author: CHOY, Circuit Judge:

text:
    HERTZKA & KNOWLES, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
    No. 73-2971.
    United States Court of Appeals, Ninth Circuit.
    Sept. 18, 1974.

      Donald D. Connors, Jr. (argued), of Brobeck, Phleger & Harrison, San Francisco, Cal., for petitioner.
    William DuRoss (argued), N.L.R.B., San Francisco, Cal., for respondent.
    Before KOELSCH and CHOY, Circuit Judges, and RENFREW, District Judge.

       The Honorable Charles B. Renfrew, United States District Judge for the Northern District of California, sitting by designation.

   OPINION

CHOY, Circuit Judge:

This case arises out of a labor dispute at Hertzka & Knowles, a medium-sized architectural firm located in San Francisco. In September of 1971 its professional employees voted to have the Organization of Architectural Employees (OAE) as their bargaining agent. After months of negotiations failed to produce an agreement with management, one of the then 25 employees in the bargaining unit petitioned the National Labor Relations Board to decertify OAE. The Board set an election for December 6, 1972.

Prior to the election, management representatives spoke to the employees on several occasions. What occurred at a December 1st meeting formed the basis for OAE charges, filed with the Board after the election, that Hertzka & Knowles violated § 8(a)(1) of the National Labor Relations Act by allegedly making certain threats of reprisal.

OAE lost the election by a vote of 14 against continuing representation and 11 for.

Immediately after the election, a meeting attended by both the employees and the partners of the firm produced a new plan for employee bargaining. It called for five in-house committees with each to be composed of five employees and one management representative. Each was to have a particular zone of competence- — for example, employee remuneration. In its charges before the Board, OAE claimed that this committee system violated § 8(a)(2) of the Act which requires that an employer not “dominate or interfere with the formation or administration of ... or contribute financial or other support to” any labor organization.

The Board agreed, after a hearing before a trial examiner, that the employer had committed the unfair labor practices OAE charged. 206 N.L.R.B. No. 32 (1973). Its order requires Hertzka & Knowles to cease and desist from threatening its employees with reprisals and to withdraw recognition and support from and disestablish the employees’ committees. Additionally, the Board set aside the decertification and called for a new election.

Hertzka & Knowles petitions here to set aside, and the Board cross-petitions to enforce, this order insofar as it pertains to the unfair labor practices. We enforce the order as to the alleged threats of reprisal, but refuse to enforce that part based on the § 8(a)(2) charges.

The § 8(a)(1) Charges

We first consider management’s pre-election speeches to the employees. Section 8(a)(1) prohibits employer interference with employee rights of self-organization. Because that prohibition could facially restrict almost any employer opposition to union organization efforts, it is qualified by § 8(c) of the act which, in turn, incorporates First Amendment safeguards. The subsection provides that the “expressing of any views, argument, or opinion, or the dissemination thereof” shall not. be evidence of an unfair labor practice “if such expression contains no threat of reprisal or force or promise of benefit.” The issue for us is whether Hertzka & Knowles’ pre-election statements fall within the class of unprotected threats of reprisal.

The Supreme Court in NLRB v. Gissel Packing Co., 395 U.S. 575, 616-620, 89 S.Ct. 1918, 23 L.Ed.2d 462 (1969), provided the standard for distinguishing between protected and unprotected speech. An employer, the Court said, is “free to communicate to his employees any of his general views about unionism or any of his specific views about a particular union” absent a threat. Id. at 618, 89 S.Ct. 1918 at 1942.

He may even make a prediction as to the precise effects he believes unionization will have on his company. In such a case, however, the prediction must be carefully phrased on the basis of objective fact to convey an employer’s belief as to demonstrably probable consequences beyond his control or to convey a management decision already arrived at to [say] close [a] plant in case of unionization. ... If there is any implication that an employer may or may not take action solely on his own initiative for reasons unrelated to economic necessities and known only to him, the statement is ... a threat . . ., and as such without the protection of the First Amendment.

Id. (Citation omitted.)

With this background we turn to the particular speeches which the Board found to contain threats. First, at the December 1st meeting senior partner Knowles spoke to explain how he and Hertzka were transferring ownership of the firm to the junior partners. During the course of explaining this complex scheme, he mentioned that the motivation was the desire to keep the business going — “we could have closed it up, but we didn’t.” Ekstein, an OAE officer, immediately rose and characterized this as an unlawful threat to shut the firm down should the union win the election. Angered, Knowles advanced on Ekstein and declared that in courting a union, the employees were “playing with a loaded stick of dynamite.” After being restrained by Hertzka, Knowles then said in a low-voiced aside to the former: “Come on Wayne, we don’t have to put up with this; we can close down.” Because of the commotion, not everyone heard the last remark, but, according to the testimony of employee Dennis Smith, at least several of those in attendance did.

We think that both the “loaded stick” comment and the aside to Hertzka are clearly unprotected by § 8(c) or the First Amendment. These were threats to take action solely within the power of the employer and obviously unbased on any economic predictions. It is not necessary for all the employees to have heard the remarks; as long as some heard, there was a good chance of an impact upon employee free choice. Nor does it matter that it was not intended that others should hear the comments, for it is not only the subjective intent of the speaker that is significant, but also the impact on the employees.

Second, at the same meeting Tobin, another management representative, expressed the view that employment at an architectural firm was “transitory” and that “when people leave, Hartzka & Knowles in the future and Hartzka & Knowles is a union office, [its] people will be known as union activists and will find it very difficult to secure employment.” The examiner found this to be an implied threat to blacklist those supporting the union.

Hertzka & Knowles claims only that it was a true statement of fact based on OAE’s poor reputation in the San Francisco architectural community. The dispute is thus purely one over the inference that can be drawn from To-bin’s statement — whether a prediction of fact or a threat to blacklist. The general rule is that if more than one inference can be drawn from a given set of facts, the Board’s will control unless it is unreasonable. Though we consider the question a close one, we cannot say it is unreasonable to conclude that, in the heat of a decertification campaign, reference to “transitory” employment and the difficulty in finding employment elsewhere are implied threats to blacklist. See Coca Cola Bottling Co., 188 N.L.R.B. 590 (1971).

Third, Tobin went on to remark that if the office “turned union,” it would be more difficult to find business due to the reluctance of clients to deal with a unionized architect; this, of course, would mean fewer employees. Hertzka later said much the same thing in slightly more veiled terms. The examiner found these to be implied threats to lay off union supporters.

Again, although we are troubled by this finding, we think there is substantial evidence to support it. The statement constitutes a prediction of economic consequences, but it is not, as required by Gissel, one “carefully phrased on the basis of objective fact to convey an employer’s belief as to demonstrably probable consequences beyond his control.” NLRB v. Gissel Packing Co., 395 U.S. at 618, 89 S.Ct. at 1942. Hertzka & Knowles produced no evidence of a prospective business slowdown in the event the office remained unionized. In fact, the evidence was to the contrary since the firm’s business apparently increased during the 14 months OAE represented the employees. We therefore follow similar cases sustaining unfair labor practices involving unsupported predictions of company slowdown. See, e. g., Amalgamated Clothing Workers v. NLRB, 24 F.2d 818 (D.C. Cir. 1970).

The § 8(a)(2) Charges — The Committee System

When the results of the decertification election became clear on December 6, Hanna, a partner in the firm, called a meeting of both partners and professional personnel for the next morning. The meeting was opened by Hanna who commented that the eleven pro-union votes indicated a degree of dissatisfaction which had to be taken into account. He then asked for suggestions from the floor on how to accomplish a management-employee dialogue.

