author: HAYS, Circuit Judge:

text:
    Roland J. KALB, Plaintiff-Appellant, v. UNITED STATES of America, Defendant and Third-Party Plaintiff-Appellee, v. Jerome L. HEROLD, Third-Party Defendant-Appellant.
    Nos. 741 and 742, Dockets 73-2222 and 73-2256.
    United States Court of Appeals, Second Circuit.
    Argued April 3, 1974.
    Decided Oct. 15, 1974.

      Samuel M. Eisenstat, New York City (J. Michael Gottesman and Eisenstat & Gottesman, P. C., New York City, on the brief), for plaintiff-appellant Kalb.
    Eugene R. Anderson, New York City (Anderson, Russell & Kill, P. C., New York City, on the brief), for third-party defendant-appellant Herold.
    Joel B. Harris, Asst. U. S. Atty. (Paul J. Curran, U. S. Atty., for the Southern District of New York, and Gerald A. Rosenberg, Asst. U. S. Atty., on the brief), for defendant and third-party plaintiff-appellee.
    Before HAYS and OAKES, Circuit Judges, and CHRISTENSEN, District Judge.

       Honorable A. Sherman Christensen of the United States District Court for the District of Utah, sitting by designation.

   HAYS, Circuit Judge:

In April 1969 the IRS assessed appellants $163,613.35 in penalties pursuant to 26 U.S.C. § 6672 (1970) for failure to collect and pay over to the United States taxes withheld from employees of Herold Radio & Electronics Corp. for various periods in 1959, 1960, and 1961. Appellant Kalb paid part of the assessment and then commenced an action for a refund of the payment. The United States counterclaimed for the unpaid part of the assessment. Later the United States commenced a third-party action against appellant Herold and another officer of Herold Electronics. Herold counterclaimed for his partial payment of the assessment. After introduction of evidence by all parties the district court granted the motion of the United States to dismiss Kalb’s claim and Her-old’s counterclaim and to direct a verdict for the United States on its counterclaim and third-party claim.

We find that there was a triable issue of fact as to whether Herold’s failure to pay was “willful” within the meaning of section 6672. We therefore reverse and remand as to him. In all other respects we affirm the judgment of the district court.

I.

In 1949 appellants and one Morris Steelman formed a business to manufacture radios and phonographs. In 1955 they revised the corporate structure of the venture, making Herold Radio the parent company with Steelman Phonograph Company and Roland Radio Company as subsidiaries.

In 1959 the company’s financial condition began to deteriorate. The Bankers Trust Company, which had provided financing for the business, threatened to withdraw its line of credit. The parties reached an agreement whereby financing continued on the condition that the bank was permitted to place a representative on Herold Radio’s premises to oversee the company’s financial operations.

In the ensuing period the bank and the company tried to keep the latter financially viable by paying only the company’s most persistent creditors and deferring others. Although the company continued to withhold taxes from its employees, it did not pay over these taxes to the government.

The efforts to save Herold Radio failed. In January 1961 the company ceased operations with the withholding taxes still unpaid.

Pursuant to 26 U.S.C. § 6672 (1970) the government then assessed appellants for the full amount of the unpaid taxes.

II.

Appellant Herold claims that under 26 U.S.C. § 6501 (1970) the statute of limitations ran as to him for the first quarter of 1961. The return was filed after the company’s bankruptcy and was not signed. Generally an unsigned return does not start the statute of limitations running. Lucas v. Pilliod Lumber Co., 281 U.S. 245, 248-249, 50 S.Ct. 297, 74 L.Ed. 829 (1930); Doll v. Commissioner, 358 F.2d 713 (3d Cir. 1966).

Herold seeks to distinguish his case on the ground that it was not his return and that he was not aware it was unsigned. He offers no authority for his position. Although the return was not personal, Herold was responsible for it, see part V infra. We find no reason to remove this ease from the general rule that the statute does not run while the return remains unsigned.

Herold also claims that he is not liable for taxes withheld in the second and third quarters of 1960 because the taxes did not become due until August 15, 1960, on which date the company filed a petition under Chapter XI of the Bankruptcy Act. Herold argues that in those circumstances payment of a preexisting debt was impermissible as a matter of law. However, withholding taxes are not simply a debt. They are part of the wages of the employee, held by the employer in trust for the government. 26 U.S.C. § 7501(a) (1970). In paying the taxes over to the government the employer merely surrenders that which does not belong to him. We know of no rule prohibiting such payments by a petitioner under Chapter XI.

Herold also contends that he is not liable for the penalty for the first quarter of 1961 because the company went bankrupt on January 14, 1961, at which time the payments for the first quarter were not yet due. The fact that the taxes were not yet due is irrelevant. As the employer withholds taxes from employees’ wages a contingent liability is created. The liability merely becomes fixed on the due date. See In re Serignese, 214 F.Supp. 917, 920 (D.Conn. 1963), aff’d sub nom., Goring v. United States, 330 F.2d 960 (2d Cir. 1964 (mem.)). Again, appellant shows no authority for the claim that payments of these funds held in trust are prohibited by law. Even adjudication as a bankrupt does not discharge liability for taxes withheld from employees. Bankruptcy Act § 17(a)(1)(e), 11 U.S.C. § 35(a)(1)(e) (1970).

The filing of the Chapter XI petition and the subsequent bankruptcy of Her-old Radio therefore do not excuse nonpayment.

III.

Both appellants claim that Her-old Radio requested the IRS to apply an overpayment arising from the company’s net operating loss in 1960 to reduce its withholding tax liability, that the IRS wrongfully refused to honor that request, and that if the loss is so applied it will eliminate appellants’ liability.

26 U.S.C. § 6402(a) (1970) clearly gives the IRS discretion to apply a refund to “any liability” of the taxpayer. Kalb claims that the IRS did not have this discretion here because the overpayment was voluntary. Although in other areas of the law a payor may have power to direct application of voluntary payments, we find no basis for such power in tax law. Cf. United States v. Rochelle, 363 F.2d 225, 232-233 (5th Cir. 1966); Jewel Shop, Inc. v. United States, 352 F.2d 526, 530, 173 Ct.Cl. 466 (1965); Horwitz v. United States, 339 F.2d 877, 878 (2d Cir. 1965).

Herold argues that even if the IRS properly refused to apply the overpayment to the withholding tax liability, his reasonable belief that it would be so applied negates the allegation that he willfully failed to pay the tax. The Fifth Circuit has recognized an exception of “very limited application” to section 6672 where there is “reasonable cause” for the willful failure to pay over withholding taxes. See Newsome v. United States, 431 F.2d 742, 746-747 & n. 11 (5th Cir. 1970). Other circuits have explicitly rejected the “reasonable excuse” exception. See Monday v. United States, 421 F.2d 1210, 1216 (7th Cir.), cert. denied, 400 U.S. 821, 91 S.Ct. 38, 27 L.Ed.2d 48 (1970).

In this case the government at no time indicated that the overpayment would be applied to the withholding tax liability. Attorneys for the company petitioned the referee in bankruptcy for such relief, but neither the referee nor the government ever suggested the relief would be granted. Thus any assumption by appellants that the overpayment would be applied to the withholding tax liability was totally unjustified.

IV.

Appellant Herold raises several claims as to the constitutionality of section 6672. None has any merit.

First, he claims that section 6672 imposes criminal penalties and that it was therefore unconstitutional to apply it without extending to him the rights enjoyed by criminal defendants. The statute essentially provides penalties for breach of that trust imposed by 26 U.S.C. § 7501(a) (1970) when an employer fails to pay to the government taxes withheld from the wages of employees. Thus the penalty imposed is civil in nature. Monday v. United States, supra; see Botta v. Scanlon, 314 F.2d 392, 393 (2d Cir. 1963).

Herold argues that the assessment procedure denied him due process because he was not afforded a hearing before the penalty was levied. It has long been held that collection of taxes by summary proceedings, with judicial review afforded after assessment, does not violate due process. See Phillips v. Commissioner, 283 U.S. 589, 595, 51 S.Ct. 608, 75 L.Ed. 1289 (1931). Only recently the Court expressly recognized that collection of taxes is one of the exceptions to the requirement of a prior hearing. Fuentes v. Shevin, 407 U.S. 67, 92 & n. 24, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972).

V.

Appellants claim that they were not “responsible persons” and did not willfully fail to pay taxes within the meaning of section 6672.

First, they claim that during the relevant period Bankers Trust Company controlled Herold Radio’s finances and prevented appellants from paying withholding taxes. They allege that they always included taxes in the list of debts forwarded to the bank for approval of payment, but that the bank refused to approve payment. The government contests the allegation, but even if it were true it would not absolve appellants because it is undisputed that appellants voluntarily entered into and at all times acceded to the arrangement.

Appellants concede that any power the bank may have had to select which creditors should be paid was granted by appellants as part of the consideration for the bank’s continuing financing of Her-old Radio. Appellants maintained legal control of the company, including the power to sign checks. Appellants were always free to rescind the agreement if it involved them in breaches of their duties under section 3402(a).

To permit corporate officers to escape liability under section 6672 by entering into agreements which prefer other creditors to the government would defeat the entire purpose of the statute. As we have noted, and as section 7501(a) makes explicit, withholding taxes are held in trust. We cannot imagine that in any other context a trustee could avoid his obligations by entering into an agreement by which funds entrusted to him are used to pay his other obligations. Similarly, we will not permit appellants so to escape their obligations here. Cf. United States v. Hill, 368 F.2d 617, 620-622 (5th Cir. 1966); United States v. Strebler, 313 F.2d 402, 404 (8th Cir. 1963); Bloom v. United States, 272 F.2d 215, 222-223 (9th Cir. 1959), cert. denied, 363 U.S. 803, 80 S.Ct. 1236, 4 L.Ed.2d 1146 (1960).

The only remaining question is whether Kalb and Herold were “responsible persons” and whether they “willfully” failed to pay taxes.

