs of these public entities, including, inter alia, conducting state championship events, imposing restrictions on practices and eligibility, and conducting investigations and meting out sanctions. Consequently the organizations were sufficiently intertwined with state instrumentalities, whose involvement was significant, albeit not exclusive, as to be subject to constitutional restraints.

Against this considerable body of precedent, the NCAA relies heavily on the district court decision in McDonald v. NCAA, 370 F.Supp. 625 (C.D.Cal.1974), which purported to distinguish the high school cases and which held that the activities of the NCAA were not state action. While the vitality of its holding has been undercut by the Ninth Circuit’s subsequent decision in Associated Stu dents, supra, the McDonald analysis still deserves scrutiny. McDonald distinguished the high school cases on two grounds. First, the district court focused on the St. Augustine case, the genesis of the high school line of cases, and dismissed it as a racial discrimination case where a public body attempted to cloak its unconstitutional actions behind a private entity. 370 F.Supp. at 630-31. Second, the court argued that the NCAA’s function differs from the function of the Association in St. Augustine in that no one state or state’s instrumentalities control the NCAA, nor does the NCAA regulate the athletic program of a particular state. Id. at 631.

The McDonald analysis contains, however, fatal flaws. While St. Augustine dealt with racial discrimination, the high school cases, as indicated above, now clearly extend constitutional scrutiny to the types of rules and regulations at issue here. As to the second point, the district judge misperceived the issue. It is undeniable that the NCAA, unlike the state athletic associations, is not the delegated body which is the substituted overseer of one particular state’s athletic program. Compare Terry v. Adams, 345 U.S. 461, 73 S.Ct. 809, 97 L.Ed. 1152 (1953). However, that analysis does not resolve the question of whether the degree of NCAA regulation of and involvement in those universities’ programs and the fact that half the NCAA’s membership are public institutions sufficiently intertwines their interests and affairs so that the NCAA is subject to the fifth and fourteenth amendments. It is that question that the Fifth and Ninth Circuits and the district court in this case, properly relying in part on the high school cases, have answered affirmatively. We agree.

Approximately half of the NCAA’s 655 institutional members are state- or federally-supported. Since financial contribution to the NCAA is based upon institutional size, and since public universities generally have the largest student bodies, the public institutions provide the vast majority of the NCAA’s capital (the NCAA’s annual administrative budget at the time of the suit being $1.3 million). A.. 179, 343. Principal power in the Association lies with the Convention, which is made up of representatives of the member institutions. The Convention elects the governing Council and the NCAA’s principal officers, adopts and amends the constitution and by-laws, and reviews all Council and committee actions. As can be seen from this description, the state instrumentalities are a dominant force in determining NCAA policy and in dictating NCAA actions. That conclusion is buttressed by reference to the record before us which documents that both the President and Secretary-Treasurer were representatives of public instrumentalities and that state instrumentalities traditionally provided the majority of the members of the governing Council and the various committees. A. 198-207. Thus, governmental involvement, while not exclusive, is “significant”, and all NCAA actions appear “impregnated with a governmental character.” See Moose Lodge, supra; Evans v. Newton, supra.

The NCAA’s regulation and supervision over intercollegiate athletics is extensive and represents an immeasurably valuable service for its member institutions. The NCAA conducts championship events in most sports for the benefit of its member institutions. The Association regulates the amateur status of student-athletes, sets financial aid policies, prescribes playing and practice seasons, fixes minimum academic standards, establishes standards for approved extra events and determines eligibility for intercollegiate competition and NCAA championships. The NCAA also negotiates television contracts, the proceeds of which, $13,000,000 annually, flow directly to the participating schools, primarily the public universities. A. 343-46. The foregoing analysis indicates that the NCAA and its member public instrumentalities are joined in a mutually beneficial relationship, and in fact may be fairly said to form the type of symbiotic relationship between public and private entities which triggers constitutional scrutiny. See Jackson v. Metropolitan Edison Co., 419 U.S. 345, 95 S.Ct. 449, 42 L.Ed.2d 477 (1974); Burton v. Wilmington Parking Authority, supra.

If the NCAA was composed of solely public institutions, clearly state action would be present. In contrast, if the NCAA had no public members, its actions would be private for constitutional purposes. Drawing the line as to the requisite quantum of public participation to invoke fourteenth amendment protections is a difficult task indeed. However, that is unnecessary in this case where the degree of public participation and entanglement between the entities is substantial and pervasive. In light of this substantial participation, we must agree with the Fifth Circuit’s recent comment in Parish: “it would be strange doctrine indeed to hold that the states could avoid the restrictions placed upon them by the Constitution by banding together to form or to support a ‘private’ organization to which they have relinquished some portion of their governmental power.” 506 F.2d at 1033. We hold that state action is present and that the district court correctly determined it possessed jurisdiction under 28 U.S.C. § 1331 (1970).

III. Constitutional Challenges

In district court appellants Howard and Diane argued that the three applicable NCAA rules denied them equal protection and that the NCAA proceedings which culminated in sanctions against appellant Howard infringed upon their due process rights. We turn first to the equal protection challenge.

The Supreme Court has most recently articulated the generally applicable equal protection standard in its unanimous decision in Reed v. Reed, 404 U.S. 71, 75-76, 92 S.Ct. 251, 253-254, 30 L.Ed.2d 225 (1971):

the Fourteenth Amendment does not deny to States the power to treat different classes of persons in different ways. ... A classification “must be reasonable, not arbitrary, and must rest upon some ground of difference having a fair and substantial relation to the object of the legislation, so that all persons similarly circumstanced shall be treated alike.” Royster Guano Co. v. Virginia, 253 U.S. 412, 415, 40 S.Ct. 560, 64 L.Ed. 989 (1920).