Employee Smith suggested the committee system previously described. The source of the idea, he later testified, was a proposal put forth by OAE during their unsuccessful negotiations with Hertzka & Knowles prior to decertification. The idea of adding a management representative to the committees was Smith’s; he felt it would lessen what he termed the “long, tedious process” of negotiating with management that had been experienced with OAE as the bargaining agent. Smith’s motion to adopt this system was seconded by two other employees and was approved by the employees, in the examiner’s words, “overwhelmingly.” An employee then suggested that the partners vote on the proposal. The suggestion was enthusiastically embraced, and the proposal passed unanimously.

The committees, though at the time of the Board hearing still in a nascent state, operate in a not unusual fashion. Their purpose is to discuss and formulate proposals for changes in employment terms and conditions; in some cases, it was contemplated that proposals would have to be passed on to management. Meetings are sometimes held on company time without loss of pay. On some committees the management member votes but apparently not on others. The firm representative, like other committee members, is consulted on meeting times and participates fully in the proceedings.’

The issue for our consideration is whether the employer’s participation in the system’s approval and operation represents an illicit degree of interference, under § 8(a)(2), with its formation and administration.

Central to the National Labor Relations Act is the facilitation of employee free choice and employee self-organization. Indeed, § 8(a)(2) is, in part, a means to that end, for it seeks to permit employees to freely assert their demands for improvements in working conditions. Literally, however, almost any form of employer cooperation, however innocuous, could be deemed “support” or “interference.” Yet such a myopic view of § 8(a) (2) would undermine its very purpose and the purpose of the Act as a whole — fostering free choice — because it might prevent the establishment of a system the employees desired. Thus the literal prohibition of § 8(a)(2) must be tempered by recognition of the objectives of the NLRA.

In saying this, we are merely repeating what Senator Wagner said of § 8(a)(2) when he introduced his bill to the Senate:

The erroneous impression that the bill expresses a bias for some particular form of union organization probably arises because it outlaws the company-dominated union. Let me emphasize that nothing in the measure discourages employees from uniting on an independent — or company-union basis, if by these terms we mean simply an organization confined to the limits of one plant or one employer. Nothing in the bill prevents employers from maintaining free and direct relations with their workers.
The only prohibition is against the sham or dummy union which is dominated by the employer, which is supported by the employer, which cannot change its rules and regulations without his consent, and which cannot live except by the grace of the employer’s whims.

Statutoiy History of the United States: Labor Organization 278-79 (R. Koretz, ed. 1970) (remarks of Feb. 21, 1935).

For this same reason courts have emphasized that there is a line between cooperation, which the Act encourages, and actual interference or domination considered from the standpoint of the employees, which the Act condemns. See, e. g., Federal-Mogul Corp. v. NLRB, 394 F.2d 915, 918 (6th Cir. 1968); NLRB v. Prince Macaroni Manufacturing Co., 329 F.2d 803, 809-812 (1st Cir. 1964); Chicago Rawhide Manufacturing Co. v. NLRB, 221 F.2d 165, 167-168 (7th Cir. 1955). In NLRB v. Wemyss, 212 F.2d 465 (9th Cir. 1954), we declined to approve a Board finding that an employer interfered with and dominated the administration of an in-house committee system. Judging the § 8(a)(2) issue from the subjective standpoint of the employees, we said:

[T]he question is whether the organization exists as the result of á choice freely made by the employees, in their own interests, and without regard to the desires of their employer or whether the employees formed and supported the organization, rather than some other, because they knew their employer desired it and feared the consequences if they did not.

Id. at 471. We indicated that the employer must be shown to have interfered with the “freedom of choice” of the employees. Id. at 472. The sum of this is that a § 8(a)(2) finding must rest on a showing that the employees’ free choice, either in type of organization or in the assertion of demands, is stifled by the degree of employer involvement 'at issue. Cf. NLRB v. Keller Ladders Southern, Inc., 405 F.2d 663, 667 (5th Cir. 1968); Note, New Standards for Domination and Support Under Section 8(a)(2), 82 Yale L.J. 510, 519-32 (1973).

Judged by this standard, we do not think there is substantial evidence, in the totality of circumstances, that Hertzka & Knowles violated § 8(a)(2). Unlawful support is not shown by the fact the committees meet at the firm and on firm time. E. g., Coppus Engineering Corp. v. NLRB, 240 F.2d 564, 573 (1st Cir. 1957). Nor is it a weighty circumstance that Hanna called and opened the meeting at which the committee system was adopted. The idea was still that of an employee, and it was approved by the employees. There was no evidence produced at the hearing, that the employees’ preference was affected by this fact. Finally, that the partners voted on the proposal is relatively meaningless; it was the result of a suggestion made by an employee and its enthusiastic acceptance by the body of employees.

The question essentially comes down to the significance of having management partners on the committees. True, this may1 mean bargaining is “weaker” than if there were a formally organized union. Yet this feature too was chosen by the employees, and it is one with which, for all the record shows, they are not dissatisfied. This is perhaps not unreasonable given the close contact that must exist between partners and professional associates in an architectural firm. There is no evidence, furthermore, of actual interference with the assertion of employee demands through the committees. At most, there is the management vote on some committees, and even where the partner votes, the employees can easily outvote him.

For us to condemn this organization would mark approval of a purely adversial model of labor relations. Where a cooperative arrangement reflects a choice freely arrived at and where the organization is capable of being a meaningful avenue for the expression of employee wishes, we find it unobjectionable under the Act.

The Board will prepare a revised proposed order complying with this opinion.

Enforced in part and not enforced in part.

      . 29 U.S.C. § 158(a)(1). Under that subsection it is an unfair labor practice to “interfere with, restrain, or coerce” employees in the exercise of rights granted them under § 7 of the Act, 29 U.S.C. § 157. Section 7 basically insures the rights to self-organization and to engage in other concerted activity in pursuit of labor goals.

      . The five committees are: (1) Professional Stature Within the Firm; (2) Remuneration for Professional Services; (3) Minimum Standards; (4) Efficiency; and (5) Physical Environment.

      . 29 U.S.C. § 158(a)(2): It provides that it shall be an unfair labor practice for an employer :
      to dominate or interfere with the formation or administration of any labor organization or contribute financial or other support to it: Provided, That subject to rules and regulations made and published by the Board . . ., an employer shall not be prohibited from permitting employees to confer with him during working hours without loss of time or pay.

      . That part of the order setting aside the election and requiring a new election is not, and could not be, before us. See Boire v. Greyhound Corp., 376 U.S. 473, 84 S.Ct. 894, 11 L.Ed.2d 849 (1964); A. F. of L. v. NLRB, 308 U.S. 401, 60 S.Ct. 300, 84 L.Ed. 347 (1940).

      . 29 U.S.C. § 158(c).

      . The findings set forth are those which we find substantial evidence to support.

      . So the examiner found. Knowles denies saying these things, but other witnesses supported the examiner’s version. In the absence of a clear preponderance of all the other evidence, we are bound by the trial examiner’s findings of credibility. B. g., NLRB v. Luisi Truck Lines, 384 F.2d 842, 845-846 (9th Cir. 1967).

      . See NLRB v. Tom Wood Pontiac, 447 F.2d 383, 385-86 (7th Cir. 1971); NLRB v. River Togs, Inc., 382 F.2d 198, 200-202 (2d Cir. 1967); Surprenant Mfg. Co. v. NLRB, 341 F.2d 756, 761-762 (6th Cir. 1965).

      . See, e. g., NLRB v. Clapper’s Mfg. Co., 458 F.2d 414, 417-418 (3d Cir. 1972).

      . See, e. g., NLRB v. Kaiser Agricultural Chemicals, 473 F.2d 374, 381 (5th Cir. 1973).

      . Famet, Inc. v. NLRB, 490 F.2d 293, 295 (9th Cir. 1973); NLRB v. Douglas & Lomason Co., 443 F.2d 291, 294 (8th Cir. 1971); NLRB v. Miller Redwood Co., 407 F.2d 1366, 1369-1370 (9th Cir. 1969); see NLRB v. Holly Bra, Inc., 405 F.2d 870, 872 (9th Cir. 1969).