Under section 6672 a responsible person is “[a]ny person required to collect, truthfully account for, and pay over” the relevant tax. 28 U.S.C. § 6672 (1970). Except to the extent that he relies on the arrangement with the bank, Kalb hardly denied that he was a responsible person. Kalb was the Chairman of the Board and chief executive officer of the company. S. Freedland, the company’s controller and head of its accounting department, was responsible to Kalb. It was Kalb who negotiated the agreement whereby Bankers Trust continued to finance Herold Radio. In general, the evidence amply demonstrated that Kalb held ultimate authority over the company’s financial affairs and was clearly a “responsible person.”

As to Herold the evidence is less overwhelming but still justified a directed verdict on the issue of responsibility. He was president of the company, a major stockholder, and he participated in discussions by the board concerning the company’s financial condition and tax problems. He signed checks, including on occasion checks to the IRS, and he signed some of the company’s tax returns. Although his involvement in the financial affairs of the company was not as great as Kalb’s, it was sufficient to make him a responsible person.

Nor is there any substantial question that Kalb’s failure to pay was willful. He not only knew of but negotiated the arrangement with the bank under which other creditors were preferred to the government. He participated in the arrangement by signing checks while knowing that withholding taxes were not being paid.

As to Herold, however, a rather different situation exists. He claims, that he did not know that withholding taxes were not being paid. He contends that he became president of the corporation through the historical accident that Herold Radio became the parent company when the three constituent companies merged in 1955, that in substance he was only the purchasing agent for the company, and that he had little understanding of financial matters. He also claims that payment of the Corporation’s taxes was handled by others, a not untenable claim since Herold Radio was a fairly large organization, employing 800 workers at its peak.

In the district court and in this court the government does not deny Herold's claim, but argues that because of his official capacity he had a duty to know about the arrearage in withholding taxes. A corporate officer acts “willfully” within the meaning of section 6672, the government argues, when he should have known that taxes owed were not paid. We cannot agree. Conduct amounting to no more than negligence is not willful for purposes of § 6672. Dudley v. United States, 428 F.2d 1196, 1200 (9th Cir. 1970). It is, however, not necessary that evil motive or intent to defraud be proven in order to establish willfulness. Monday v. United States, 421 F.2d at 1216; Bloom v. United States, 272 F.2d at 223. Monday defined willful action under § 6672 as “voluntary, conscious and intentional — as opposed to accidental — decisions not to remit funds properly withheld to the Government.” 421 F.2d at 1216. That definition has been widely accepted. Dudley v. United States, 428 F.2d at 1198 n. 3. See e. g., Spivak v. United States, 370 F.2d 612, 615 (2d Cir.), cert,. denied, 387 U.S. 908, 87 S.Ct. 1690, 18 L.Ed.2d 625 (1967). Monday also points out, as has to be the case, that willful conduct “may also indicate a reckless disregard for obvious or known risks.” 421 F.2d at 1215. Willful conduct also includes failure to investigate or to correct mismanagement after having notice that withholding taxes have not been remitted to the Government. United States v. Leuschner, 336 F.2d 246 (9th Cir. 1964); Dougherty v. United States, 327 F.Supp. 202 (D.S.D.1971), aff’d without opinion, 471 F.2d 656 (8th Cir. 1972). See Burack v. United States, 461 F.2d 1282, 198 Ct.Cl. 855 (1972).

This case must therefore be remanded for determination of whether Herold, a responsible person under § 6672, “willfully” failed to see to it that the withheld taxes were paid over to the rightful payee, the Internal Revenue Service.

      . The statute provides :
      “Any person required to collect, truthfully account for, and pay over any tax imposed by this title who willfully fails to collect such tax, or truthfully account for and pay over such tax, or willfully attempts in any manner to evade or defeat any such tax or the payment thereof, shall, in addition to other penalties provided by law, be liable to a penalty equal to the total amount of the tax evaded, or not collected, or not accounted for and paid over. No penalty shall be imposed under section 6653 for any offense to which this section is applicable.”

      . The two cases advanced by appellant clearly differ from the instant case. In Miller v. Commissioner, 237 F.2d 830, 837 (5th Cir. 1956), the court held that the IRS could not claim that for purposes of the statute of limitations the return was unsigned when the taxpayer’s wife had signed taxpayer’s name in accordance with his directions. In Ardbern Co. v. Commissioner, 120 F.2d 424, 427 (4th Cir. 1941), the court held in essence that the IRS was estopped from claiming that the return was unsigned because the infirmity was induced by the actions of its own agent. Neither holding supports appellant’s position.


source: Caselaw Access Project

author: CHOY, Circuit Judge:

license: Public Domain

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Richard Edward LONG, Defendant-Appellant.
    No. 74-1485.
    United States Court of Appeals, Ninth Circuit.
    Oct. 17, 1974
    As Amended Feb. 28, 1975.

      Harvey Erickson, Spokane, Wash., (argued), for defendant-appellant.
    Carroll D. Gray, Asst. U. S. Atty. (argued), Spokane, Wash., for plaintiff-appellee.
   OPINION

Before BROWNING and CHOY, Circuit Judges, and THOMPSON, District Judge.

CHOY, Circuit Judge:

Long appeals from a conviction for willfully and knowingly failing to report for induction into the Armed Forces, in violation of 50 U.S.C. App. § 462. We reverse.

Long, a registrant with the Selective Service Board, listed as his address: Star Route, Mesa, Washington 99343. From mid-1971 to March 27, 1973, the date of the indictment, appellant was a musician with a band that performed in various places on the West Coast and in Hawaii. His mother, who lived near Mesa, Washington, would periodically pick up his mail and forward it to him wherever he would be performing at the time.

On June 2, 1972, an induction notice ordering Long to report July 12, 1972, was mailed to him at his Mesa address. The notice was never returned to the local board. On August 4, 1972, another notice to report for induction was mailed by certified mail to the same address, and the letter was returned to the local board unsigned.

On January 4, 1973, the FBI contacted Long’s mother, who in turn, informed appellant that the FBI was looking for him. Knowing that his lottery number had been called in 1972, Long suspected, when he learned about the FBI inquiry, that an induction order had been sent and that the reporting date had passed. Three weeks later appellant’s suspicions were confirmed when an FBI agent informed him that he had failed to report for induction. Long claimed, however, that he never received any notice to report for induction.

On March 27, 1973, Long was indicted for failure to report for induction on or about July 13, 1972 and for failure to report up to the date of the indictment.

Appellant claims that the evidence is insufficient to support the conviction. We agree. To obtain a conviction for willfully and knowingly failing to report for induction, the Government must prove beyond a reasonable doubt that the registrant had actual notice of the induction order. United States v. Belgrave, 484 F.2d 915, 918 (3rd Cir. 1973). The extent of the Government’s proof on this issue was the mere posting of two induction notices to Long’s mailing address (Star Route, Mesa, Washington). Absent rebuttal evidence by Long, such proof would have been sufficient to support an inference that the mail reached its destination and was received by the addressee. Hagner v. United States, 285 U.S. 427, 430, 52 S.Ct. 417, 76 L.Ed. 861 (1932); United States v. Lee, 458 F.2d 32, 33 (9th Cir. 1972). The inference of receipt, however, was dispelled by Long’s testimony that he was away from the designated address during July and August 1972— the time period in which delivery of the letters would normally have been made. See United States v. Schwartz, 366 F.Supp. 443, 447 (E.D.Pa.1973). Faced with such rebuttal evidence the Government, in order to prove receipt, had the burden of coming forward with evidence that Long during the critical period was in fact present at the designated address. It did not come forward with any such evidence, and consequently, proof of receipt failed for insufficient evidence. See United States v. Belgrave, 484 F.2d at 917-918; Fisher v. United States, 413 F.2d 1034, 1035 (9th Cir. 1969); United States v. Schwartz, supra.

Alternatively, the Government contends that the induction orders created a continuing duty to report, and that Long’s failure to report after he had notice in January, 1973 of the order’s existence constituted a violation of 50 U.S.C. App. § 462.

Even assuming that an induction order does create a continuing duty to report, United States v. Williams, 433 F.2d 1305, 1306 (9th Cir. 1970), the evidence does not support a finding that Long knowingly failed to discharge that duty. Long suspected on January 4 and learned from the FBI on January 24 nothing more than that an induction date had passed. The FBI never mentioned any continuing obligation to report and, by telling Long new induction orders would be sent, actually implied that Long need not do anything until he received the orders. Long’s comment that he would rather go to jail than to be inducted did not amount to a “refusal to report Tor induction, for he had no reason to believe that he was then under any order or duty to report”, or that the FBI questioned him “for any purpose other than to gather evidence as to his past conduct”. Graves v. United States, 252 F.2d 878, 884 (9th Cir. 1958). Viewing the evidence in a light most favorable to the Government, Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 86 L.Ed. 680 (1942), we find the Government has failed to show that during the period covered by the indictment Long was aware of any legal obligation to report for induction. See Graves v. United States, supra.

In any event, the Selective Service directives terminated, as of January 1, 1973, any continuing duty that Long might have had to report for induction. On December 27, 1972, the Director of the Selective Service issued an order suspending inductions for January and February 1973 for all registrants except “violators” willing to submit to induction in lieu of prosecution. Temporary Instruction No. 632-13, 660-8, Selective Service System (Dec. 27, 1972). Then on February 14, 1973, the Director issued another order reclassifying all registrants and canceling all inductions except for ^violators”. Temporary Instruction No. 632-14, Selective Service System (Feb. 14, 1973).

Long could not have been a “violator” as of the date the first directive went into effect because he as yet had no knowledge of any induction order. See discussion supra. Thus, the first directive cut off any duty to report for induction during January and February, and the second directive cut off any duty during March and thereafter.

Reversed.

       The Honorable Bruce R. Thompson, United States District Judge for the District of Nevada, sitting by designation.

      . United States v. Williams, 433 F.2d 1305 (9th Cir. 1970), relied on by the Government, is inapposite. In that case, the FBI three times personally advised appellant of his duty to report and that his local board was seeking to make contact with him. Id. at 1306.


author: BUTZNER, Circuit Judge:

text:
    Roy W. WEATHERS, Appellant, v. Paul EBERT, Appellee.
    No. 74-1231.
    United States Court of Appeals, Fourth Circuit.
    Argued July 24, 1974.
    Decided Nov. 13, 1974.