One student-athlete, Keith Aqui, was adjudged to have violated the five-year rule. The district court found that the rule “is designed to compel the regular progression of athletes through a four-year college curriculum without unnecessary or material delay” and “is reasonable and fundamental to the Association’s objectives and in no way discriminates against aliens.” 367 F.Supp. at 929. We agree. The rule was adopted to reflect the average time, four and one-half years, required to obtain a college degree. See A. 363 — 64. While there are undoubtedly other potential mechanisms to ensure an athlete’s progress toward graduation, we see no indication that the method adopted is unreasonable or not substantially related to its objective. See Reed v. Reed, supra.

The 1.600 rule applies only to championship events. Its objectives are, inter alia, to reduce the recruitment and exploitation of young athletes who are not representative of the institution’s student body and to limit athletic competition to actual student-athletes. 367 F.Supp. at 929; A. 343, 372. Howard argues that the rule, especially in light of the NCAA’s Official Interpretation 418 (O.I. 418), violates the Reed standard. Appellant’s Br. at 10-13.

O.I. 418 reads:

A student-athlete who practices or participates while ineligible under the [1.600 rule] shall be charged with the loss of one year of practice and varsity eligibility by his institution for each year gained improperly, which shall be the next year the student is in attendance. A student-athlete who receives financial aid while ineligible for such aid . shall be declared permanently ineligible ... by his institution. The institution may appeal to the Council for a reduction of the ineligibility in either instance. The loss of eligibility may apply only at the institution involved in the violation.

A. 177. Appellants rely principally on the holding and reasoning of the district court opinion in Associated Students, Inc. v. NCAA, C. No. S-2754 (E.D.Cal. 1973), which opined that the rule as interpreted by O.I. 418 established an over-inclusive classification since it declares ineligible student-athletes who demonstrated by the conclusion of the first year that they had the ability to achieve academic success by actually earning at least 1.600 grade point average. However, since the filing of appellants’ brief, the Ninth Circuit rejected the district court’s reasoning and upheld the rule as interpreted as reasonably related to the objective behind it. Associated Students, Inc. v. NCAA, supra, 493 F.2d at 1256.

We find the Ninth Circuit’s reasoning persuasive. One primary objective of the rule is to prevent member schools from granting scholarships to individuals who do not have a realistic chance of obtaining a degree. To effectuate that objective, the eligibility determination obviously must be made at the time of the student’s application and certification. To adopt appellants’ theory would permit member institutions to recruit ineligible athletes with the hope (or expectation) that they might meet prediction standards after their first year in college and thus become eligible for athletics during the remainder of their college career. In order to prevent such a complete undermining of the rule’s legitimate objective, O.I. 418 requires ineligibility for an improperly certified athlete, regardless of his college academic record. A penalty need not be the best that might have been provided, but only reasonably related to the rule’s purpose. We think that the 1.600 rule, as interpreted by O.I. 418, meets that test. Accord, id.; Parish v. NCAA, supra. See also Schubert v. NCAA, 506 F.2d 1402, (7th Cir. 1974).

The district court did strike down the third rule at issue, the foreign-student rule. While it is somewhat unclear from the briefs and argument whether the NCAA places the correctness of that ruling in dispute here, we reach its merits and also find that the rule violates the equal protection guarantee. The rule clearly establishes an alienage classification, treating foreign student-athletes differently than American student-athletes, and thus must be subjected to close judicial scrutiny. In re Griffiths, 413 U.S. 717, 721, 93 S.Ct. 2851, 37 L.Ed.2d 910 (1973); Graham v. Richardson, 403 U.S. 365, 372, 91 S.Ct. 1848, 29 L.Ed.2d 534 (1971). The NCAA must demonstrate that its purpose is substantial and that the classification as drawn is necessary to the accomplishment of that purpose. In re Griffiths, supra, 413 U.S. at 721-22, 93 S.Ct. 2851.

We must conclude that the NCAA has failed to meet its burden. The NCAA claims that the rule’s objective is to prevent older, foreign players from dominating championship competition because of age and experience. While the objective of preventing older players from dominating competition may be substantial, the classification as drawn results in an arbitrary discrimination against aliens. Under the rule, foreign student-athletes are penalized for activities (for example summer amateur participation) in which American athletes may freely compete. Thus, this suspect alienage classification as drawn cannot stand.

Turning to the due process question, we should first note our substantial doubts whether appellant Howard and especially appellant Diane have recognizable property interests subject to due process protections under the standards of Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972). However, even assuming a recognizable interest, appellants were in no way denied due process. The requirements of due process are flexible and vary as the particular situation demands. See Morrissey v. Brewer, 408 U.S. 471, 481, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972); Cafeteria Workers v. McElroy, 367 U.S. 886, 895, 81 S.Ct. 1743, 6 L.Ed.2d 1230 (1961). In the case sub judice, Howard, as sketched in Part I, supra, was given notice and full particulars of the charges against it, the right to participate and defend its action before both the Committee and Council, and the opportunity to appeal the rulings of both bodies to the NCAA Convention. Diane had an opportunity to appeal on his own behalf but failed to do so, 367 F.Supp. at 931, presumably because he was satisfied with Howard’s representation of his interests. Moreover, his period of ineligibility was significantly reduced when Howard appealed on his behalf. We think that the NCAA has complied adequately with any due process responsibilities it might have had.

In sum, we conclude that state action is present, that the five-year and 1.600 rules, but not the foreign-student rule, pass constitutional scrutiny, and that no due process violation has occurred. The judgment, therefore, is

Affirmed.

      . The “Foreign-Student” Rule. Any participant in a National Collegiate Athletic Association event must meet all of the following requirements for eligibility .... He must not previously have engaged in three seasons of varsity competition after his freshman year, it being understood that: . Participation as an individual or as a representative of any team whatever in a foreign country by an alien student-athlete in each twelve-month period after his nineteenth birthday and prior to his matriculation at a member institution shall count as one year of varsity competition. NCAA By-law 4-l(f)(2), A. 173.

        . The “Five-Year” Rule. An institution shall not permit a student-athlete to represent it in intercollegiate athletic competition unless he meets the following requirements of eligibility: He must complete his seasons for participation within five calendar years from the beginning of the semester or quarter in which he first registered at a collegiate institution. NCAA Constitution art. Ill § 9(a), A. 156.