      . Hertzka & Knowles also argues that the blacklist charge should not be upheld because it was deleted from the charges by the Board’s General Counsel. While normally nonenforcement would seem required, nowhere did the employer object to the admission of evidence on the subject, nor to the variance between charge and findings. If an issue is thus fully tried without contemporaneous objection, the findings will be upheld. Rogers Mfg. Co. v. NLRB, 486 F.2d 644, 648 (6th Cir. 1973); Rea Trucking Co. v. NLRB, 439 F.2d 1065, 1066 (9th Cir. 1971); cf. Golden Grain Macaroni Co. v. FTC, 472 F.2d 882, 886 (9th Cir. 1972), cert. denied, 412 U.S. 918, 93 S.Ct. 2730, 37 L.Ed.2d 144 (1973).

      . A similar idea was discussed at a pre-election meeting. Several Hertzka & . Knowles employees invited representatives from another architectural firm to speak on a committee system in effect there.

      . See Modern Plastics Corp. v. NLRB, 379 F.2d 201, 203-204 (6th Cir. 1967); NLRB v. Post Pub. Co., 311 F.2d 565, 569 (7th Cir. 1962); Chicago Rawhide Mfg. Co. v. NLRB, 221 F.2d at 167-168; cf. Wayside Press, Inc. v. NLRB, 206 F.2d 862, 865-866 (9th Cir. 1953).

      . Alternatively, an employer’s intended attempt to suppress' employee rights of self-organization might well be condemnable under § 8(a)(2).


source: Caselaw Access Project

author: BOREMAN, Senior Circuit Judge:

license: Public Domain

text:
    Edgar T. MOYE, on behalf of himself and all others similarly situated, Appellants, v. The CITY OF RALEIGH, a municipal corporation, et al., Appellees.
    No. 73-2515.
    United States Court of Appeals, Fourth Circuit.
    Argued April 4, 1974.
    Decided Oct. 1, 1974.

      L. Philip Covington, Garner, N. C., for appellant. ■
    Walter Lee Horton, Jr., Raleigh, N. C. (Horton, Conely & Michaels and Broxie J. Nelson, Raleigh, N. C., on brief) for appellees.
    Before BOREMAN, Senior Circuit Judge, and BUTZNER and RUSSELL, Circuit Judges.
   BOREMAN, Senior Circuit Judge:

Plaintiff, Edgar T. Moye, brought this class action against the City of Raleigh, North Carolina, all other municipalities in the State of North Carolina, and certain designated municipal officers, seeking injunctive relief, a declaratory judgment, and damages. Moye alleges that he and other persons similarly situated are being deprived of their constitutional rights as a result of the legislative scheme of the defendants in the enactment and enforcement of municipal parking ordinances. The district court dismissed the action, holding that the complaint failed to present a substantial federal question or state a claim for relief.

Under the legislative system here attacked violators of municipal parking ordinances are issued tickets. The recipient of a ticket may pay a “voluntary contribution” of a designated amount between one and five dollars to the municipality and avoid criminal prosecution or, alternatively, withhold payment and face prosecution. Those who are subject to prosecution are tried in a state court, with the right to a jury trial, and if found guilty must pay a fine (equal to the amount of the “voluntary contribution”) and the court costs all of which go to the state unified court system rather than to the municipality. Moye points out that a parking ordinance violator who elects to defend in a criminal trial rather than pay the “voluntary contribution” subjects himself to the possibility of the payment of a greater sum of money and the entry of a criminal conviction on his record. Thus, he contends, this legislative scheme violates due process of law since alleged violators are the subjects of coercion which effectively denies them their right to trial by jury. He further complains that since those who refuse to make the “voluntary contribution” are exposed to a greater monetary penalty (in the form of added court costs) and a record of conviction of a criminal offense, the class of persons exercising their right to trial are denied equal protection of the laws. Finally, Moye asserts that this system of prosecuting parking ordinance violators constitutes a bill of attainder.

The complaint reveals that Moye is presently being subjected to criminal prosecution in state court for alleged packing ordinance violations as a result of his failure or refusal to pay the City of Raleigh the designated amount of “voluntary contributions.” Plaintiff has not alleged or even suggested that his prosecution is being conducted in bad faith or for purposes of harassment.

These facts clearly compel application of the rule announced in Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), whereby federal courts should refrain from interfering with a criminal prosecution pending in state court where the defendant has not shown extraordinary circumstances involving great and immediate threat to federally protected rights which cannot be protected in the defense of the action before the state court. See also Mitchum v. Foster, 407 U.S. 225, 92 S.Ct. 2151, 32 L.Ed.2d 705 (1972).

Plaintiff has sought to distinguish Younger by noting that there the plaintiff sought to enjoin the state prosecution itself. While technically what the plaintiff seeks here is an injunction to prevent continued operation of the “voluntary contribution” system, as a practical matter such equitable relief would “result in precisely the same interference with and disruption of state proceedings that the longstanding policy limiting injunctions [against pending state prosecutions] was designed to avoid.” Samuels v. Mackell, 401 U.S. 66, 72, 91 S.Ct. 764, 767, 27 L.Ed.2d 688 (1971). The principles of equity, comity, and federalism which precluded issuance of a federal injunction against the pending state criminal prosecution in Younger, supra, likewise preclude issuance of such equitable relief in this case. To enjoin the continued operation of the “voluntary contribution” system while a state criminal action is pending would constitute a “disruptive interference with the operation of the state criminal process.” Perez v. Ledesma, 401 U.S. 82, 84, 91 S.Ct. 674, 676, 27 L.Ed.2d 701 (1971). Accordingly, we find no entitlement to the injunctive relief sought.

In addition to injunctive relief, plaintiff seeks a declaratory judgment adjudicating as unconstitutional the system allowing an accused to avoid prosecution for parking violations by making a “voluntary contribution” to the City of Raleigh. “[I]n cases where the state criminal prosecution was begun prior to the federal suit, the same equitable principles relevant to the propriety of an injunction must be taken into consideration by federal district courts in determining whether to issue a declaratory judgment, and . . . where an injunction would be impermissible under the'se principles, declaratory relief should ordinarily be denied as well.” Samuels v. Mackell, 401 U.S. 66, 73, 91 S.Ct. 764, 768, 27 L.Ed.2d 688 (1971). Plaintiff freely admits that he has asserted the unconstitutionality of the “voluntary contribution” system as a defense to his prosecution now pending in state court. A declaratory judgment would, in fact, adjudicate the merits of Moye’s defenses to the state prosecution; such a judgment might then be res judicata and virtually take the case out of state court before it could be heard and decided. Public Service Commission v. Wycoff Co., 344 U.S. 237, 247, 73 S.Ct. 236, 97 L.Ed. 291 (1952); Perez v. Ledesma, 401 U.S. 82, 125, 91 S.Ct. 674, 27 L.Ed.2d 701 (1971) (separate opinion of Justice Brennan). It is our conclusion that the issuance of a declaratory judgment would be inappropriate in the instant case and the request therefor should be denied.

Finally we are confronted with the claim for money damages for violation of plaintiff’s civil rights pursuant to 42 U.S.C. §§ 1983 and 1985(3). Plaintiff has not submitted his claim for money damages to the state court and he need not do so in order to invoke the jurisdiction of the federal courts. Monroe v. Pape, 365 U.S. 167, 183, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961); Scott v. Vandiver, 476 F.2d 238 (4 Cir. 1973). However, it is clear that he has submitted many of the issues involved in this federal action for money damages to the state court by way of his defense to the pending state criminal prosecution. Judicial economy and the sound exercise of judicial discretion require that federal courts abstain until the state court has had an adequate opportunity to resolve those issues. We recognize that the decision of the state courts on those issues may be res judicata in this civil action. P I Enterprises, Inc. v. Cataldo, 457 F.2d 1012 (1 Cir. 1972); Norwood v. Parenteau, 228 F.2d 148 (8 Cir. 1955). But it is the plaintiff who chose to submit those issues to the state court and, having elected to try them there in the first instance, he cannot now be permitted to avoid his decision by initiating this action in federal court while the state action is pending. See England v. Louisiana State Board of Medical Examiners, 375 U.S. 411, 84 S.Ct. 461, 11 L.Ed.2d 440 (1964); See also Moran v. Mitchell, 354 F.Supp. 86 (E.D.Va.1973).