      James R. Tate, Fairfax, Va. (Duvall, Tate, Bywater & Davis, Fairfax, Va., on brief), for appellant.
    Robert C. Coleburn, Arlington, Va. (Benjamin Margolin, Simmonds, Cole-burn, Towner & Carman, Arlington, Va., on brief), for appellee.
    Before CRAVEN, BUTZNER and FIELD, Circuit Judges.
   BUTZNER, Circuit Judge:

Roy Weathers appeals from the dismissal of his suit under 42 U.S.C. § 1983 against Paul Ebert, Commonwealth’s Attorney for Prince William County, Virginia, for failure to state a claim on which relief can be granted. According to Weathers’ amended complaint, Ebert, three local police officers, and other defendants conspired to deprive him of his constitutional rights by having him indicted, arrested, and brought to trial on a charge of which he had previously been acquitted. The district court held that Ebert was immune from suit, and we affirm.

I

The Supreme Court has not had occasion to rule on the immunity of prosecuting attorneys from liability for damages. It has held, though, that the common law immunity of legislators and judges from liability for their official acts applies in suits under 42 U.S.C. § 1983. Pierson v. Ray, 386 U.S. 547, 87 S.Ct. 1213, 18 L.Ed.2d 288 (1967); Tenney v. Brandhove, 341 U.S. 367, 71 S.Ct. 783, 95 L.Ed. 1019 (1951). Relying on these precedents and on the common law, a number of courts have held that prosecuting attorneys are immune from civil suits for damages based on the performance of duties that are part of the judicial process. E. g., Marlowe v. Coakley, 404 F.2d 70 (9th Cir. 1969); Bauers v. Heisel, 361 F.2d 581 (3rd Cir. 1966); Phillips v. Nash, 311 F.2d 513 (7th Cir. 1962). But see Imbler v. Pachtman, 500 F.2d 1301, 1304 (9th Cir. 1974) (Kilkenny, J. dissenting); Scheuer v. Rhodes, 416 U.S. 232, 247, 94 S.Ct. 1683, 1692, 40 L.Ed.2d 90 (1974) (dictum).

As we noted in McCray v. Maryland, 456 F.2d 1, 3 (4th Cir. 1972), the public interest in forthright enforcement of the criminal law is best served when a state’s attorney can freely decide when to prosecute, uninfluenced by the potential burden of retaliatory suits. Although that burden cannot be eliminated so long as the courts are open, it is most effectively minimized by a doctrine which allows suits to be dismissed on the basis of the complaint without exploring the underlying facts. For this reason, most courts afford the state’s attorney immunity from any civil action connected with his prosecuting function. E. g., Imbler v. Pachtman, 500 F.2d 1301 (9th Cir. 1974); Barnes v. Dorsey, 480 F.2d 1057 (8th Cir. 1973); Madison v. Gerstein, 440 F.2d 338 (5th Cir. 1971); Bauers v. Heisel, 361 F.2d 581 (3rd Cir. 1966). Traditional concepts of immunity, then, require the dismissal of Weathers’ suit.

Nevertheless, Weathers urges that two recent cases support his claim. The first, Littleton v. Berbling, 468 F.2d 389 (7th Cir. 1972), vacated and remanded on other grounds sub nom., Spomer v. Littleton, 414 U.S. 514, 94 S.Ct. 685, 38 L.Ed.2d 694 (1974), held that immunity does not bar a suit for equitable relief designed to prevent future violations of § 1983 by a prosecutor. The court, however, granted immunity with respect to monetary damages. Since Weathers does not seek an injunction, Littleton is inapplicable.

The second case, Hilliard v. Williams, 465 F.2d 1214 (6th Cir. 1972), denied immunity to a prosecutor charged with the deliberate suppression of an FBI laboratory report that established the innocence of the defendant. The court reasoned that since a prosecutor’s duty is to protect the innocent as well as to convict the guilty, his discretion does not extend to seeking the conviction of a person he knows to be innocent. Accordingly, it held that the district court erred in dismissing the complaint.

Hilliard represents a real, but very limited, departure from the traditional rule of prosecutorial immunity. The complaint charged an intentional abuse of the prosecuting function which resulted in a denial of due process. It supported this charge, with specific aver-ments of the evidence concealed by the prosecutor, its exculpatory effect, and the deceitful means he used. Under the principles expressed in Hilliard,- a complaint such as Weathers’ could not be dismissed on the ground of immunity if it alleged facts showing that a prosecutor had intentionally placed the plaintiff in double jeopardy. We need not decide, however, whether to follow that case, for the complaint in this one does not meet its standards.

Weathers’ complaint charges that Ebert “knew or should have known” that Weathers had been acquitted previously of the identical offense. These allegations are too broad. If immunity were denied, Ebert would be burdened by defending not only against a claim of intentional abuse of his authority but also against claims that he negligently overlooked the existence of the first acquittal or mistook its legal effect. Moreover, the complaint alleges no facts which would support a finding of intent instead of negligent or innocent mistake. Its bare charges of malice are no substitutes for specific averments, for “[t]he immunity doctrine would be of little value if such characterization could force the prosecutor to stand trial.” Hampton v. Chicago, 484 F.2d 602, 608 (7th Cir. 1973); cf. Snowden v. Hughes, 321 U.S. 1, 10, 64 S.Ct. 397, 88 L.Ed. 497 (1944). Since the facts set forth in this complaint do not approach the specific allegations of deliberate malfeasance which led the court in Hil-liard to depart from the traditional rule of immunity, that case is inapplicable.

II

We also conclude that the complaint does not state a claim against Ebert for Weathers’ arrest and detention. Making an arrest is a police function, not a judicial one, and Ebert would lack immunity if he were involved. Hampton v. Chicago, 484 F.2d 602 (7th Cir. 1973); Lewis v. Brautigam, 227 F.2d 124 (5th Cir. 1955); cf. Pierson v. Ray, 386 U.S. 547, 87 S.Ct. 1213, 18 L.Ed.2d 288 (1967). Assuming, for the purpose of this decision, that the complaint alleges a violation of Weathers’ constitutional rights by the police, it does not connect Ebert with the arrest. His procurement of the second indictment is the single specific allegation against him, and we concluded in part I that this was insufficient. The other allegations are only general statements that he acted in concert with others. These, unsupported by averments of communication, consultation, cooperation, or command, do not make him responsible under § 1983 for the acts of others. Compare Powell v. Workmen’s Compensation Board, 327 F.2d 131, 137 (2nd Cir. 1964) with Lewis v. Brauti-gam, 227 F.2d 124, 129 (5th Cir. 1955).

The judgment is affirmed.

      . The court quoted with approval the following passage from the ABA Code of Professional Responsibility:
      “DR 7-103 Performing the Duty of Public Prosecutor or Other Government Lawyer.
      “(A) A public prosecutor or other government lawyer shall not institute or cause to be instituted criminal charges when he knows or it is obvious that the charges are not supported by probable cause.
      “(B) A public prosecutor or other government lawyer in criminal litigation shall make timely disclosure to counsel for the defendant . . . of the existence of evidence, known to the prosecutor or other government lawyer, that tends to negate the guilt of the accused, mitigate the degree of the offense, or reduce the punishment.” 465 F.2d at 1218.

      . Contra, Imbler v. Pachtman, 500 F.2d 1301 (9th Cir. 1974), in which a prosecutor was held immune from suit on a claim that he had knowingly presented perjured testimony at trial. Accord, Kauffman v. Moss, 420 F.2d 1270 (3rd Cir. 1970).

      . Weathers alleged:
      “11. On or about the 3rd day of August, 1970, . . . Ebert acting individually and on behalf of . . . The State of Virginia . . . presented to the Grand Jury of Prince William County, indictment number 3836, which was returned a true bill, in spite of the fact that [he] knew or should have known that the same grand jury had on June 1, 1970, returned indictment 3778 for the identical offense, on which indictment the plaintiff was acquitted on July 23, 1970. .
      “12. As a direct result of the action of defendants in securing a second indictment of plaintiff for an offense for which he had previously been acquitted and in subsequently arresting plaintiff on that indictment, defendants violated plaintiff’s right under the Fifth Amendment . . . not to be put twice in jeopardy of life or limb.
      “13. On May 10, 1973, plaintiff was brought to trial ... on the second indictment, number 3836, at which time the attorney for The State of Virginia moved the Court to nolle prosequi the indictment which motion was objected to by counsel for the defendant. The Circuit Court granted the motion . . . and the indictment was dismissed.”

      . Since this suit is still pending against the other defendants, we express no opinion as to the sufficiency of Weathers’ claims against them.

      . The complaint states that in February, 1973, two local policemen, named as defendants, arrested Weathers on the second indictment without a valid warrant and took him to the county jail, where he was imprisoned for twenty-four hours. It further alleges :
      “14. In addition each of the defendants, separately and in concert, acted outside the scope of his jurisdiction and without authorization of law . . . wilfully, knowingly, and purposefully with the specific intent to deprive plaintiff of his right to:
      a) Freedom from illegal seizure of his person, papers, and effects;
      b) Freedom from unlawful arrest;
      c) Freedom from illegal detention and imprisonment ;
      d) Freedom from physical abuse, coercion, and intimidation.”
      We assume, of course, that Ebert is included among the defendants mentioned in this paragraph.


author: ENGEL, Circuit Judge.

text:
    Complaint of CAMBRIA STEAMSHIP CO., a corporation, as owner and Bethlehem Steel Corporation as demise Charterer in possession and operator of the STEAMER DANIEL J. MORRELL, her engines, etc., for exoneration from or limitation of liability. Claim of Frederick W. RISCHMILLER, Administrator of the Estate of Henry Rischmiller, Appellant, v. Dorothy M. DAHL, Widow, Administratrix of the Estate of George M. Dahl, Deceased, Appellee 73-1349. Claim of Chester E. GORDON, Administrator of the Estate of Arthur I. Craw-ley, Deceased, Appellant, v. Dorothy M. DAHL, Widow, Administra-trix of the Estate of George M. Dahl, Deceased, Appellee 73-1350.
    Nos. 73-1349, 73-1350.
    United States Court of Appeals, Sixth Circuit.
    Decided Oct. 30, 1974.
    Certiorari Denied March 17, 1975.
    See 95 S.Ct. 1399.