      . The “1.600 Rule". A member institution shall not be eligible to enter a team or individual competitors in an NCAA-sponsored meet, unless the institution in the conduct of all its intercollegiate athletic programs: (1) Limits its scholarship or grant-in-aid awards (for which the recipient’s athletic ability is considered in any degree), and eligibility for participation in athletics or in organized athletic practice sessions during the first year in residence to student-athletes who have predicted minimum grade point averages of at least 1.600 (based on a maximum of 4.000) as determined by the Association’s national prediction tables or Association-approved conference or institutional tables. . . . NCAA By-law 4-6(b)(1), A. 175.

      . The state action requirement also arises in cases dealing with the “under color of state law” standard of 42 U.S.C. § 1983 (1970). The Supreme Court has indicated that the “under color of state law” requirement is equivalent to the constitutional state action standard, United States v. Price, 383 U.S. 787, 794 n.7, 86 S.Ct. 1152, 16 L.Ed.2d 267 (1966), and principles derived from both lines of cases are used interchangeably. See, e. g., Parish v. NCAA, 506 F.2d 1028, 1031 n.6 (5th Cir. 1975); Bryant v. Jefferson Federal Savings and Loan Ass’n, 166 U.S.App.D.C. -, - n.4, 509 F.2d 511, 513 n.4 (1974).

      . The district court in Parish relied heavily on the high school line of cases, discussed infra and opined:
      Although NCAA is a nationwide association, it does control public schools which are State agencies to the extent that the high school athletic associations control their respective members at least insofar as . regulations, sanctions, and discipline are concerned. Moreover, State funds are used by public schools to pay membership dues in this association.

      . Moreover, the Parish court asserted that regulation of intercollegiate athletics was beyond the effective reach of any single state and that there was little doubt “that were the NCAA to disappear tomorrow, government would soon step in to fill the void.” Thus,' the NCAA by taking upon itself the role of coordinator and overseer of college athletics is performing a traditional governmental function. 506 F.2d at 1032-33.
      The Seventh Circuit, in upholding the constitutionality of the “2.0 Rule”, which has superceded the “1.6 Rule” under attack here, did not reach the state action question. Schubert v. NCAA, 506 F.2d 1402 (7th Cir. 1974).

      . Smith v. Southern Methodist University, CA-3-74-895B (N.D.Tex.1974) (unreported order); Buckton v. NCAA, 366 F.Supp. 1152 (D.Mass.1973); Curtis v. NCAA, C-712088 ACW (N.D.Cal.1972) (unreported opinion). See also Note, Judicial Review of Disputes Between Athletes and the National Collegiate Athletic Association, 24 Stan.L.Rev. 903, 916-28 (1972).

      . See also Oklahoma High School Athletic Ass’n v. Bray, 321 F.2d 269 (10th Cir. 1963) (eligibility); Gilpin v. Kansas State High School Activities Ass’n, Inc., 377 F.Supp. 1233 (D.Kan.1973) (sex discrimination); Taylor v. Alabama High School Athletic Ass’n, 336 F.Supp. 54 (M.D.Ala.1972) (disciplining basketball team). Compare Kelly v. Wisconsin Interscholastic Athletic Ass’n, 367 F.Supp. 1388 (E.D.Wis.1974) (complaint dismissed for failure to allege state action).

      . See, e. g., Gilpin v. Kansas State High School Activities Ass’n, Inc., supra note 8, 377 F.Supp. at 1233; Reed v. Nebraska School Activities Ass’n, 341 F.Supp. 258, 261 (D.Neb.1972).

      . It is because the question in this case is one of entanglement that the Supreme Court’s latest pronouncements on state action, Jackson v. Metropolitan Edison Co., 419 U.S. 345, 95 S.Ct. 449, 42 L.Ed.2d 477 (1974) and Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 92 S.Ct. 1965, 32 L.Ed.2d 627 (1972), can be of limited guidance to us. In Moose Lodge, the Court determined that the state’s grant of a liquor license, pursuant to a regulatory scheme, to a private club did not make the club’s discriminatory membership policy state action. 407 U.S. at 171-77, 92 S.Ct. 1965. The Court in Jackson held that a heavily regulated utility with a partial monopoly was not a state actor when it terminated service in a manner that the state regulatory commission found permissible under state law. 419 U.S. 345, 95 S.Ct. 449. Unfortunately, neither Moose Lodge, analyzing state action through the grant of a benefit, or Jackson, addressing state action through regulation of a monopoly and delegation of a public function, offer any analysis to resolve the question before us of entanglement through dominant membership and participation.

      . While, unlike in the high school cases, no particular state’s instrumentalities are able to control the association, it is clear that all NCAA actions are undertaken on the votes of public instrumentalities, and it would not overstate the practical situation to assert that no NCAA action could be taken by the Convention, Council, or any committee without the substantial support of the public instrumentalities.

      . It is notable that many of these events take place at public university facilities, where they are hosted by the public instrumentalities.

      . Concededly, the NCAA’s regulation is not as all-embracing as some of the high school associations discussed previously. For example, the NCAA exercises no control over officials, does not involve itself in scheduling or classroom teaching assignments for coaches, and cannot prohibit member schools from competing with non-member schools. Nevertheless, the NCAA regulation is pervasive, and similar enough to the high school associations so that we feel that those cases must be given great weight in resolving the question before us.

      . Howard also attacks the rule’s application in this case. The NCAA found that because Mr. Aqui attended Mausica College, Trinidad in 1965, his eligibility had expired prior to the 1970 season. A. 134. Howard contends that Mausica does not fall within the scope of the “collegiate institution” portion of the five-year rule. However, we discern no reason to disturb the NCAA’s finding in light of appellant’s admissions in the record of the rule’s applicability to Aqui’s attendance at Mausica. See A. 35, 473-74.