Ordinarily in such cases we would remand the ease to the district court so that it might retain jurisdiction over the claim for money damages pending the outcome of the state proceeding. However, it appears likely that the outcome of those proceedings will be controlling with respect to many of the issues involved in the claim for money damages and would necessitate extensive revision or amendment of the pleadings. Accordingly, we conclude that the action for damages should be dismissed without prejudice to the right of the plaintiff to institute a new action for damages should he be so advised.

Additionally, we note that a substantial question exists as to whether the complaint properly states a cause of action against the municipalities and their officers under 42 U.S.C. § 1983 and § 1985(3). It would appear that the municipalities designated as defendants in this action are not “persons” subject to suit within the meaning of those sections. Likewise the complaint does not appear to properly state a cause of action against the municipal officers. This jurisdictional issue was not raised in the district court but in the event a new action for. damages is instituted it will be necessary for the district court to fully examine its jurisdiction prior to any consideration of the merits.

For the reasons herein stated we affirm the district court’s dismissal of the action with respect to the plaintiff’s claims for injunctive and declaratory relief but as to the action for damages it is dismissed without prejudice to the plaintiff’s right to institute a new action should he be so advised.

Affirmed in part and the dismissal of the action for damages affirmed as modified.

      . There was no determination by the district court as to whether the plaintiff could maintain a class action. Since we conclude that the complaint should be dismissed on grounds which do not require such determination at this time, we intimate no opinion on that question.

      . Since only local ordinances were involved it was not necessary to convene a three-judge court to hear the constitutional challenge.' This is true even though similar ordinances existed in numerous municipalities throughout the state. Moody v. Flowers, 387 U.S. 97, 102, 87 S.Ct. 1544, 18 L.Ed.2d 643 (1967).

      . The district court concluded that the bill of attainder argument “is frivolous and involves no substantial federal question.”

      . Jurisdiction of the claim for injunctive relief is asserted under 28 U.S.C. § 1343.

      . Jurisdiction for the requested declaratory judgment is asserted under 28 U.S.C. §§ 2201 and 2202.

      . We recognize that there are instances where a declaratory judgment is appropriate although a simultaneous request for injunc-tive relief must be denied. Steffel v. Thompson, 415 U.S. 452, 94 S.Ct. 1209, 39 L.Ed.2d 505 (1974). However, the instant case is clearly distinguishable from Steffel since there is here a pending state criminal prosecution. Steffel held that in the absence of a pending state prosecution equity, comity, and federalism do not mandate abstention from the mild relief of a declaratory judgment. However, when state criminal proceedings are pending the Court has promulgated firm rules of abstention which are in addition to the traditional equitable requirements that apply where there are no such proceedings pending. Samuels v. Mackell, 401 U.S. 66, 91 S.Ct. 764, 27 L.Ed.2d 688 (1971).

      . Jurisdiction of the claim for money damages is asserted under 28 U.S.C. § 1343.

      . “Every pei’son who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.” 42 U.S.C. § 1983.

      . “If two or more persons in any State or Territory conspire . . . for the -purpose of depriving, either directly or indirectly, any person or class of persons of the equal protection of the laws, or of equal privileges and immunities under the laws . . . the party so injured or deprived may have an action for the recovery of damages, occasioned by such injury or deprivation, against any one or more of the conspirators.” 42 U.S.C. § 1985(3).

      . It is well established that a municipality is not a “person” within the meaning of 42 U.S.C. § 1983, and therefore cannot be liable under that section in an action for damages [Monroe v. Pape, 365 U.S. 167, 191, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961)] or injunctive relief [City of Kenosha v. Bruno, 412 U.S. 507, 513, 93 S.Ct. 2222, 37 L.Ed.2d 109 (1973)]. It would appear that municipalities are also immune from suit under 42 U.S.C. § 1985(3). Spampinato v. City of New York, 311 F.2d 439 (2 Cir. 1962), cert. denied, 372 U.S. 980, 83 S.Ct. 1115, 10 L.Ed.2d 144, rehearing denied, 374 U.S. 818, 83 S.Ct. 1699, 10 L.Ed.2d 1042; Agnew v. City of Compton, 239 F.2d 226 (9 Cir. 1957), cert. denied, 353 U.S. 959, 77 S.Ct. 868, 1 L.Ed.2d 910.

      . Various municipal officials, including police chiefs, town managers, and members of city councils of all municipalities in North Carolina are designated as defendants in this action. They are sued individually and in their official capacities. There is a substantial question whether these officials can be sued “in their official capacities” and the absence of any allegation that they acted “in bad faith” may preclude proceeding against them as individuals. See Bennett v. Gravelle, 323 F.Supp. 203 (D.Md.1971), aff’d 451 F.2d 1011, petition for cert. dismissed 407 U.S. 917, 92 S.Ct. 2451, 32 L.Ed.2d 692; see also Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). Other possible jurisdictional questions would appear to be presented but the record is presently inadequate to warrant consideration thereof.


author: PHILLIPS, Chief Judge. McCREE, Circuit Judge

text:
    BITUMINOUS CASUALTY CORPORATION, Appellee and Cross-Appellant, v. James T. LYNN, Secretary of Housing and Urban Development, Appellant and Cross-Appellee.
    Nos. 73-2043, 73-2044.
    United States Court of Appeals, Sixth Circuit.
    Decided Oct. 2, 1974.
    McCree, Circuit Judge, filed an opinion concurring in part and dissenting in part.

      Michael H. Stein, Appellate Section, Civil Div., Dept, of Justice, Washington, D. C., for appellant and cross-appellee; Irving Jaffe, Acting Asst. Atty. Gen., Washington, D. C., Eugene E. Siler, Jr., U. S. Atty., Lexington, Ky., William Kanter, Atty., Dept, of Justice, Washington, D. C., on brief.
    Arnold M. Weiner, Baltimore, Md., for appellee and cross-appellant; Robert E. Cahill, Baltimore, Md., Charles Lan-drum, Jr., Lexington, Ky., on brief.
    Before PHILLIPS, Chief Judge, and MeCREE, and ENGEL, Circuit Judges.
   PHILLIPS, Chief Judge.

This is an action to recover on a contract of reinsurance issued by the Department of Housing and Urban Development to Bituminous Casualty Corporation pursuant to the Urban Property Protection and Reinsurance Act of 1968, 12 U.S.C. §§ 1749bbb-l to 1749bbb-21.

In case No. 73-2043 the Secretary appeals from the judgment of the District Court awarding a recovery to Bituminous under its contract in the amount of $372,167.58 plus interest at six per cent per annum from the date of the judgment. In case No. 73-2044 Bituminous cross-appeals from the disallowance of pre-judgment interest from the date of the denial of its claim.

We affirm as to the judgment allowing recovery on the claim and the award of post-judgment interest and reverse as to the denial of pre-judgment interest.