      Ned L. Mann, Cleveland, Ohio, Richard A. Grimm, Jr., Buffalo, N. Y., and J. Harold Traverse, Cleveland, Ohio for appellant.
    Mortimer Riemer, Cleveland, Ohio, David Scribner, Pressman & Scribner, New York City, Abraham E. Freedman, New York City, Harry E. Lorenzo, Lorenzo & Lorenzo, Buffalo, N. Y., Woodrow R. Bugge, Dollar Bay, Mich., Victor E. Manz, Carl S. Feinsinger and Desmond & Drury, Buffalo, N. Y., Victor G. Hanson, Detroit, Mich., Ned L. Mann, Cleveland, Ohio, Zweig, Taback & Remer, Detroit, Mich., Richard A. Grimm, Jr., Grimm & Grimm, Buffalo, N. Y., Hayes & Hayes, N. Wilkesboro, N. C., Courtney, Courtney & Gruesen, Duluth, Minn., Eugene L. Bleiweiss, Cleveland, Ohio, Sheldon & Warren, Ashtabula, Ohio, Anthony J. Colucci, Block, Colucci, Callanan & Crangle, Buffalo, N. Y., Thomas G. Poulos, Niagara Falls, N. Y., William J. Syring, Toledo, Ohio, Harney B. Stover, Jr., Milwaukee, Wis., Howard W. Bernstein, Dworken 6 Bernstein, S. Eldridge Sampliner, Laurence J. Hoch, Dworken & Bernstein ana William C. Todia, Cleveland, Ohio, for appellees.
    Before WEICK, LIVELY and ENGEL, Circuit Judges.
   ENGEL, Circuit Judge.

In Moragne v. States Marine Lines, 398 U.S. 375, 90 S.Ct. 1772, 26 L.Ed.2d 339 (1970), the Supreme Court overruled The Harrisburg, 119 U.S. 199, 7 S.Ct. 140, 30 L.Ed. 358 (1886) to create for the first time a non-statutory cause of action for wrongful death based upon unseaworthiness. Moragne deliberately left the shaping of the new action to “further sifting through the lower courts in future litigation.” 398 U.S. at 408, 90 S.Ct. at 1792. Specifically, the Court in Moragne left unanswered the question of who were to be the beneficiaries of the newly created maritime right and what elements of damages were to be recoverable, but suggested that the court would not be without “persuasive analogy” in the general maritime law as well as state and federal wrongful death acts, as they endeavored to resolve the “subsidiary issues” left open by Moragne. We consider two of those issues in these consolidated appeals.

In the appeal of Rischmiller, we consider whether an adult and non-dependent brother, as sole surviving next of kin, can maintain a Moragne action to recover damages for his loss of prospective inheritance.

In the appeal of Crawley’s Estate, as represented by appellant Gordon, administrator of that estate, we consider whether the wrongful death action created by Moragne should be an action for “loss to the estate” of the deceased, measured by the amount the deceased would have accumulated out of his earnings during the period by which his life expectancy was shortened, and recoverable irrespective of whether the decedent is survived by next of kin or other beneficiaries.

The district court below disallowed both Gordon’s and Rischmiller’s claims. In re Cambria Steamship Company, 353 F.Supp. 691 (1973). We affirm.

On November 29, 1966, the S.S. Daniel J. Morrell, a Great Lakes bulk cargo carrier, broke in two and sank in Lake Huron within the coastal waters of the State of Michigan. Among the twenty-eight men who perished in the disaster were Arthur I. Crawley, Captain of the Morrell, and Henry Risehmiller, a crew member.

Following the loss, the owners of the ship brought an action for exoneration or limitation of liability in the United States District Court for the Northern District of Ohio. After notice, interested claimants filed answers to the complaint alleging that the ship was un-seaworthy and also filed individual claims for recovery. The case was eventually settled as to liability and the vessel owners paid into the registry of the court the agreed sum of $2,750,000, out of which all claims were to be paid. Among the claimants were appellant Frederick I. Risehmiller who made claim for the wrongful death of his brother Henry, and appellant Chester E. Gordon, who, as administrator of the estate of the deceased Captain Crawley, filed a claim on behalf of the latter’s estate.

To determine the validity and amount of the several claims, the district court appointed two special masters who thereafter reported their findings to the court, which entered final judgment on February 3, 1973. The judgment included determinations that neither the brother of Risehmiller, nor the administrator of Captain Crawley’s estate was entitled to recover damages representing loss of prospective inheritance, or loss to the estate itself.

Henry Risehmiller was a wheelsman aboard the Morrell. At the time of his death he was 34 years old, unmarried, and earned over $7,000 per year. He left surviving him only his brother Frederick who was admittedly self-supporting and independent. Frederick filed his claim in the district court action for loss of inheritance caused by the untimely death of his brother. The masters found that it was likely that Henry would have continued working until age 65 at the latest, and would have accumulated substantial savings in the meantime. They further found that Frederick Risehmiller would probably have survived Henry and been his sole heir, and that the present value of the additions to Henry’s estate which would ultimately have been inherited by Frederick but for the wrongful death was $48,667.67. The Risehmiller claim was therefore put at that sum, but was disallowed by the masters and the trial judge because Frederick was a non-dependent collateral relative.

Arthur I. Crawley was Captain of the Morrell. No claim was established that his conduct in any way contributed to the unseaworthiness or loss of the vessel. Forty-seven years of age at the time of his death, Crawley had never married and he was survived by two brothers and four sisters, all of whom were older than he. One brother died after Craw-ley’s death, leaving children, but none of the brothers or sisters, or their children, were in any way dependent upon Arthur. Captain Crawley’s income far exceeded his expenses and, in the ten years prior to his death, his savings had averaged 34.9 per cent of his income. Appellant Chester E. Gordon was appointed administrator of Captain Craw-ley’s intestate estate and made claim in the district court on the theory of a “loss of estate” due to the wrongful death. The special masters computed such loss as reduced to present value, at $239,-189.59. This last sum, however, they disallowed for the reasons stated in dis-allowance of the Risehmiller claim, and because Captain Crawley, as the youngest in his family, would probably have outlived his brothers and sisters, making the likelihood that they or the children would in fact have inherited his estate, even more speculative.

While the two appeals proceed upon somewhat different theories, the ultimate recipients of any damages in both would be non-dependent collateral relatives, and the amount recovered would be measured by a reduction to present value of the amount of any accumulation of earnings which would have been added to decedent’s estate had he lived out his normal life expectancy.

Appellant Rischmiller urges us to apply the state law of Michigan because the Morrell sank in its waters. Appellees urge that we simply borrow the schedule of beneficiaries from the Death on the High Seas Act. We reject both approaches. The decisions following Moragne, while following the mandate of that case to seek guidance from state and federal statutes, have endeavored generally to develop a uniform body of federal law, neither borrowing automatically from federal statutory provisions, nor applying any particular state law.

In Sea-Land Services v. Gaudet, 414 U.S. 573, 94 S.Ct. 806, 39 L.Ed.2d 9 (1974), the Supreme Court more specifically defined the nature of the action created by Moragne. It first addressed itself to the question of whether a Moragne action could be maintained by a widow, although her husband before his death had already recovered damages for his injuries sustained aboard petitioner’s vessel. While recognizing that “a majority of the courts interpreting state and federal wrongful death statutes have held that an action for wrongful death is barred by the decedent’s recovery for injuries during his lifetime”, 414 U.S. at 579, 94 S.Ct. at 812, Mr. Justice Brennan, speaking for a majority of the Supreme Court, ruled that Moragne created a wholly new uniform and non-statutory federal cause of action for maritime death. Seeking guidance from existing federal and state statutory law, but conceiving itself bound by neither, the Supreme Court ruled that the cause of action thus created was independent of and in addition to any action which the decedent may have had for his personal injuries, and was thus not barred by the pre-death recovery of the decedent.

A majority of the Court in Gaudet, supra, also held that the new cause of action permitted recovery by the dependents of the deceased for loss of support, services and society as well as damages for funeral expenses, but not for grief. In permitting damages for loss of society, the Court provided relief that is generally not available under the Death on the High Seas Act. While noting that a majority of the states recognize loss of society, the Court ultimately based its ruling on the character of the maritime law itself.

“But in any event, our decision is compelled if we are to shape the remedy to comport with the humanitarian policy of the maritime law to show ‘special solicitude’ for those who are injured within its jurisdiction.” 414 U.S. at 588, 94 S.Ct. at 816.

In our approach to the issues in this case, we believe we should be guided by those general principles which are set forth in Sea-Land Services v. Gaudet, supra, as defining the nature of the action and remedy created by Moragne.

LOSS TO ESTATE

Recognizing the unique opportunity which rests in the courts to fashion new rights and remedies under Moragne, counsel for Captain Crawley’s estate urges that we adopt a rule obtaining by statute in a minority of the states which provides a right of recovery for loss of the estate itself, apart from whether there exist any surviving next of kin.

The fundamental difference between loss to survivor statutes and loss to estate statutes is that:

“Whereas most loss to survivors statutes will permit either no recovery at all or only a small measure of nominal damages, or special damages such as medical or funeral expenses, in cases where decedent is not survived by any statutory beneficiary, most loss to the estate statutes permit the action to be maintained and allow recovery of the full measure of the loss to the estate notwithstanding the fact that decedent is survived by no next of kin or statutory beneficiary.” Speiser, Recovery for Wrongful Death (1966), at p. 251.

This argument is particularly necessary to the claim of the Crawley estate since no brother or sister would probably have survived Captain Crawley, he being the youngest, and we recognize some merit in it. Such an approach in essence measures the net value of the life which was wrongfully taken, and in measuring the responsibility of the tortfeasor thereby, provides a simpler means of computing damages. It also avoids what is claimed to be an unconscionable result where a valuable life is taken, but there exists no obligation on the part of the tortfeasor to pay for it because no survivor could make claim for the loss of it.

We reject this view, however, because it has commended itself to so few other jurisdictions, and because its fundamentally punitive approach is inconsistent with the expressed compensatory philosophy of the maritime law.