      . We note the NCAA’s representation that under the appeal authorized under O.I. 418, a student-athlete’s ineligibility is consistently reduced to a period equal to that which he participated in athletics in violation of the rule. Appellant Diane apparently has had his period of ineligibility reduced in such a manner. See NCAA’s Br. at 46.
      Since we uphold the rules, we need not decide whether in light of our finding of state action vis-a-vis the NCAA, the actions of a private university, Howard, taken against appellant Diane, that are triggered by its voluntary concurrence in the decisions of the NCAA also constitute state action. See Parish v. NCAA, supra note 4, 506 F.2d at 1032 n. 10.

      . Several courts have held that the privilege of participating in athletics must be deemed to fall outside the protection of due process. See, e. g., Parish v. NCAA, supra note 4; Mitchell v. Louisiana High School Athletic Ass’n, 430 F.2d 1155, 1157-58 (5th Cir. 1970); Oklahoma High School Athletic Ass’n v. Bray, supra note 8. Conceivably, Howard has a sufficient property interest in the trophies originally awarded in championship competition.


source: Caselaw Access Project

author: DONALD RUSSELL, Circuit Judge:

license: Public Domain

text:
    Clyde SNYDER, Appellant, v. Ira M. COINER, Warden, West Virginia State Penitentiary, Appellee.
    No. 73-2367.
    United States Court of Appeals, Fourth Circuit.
    Argued Dec. 3, 1974.
    Decided Feb. 7, 1975.

      Jack L. Gould, Bowie, Md., for appellant.
    David P. Cleek, Asst. Atty. Gen. of W. Va. (Chauncey H. Browning, Jr., Atty. Gen. of W. Va., Richard E. Hardison, Deputy Atty. Gen. of W. Va., on brief), for appellee.
    Before WINTER, CRAVEN and RUSSELL, Circuit Judges.
   DONALD RUSSELL, Circuit Judge:

The petitioner, a state prisoner convicted of rape, seeks federal habeas relief, after exhausting state post-conviction remedies. The District Court denied relief and we affirm.

I

The primary claim of error, asserted by the petitioner, concerns the limitation placed by the trial court on the cross-examination of a prosecution witness. The defense sought to establish by cross-examination of the witness that five years earlier, he, then fifteen years of age, at the insistence of his father, had falsely testified at a deposition that he was a passenger, rather than the driver, of a car that had been involved in an accident. The prosecution objected to the admission of such evidence. The trial court permitted full inquiry to be made by the defense into the incident without the presence of the jury before ruling on the admissibility of such evidence. The witness admitted the incident but stated he acted at the direction of his father. At any rate, after a full inquiry without the presence of the jury during which counsel for the petitioner was allowed to inquire into all the details, the trial court ruled that, under all the circumstances, it would not permit the petitioner to impeach the credibility of the witness by offering proof of such false testimony.

It is the petitioner’s contention that the trial court’s ruling, limiting the right of cross-examination of the witness, denied him his constitutional right of confrontation. The right to an effective cross-examination, it is well established, is an integral part of the right of confrontation guaranteed under the Sixth Amendment, made applicable to the States by the Fourteenth Amendment. Accordingly, while the scope and extent of cross-examination is generally declared to be within the sound discretion of the trial court, that discretion must be exercised with due regard for the defendant’s constitutional rights. Specifically, it is an abuse of discretion and a violation of constitutional rights to deny to a defendant the right to cross-examine a witness at all on “a subject matter relevant to the witness’s credibility,” such as an instance of prior false swearing. Davis v. Alaska (1974) 415 U.S. 308, 318, 94 S.Ct. 1105, 1112, 39 L.Ed.2d 347; United States v. Jordan (4th Cir. 1972) 466 F.2d 99, 104-105, cert. den. 409 U.S. 1129, 93 S.Ct. 947, 35 L.Ed.2d 262; Simon v. United States (4th Cir. 1941) 123 F.2d 80, 85, cert. den. 314 U.S. 694, 62 S.Ct. 412, 86 L.Ed. 555; Pullman Co. v. Hall (4th Cir. 1932) 55 F.2d 139, 141; Gaiten v. Stahl (D.C.N.C. 1971) 327 F.Supp. 415, 421. This, however, is not an inflexible rule. It does not extend to transactions or convictions which may be considered too remote in time and circumstance. This is so because to permit inquiry into events too remote in time and circumstances is unreasonably to harass, annoy or embarrass the witness, and such harassment is not within constitutional guarantees. Courts, however, have not established' any fixed time or settled circumstance by which remoteness may be determined in this context. Since remoteness in this context is an issue to be resolved in the light of the facts of the particular case, it is the rule generally followed in federal courts as well as in West Virginia courts that the issue is a “matter primarily for the trial court’s judgment, and its rulings in this respect will not be disturbed except for clear and prejudicial abuse of discretion.” Hawkins v. Missouri Pac. R. Co. (8th Cir. 1951) 188 F.2d 348, 351-352; State v. Price, supra (167 S.E. at 866). The trial court, in the exercise of its discretion, denied cross-examination in this case because the conduct in question occurred five years earlier at the time when the witness was a juvenile fifteen years of age, acting under the directions of his father. As we have said, ordinarily that ruling would not be “disturbed except for clear and prejudicial abuse of discretion.” It is unnecessary, however, for us to determine in this case whether the exercise of discretion by the trial court to the effect that the specific instance about which the defendant was denied the right of cross-examination, on account of remoteness in time and circumstance, constituted “clear and prejudicial abuse of discretion.” Assuming arguendo that such ruling was a “prejudicial abuse,” the error was clearly harmless within the principle of Chapman v. California (1967) 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705.