The events giving rise to the claim against the Secretary of HUD were summarized by District Judge Bernard T. Moynahan, Jr., as follows:

“The claim arises from the violent destruction, during the night of August 24-25, 1968, of certain heavy-mining equipment owned by Clairfield Equipment Company, Inc. (‘Clair-field’) and located at a mining site on Red Bird mountain in Leslie County, Kentucky. The destroyed equipment had been insured against loss, including loss from riot, by an inland marine policy issued by Bituminous to Clairfield. The premium paid by Clairfield to Bituminous for this policy was included in the total of inland marine premiums on which the Secretary calculated the premiums for the reinsurance contract.
“Clairfield was owned and controlled by the U. R. Arnold family. The insured equipment, was leased to two corporations, also operated by the Arnolds, which operated a strip mine and a deep mine at the site involved here. Approximately twenty employees, members of the Southern Labor Union, worked at these mines. The Arnolds also employed a local resident to act as watchman and to guard the mine and equipment after working hours.
“At approximately 10:00 P.M., on the night of August 24, 1968, an armed gang of three or four men descended upon the watchman, assaulting him and forcibly removing from his person the guns which he had used to protect the mines and equipment. He was thrown to the ground, kicked about the head and told that he might be killed. The gang forcibly broke into a trailer containing high explosives, and, for more than four hours, with the watchman bound and blindfolded, they planted the explosives beneath every piece of valuable equipment on the site. As they went about their task, the gang continued to threaten the watchman and at one point some of them suggested that he be tied to the equipment and destroyed along with it. The destruction was accomplished by a prolonged series of explosions. The first of the blasts terrorized not only the watchman, but the members of the gang as well. A separate fuse was lit beneath each piece, and, for a sustained period, the mountain was shaken by a sequence of blasts. Persons living in the vicinity, including those on the other side of the mountain, as much as five miles away, were awakened and frightened by the tumult. The explosions were so violent that their houses were shaken. It appeared to some that ‘the mountain was a ball of fire’ and to others that ‘the sky was lit up’.”

Bituminous had purchased a standard form riot reinsurance policy from the Secretary. The policy provided:

“Pursuant to the provisions of the Urban Property Protection and Reinsurance Act of 1968 and subject to the terms and conditions herein set forth, the REINSURER hereby obligates itself to pay, as reinsurance of the COMPANY, the amount of the COMPANY’S excess aggregate losses resulting from riots or civil disorders in such lines of mandatory and optional coverage as may be designated herein separately for each State.”

Clause XV(2) defined “riots or civil disorders” to mean:

“a. any tumultuous disturbance of the public peace by three or more persons mutually assisting one another in execution of a common purpose by the unlawful use of force and violence resulting in property damage of any kind;
“b. two or more unlawful and terror-istic acts or occurrences which, under similar circumstances, take place within reasonable proximity as to time and place, at least two of which acts or occurrences each result in property damage of any kind in excess of $1,000 or;
“c. any other unlawful and terroristic act or occurrence, resulting in property damage of any kind, which may reasonably be determined by the REINSURER, on the basis of evidence submitted by the COMPANY, to have been, under the circumstances, a form of civil disorder.”

Bituminous submitted its claim to HUD which summarily rejected it because “it [did] not appear that this loss arose incident to a riot or civil disorder as defined in the Standard Reinsurance Contract.” After Bituminous requested reconsideration of the denial of its claim, HUD amplified its reasons for the denial:

“Nevertheless, it was the recommendation of our internal Claims Review Committee, and my ultimate decision as Administrator, that the type of loss involved was not one covered, or intended by the Congress to be covered, under the Standard Reinsurance Contract. It was our conclusion that the loss resulted from traditional malicious mischief rather than from the type of riot or civil disorder envisaged by the Urban Property Protection and Reinsurance Act of 1968.

“Specifically, the Congress, in broadening the scope of the program from the catastrophic coverage originally contemplated, stated:

“It has been pointed out that there has recently been a pattern of losses resulting from intentionally caused fire or other property damage which may or may not be connected in time or place to riots or group activity, but which could be determined to be a form of civil disorder. It is the view of the committee that losses of this nature might be considered by the Secretary when he issues regulations delineating the precise scope of ‘losses resulting from riots or civil disorders.’ (Emphasis supplied.) House Report No. 1585, Committee on Banking and Currency, 90th Congress, 2d Session, p. 80.
“Both the testimony which led to the expansion of the scope of the Act, and the reference in the Committee Report to the recent pattern of intentionally-caused losses, make clear that the types of civil disorder intended to be covered were isolated or related acts of terrorism directed at an identifiable population or significant segment thereof by militant groups, often having racial cause, but having in common a primary motivation of civil protest or civil disruption; as distinguished, for example, from destructive acts directed toward a single employer or organization (as is typical of labor disputes), and particularly as distinguished from isolated acts which do not involve, either directly or indirectly, a community or a population. In summary, what we believe the Congress intended, and what we certainly intended by the (B) and (C) definitions of our Contract, was coverage primarily for terroristic acts affecting a population, which cause property damage, but which fall short of the mass riots which occurred in Watts, Newark, and Detroit, for example. Under the circumstances presented, where motive is unknown, the possibly related acts were distant both in time and place, and no population was affected, we do not believe that we can stretch either the intention of the Congress or the wording of the Contract to provide the reinsurance coverage you seek.”

Thereupon, Bituminous filed suit pursuant to the provisions for judicial review set forth in 12 U.S.C. § 1749bbb-11(b)(1). There being no dispute as to any material fact, both parties moved for summary judgment. The District Court in an amended memorandum opinion, held that the loss was covered under paragraphs (a) and (b) of clause XV(2), supra, awarded post-judgment interest and denied pre-judgment interest.

1) LIABILITY

It has not been disputed that the definition contained in paragraph (a), supra, corresponds with the common law description of a riot. See Providence Washington Insurance Co. v. Lynn, 492 F.2d 979 (1st Cir. 1974). See also generally 54 Am.Jur.2d Mobs and Riots § 1 (1971); Annotation, 121 A.L.R. 250.

The Secretary’s argument proceeds on two theories: (1) The definition of riot should be construed narrowly so as to make it consistent with the legislative intent underlying the reinsurance program; and (2) the acts giving rise to the loss, in any event, do hot constitute a common law riot.

While admitting that the Act and the reinsurance contract were designed to cover losses sustained in rural as well as urban areas, the Secretary contends that they were designed to provide protection against riots such as those that occurred in the 1960’s. In adopting this position, the Secretary would have us read a “motivation” element into the contract definition of a riot. Specifically, it is argued that the riot must be motivated by social or political reasons and not by “labor strife unrelated to . ideological or racial disturbances.” We do not read the contract so narrowly.

As a general rule, contracts of the United States are governed by federal law. United States v. Seckinger, 397 U.S. 203, 209-210, 90 S.Ct. 880, 25 L.Ed.2d 224 (1970); S.R.A., Inc. v. Minnesota, 327 U.S. 558, 564, 66 S.Ct. 749, 90 L.Ed. 851 (1946); Clearfield Trust Co. v. United States, 318 U.S. 363, 366-367, 63 S.Ct. 573, 87 L.Ed. 838 (1943). However, where Congress has not adopted a different standard, it is customary to apply the principles of general contract law. Priebe and Sons, Inc. v. United States, 332 U.S. 407, 411, 68 S.Ct. 123, 92 L.Ed. 32 (1947). Indeed, the rules governing federal contracts are derived from the common law. As stated by the Supreme Court in Seckinger, supra:

“In fashioning a federal rule we are, of course, guided by the general principles that have evolved concerning the interpretation of contractual provisions such as that involved here. Among these principles is the general maxim that a contract should be construed most strongly against the drafter, which in his case was the United States. (Footnotes omitted.)
*■ -X X -X- -X- *
“Finally, our interpretation adheres to the principle that as between two reasonable and practical constructions of an ambiguous contractual provision, such as the two proffered by the Government, the provision should be construed less favorably to that party which selected the contractual language. This principle is appropriately accorded considerable emphasis in this case because of the Government’s vast economic resources and stronger bargaining position in contract negotiations.” (Footnotes omitted.) 397 U.S. at 210, 216, 90 S.Ct. at 885, 887.