As concepts of compensation for humanitarian purposes have grown, and with them an erosion of the barriers to recovery based on fault concepts, we believe the courts have as well moved away from ideas that damages ought to be punitive rather than compensatory.

None of the federal wrongful death statutes premises recovery on losses sustained by the estate, but each provides a specified list of beneficiaries for whose benefit the action is to be brought. The Supreme Court itself recognized, in reliance upon Speiser, supra, and other sources, that 44 states and territories measure damages by losses sustained by beneficiaries.

While a few of those jurisdictions measuring damages by loss to beneficiaries permit an action on behalf of the estate where the decedent is not survived by any statutory beneficiaries, and a few other as noted earlier, measure all losses by loss to the estate, the majority do not provide for this type of recovery. Thus, while appellant is not without some authority for the position urged, we hold the better rule to be that the action exists primarily for the benefit of individual beneficiaries, and general losses to the estate are not recoverable. Moragne and Sea-Land Services v. Gaudet speak consistently in terms of dependents :

“In overruling The Harrisburg, Mor-agne ended these anomalies by the creation of a uniform federal cause of action for maritime death, designed to extend to the dependents of maritime wrongful death victims admiralty’s ‘special solicitude for the welfare of those men who undertake] to venture upon hazardous and unpredictable sea voyages.’ Moragne, supra, 398 U.S. at 387, 90 S.Ct. at 1780. Our approach to the resolution of the issue before us must necessarily be consistent with the extension of this ‘special solicitude’ to the dependents of the seafaring decedent.” Sea-Land Services v. Gaudet, 414 U.S. at 577, 94 S.Ct. at 811.

In our view, the liberal and humanitarian character of maritime proceedings as expressed in Moragne and Gaudet, supra, contemplates solicitude for dependents, not inanimate estates. In so holding, we do not rule that certain specialized losses such as funeral expenses may not nonetheless be recovered by the estate, as is the case in several states premising primarily recovery on a beneficiary rather than an estate theory.

NON-DEPENDENT BROTHER AS BENEFICIARY

Many of the reasons for rejecting the claim of Crawley’s estate apply as well to the claim of Frederick Rischmiller.

We recognize at the outset that loss of prospective inheritance is frequently held a proper element of damages which are awarded qualified beneficiaries. Thus it is allowed under the Death on the High Seas Act, National Airlines, Inc. v. Stiles, 268 F.2d 400 (5th Cir. 1959) and the Federal Employers Liability Act, see Martin v. Atlantic Coast Line R. Co., 268 F.2d 397 (5th Cir. 1959), and hence would be available under the Jones Act. See Cleveland Tankers v. Tierney, 169 F.2d 622 (6th Cir. 1948).

These acts, however, specifically limit recovery to parents, children, spouse or dependent next of kin. Non-dependent collateral relatives are not included.

The reason for the different treatment, we conclude, lies in the nature of the relationship existing between the claimant and the decedent. In awarding loss of inheritance to a widow, the court in National Air Lines v. Stiles, supra, observed:

“It is as likely that a wife in these circumstances who did in fact inherit her husband’s entire estate on his untimely death, would continue to be the natural object of his affection and beneficence if he lived out his expectancy and made substantial additional accumulations as that he would continue to give her the kind of support the defendant admits [he] would continue.” 268 F.2d at 403.

State law provides less guidance. In a large number of states, loss of prospective inheritance is recognized as a proper element of damages. Except in “loss of estate” jurisdictions, however, there is little uniformity among the state acts. We have, in fact, been shown no case in which a non-dependent collateral relative was awarded damages for this loss.

We remain unconvinced that the humanitarian principles of maritime law which led the Supreme Court in Sea-Land Services v. Gaudet, supra, to compensate a widow for loss of society, should lead us to hold that a non-dependent and collateral relative should recover for loss of an inheritance, based solely upon his legal relationship to the deceased as next of kin. We agree with appellants that the amount of a deceased’s prospective accumulations may not be too speculative to ascertain, see O’Toole, supra, and indeed, the special masters here experienced little difficulty in determining them upon the proofs. An even greater uncertainty, however, is whether the particular claimants would ultimately have received any benefit themselves. As the special masters observed, in discussing the likelihood that Crawley’s collateral relatives would have ultimately inherited his accumulations :

“We are asked to assume that he would have divided his estate equally among each branch of his family, that he would have given no portion of his estate to charity or to individuals outside the family, and that he would have continued saving, even though the only individuals who would have benefited from such saving would be collateral relatives. All of these assumptions may be true; or all may not be true.
“These assumptions are by their very nature more speculative ones than those we are required to make in dependency claims. In dependency claims there is either a legal or moral obligation to support the dependent, and there is a history of the amount of contribution and its frequency. This pattern of established conduct forms the basis for a prediction of future conduct.”

Comfort, companionship and society, recognized in Gaudet, supra, go to the very heart of family life, and their loss by family members is genuinely felt, thus justifying the intervention of the humanitarian maritime law. On the other hand, loss of prospective inheritance by one whose hopes of that inheritance hinge upon the fortuity of a man remaining unmarried and childless throughout his life, is not an injury capable of comparison with the losses sought in Gaudet. The mere accident of blood relationship with nothing more does not itself call for that special solicitude which the maritime law holds for those injured within its jurisdiction.

Accordingly, the judgment of the district court is affirmed.

      . The Harrisburg, 119 U.S. 199, 7 S.Ct. 140, 30 L.Ed. 358 (1886), held that the common law of admiralty, recognized no cause of action for wrongful death. The Court in Moragne recognized that the doctrine applied in The Sarrishurg was based upon an antiquated English doctrine of felony merger, which the Court found to be no longer viable in this century. According to the felony merger doctrine, the common law did not allow civil recovery for an act that constituted both a tort and a felony. Since all intentional or negligent homicide was felonious, and conviction brought forfeiture of the felon’s estate, there could be no civil suit for wrongful death. See Moragne v. States Marine Lines, 398 U.S. 375, at 382, 90 S.Ct. 1772. In creating the new cause of action, the Supreme Court recognized that wrongful death statutes had been enacted in every state in the union, and that such a remedy was provided by several federal statutes. For an excellent discussion of the development of wrongful death remedies in this country and in England, see Moragne, supra, at 381-388, 90 S.Ct. 1772.

      . Claims were assessed and allowed, however, to all claimants, representing damages for pain and suffering of the decedent, in the amount of $7,500. Since the total of all claims allowed exceeded the fund, this amount, as well as others, was reduced proportionately.

      . In Speiser, Recovery for Wrongful Death (1966), at 182, the difference between these two theories is described:
      The difference between recovery by decedent’s next of kin for loss of inheritance under the loss to survivors type death statute, and recovery for loss of inheritance under statutes which measure damages by loss to the estate, was described as follows by McCormick: “This [element of damage] is closely reminiscent of the ‘loss to the estate’ basis of recovery, but is different in that the claim here is founded not only on the probability of accumulation by the deceased, but is also conditioned on the probability that he would have left it, by will or inheritance, to the statutory beneficiaries.”
      We note that we are not asked to determine here who is the proper party to bring a wrongful death action under the general maritime law. But see Futch v. Midland Enterprises, Inc., 471 F.2d 1195 (5th Cir. 1973), where it was held that the action must be brought by the personal representative of the decedent.

      . M.C.L.A. § 600.2922. We doubt in any event that application of Michigan law would have resulted in recovery for these appellants. While non-dependents have been permitted to recover for loss of society in Michigan, Smith v. City of Detroit, 388 Mich. 637, 202 N.W.2d 300 (1972), indicating that dependency may not be an absolute requirement, the Michigan Supreme Court has also held that the loss of prospective inheritance is not a proper element of damages under the Michigan Act. Baker v. Slack, 319 Mich. 703, 30 N.W.2d 403 (1948). We need not consider whether Baker v. Slack would be applied in Michigan today were the question to arise since we conclude that neither the law of Michigan nor that of any state is controlling.

      . 46 U.S.C. § 761, which provides:
      Whenever the death of a person shall be caused by wrongful act, neglect, or default occurring on the high seas beyond a marine league from the shores of any State, or the District of Columbia, or the Territories or dependencies of the United States, the personal representative of the decedent may maintain a suit for damages in the district courts of the United States, in admiralty, for the exclusive benefit of the decedent’s wife, husband, parent, child or dependent relative against the vessel, person, or corporation, which would have been liable if death had not ensued.

      . See, e. g., Spiller v. Lowe & Associates, 466 F.2d 903 (8th Cir. 1972) [step-child a proper beneficiary under wrongful death action]; Greene v. Vantage Steamship Corp., 466 F.2d 159 (4th Cir. 1972) [funeral expenses and pain and suffering of deceased recoverable]; Futch v. Midland Enterprises, Inc., 471 F.2d 1195 (5th Cir. 1973) [personal representative is proper plaintiff in action for wrongful death] ; Petition of M/V Elaine Jones, 480 F.2d 11 (5th Cir. 1973) [damages for grief not recoverable].

      . It has generally been held that recovery for loss of companionship and society is not permitted under the Death on the High Seas Act. First National Bank in Greenwich v. National Airlines, Inc., 288 F.2d 621 (2nd Cir. 1961).

      . Sea-Land Services v. Gaudet, 414 U.S. 573, 587, and note 21, 94 S.Ct. 806.

      . See Speiser, Recovery for Wrongful Death (1966), § 3.2, where the author indicates that several states measure damages solely by loss to the estate, while a few others, e. g. Florida, provide that a claim for estate loss may be made where there are no surviving statutory beneficiaries.

      . See, e. g. Mahnich v. Southern S.S. Co., 321 U.S. 96, 64 S.Ct. 455, 88 L.Ed. 561 (1944), where the Supreme Court held that a shipowner’s duty to provide a seaworthy ship is absolute, and not satisfied by due diligence.

      . In an admiralty action it has been held that an individual claimant may not recover punitive damages absent a showing of gross negligence, actual malice or criminal indifference. Thus, where the action is predicated upon unseaworthiness alone, punitive damages are not recoverable. See In re Marine Sulphur Queen, 460 F.2d 89 (2nd Cir. 1972), cert. denied 409 U.S. 982, 93 S.Ct. 318, 34 L.Ed.2d 246 (1972).