The testimony of the witness in question could only be considered as corroborative and corroborative of facts that were undisputed even by the defendant himself. A careful comparison of Franck’s and the defendant’s testimony clearly demonstrates such corroboration. The witness (Franck) testified that, while he and the prosecutrix sat in a car parked on a sideroad, the car door was suddenly jerked open and he, after being “insulted”, was grabbed by the shoulder and dragged out of the car by four men, among whom was the defendant. The defendant admits that he was in the group. He went further and admitted that it was he who actually jerked the door open suddenly, and that he participated in dragging the witness “rudely” from the car. He admitted, too, that both Franck and the prosecutrix plead with him and his companions to “let him [Franck] and his girlfriend go.” Franck testified that, after he was pulled “rudely,” to use the defendant’s own term, from the car, and despite his pleas to the group to let him and “his girlfriend” alone, he was kicked, beaten and knocked down by the group. Again, the defendant admits all this. He testified freely that he was among those struggling with, hitting and kicking Franck. Franck testified someone in the group had a gun and that the gun was fired. The defendant admits there was a gun and that it was fired a number of times. The defendant sought to give the shooting an innocent purpose by stating that one of the group was engaging in target practice on some beer cans at night! The defendant claimed too the gun was in the possession of another member of the assaulting group and inferred he had no connection with the gun. However, he later testified that when he was getting into the car prior to his alleged assault on the prosecutrix, he had in his possession the gun which he at that point took out of his pocket and gave to another member of the group. Franck, who was being held on the ground some distance in front of his car by one of the group, was not able to see the actual assaults and did not cover them in his testimony. The only testimony given by him that could relate to the assaults consisted of his statement that he heard the prosecutrix struggling and screaming during the time he was being held. The defendant admitted that the prosecutrix struggled, kicked, fought and screamed. He thus confirmed by his own testimony the statement of Franck to this effect. But he contends simply that this did not occur while he was with the prosecutrix. In short, he testified the prosecutrix resisted the others but welcomed him to her embraces and that, while Franck was correct in his statement that the prosecutrix was screaming and struggling, the screams and struggling heard by the witness did not take place while he was with the prosecutrix. Finally, Franck testified to the fact that, after he was released and the group had run off (apparently because of the approach of another car), he hastened back to the prosecutrix in the car. At that time, he testified, the prosecutrix was in a dazed condition, with her hair caught in the window latch, and with “blood on her chest” and “blood coming out of her nose and mouth.” Photographs of the prosecutrix, taken the next morning after the alleged rapes, confirmed cuts and abrasions on the prosecutrix. The existence of cuts and abrasions on the prosecutrix and her bleeding, again, the defendant does not deny, but he contended in his testimony, that it was another member of the group who inflicted these injuries on the prosecutrix.

This constitutes a review of the extent of Franck’s testimony, so far as it might be considered as affecting the defendant. At most, the testimony of Franck simply confirmed the defendant’s own admissions as to his conduct and its nature as well as the conduct of his group. Any restrictions on the right of the defendant to impeach the credibility of the witness imposed by the trial court, if too severe, were thus harmless.

This conclusion is also reinforced by the overwhelming evidence of defendant’s guilt, leaving aside Franck’s testimony. The defendant admitted that he and his companions had been drinking. He testified he himself had had two drinks of whiskey and some beer. A cousin of the defendant, who was with the group, testified that the defendant and one Ratliff shot pool just before they embarked upon their assault on Franck and his companion for the purpose of determining which one would first assault the girl they confidently assumed was in the parked car they had observed earlier on the back road and to which they intended to go. According to the defendant’s cousin, Ratliff won, a somewhat significant fact since, when the group had pulled Franck, the male companion of the prosecutrix, out of the parked car, it was Ratliff who first assaulted the prosecutrix. This testimony, if believed, established the criminal purpose with which the defendant and other members of the group approached the occupants of the parked car. The defendant denied this testimony of his cousin but his conduct, as he himself recounted it, unmistakenly demonstrated the nature of their conduct.

Armed with a gun, the members of the group were not embarking on some youthful lark, prompted by innocent curiosity; they manifestly intended no good when they approached the parked car; their purpose was inferable. And their subsequent conduct fully confirmed the inference. Even under the defendant’s account, he and his companions went down to the parked car for the purpose of seeing “what they [that is, the occupants of the car] are doing.” They stopped their car some distance from the parked car and noiselessly approached it on foofcy It is obvious that they wished to accost the occupants of the parked car before the latter were aware of their presence. As we have said earlier, when the group got to the parked car, the defendant, on direct examination, first said “the car door opened,” though he later admitted he may have jerked the door open. He then said that one of his group asked the male companion of the prosecutrix “what he was doing” and, when no answer was given, the same member of the group “put his hand on the boy’s shoulder and the boy stepped out of the car.” Later, however, the defendant admitted his innocent and guileless account was wide of the mark. He testified Franck didn’t just gently step out of the car after a tap on the shoulder but was pulled out of the car. There is no question that the group, which included one [the defendant’s half brother] who because of his size and strength was called “Space Man,” then assaulted Franck. “Space Man,” after Franck had been overpowered, held him, so that he could do nothing and actually could not observe what was taking place in the car. During this time, we have pointed out that the group began firing their gun. The contention that the group was engaged in some innocent target shooting is incredible. That this conduct was intended to put Franck and his companion in fear for their lives seems an inescapable conclusion.

While Franck was being overpowered and the gun was being fired, Ratliff, according to the defendant, got into the car with the prosecutrix and asked her to have “a drink of beer” but she did not respond. Later, according to the defendant, Ratliff got out of the car, called to the defendant, asked him if he wanted to have relations with the prosecutrix. The defendant testified that he replied that he did not and then incredibly [if his prior testimony is to be believed] proceeded to get into the car where, according to his account, the prosecutrix, who resisted so vigorously the others, practically seduced him, a story that was undermined by his own later statement that while he was on top of the prosecutrix, he noticed her trying to get at something and that he thought she was trying to get some object with which to hit or assault him. It would hardly seem possible that the defendant could have thought the prosecutrix was willingly consenting if she were attempting at the same time to find an object with which to defend herself against him and his advances. Moreover, during this time one member of the group was engaged in firing their gun. The brandishing of the gun and its use were naturally calculated to ins'till fear in both the prosecutrix and Franck, and it is difficult ’ to credit that there was any other purpose in such conduct on the part of the group.