We are of the view that the legislative history of the Act does not show that Congress meant to adopt different rules of interpretation with respect to reinsurance contracts executed pursuant to the Act. The program was designed to be flexible with authority left to the Secretary to draft contracts which would provide coverage consistent with the purposes of the Act. 12 U.S.C. § 1749bbb-8(c). Had Congress or the Secretary desired to exclude from coverage the type of loss presented under the facts of this case, unambiguous language to that effect could have been used.

We decline to read a motivation test into the contract. Clause XV(2) (a) is unambiguous in defining the elements of a common law riot. Even if it contained an ambiguity, we would be required to resolve it against the Secretary and in favor of Bituminous. The contract was of a standard form and was drafted by the Secretary who had a much stronger bargaining position than Bituminous. Moreover, Bituminous, .along with other private companies, participated in statewide plans of insurance in return for protection under the statutory reinsurance program. 12 U.S.C. § 1749bbb-7(c). We think these factors mandate the application of the general rule that a contract should be construed less favorably against the party that drafted it. Seckinger, supra.

More importantly, however, the allowance of a claim such as the one at bar is entirely consistent with the legislative history of the Act. The purpose of the reinsurance program was to ease the insurance crisis that existed in areas where property owners could not obtain coverage. 1968 U.S. Code Cong. & Adm. News, pp. 2951-2953. In finding that the national interest required that riot insurance be available to property owners, the Congress stated that the purposes of the Act were to:

“(1) encourage and assist the various State insurance authorities and the property insurance industry to develop and carry out statewide programs which will make necessary property insurance coverage against the fire, crime, and other perils more readily available for residential, business, and other properties meeting reasonable underwriting standards; and (2) provide a Federal program of reinsurance against abnormally high property insurance losses resulting from riots and other civil commotion, placing appropriate financial responsibility upon the States to share in such losses.” Urban Property Protection and Reinsurance Act of 1968, Pub.L. No. 90-448, § 1102(b).

The record established beyond doubt that an insurance crisis exists in southeast Kentucky. As stated by District Judge Moynahan:

■ “Southeastern Kentucky has been plagued with an insurance crisis not unlike that which has existed in the inner cities. Because of the violence which has characterized relations within the coal industry, there has been an exodus of insurance companies from that area. Of the more than four hundred casualty companies operating in Kentucky, less than ten percent of them will accept any risk in the southeastern part of the State. Only two or three insurance companies, one of them Bituminous, will still write insurance voluntarily on coal properties. The absence of federal riot reinsurance would render property insurance virtually unavailable to the coal industry. This, in turn, would have serious adverse effect upon the ability of the industry to obtain financing and otherwise to operate.”

In view of these findings of the District Court, we see no inconsistency between applying contract protection to the loss here involved and the purpose behind this legislation. To the contrary, it would appear that Congress, in drafting the statute, intended to provide protection in a case such as this one. Since we are unwilling to fashion an exception to the definition of riot contained in the contract, the sole question remaining is whether the events giving rise to the property damage fall within the contract definition.

The essential elements of a riot as defined in clause XV(2) (a) are: 1) a tumultuous disturbance of the public peace, 2) by three or more persons mutually assisting one another in the execution of a common purpose, 3) by the unlawful use of force and violence, 4) resulting in property damage of any kind. The issue in the case at bar concerns item 1.

Addressing itself to this issue, the District Court stated:

“There is no merit to the Defendant’s further contention that the acts of the gang here did not amount to a disturbance of the public peace and that they were not tumultuous. Even if the explosions' and the terrorizing of the local population were ignored, the assaults upon the watchman were more than sufficient to amount to a tumultuous disturbance of the public peace.”

The Secretary contends that “disorderly agitation or milling about of a crowd, usually with uproar and confusion of voices” is an essential part of a tumultuous disturbance. It is argued further that the events giving rise to the damage are, at the most, simple assault and malicious mischief. No authority is cited for this proposition. The authorities which we refer to below mandate a contrary conclusion.

In the only other reported appellate case cited to us interpreting clause XV(2)(a), the First Circuit held that a prison fire set secretly and away from public view was not a riot. Providence Washington Insurance Co., supra, 492 F.2d at 983. In analyzing the decisions, the court cited with approval the District Court’s determination in the ease at bar that a riot had occurred. Id. The distinction between the two cases was stated by the First Circuit:

“The cases wherein destructive activity has been found to be riotous have been ones where the illegal act was accompanied by the use of force, or the.threat of use of force, against anyone who might interfere with the criminal enterprise. See e. g., Insurance Co. of North America v. Rosenberg, 25 F.2d 635 (2d Cir. 1928); Brous v. Imperial Assur. Co., 130 Misc. 450, 224 N.Y.S. 136 (1927), aff’d, 223 App.Div. 713, 227 N.Y.S. 777 (1928); Germania Fire Ins. Co. v. Deckard, 3 Ind.App. 361, 28 N.E. 868 (1891). The only other case to construe a reinsurance contract under the National Insurance Development Program reached a conclusion consistent with these cases. In Bituminous Casualty Corp. v. Romney, (amended mem. opinion, E.D.Ky.1973), the court found a riot, as defined in a provision of the contract identical to the one in issue here, in the actions of three or four men who overpowered, bound and threatened the night watchman at a coalfield and who then destroyed valuable mining . equipment with explosives. On the other hand, stealthy destructive activity accomplished without force or threat of force to those who might interfere has been found not to constitute a riot, . . . ”

The significance of the watchman’s presence is further illustrated in Salem Mfg. Co. v. First American Fire Ins. Co. of New York, 111 F.2d 797 (9th Cir. 1940), and Hartford Fire Insurance Co. v. War Eagle Coal Co., 295 F. 663 (4th Cir. 1924).

In Lycoming Fire Insurance Co. v. Schwenk, 95 Pa. 89, 40 Am.Rep. 629 (1880), a party of men convened in the nighttime upon a coal breaker, fired shots causing two watchmen to flee and then set fire to the breaker. The court held that these events constituted a riot.

In State v. Johnson, 43 S.C. 123, 20 S.E. 988 (1895), seven defendants were convicted of riot because they tied a man to a tree and whipped him.

In Germania Fire Insurance Co. v. Deckard, 3 Ind.App. 361, 28 N.E. 868 (1891) a group of men broke into a building at night, forced the occupants to vacate under threats of personal violence and then set fire to the building. The court held that these acts constituted' a riot.

Similarly, in Spring Garden Insurance Co. v. Imperial Tobacco Co., 132 Ky. 7, 116 S.W. 234, 20 L.R.A.,N.S., 227, 136 Am.St.Rep. 164 (1909), the court found that a riot had occurred when a large group of men dynamited and burned the plaintiff’s property. See generally 5 Appleman, Insurance Law and Practice § 3111 (1970); Annotation, 121 A.L.R. 250, supra.

We are of the view that these authorities mandate the conclusion that the events giving rise to the destruction of the equipment in the case at bar constituted a riot within the meaning of clause XV(2)(a) of the reinsurance contract.

2) POST-JUDGMENT INTEREST

In awarding post-judgment interest, the District Court stated:

“The federal riot reinsurance program is operated by the National Insurance Development Fund (12 U.S.C. Sec. 1748bbb-l through 1749bbb-20). This instrumentality functions as a business entity with the capacity to sue and be sued with respect to its transactions. (12 U.S.C. Sec. 1749bbb-10 and 1749bbb-ll(b)). The program is self-supporting, drawing on premium and investment income. It has been operated at a substantial profit since its inception. It is subject to the same incidents of suit, including allowance of interest, as a private business entity.”

The court did not award pre-judgment interest because, in its view, the claim was not liquidated.