      . See 46 U.S.C. § 761; (text provided in note 4, supra). See also 46 U.S.C. § 688 (Jones Act) which incorporates by reference the recovery provisions of the Federal Employers’ Liability Act, 45 U.S.C. § 51, which provides in pertinent part:
      Every common carrier by railroad . shall be liable in damages to any person suffering injury . . or in case of the death of such employee, to his or her personal representative, for the benefit of the surviving widow or husband and children of such employee; and if none, then of such employee’s parents; and if none, then of the next of kin dependent upon such employee .

      . 414 U.S. at 587, n. 21, 94 S.Ct. 806.

      . See Speiser, supra, at 63-66.

      . See, e. g. Illinois Revised Stats, ch. 70 § 2, where it is provided that the estate may recover up to $900 for hospitalization, medical and funeral expenses, and other administrative costs, where no beneficiary survives. See also Speiser, supra, at 66.

      . See Footnotes 5 and 12, supra.

      . O’Toole v. United States, 242 F.2d 308 (3rd Cir. 1957), and eases cited in Annotation following Martin v. Atlantic Coast Line, supra, 91 A.L.R.2d 477; Speiser, supra, at 182-183.

      . See generally, the Annotation following Schwarz v. Gage, Mo.App., 417 S.W.2d 33, 31 A.L.R.3rd 371, 379, indicating that recovery by collateral relatives is variously limited or precluded in a number of states by dependency and pecuniary loss requirements. There is reflected no general trend in the states regarding recovery by such persons.


author: LAY, Circuit Judge.

text:
    William JOSEPH, Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
    No. 73-2034.
    United States Court of Appeals, Seventh Circuit.
    Argued Oct. 1, 1974.
    Decided Nov. 7, 1974.
    Camillo F. Volini and John 0. Tuohy, Chicago, 111., for plaintiff-appellant.
    James R. Thompson, U. S. Atty., Gary L. Starkman and Martin B. Lowery, Asst. U. S. Attys., Chicago, 111., for defendant-appellee.

      Before PELL, SPRECHER and LAY, Circuit Judges.

       Judge Donald P. Lay of the Eighth Circuit is sitting by designation.

   LAY, Circuit Judge.

This appeal arises from the dismissal of a complaint brought under the Federal Tort Claims Act, 28 U.S.C. § 2674. The district court dismissed the claim as being “service-connected” and therefore not actionable. We affirm.

Plaintiff William Joseph alleged that on May 7, 1970, he was given a pre-in-duction physical examination at the U. S. Army Induction Center in Chicago. The government physician found him physically fit to be inducted into the Army. Joseph alleges that he in fact had a pre-existing infirmity — bilateral pes planus or flat feet — which should have rendered him unqualified to perform military service. On July 8, 1970, he was inducted into the Army. During basic training his condition became aggravated and on January 12, 1971, he was discharged on the gound that he “did not meet medical fitness standards at time of induction,” based on Section III, Chapter 5 of Army Regulations, 635-200. On February 14, 1971, he was admitted to the hospital where he underwent a fusion of the bones of his ankle to prevent flexion. Plaintiff originally sought disability compensation from the Veterans Administration, but this was denied on the grounds that his injury was not incurred or aggravated while in the service. He thereafter filed an administrative claim with the Department of the Army requesting compensation under the Federal Tort Claims Act. This claim was denied because of his allegation that his injuries were caused or aggravated as an incident to his service. Plaintiff urges on appeal (1) that the malpractice alleged occurred at a time when he was still a civilian, and (2) that it was a denial of due process for the government to deny his claim on the inconsistent grounds asserted by the Veterans Administration and the Department of the Army. We respectfully reject both grounds of appeal.

Plaintiff urges that the negligent act of the government occurred at a time when he was not a member of the Armed Forces, and that under general principles of tort law a tortfeasor should be liable for all subsequent harm which proximately flows from the negligent act. As a general proposition this court has no dispute with this argument. Tortious conduct occurring during the physical examination, although closely connected to an inductee’s prospective service, might still subject the government to liability. The basic difficulty with plaintiff’s reasoning is that his claim is not barred under the Federal Tort Claims Act on causation principles under general tort law. The claim is barred by the judicial exemption applied to the Federal Tort Claims Act under the decision of Feres v. United States, 340 U.S. 135, 71 S.Ct. 153, 95 L.Ed. 152 (1950). In Feres, the Supreme Court held:

“[T]he Government is not liable under the Federal Tort Claims Act for injuries to servicemen where the injuries arise out of or are in the course of activity incident to service.” 340 U.S. at 146, 71 S.Ct. at 159. (emphasis added).

This is true regardless of when the conduct which may place responsibility for that injury occurred.

As the court observed in Healy v. United States, 192 F.Supp. 325 (S.D.N.Y.), aff’d, 295 F.2d 958 (2d Cir. 1961):

“The mere induction of plaintiff into the armed forces which followed from the alleged negligent physical examination and certification did not, in itself, cause his injury or the aggravation of his pre-existing injury. This came about only as a result of his activity following induction when he was subject to military orders . . ..” 192 F.Supp. at 328.

The claim is thus defeated by reason of the Feres doctrine since the injury received is connected with military service.

Plaintiff urges that he was denied equal application of federal law in that the ruling that his injury was service-connected is inconsistent with the denial of relief by the Veterans Administration. He asserts that 38 U.S.C. § 211 bars the district court from disregarding the Veterans Administration’s finding that the injury was not service-connected. The nonreviewability of Veterans Administration decisions under § 211 has no relationship to a federal court’s interpretation of the Federal Tort Claims Act. The two proceedings are completely independent of one another. Nor can it be successfully urged that the Veterans Administration’s administrative finding constitutes res judicata as to whether the injury is service-connected. Cf. United States v. Smith, 482 F.2d 1120 (8th Cir. 1973). In the instant proceeding, the complaint alleged that the aggravation of plaintiff’s preexisting condition took place while in military service. This was a pleaded fact, not a finding of fact by the court. If, as Joseph pleads, the injury is connected to his military service, it is barred by the Feres doctrine as a matter of law. However, if his injury could be proven to have been aggravated by his military service, then the Veterans Administration might reconsider. This, of course, turns on factual proof, not on mere allegation.

Judgment affirmed.

      . The district court alternatively relied on the language in Redmond v. United States, 331 F.Supp. 1222 (N.D.Ill.1971), which observed :
      “And since this conduct was performed by the Army, in the course of decedent’s service or in determining w..ether lie was qualified to serve, the conduct is inseparably intertwined, as the Ilealy court said, with the decedent’s active military service. This being the ease, Veres compels the dismissal of this action.” 331 E.Supp. at 1224.
      We need not endorse this broad an interpretation of the Healy case. Healy v. United States, 192 F.Supp. 325 (S.D.N.Y.), aff’d, 295 F.2d 958 (2d Cir. 1961). If the inductee received an x-ray burn or was in some other way negligently injured at the time of his physical examination, the language of Redmond would conceivably bar a claim under the Federal Tort Claims Act. Tins result would be highly questionable.

      . Tit. 38 U.S.C. § 211 provides:
      “(a) . . . [Tjlie decisions of tl.e Administrator on any question of law or fact under any law administered by the Veterans’ Administration providing benefits for veterans and their dependents or survivors shall be final and conclusive and no other official or any court of the United States shall have power or jurisdiction to review any such decision by an action in the nature of mandamus or otherwise. . . .”

      . Plaintiff’s counsel announced at oral argument that he has sought a rehearing before the Veterans Administration. If, of course, plaintiff’s proof before the VA merely shows a preexisting infirmity, without aggravation, his Veterans Administration claim could fail as not demonstrating a service-connected injury.


author: PER CURIAM.

text:
    James FREEMAN et al., Plaintiffs-Appellants, v. CHICAGO TITLE & TRUST CO., a corporation, et al., Defendants-Appellees.
    No. 73-1619.
    United States Court of Appeals, Seventh Circuit.
    Argued June 5, 1974.
    Decided Nov. 6, 1974.

      Kenart M. Rahn, Richard A. Kerwin, Chicago, 111., for plaintiffs-appellants.
    Joseph J. Jaros, Jerome P. Croke, Herman Smith, Arthur T. McGivern, John T. Loughlin and John C. Christie, Jr., Russell, Bridewell & Lapperre, Irwin I. Zatz, Chicago, 111., for defendants-appellees.
    Before CLARK, Associate Justice, and FAIRCHILD and STEVENS, Circuit Judges.

       Associate Justice Tom C. Clark (Retired) of the Supreme Court of the United States is sitting by designation.

   PER CURIAM.

The issue presented by this appeal is whether § 2(c) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. § 13(c), prohibits a title insurance company from paying secret rebates to agents of property owners in connection with the sale of title insurance. In their treble damage complaint, plaintiffs alleged that they had authorized the defendant savings and loans and other agents (hereinafter Taiman) to purchase title insurance for them. Taiman obtained policies solely from defendants Chicago Title & Trust Co. and Chicago Title Insurance Co. (hereinafter CT&T); without plaintiffs’ knowledge, Taiman received from CT&T a payment equal to 10,% of the amount paid as premiums by plaintiffs. The district court dismissed • the complaint on the ground that § 2(c) has no applicability to payments made in connection with the sale of intangibles such as insurance. We affirm.

I.

The dispute in this case centers largely around the proper reading of § 2(c) of the Clayton Act. The statute provides:

“(c) Payment or acceptance of commission, brokerage or other compensation.
It shall be unlawful for any person engaged in commerce, in the course of such commerce, to pay or grant, or to receive or accept, anything of value as a commission, brokerage, or other compensation, or any allowance or discount in lieu thereof, except for services rendered in connection with the sale or purchase of goods, wares, or merchandise, either to the other party to such transaction or to an agent, representative, or other intermediary therein where such intermediary is acting in fact for or in behalf, or is subject to the direct or indirect control, of any party to such transaction other than the person by whom such compensation is so granted or paid.” (Emphasis added.)