That others in the group of which he was an active part had ravished the prosecutrix the defendant did not deny; in fact, he admitted it. The defendant also admitted that when the group arrived the prosecutrix plaintively appealed to them, including the defendant, not to harm or assault her. The appeal fell on deaf ears, including those of the defendant. The guilt of the defendant was thus compellingly established.

We accordingly find no merit in petitioner’s first contention.

II

After testimony had been concluded, the defendant raised the question of the disqualification of one of the jurors in the case. Counsel for the defendant voiced some reluctance in raising the point, especially since the basis for the claimed disqualification was a statement of one Goff, who had been a companion of the defendant on the night of the alleged rapes and who was, also, under indictment for rape on that account. Counsel for the State joined in the suggestion that Goff be examined by the Court. Goff was examined in camera. His testimony was to the general effect that he was told by the daughter of one of the jurors, whom he had dated some weeks earlier, that her mother, the juror, had gone over in great detail the facts of the case with her and that her mother had at that time expressed the intention to see that all the participants in the alleged rapes were punished to the fullest extent. All of this occurred, under the time sequence testified to by Goff, long before the jurors had been selected and perhaps before she was included in the jury venire. Goff, also, testified that the daughter was employed in the offices of the State Police and had transcribed' the statements or confessions of a number of the participants in the alleged rapes. Examined separately under oath, both the daughter and her mother denied that they had discussed in any detail the case or that the mother had ever expressed any opinion in the cause or indicated she thought that those who had allegedly participated should be punished. Actually, the daughter testified that she had not transcribed the statements of either the defendant or any of the other participants in the alleged rapes. The juror declared her impartiality in the case and the absence of any bias on her part. After considering the evidence and the demeanor of the parties, the trial court concluded that Goff was an untrustworthy witness and found that the daughter and mother had testified truthfully. It accordingly denied the motion to disqualify the juror.

Under the circumstances, the determination of the disqualification of the juror was for the trial court. In federal post-conviction proceedings, this ruling could only provide a basis for relief if it could be said to have been so prejudicial as to be violative of due process. See Murphy v. State of Florida (D.C.Fla.1973) 363 F.Supp. 1224, 1228-1230, aff. 5 Cir., 495 F.2d 553, 556. We do not find it of such dimensions and it gives no basis for federal habeas relief. In fact, we agree with the state court that the ruling was not clearly erroneous.

Ill

The other grounds for appeal are without merit. The first concerns delay in the allowance of an appeal. The State Court, however, reordered sentencing in order to permit a belated appeal by the defendant. There is accordingly an absence of any prejudice in this context.

The other contention is that the defendant was denied a public trial, since, for a time during arguments of counsel before the jury, a bailiff refused to allow persons to enter or leave the courtroom. Such condition existed for but a short time and was quickly changed by .the Court, when advised of the action of the bailiff. The bailiff, in acting as he did, merely sought to prevent any disturbance during the arguments. There were no restrictions placed on the defendant, his counsel, family or witnesses or even spectators then in the courtroom. The incident was entirely too trivial to amount to a constitutional deprivation.

CONCLUSION

The judgment of the District Court is accordingly affirmed.

Affirmed.

      . Alford v. United States (1931) 282 U.S. 687, 691, 51 S.Ct. 218, 75 L.Ed. 624.

      . Roberts v. Russell (1968) 392 U.S. 293, 294, 88 S.Ct. 1921, 20 L.Ed.2d 1100.

      . See Beaty v. United States (4th Cir. 1954) 213 F.2d 712, 721, vac. on other grounds, 348 U.S. 905, 75 S.Ct. 311, 99 L.Ed. 710; United States v. Norman (9th Cir. 1968) 402 F.2d 73, 76, cert. den. 397 U.S. 938, 90 S.Ct. 949, 25 L.Ed.2d 119; United States ex rel. Ragazzini v. Brierley (D.C.Pa.1970) 321 F.Supp. 440, 444; States v. Riss & Co. (1953) 139 W.Va. 1, 80 S.E.2d 9, 17.

      . See Davis v. Alaska, supra (Stewart, J., concurring):
      “ * * * I would emphasize that the Court neither holds nor suggests that the Constitution confers a right in every case to impeach the general credibility of a witness through cross-examination about his past delinquency adjudications or criminal convictions.”

      . See United States v. Cole (4th Cir. 1974) 491 F.2d 1276, 1279; United States v. Miller (4th Cir. 1973) 478 F.2d 768, 770; State v. Price (1933) 113 W.Va. 326, 167 S.E. 862, 866; 4 Jones on Evidence, sec. 25:12, p. 147 (6 ed. 1972); McCormick on Evidence, sec. 42, pp. 87-8 (1954 ed.); 58 Am.Juris., sec. 746, pp. 402-3; 98 C.J.S. Witnesses § 515, p. 423; Rule 609, New Federal Rules of Evidence.
      The West Virginia rule, as phrased in State v. Price, and controlling in the trial of this case, is limited to a “recent transaction or conviction.” This is substantially the rule stated in Jones to the effect that the trial judge “should exclude examination as to transactions which are too remote to affect credibility. The court’s decision is to be arrived at in view of the evidence which has already been introduced and the testimony of the witness in the direct examination and all the circumstances of the case.”
      In its official note on Rule 609, the Advisory Committee observes that, “Few statutes recognize a time limit on impeachment by evidence of conviction. However, practical considerations of fairness and relevancy demand that some boundary be recognized.” The Rule accordingly erects an absolute barrier of 10 years on the use of such evidence to impeach the credibility of a witness. Whether a shorter period is justified in a particular case is a matter apparently in the discretion of the trial judge to be determined on the basis of the circumstances of the particular case. A circumstance that the Rule recognizes as entitled to consideration in determining remoteness, it would seem, is the youth of the witness at the time of the transaction sought to be used for impeachment purposes. See subdivision (d) of the Rule and the comment thereon of the Advisory Committee.

      . State v. Price, supra (167 S.E. at 866):
      “Where the cross-examination relates to a recent transaction or conviction ‘bearing directly upon the present character and moral principles of the witness, and therefore essential to the due estimation of his testimony by the jury’ (citing authority), the court may permit the inquiry, within reasonable limits. Necessarily, this must rest largely in the sound discretion of the trial judge.”