The general rule is that the United States, subject to constitutional limitations, is not liable for interest unless it is expressly authorized by contract or statute. United States v. Alcea Band of Tillamooks, 341 U.S. 48, 49, 71 S.Ct. 552, 95 L.Ed. 738 (1951); United States v. New York Rayon Importing Co., Inc., 329 U.S. 654, 659, 67 S.Ct. 601, 91 L.Ed. 577 (1947); United States v. Thayer-West Point Hotel Co., 329 U.S. 585, 588, 67 S.Ct. 398, 91 L.Ed. 521 (1947); United States v. Worley, 281 U.S. 339, 341, 50 S.Ct. 291, 74 L.Ed. 887 (1930); Gray v. Dukedom Bank, 216 F.2d 108, 110 (6th Cir. 1954). See generally Annotation 24 A.L.R.2d 928, 983-96.

This rule, however, is subject to certain well defined exceptions. One of these exists when the United States embarks on a business venture with the power to “sue and be sued.” In those cases it has been held that the United States has placed itself on an equal footing with private parties, including the usual incidents of suits.

In Standard Oil Co. v. United States, 267 U.S. 76, 45 S.Ct. 211, 69 L.Ed. 803 (1925), the United States had issued two policies of insurance against war risks. A suit was brought on the policies, and the Supreme Court, speaking through.Mr. Justice Holmes, stated:

“Some question was made as to the allowance of interest. When the United States went into the insurance business, issued policies in familiar form and provided that in case of disagreement it might be sued, it must be assumed to have accepted the ordinary incidents of suits in such business. The policies promised that claims would be paid within 30 days after complete proofs of interest and loss had been filed with the Bureau of War Risk Insurance. The proofs seem to have been filed on January 11, 1917. Interest at six per cent, should be allowed from February 11, 1917.” Id. at 79, 45 S.Ct. at 212.

In United States v. Worley, 281 U.S. 339, 342, 50 S.Ct. 291, 293, 74 L.Ed. 887 (1930), the Supreme Court elaborated on its holding in Standard Oil, supra, and set forth the factors that would be necessary to justify an award of interest:

“The act authorized the Bureau to adopt and publish forms of policies and to establish reasonable rates. The policies adopted by the Bureau and used in that case contained a promise to pay losses within a specified time. Under that form of contract private underwriters are liable for interest when payment is not made as agreed. There was nothing in the statute to disclose an intention on the part of the United States to bear any part of the cost of the insurance or to give pecuniary aid to the owners of vessels or other property insured. And as a matter of fact a large profit resulted from the operation of the business. Annual Report of the Director of the U.S. Veterans’ Bureau, 1923, p. 675.”

Although the Court in Worley did not award interest, it nevertheless left the Standard Oil doctrine untouched by observing that the United States had borne a large part of the cost of the insurance program. Id. at 343, 50 S.Ct. 291.

In Keifer & Keifer v. Reconstruction Finance Corp., 306 U.S. 381, 59 S.Ct. 516, 83 L.Ed. 784 (1939), the Supreme Court, speaking through Mr. Justice Frankfurter, observed that “the government does not become the conduit of its immunity in suits against its agents or instrumentalities merely because they do its work.” Id. at 388, 59 S.Ct. at 517. After noting that the Congress could, of course, confer governmental immunity on its instrumentality, the Court declared that the absence of a “sue and be sued” clause would not be conclusive of the issue. Id. at 389, 59 S.Ct. 516.

In Federal Housing Administration v. Burr, 309 U.S. 242, 245, 60 S.Ct. 488, 490, 84 L.Ed. 724 (1940), the Court authorized garnishment against the Federal Housing Administration. Mr. Justice Douglas, speaking for the Court, stated:

“As indicated in Keifer & Keifer v. Reconstruction Finance Corp., supra, we start from the premise that such waivers by Congress of governmental immunity in case of such federal in-strumentalities should be liberally construed. This policy is in line with the current disfavor of the doctrine of governmental immunity from suit, as evidenced by the increasing tendency of Congress to waive the immunity where federal governmental corporations are concerned. Keifer & Keifer v. Reconstruction Finance Corp., supra. Hence, when Congress establishes such an agency, authorizes it to engage in commercial and business transactions with the public, and permits it to ‘sue and be sued’, it cannot be lightly assumed that restrictions on that authority are to be implied. Rather if the general authority to ‘sue and be sued’ is to be delimited by implied exceptions, it must be clearly shown that certain types of suits are not consistent with the statutory or constitutional scheme, that an implied restriction of the general authority is necessary to avoid grave interference with the performance of a governmental function, or that for other reasons it was plainly the purpose of Congress to use the ‘sue and be sued’ clause in a narrow sense. In the absence of such showing, it must be presumed that when Congress launched a governmental agency into the commercial world and endowed it with authority to ‘sue or be sued’, that agency is not less amenable to judicial process than a private enterprise under like circumstances would be.
“Clearly the words ‘sue and be sued’ in their normal connotation embrace all civil process incident to the commencement or continuance of legal proceedings.” (Footnote omitted.)

In Reconstruction Finance Corp. v. J. G. Menihan Corp., 312 U.S. 81, 61 S.Ct. 485, 85 L.Ed. 595 (1941), the Court again held that a “sue and be sued” clause placed the governmental instrumentality on an equal footing with private parties and would authorize the award of costs. Id. at 85-86, 61 S.Ct. 485. Once again, the transactions were “akin to those of private enterprises.” Id. at 83, 61 S.Ct. at 486.

The continued vitality of these five cases is not open to question. N.L.R.B. v. Nash-Finch Co., 404 U.S. 138, 143 n. 2, 92 S.Ct. 373, 30 L.Ed.2d 328 (1971). It is with these cases in mind that we must focus our inquiry on the propriety of interest in the case at bar.

The reinsurance program is funded by the National Insurance Development Fund. 12 U.S.C. § 1749bbb-13. The Fund is available to pay reinsurance claims, administrative expenses for the program and repay, with interest, funds borrowed from the Treasury. Id. The assets of the Fund are derived from premiums, fees and other charges paid by the insured companies and interest on its investments. Id. The self-supporting nature of this financing arrangement was set forth in the legislative history of the Act:

“The financing arrangement envisions a reinsurance program which can be self-supporting, drawing on reinsurance premiums paid by insurance companies and payments by the States to cover losses from riots and civil disorders which exceed the losses retained by the insurance companies. If riot losses throughout the Nation resulted in reinsurance claims in excess of the aggregate amount of reinsurance premiums received by the Secretary, the excess would be paid from funds borrowed by the Secretary from the Treasury, to be repaid from future reinsurance premiums.” 1968 U.S.Code Cong. & Adm.News, p. 2962.

Moreover, it is undisputed that to date the program has built up a surplus of premium receipts over claim payments and administrative expenses. In short, the program was intended to be and has been self-supporting.

There are additional features of the program that point up its business-like nature. The policies are standard form reinsurance contracts that are drafted by the Secretary and provide that claims shall be paid promptly. Moreover, although Congress did not grant broad “sue and be sued” powers, it authorized the Secretary to sue for unpaid premiums and to be sued on claims. 12 U.S.C. §§ 1749bbb-10(a), 1749bbb-ll(b)(1).

We find nothing in the Act or the legislative history to indicate that Congress intended to restrict these limited clauses authorizing suits by and against the Secretary so as to exclude a normal incident of suit such as interest.

In view of the self-supporting nature of the program, the fact that the transactions are akin to those of private parties and the Congressional authorization for suits on disputed claims, we hold that the Secretary is in the business of selling insurance and, for the purposes of this litigation, is on an equal footing with private parties. Thus, 12 U.S.C. § 1749bbb-ll(b)(1), insofar as it authorizes suits against the Secretary on disputed claims, must be construed as being a waiver of governmental immunity on the award of interest as an ordinary incident of suit.

We, therefore, hold that the District Court did not err in awarding post-judgment interest.

3) PRE-JUDGMENT INTEREST

By cross-appeal Bituminous asserts that it is entitled to interest from the date of the denial of its claim. The District Court held that the claim was unliquidated and that Bituminous was not entitled to interest prior to judgment. Bituminous asserts that its claim was based on undisputed facts, that the amount was calculable by a reference to a formula set forth in the reinsurance contract and that the claim, therefore, was liquidated.