Plaintiffs note that there is no comma between the words “rendered” and “in.” Thus, they contend that the statute expressly prohibits commissions paid to the other party or his agent in any transaction in commerce, without limitation to transactions involving tangibles, and that the statutory reference to “in connection with the sale or purchase of goods, wares or merchandise . . . ” limits the exception of “services rendered” and is not a limitation of the broad prohibition itself. The district court, however, read the statute as if a comma had been inserted between the two words. Under its reading § 2(c) has applicability only if “goods, wares, or merchandise.” i. e., tangibles, are involved.

Section 2(c) was enacted as part of the Robinson-Patman Amendments to the Clayton Act. See Act of June 19, 1936, Pub.L.No. 74-692, § 2(c), 49 Stat. 1527. The courts have consistently interpreted the other provisions of the Robinson-Patman Act as being restricted to transactions involving tangible products. In Baum v. Investors Diversified Services, Inc., 409 F.2d 872, 875 (7th Cir. 1969), for example, this court held that § 2(a) of the Clayton Act, 15 U.S.C. § 13(a), was so restricted. As one scholar has observed, the result reached in these decisions “comports with the Act’s legislative history and textual structure.” F. Rowe, Price Discrimination Under the Robinson-Patman Act 61 (1962). Since we find no affirmative evidence that Congress intended § 2(c) to be the only Robinson-Patman provision applicable to intangibles, we are satisfied that the district court’s interpretation of this section is the proper one.

Plaintiffs argue that this interpretation in effect requires judicial repunctu-ation of § 2(c) and that such is improper. The Supreme Court, however, has stated:

“Punctuation marks are no part of an act. To determine the intent of the law, the court, in construing a statute, will disregard the punctuation, or will repunctuate, if that be necessary, in order to arrive at the natural meaning of the words employed.”

United States v. Shreveport Grain & Elevator Co., 287 U.S. 77, 82-83, 53 S.Ct. 42, 44, 77 L.Ed. 175 (citing cases). In our opinion, it is appropriate to read § 2(c) as though it contained one more comma in order to effectuate apparent congressional intent.

II.

Insofar as title insurance bears the same qualities as any other insurance, it can properly be characterized as an intangible not subject to § 2(c). According to plaintiffs, however, the purchaser of a CT&T policy is not as interested in insurance as he is in the report on the presence or absence of title defects which accompanies every policy; the “insurance aspect simply indemnifies the ‘insured’ against loss should the report as to the status of the title prove inaccurate.” Pl.Br. at 41. Plaintiffs thus contend that, even if § 2(c) is limited to tangibles, it prohibits the alleged rebates because the report itself is a tangible physical document.

Assuming arguendo that plaintiffs’ determination of the principal purpose of title insurance is correct, we must nevertheless reject their contention. The transfer of any intangible can rarely be accomplished without the “incidental involvement” of documents or other tangibles; consequently, it is the “dominant nature” of such transactions which determines whether they are subject to § 2(c).

CT&T does provide purchasers of title insurance with a tangible, physical document. More importantly, however, it provides them with a professional service, namely, the search of records which might reveal a defect in the title and the rendering of an opinion based upon this search; the reports, like legal memo-randa, are merely the embodiment of that service. Clearly, it is the performance of this service and not the delivery of a physical document which constitutes the dominant nature of the transaction between CT&T and its customers. Compare Tri-State Broadcasting, supra note 10. Since services are intangible, see Baum, supra note 3, at 875, even plaintiffs’ characterization of title insurance’s principal purpose is insufficient to invoke § 2(c).

III.

Section 2(b) of the McCarranFerguson Act, 15 U.S.C. § 1012(b), contains the following proviso:

“[AJfter June 30, 1948 . . . the Act of October 15, 1914, as amended, known as the Clayton Act . shall be applicable to the business of insurance to the extent that such business is not regulated by State law.”

Plaintiffs contend that § 2(b) is a substantive amendment to the Clayton Act which makes each of the provisions of this Act, including § 2(c), applicable to the insurance industry — regardless of whether the provision applies according to its terms.

The legislative history of the McCar-ran-Ferguson Act demonstrates that Congress intended no such amendment. In 1868 the Supreme Court determined that the business of insurance was a matter of purely state concern. See Paul v. Virginia, 75 U.S. (8 Wall.) 168, 19 L.Ed. 357. Some 75 years later, however, in United States v. South-Eastern Underwriters Ass’n, 322 U.S. 533, 64 S.Ct. 1162, 88 L.Ed. 1440 the Court reversed itself; it held that the insurance business was commerce and, therefore, subject to the federal antitrust laws. As a result of this ruling, there arose great uncertainty over the constitutionality of state statutes regulating insurance. The McCarran Act was passed in response to this uncertainty.

Congress’ intent was to make certain ■that the states’ power to regulate insurance should continue. This is apparent not only in the debates and legislative material accompanying the Act’s passage, but in the language of the Act itself. As Justice Rutledge, speaking for the Court in Prudential Insurance Co. v. Benjamin, 328 U.S. 408, 66 S.Ct. 1142, 90 L.Ed. 1342 noted:

“Obviously Congress’ purpose was broadly to give support to the existing and future state systems for regulating and taxing the business of insurance. This was done in two ways. One was by removing obstructions which might be thought to flow from its own power, whether dormant or exercised, except as otherwise expressly provided in the Act itself or in future legislation. The other was by declaring expressly and affirmatively that continued state regulation and taxation of this business is in the public interest and that the business and all who engage in it ‘shall be subject to’ the laws of the several states in these respects.”

328 U.S. at 429-430, 66 S.Ct. at 1155 (footnote omitted).

While Congress’ concern with ensuring the states’ power is clear from the Act’s legislative history, there is nothing in that history indicating any intent to expand federal power. The legislators correctly recognized that the Supreme Court, in South-Eastern, broadened the coverage of the federal antitrust laws. Thus, they were concerned only with making certain that, insofar as these laws already were applicable as a result of the South-Eastern decision, they should not be construed as invalidating or displacing state laws.

Plaintiffs note that, when the Senate initially passed what is now the McCar-ran-Ferguson Act, it provided in part that nothing in the Robinson-Patman Act “shall apply to the business of insurance or to acts in the conduct of that business.” See 91 Cong.Rec. 488 (1945). The ultimate rejection of this provision is, according to plaintiffs, persuasive evidence of Congress’ intent to make the Robinson-Patman Act, and therefore § 2(c), applicable to insurance.

Congress’ action does not, in our opinion, admit of that interpretation. Indeed, it is likely that some legislators withdrew support for the provision because they recognized that it was unnecessary since insurance was not covered by the Robinson-Patman Act; others, erroneously believing that insurance was covered, were unwilling to change the Act so as to exempt the insurance industry. There is, however, nothing in the legislative history to suggest that any legislator thought he was broadening the coverage of the Robinson-Patman Act by rejecting an amendment which would expressly exempt the insurance industry from its coverage. The net result of the elimination of the provision was merely to permit the impact of the Robinson-Patman Act on the insurance industry to be unaffected, one way or another, by the enactment of the McCarran-Ferguson Act.

Before a court will find that Congress has amended a statute, there must be clear evidence of an intent to do so. See United States v. Welden, 377 U.S. 95, 84 S.Ct. 1082, 1087, 12 L.Ed.2d 152, 103 n. 12 (“Amendments by implication . . . are not favored”). In this case, there is nothing in the language or legislative history of the McCarran-Ferguson Act which indicates that Congress intended to enlarge the scope of the Clayton Act; and, since the clear purpose of the Act was to protect the states’ power of regulating insurance, such an intent can hardly be presumed. Consequently, plaintiffs’ construction of § 2(b) is untenable.

IV.

Plaintiffs’ final contention, that CT&T .is collaterally estopped by the judgment in United States v. Chicago Title & Trust Co., 242 F.Supp. 56 (N.D.Ill.1965), from denying that § 2(c) applies to title insurance, also is without merit. In Chicago Title the court determined only that § 7 of the Clayton Act applies to the title insurance business. Since the prohibition of § 7, unlike that of § 2(c), is not limited to “goods, wares, or merchandise,” the Chicago Title decision cannot have the estoppel effect for which plaintiffs contend.

In conclusion, it should be noted that our decision in this appeal is simply that § 2(c) of the Clayton Act, as amended by the Robinson-Patman Act, has no applicability where the “product” involved is title insurance. We, of course, express no opinion on the propriety of the rebate practices described in the complaint and, specifically, on whether such practices might be prohibited by other state or federal laws.

The judgment of the district court dismissing plaintiffs’ complaint for failure to state a cause of action is

Affirmed.

      . Plaintiffs alleged that they and the defendant savings and loans each represented a class. No class determination, however, was made by the district court.

      . Title insurance is designed to protect prop-perty owners and mortgagees against loss through defects in the record title to real property, risks not revealed by public records and expenses incurred while defending attacks made upon the title of the insured. See generally United States v. City of Flint, 346 F.Supp. 1282, 1284-1285 (E.D.Mich.1972).

      . In Baum v. Investors Diversified Services, Inc., 409 F.2d 872, 875 (7th Cir. 1969), this court made clear that the terms “goods, wares, or merchandise” as used in the Clayton Act refer solely to tangible products.

      . In addition to the authority cited in Baum, supra note 3, at 875, and Stutzman Feed Service, Inc. v. Todd & Sargent, Inc., 336 F.Supp. 417, 419 (S.D.Iowa 1972), see Morning Pioneer, Inc. v. Bismarck Tribune Co., 493 F.2d 383, 389 n. 11 (8th Cir. 1974); TV Signal Co. of Aberdeen v. AT&T Co., 462 F.2d 1256, 1259 (8th Cir. 1972); Export Liquor Sales, Inc. v. Ammex Warehouse Co., 426 F.2d 251, 252 (6th Cir. 1970), cert. denied, 400 U.S. 1000, 91 S.Ct. 460, 27 L.Ed.2d 451; Gordon v. New York Stock Exchange, Inc., 366 F.Supp. 1261, 1263 (S.D.N.Y.1973); LaSalle Street Press, Inc. v. McCormick & Henderson, Inc., 293 F.Supp. 1004, 1005 (N.D.Ill.1968), aff’d in part and rev’d in part on other grounds, 445 F.2d 84 (7th Cir. 1971).