      . Cf., Lott v. State (1933) 123 Tex.Cr.R. 591, 60 S.W.2d 223, 225, where a conviction obtained nine years earlier when the witness was fifteen years of age was held inadmissible for purposes of impeaching the credibility of the witness.

      . It is somewhat difficult at times to follow the testimony of the defendant, which abounds in inconsistencies and contradictions. He testified on direct that the door on the car apparently opened without explanation. He admitted on cross-examination, however, that he had given a statement to an investigating officer shortly after the incident which statement represented his best recollection at the time, and in this statement he admitted he was the one who jerked the door of the car open. Similarly, he claimed on direct examination that Franck got out of the car — apparently voluntarily. On cross-examination he admitted that Franck was dragged out of the ear and that he had been one of those who, in his words, “pushed” Franck out of the car. It was, also, stated without contradiction that the defendant had given another statement to the investigating authorities which differed in other particulars from his testimony at trial. Seemingly because Miranda [Miranda v. Arizona (1966) 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694] had not been observed, the State made no effort to cross-examine on this statement, though cross-examination would have been admissible under Harris v. New York (1971) 401 U.S. 222, 223-226, 91 S.Ct. 643, 28 L.Ed.2d 1.

      . See Subilosky v. Moore (1st Cir. 1971) 443 F.2d 334, 336, cert. denied 404 U.S. 958, 92 S.Ct. 328, 30 L.Ed.2d 276.

      . Cf., State v. Thompson (1965) 149 W.Va. 649, 142 S.E.2d 711, 719, quoting from State v. Wamsley (1930) 109 W.Va. 570, 156 S.E. 75:
      “ ‘ * * * At common law persons present aiding and abetting, where rape is a felony, are principals equal in guilt with the direct perpetrator. * * * All persons who were present aiding and abetting the commission of the fact are principals in the second degree at common law and may be charged in the indictment as having done the act. * * * ’ ”


author: SNEED, Circuit Judge:

text:
    Roy MILLER and Artie Miller, Petitioners-Appellees, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellant.
    No. 73-2819.
    United States Court of Appeals, Ninth Circuit.
    Feb. 3, 1975.

      George G. Wolf, Atty. (argued), of Tax Div., Dept, of Justice, Washington, D. C., for respondent-appellant.
    Warren Wertheimer (argued), Novato, Cal., for petitioners-appellees.

       Honorable Jack R. Miller, Judge United States Court of Customs and Patent Appeals, sitting by designation.

   OPINION

Before WALLACE and SNEED, Circuit Judges, and MILLER, Judge.

SNEED, Circuit Judge:

This is an appeal from a Tax Court decision which held the taxpayers, Roy and Artie Miller, not liable for the deficiency asserted by the Commissioner in his Notice of Deficiency of August 31, 1970, pertaining to the taxpayers’ return for the calendar year 1967. The essence of this case best can be revealed by quoting from the Commissioner’s Notice. Its Explanation of Adjustments reads:

Since you own more than 80% in value of the stock of both corporations, it is. determined that the sale of equipment in 1967 by Miller’s Markets to Carsan Investment Company was indirectly a sale between you and the transferee corporation within the meaning of section 1239 of the Internal Revenue Code. Accordingly, your taxable income has been increased by $1,445 to take into account as ordinary income that portion of the gain of $19,009.25 which was reported to you as a capital gain.

After certain adjustments the determined deficiency amounted to $1,299.50.

As the Explanation indicates, the Commissioner insists that the sale of equipment by Miller’s Markets, a bona fide Subchapter S corporation engaged in carrying on a trade or business, to Carsan Investment Company, also a bona fide corporation engaged in carrying on a trade or business, was, for purposes of section 1239, an indirect sale by the taxpayers to Carsan because of their ownership of more than 80% in value of the stock of both corporations. The Tax Court rejected this characterization of the transaction and so do we. As a consequence, we affirm the decision of the Tax Court.

We begin by observing that the Commissioner, to support his position, does not rely on the fact that Miller’s Markets is a Subchapter S corporation. His position would be the same even if Miller’s Markets were not such a corporation. While this suggests that the taxpayers’ ownership of more than 80% in value of both Miller’s and Carsan could lead to characterizing the sale as either one by an individual to a corporation, one by a corporation to an individual, or, perhaps, one by an individual to himself, we define the issue before us as that of determining whether the sale under the circumstances of this case constitutes an indirect sale “between an individual and a corporation more than 80 percent in value of the outstanding stock of which is owned by such individual, his spouse, and his minor children and minor grandchildren.”

The Tax Court in rejecting the Commissioner’s contentions, which he has enshrined in Revenue Ruling 69 — 109, 1969 — 1 Cum.Bull. 202, relied on the legislative history of section 1239’s predecessor, section 117(o) of the Internal Revenue Code of 1939 enacted in 1951. See section 328(a), Revenue Act of 1951, ch. 521, 65 Stat. 452. The House version of section 117(o) was “intended to forestall the practice of selling depreciable assets to controlled corporations in order to obtain substantial tax benefits available under existing law,” H.Rep.No.586, 82d Cong. (1st Sess.) 1951, 1951 — 1 Cum.Bull. 376. It required that the individual own directly or indirectly more than 50 percent of the value of the outstanding stock and contained fairly elaborate attribution rules to aid in determining whether the individual’s indirect ownership met this standard. It contained no explicit provisions purporting to attribute to an individual shareholder a sale made by his controlled corporation to another controlled corporation.

The Senate deleted the entire provision. The explanation for doing so offered by S.Rep.No.781, 82d Cong., 1st Sess. (1951), 1951-1 Cum.Bull. 507, is as follows:

It appears that the House provision would deny capital gains treatment to some bona fide transactions while failing to deny such treatment in cases of clear avoidance. For example, under the provision there would be no bar to the sale of property to a third person who then could sell it to the corporation. Your committee believes that action on this problem should be deferred until actual cases involving use of this avoidance device have been submitted for study. For this reason the bill eliminates the House provision. (Italics added.)