      . It might be noted that, under plaintiffs’ interpretation, § 2(c) would apparently prohibit the payment of a commission in connection with the purchase or sale of intangibles even if “services” had been rendered.

      . Other courts have, without extended discussion, reached this same conclusion. In Rangen, Inc. v. Sterling Nelson & Sons, Inc., 351 F.2d 851, 861 (9th Cir. 1965), cert. denied, 383 U.S. 936, 86 S.Ct. 1067, 15 L.Ed.2d 853, for example, the court stated:
      “It is necessary to the application of section 2(c) that the transaction between Rangen and the State of Idaho constitute a sale of ‘goods, wares, or merchandise,’ and not merely a contract for services.”
      Similarly, in Stutzman Feed Service, Inc. v. Todd & Sargent, Inc., supra note 4, 336 F.Supp. at 419, the court stated:
      “Cases cited by defendant involve 15 U.S. C.A. § 13(a) which uses similar, but not identical language, (‘commodities’ is not used in 15 U.S.C.A. § 13(c)) have limited the coverage of the act to the purchase of tangible personal property. . . . (citations omitted).
      “There has been no attempt to distinguish the language in these two sections and if a distinction were made, 13(c) which does not include commodities, would have to be considered the more restrictive. Patman, Complete Guide to the Robinson-Patman Act (1963), page 33.”

      . See Webb-Crawford Co. v. FTC, 109 F.2d 268, 270 (5th Cir. 1940), cert denied, 310 U.S. 638, 60 S.Ct. 1080, 84 L.Ed. 1406, and C. Austin, Price Discrimination and Related Problems Under the Robinson-Patman Act 105 n. 203 (2d ed. 1959), where, albeit for reasons different than those involved in this case, it was concluded that placement of a comma between the words “rendered” and “in” would best effectuate the congressional purposes of § 2(c).

      . Referring specifically to § 2(a) of the Clayton Act, Representative Patman noted that, in
      “its broadest sense, the word ‘commodity’ might possibly include items of trade other than those in tangible form — for example, advertising, insurance, brokerage services, and similar items. However, the word is ordinarily used in the commercial sense to designate any movable or tangible thing that is produced or used as the subject of barter. This is the definition for the word ‘commodity’ used in the application of the Robinson-Patman Act.”
      W. Patman, Complete Guide to the RobinsonPatman Act 33 (1963) (emphasis added). The essentially intangible nature of insurance was also alluded to by this court in Columbia Broadcasting System, Inc. v. Amana Refrigeration, Inc., 295 F.2d 375, 378 (1961), cert. denied, 369 U.S. 812, 82 S.Ct. 689, 7 L.Ed.2d 612.

      . The validity of this determination might well be questioned. In City of Flint, supra note 2, 346 F.Supp. at 1285, for example, the court noted: “The sole object of title insurance is to cover possibilities of loss through defects that may cloud the title.” Plaintiffs themselves alleged in their complaint that, when title insurance companies originated, they offered policies which were “designed” to protect the policyholders against certain dangers. App. 10.

      . Baum, supra note 3, 409 F.2d at 875; Tri-State Broadcasting Co. v. United Press International, Inc., 369 F.2d 268, 270 (5th Cir. 1966).
      Plaintiff contend that the issue of whether a transaction’s “dominant nature” is tangible or intangible presents a question of fact which cannot be determined on a motion to dismiss. We disagree. Although Baum and Tri-State Broadcasting did not deal specifically with this argument, it is significant that both cases arose on motions to dismiss.

      . In H.R.Rep.No.143, 79th Cong., 1st Sess. at 2 (1945), the House Judiciary Committee stated:
      “Inevitable uncertainties which followed the handing down of the decision in the Southeastern Underwriters Association case, with. respect to the constitutionality of State laws, have raised questions in the minds of insurance executives, State insurance officials, and others as to the validity of State tax laws as well as State regulatory provisions thus making desirable legislation by the Congress to stabilize the general situation.
      “Bills attempting to. deal with the problem were considered in both the House and the Senate during the Seventy-eighth Congress, but failed of enactment. Your committee believes there is urgent need for an immediate expression of policy by the Congress with respect to the continued regulation of the business of insurance by the respective States. Already many insurance companies have refused, while others have theatened refusal to comply with State tax laws, as well as with other State regulations, on the ground that to do so, when such laws may subsequently be held unconstitutional in keeping with the precedent-smashing decision in the Southeastern Undertoriters ease, will subject insurance executives to both civil and criminal actions for misappropriation of company funds.”
      The same sentiments were expressed by the Senate Judiciary Committee in S.Rep.No.20, 79th Cong., 1st Sess. at 1-2 (1945).

      . Both the Senate and House Judiciary Committees reported:
      “The purpose of the bill is twofold: (1) To declare that the continued regulation and taxation by the several States of the business of insurance is in the public interest; and (2) to assure a more adequate regulation of this business in the States by suspending the application of the Sherman and Clayton Acts for approximately two sessions of the State legislatures, so that the States and the Congress may consider legislation during that period.”
      S.Rep.No.20, supra note 11, at 2; H.R.Rep. No. 143, supra note 11, at 3. Representative, later FTC Chairman, Gwynne, similarly remarked during the floor debates that the bill
      “starts out with the statement that insurance shall be subject to State control. The Congress, of course, cannot delegate to the States the power to x-egulate insurance. What we are trying to do is to make it clear to thé States and to the insurance companies that we are as far as possible removing ourselves from the field.”
      91 Cong.Rec. 1090 (1945).

      . Section 1 of the Act, 15 U.S.C. § 1011, provides :
      “§ 1011. Declaration of policy. Congress hereby declares that the continued regulation and taxation by the several States of the business of insurance is in the public interest, and that silence on the part of the Congress shall not be construed to impose any bander to the regulation or taxation of such business by the several States.”
      Section 2(a), 15 U.S.C. § 1012(a), provides:
      “(a) The business of insurance, and every person engaged therein, shall be subject to the laws of the several States which relate to the regulation or taxation of such business.”
      Immediately prior to the proviso upon which plaintiffs rely, § 2(b) provides:
      “ (b) No Act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any State for the purpose of regulating the business of insurance, or which imposes a fee or tax upon such business, unless such Act specifically relates to the business of insurance . . . .”

      . The McCarran Act refers specifically to only four laws, i. e., the Sherman Act, the Clayton Act, the Federal Trade Commission Act and the Robinson-Patman Act. See 15 15 U.S.C. §§ 1012(b), 1013(a). Senator O’Mahoney, who had drafted a bill similar to the McCarran Act and served as a manager of the Senate in connection with this Act, stated:
      “In drafting those two bills we sought to spell out each particular law which might apply to insurance. ... In other words, a good-faith attempt was made to specify every single law which had an application, or might have an application, to insurance.”
      91 Cong.Rec. 483 (1945) (emphasis added).

      . Referring to this provision, Senator Ferguson explained:
      “We were able to single out and to indicate that we had in mind three acts of which we wanted to make exceptions, because they did not relate to insurance.”
      91 Cong.Rec. 481 (1945). Representative Gwynne stated that this provision
      “is not necessary in the bill, but it was inserted, I suppose, to make it clear that the Federal Trade Commission Act should not apply to insurance and that the Robinson-Patman Act should not apply to insurance. The reason is this: The Robinson-Patman
      Act was passed with the intent that it should regulate and control the sale of commodities. It was not meant to cover insurance any more than it was meant to cover the banking business. If the Members wish a bill of the character of the Robinson-Patman Act to cover insurance, then I submit a special bill should be introduced which should cover it more equitably and more accurately than the Robinson-Patman Act, which was not written with insurance in mind.”
      91 Cong.Rec. 1090 (1945).

      . For example, Representative Hancock, who was a member of the Conference Committee which recommended rejection of this provision, stated during the floor debates:
      “The decision [in South-Eastern] makes insurance interstate commerce, and therefore subject to all the statutes we have enacted dealing with interstate commerce. There are four, I believe: The Federal Trade Commission Act, The Patman Antidiscrimi-nation Act, the Clayton Act, and the Sherman Act.”
      91 Cong.Rec. 1087 (1945).

      . Plaintiffs argue that § 2(b) is clear on its face and, therefore, there is no need to resort to legislative history. This contention was effectively answered by the Supreme Court in Harrison v. Northern Trust Co., 317 U.S. 476, 479, 63 S.Ct. 361, 363, 87 L.Ed. 407:
      “But words are inexact tools at best, and for that reason there is wisely no rule of law forbidding resort to explanatory legislative history no matter how ‘clear the words may appear on “superficial examination.” ’ ”
      Moreover, § 2(b) must be considered in light of the other provisions of the McCarran Act. See authority cited in 2A Sutherland, Statutory Construction § 46.05 (4th ed. C. Sands ed. 1973). Given the congressional purpose apparent in these provisions, the language in § 2(b) is by no means as clear as plaintiffs suggest.

      . That Congress intended the Clayton Act to apply only to the extent that it applied prior to the South-Eastern decision is apparent from the remarks of several congressmen. Senator McCarran, for example, stated with reference to § 2(b) :
      “Under the provisions of the section in the conference report to which the Senator addresses himself, the States are advised and warned that they have a moratorium of 3 years during which they may bring themselves into compliance by way of regulation. If at the end of the 3 years they have not brought themselves into compliance, if they have not regulated the business of insurance, then they must take the consequences because after that period is over the Sherman Act and the Clayton Act and the other acts become immediately again in force as regards the business of insurance. That is all there is to that provision.”
      91 Cong.Rec. 1478 (1945) (emphasis added). See also 91 Cong.Rec. 1442 (1945) (remarks of Senator Murdock) ; 91 Cong.Rec. 1482 Cong.Rec. 1482 (1945) (remarks of Senator Pepper).

      . It should be noted that the problem specifically involved in this case may be solved by Congress. See The Real Estate Settlement Procedures Act of 1974, which has been approved in slightly different versions by both the Senate and House of Representatives. See 120 Cong.Ree.S 13,388 (daily ed. July 24, 1974) ; 120 Cong.Rec.H 8,343 daily ed. Aug. 14, 1974). The bills are now in conference.