The italicized sentence is hard to explain because the House version explicitly included indirect sales by an individual to his controlled corporation and a clearer example of an indirect sale than that described in the sentence is hard to imagine. Compounding the difficulty is the fact that no other passage in the committee reports of either the House, Senate, or Conference sheds any light on the scope of indirect sales.

In any event, the Senate’s rejection did not stand. Thereafter the Conference Committee adopted the modified version of the House proposal which became section 117(o) of the Internal Revenue Code of 1939 and which is now section 1239 of the 1954 Code. In doing so it described the new provision as one providing “that in case of a sale or exchange, directly or indirectly, of depreciable property (1) between husband and wife, or (2) between an individual and a corporation in which he, his spouse, and his minor children and minor grandchildren own more than 80 percent of the value of the outstanding stock, any gain recognized to the transferor [which may be a husband, wife, individual, or corporation] shall be considered ordinary income and not capital gain.’’ (Italics added.) H.Rep.No. 1213, 82d Cong. 1st Sess. (1951), 1951 — 1 Cum.Bull. 631. There is, of course, no suggestion in this Report that Congress intended the clause “directly or indirectly” to perform the function of attributing to a shareholder, owning more than 80 percent in value of the stock of the transferor corporation, a sale or exchange by that corporation to the transferee corporation in which the shareholder also owned more than the required 80 percent. Had it been the intention to embrace such a transaction we believe that another subsection would have been devised which would have read substantially as follows:

(x) A sale or exchange, directly or indirectly, between two corporations in both of which more than 80 percent in value of the outstanding stock is owned by the same individual, his spouse, and his minor children and minor grandchildren, shall be deemed for the purpose of this section a sale between such individual and a corporation m.ore than 80 percent in value of the outstanding stock of which is owned by such individual, his spouse, his minor children and minor grandchildren.

Precisely such a provision was added to then section 24 by the Revenue Act of 1937 (which now appears substantially as section 267(b)(3), Internal Revenue Code of 1954), when Congress intended to reach transactions between two corporations owned substantially by the same individual notwithstanding that one of the provisions of section 24 was to disallow losses.

Even if such a subsection were not added, it would be reasonable to expect the Conference Report to contain a sentence or two affixing the substance of such a subsection to the statutory word “indirectly” had it intended the word to embrace such a transaction. This is particularly true in light of the apparently very narrow reading of “indirectly” set out in S.Rep.No.781. Nothing of the sort, however, appears in the Conference Report.

Strength for the conclusion that Congress never intended the word “indirectly” to cover intercorporate sales by corporations controlled in the section 1239 sense is added when it is remembered that in 1951 statutory attribution rules had not developed to their present level of sophistication and that effective attempts to recapture previously allowed depreciation allowances upon the sale of depreciable assets at a gain were not to be enacted until a number of years later. See section 1245, enacted in 1962, and section 1250, enacted in 1964, Internal Revenue Code of 1954. Section 117(o) of the Internal Revenue Code of 1939 was a limited recapture device which must be interpreted as Congress then intended it to be understood and not in accordance with what Congress today might do if confronted with the same problem.

Our conclusion is also strengthened by the fact that the pertinent Treasury regulation contains nothing to indicate that an intercorporate sale under proper circumstances was to be treated as an indirect sale by the controlling shareholder to his controlled corporation. See Treas. Reg. 118, § 39.117(o )-1 (1953). The Treasury generally is not reticent in asserting an interpretation favorable to the fisc which it believes reasonably reflects the intent of Congress. For example, its regulations under section 117(o) and section 1239 provided that beneficial ownership by the individual, his spouse, his minor children and minor grandchildren was equivalent to legal ownership. Treas.Reg. 118, § 39.117(o)-1 (1953); Treas.Reg. § 1.1239 — 1 (1957). This interpretation, quite arguably more reasonable than that presently before us, nonetheless was rejected by the Fourth Circuit on the ground, inter alia, that Congress in other sections of the Code, e. g., section 267, employed specific language when it desired equitable ownership to be treated as legal ownership and that its failure to do so should mean that it didn’t intend for beneficial ownership to be so treated. Mitchell v. Commissioner, 300 F.2d 533, 535-6 (4th Cir. 1962). See also United States v. Rothenberg, 350 F.2d 319 (10th Cir. 1965).

The Tax Court in this case and in 10-42 Corporation, 55 T.C. 593 (1971) states that the legislative history of section 117(o) contains only one example of an indirect sale, viz. a sale through a strawman. Since this example does not appear to have been intended to illustrate an indirect sale, we do not wish to be understood as suggesting by affirming the Tax Court that the only “indirect” sale brought within the reach of section 1239 is one in which a strawman is used. The term when used in other sections, e. g. section 267(a)(1), is broader than that, see McWilliams v. Commissioner, 331 U.S. 694, 67 S.Ct. 1477, 91 L.Ed. 1750 (1947), and we wish to leave open the possibility that it is also broader in section 1239. Nonetheless, to extend the reach of the word “indirectly” to embrace intercorporate transactions which have no nexus with the controlling individual shareholder other than that which inescapably flows from his status as a controlling shareholder carries us beyond interpretation into the realm of amendment. Into that realm we are forbidden to go.'

Affirmed.

      . For example, a sale by the individual share.holder of depreciable equipment at its fair market value to a third party followed by the purchase of substantially equivalent equipment at substantially the same price by the controlled corporation from a fourth party followed or not, as the case may be, by a contribution to the capital of the controlled corporation in the amount of sales proceeds received by the individual shareholder might possibly be considered an indirect sale by the individual to his controlled corporation. Another possible example of such an indirect sale, in this case involving two corporations controlled by the same individual, is where the individual shareholder makes a contribution consisting of depreciable equipment to the capital of controlled corporation A which, after the passage of a planned but significant period of time, sells the depreciable equipment to controlled corporation B for an amount in excess of its adjusted basis.