The general rule is that interest, at the legal rate, runs as a matter of right on a liquidated claim. Royal Indemnity Co. v. United States, 313 U.S. 289, 295-297, 61 S.Ct. 995, 85 L.Ed. 1361 (1941); Standard Oil Co., supra, 267 U.S. at 79, 45 S.Ct. 211, 69 L.Ed. 803; W K Contracting Co., Inc. v. Ashland Oil & Refining Co., 478 F.2d 1046, 1049 (6th Cir. 1973); cf. Farmers Chemical Assoc., Inc. v. Maryland Casualty Co., 421 F.2d 319, 322 (6th Cir. 1970). The issue in this case concerns whether the claim of Bituminous was liquidated.

The 1968-69 Standard Reinsurance Contract included a formula for ascertaining the loss. Under the formula, the total loss sustained was $392,439.98. In its “Excess Aggregate Loss Computation Sheet” submitted with its claim, Bituminous allocated $372,182 to be borne by the reinsurer and $20,257.98 to be borne by itself. These calculations and allocations were in accordance with, the formula and, except for rounding off changes, reflect the correct amounts.

Bituminous, however, filed its claim and initiated this suit for the total amount, i. e. $392,439.98. It is undisputed that the District Court’s judgment of $372,167.58 represents the amount to which Bituminous is entitled under the policy. The $14.42 difference between this amount and Bituminous’ figure of $372,182 is due to rounding off errors. The difference in the amount of the judgment and the $392,439.98 sued for is due to failure to reflect the $20,257.98 which Bituminous previously had acknowledged in writing was its obligation under the formula. An affidavit filed by the Acting Administrator for Urban Property Insurance, Federal Insurance Administration, Department of Housing and Urban Development, established that the Secretary knew that the Bituminous claim was not for $392,439.98, but rather was for $372,167.58.

When the amount of a claim can be ascertained readily by reference to a formula in the contract and none of the facts is in dispute or when the amount of the claim itself is not disputed, the claim is liquidated. W K Contracting Co., Inc., supra; Farmers Chemical Assoc., Inc., supra; Abell v. Anderson, 148 F.2d 372, 375 (6th Cir.), cert denied, 326 U.S. 731, 66 S.Ct. 39, 90 L.Ed. 435 (1945).

Since the amount of the claim in this case was never in dispute and could, at all times, be ascertained readily by resort to the formula in the contract, we hold that it was liquidated.

The fact that Bituminous originally asserted a claim slightly in excess of the amount to which entitled under the formula, under the circumstances adequately explained by the record in this case, is not fatal to its right to interest from the date of the denial of its liquidated claim. Cf. Ginsburg v. Insurance Co. of North America, 427 F.2d 1318, 1321 (6th Cir. 1970).

We hold that the Secretary is liable for pre-judgment interest at the legal rate from the date of the denial of this liquidated claim.

4) CONCLUSION

The judgment of the District Court is affirmed in case No. 73-2043 and is reversed in case No. 73-2044. The case is remanded with directions to allow recovery by Bituminous for pre-judgment interest from the date of the denial of the claim.

McCREE, Circuit Judge

(concurring in part and dissenting in part).

I concur in the affirmance of Case No. 73-2043 but for a different reason.

The reinsurance contract provides coverage for claims arising from “riots or civil disorders” and contains the following statutory definition of these terms:

“ ‘riots or civil disorders’ means:
a. any tumultuous disturbances of the public peace by three or more persons mutually assisting one another in the execution of a common purpose by the unlawful use of force and violence resulting in property damage of any kind;
b. two or more unlawful and terror-istic acts or occurrences which, under similar circumstances, take place within reasonable proximity as to time and place, at least two of which acts or occurrences each result in property damage of any kind in excess of $1,000 or;
c. any other unlawful and terroristic act or occurrence, resulting in property damage of any kind, which may reasonably be determined by the REINSURER, on the basis of evidence submitted by the COMPANY, to have been, under the circumstances, a form of civil disorder.”

The opinion of the court focuses only on definition “a”, although the district court held, alternatively, that there was coverage here under both “a” and “b”.

I agree with the majority opinion that a motivation test should not be read into paragraph “a” and that the sole question is “whether the events giving rise to the property damage fall within the contract definition.” I submit, however, that the events resulting in the destruction of property do not satisfy the element of paragraph “a” requiring a “tumultuous disturbance of the public peace.” Nevertheless, I concur in the result of the opinion because I believe that the district court was correct in its alternative holding that the paragraph “b” definition was satisfied.

In considering whether paragraph “a” was satisfied, the district court found as follows:

At approximately 10:00 P.M., on the night of August 24, 1968, an armed gang of three or four men descended upon the watchman, assaulting him and forcibly removing from his person the guns which he had used to protect the mines and equipment. He was thrown to the ground, kicked about the head and told that he might be killed. The gang forcibly broke into a trailer containing high explosives, and for more than four hours, with the watchman bound and blindfolded, they planted the explosives beneath every piece of valuable equipment on the site. As they went about their task, the gang continued to threaten the watchman, and at one point some of them suggested that he be tied to the equipment and destroyed along with it. The destruction was accomplished by a prolonged series of explosions. The first of the blasts terrorized not only the watchman, but the members of the gang as well. A separate fuse was lit beneath each piece, and for a sustained period, the mountain was shaken by a sequence of blasts. Persons living in the vicinity, including those on the other side of the mountain, as much as five miles away, were awakened and frightened by the tumult. The explosions were so violent that their houses were shaken. It appeared to some that “the mountain was a ball of fire” and to others that “the sky was lit up”.

I do not believe that the violent explosions themselves constituted the required “tumult,” any more than it could be contended that secretly infiltrating saboteurs who might blow up a mine stealthily would be engaging in a riot. For example, in Providence Washington Insurance Co. v. Lynn, 492 F.2d 979 (1st Cir. 1974), the court held that a fire set in “quiet and stealthy manner” was not a riot under the reinsurance contract definition. That court properly stated the general rule that “a stealthy act of destruction is not transformed into an act of riot because upon later discovery of damage there is a public disturbance.” 492 F.2d at 982-983, citing 11 G. Couch, Cyclopedia of Insurance Law § 47.472 at 255. Accordingly, the sole relevant factor here in determining whether there occurred a “tumultuous disturbance of the public peace” is the assault and battery of a sole night watchman. I do not read the opinion to suggest anything to the contrary.

Yet, the opinion finds in the acts of violence committed against this watchman sufficient tumult to conclude that the element of “tumultuous disturbance of the public peace”, the definition in paragraph “a”, is satisfied. I am not convinced by the authorities cited in the opinion or by the ordinary meaning of the statutory language that this is so. I would hold that the circumstances giving rise to property damage here did not include a tumultuous disturbance of the public peace and that therefore the coverage under paragraph “a” is not available to Bituminous.

However, I concur in the result reached by the majority opinion because I believe the district court should be affirmed in its alternative holding, not discussed in the opinion, that the events here satisfied the paragraph “b” definition of “riots and civil disorders.” The district court held:

The Court also concludes that the destruction here amounted to civil disorder within the meaning of the second policy definition quoted in paragraph 2 above. It was one of two or more unlawful and terroristic acts or occurrences, taking place within reasonable proximity as to time and place, at least two of which resulted in property damage in excess of $1,000.00. The destruction was part of a pattern of nighttime bombings which persisted unabated in the immediate area for a period of almost a year. When the gang first seized the watchman here, they announced to him that they were “union men”. U. R. Arnold had long been in dispute with the United Mine Workers, resulting from his unwillingness to accept that union as the representatives of his employees. On at least two earlier occasions he had instituted litigation as a result of violence directed, against him. See, e. g., White Oak Coal Co. v. United Mine Workers, 318 F.2d 591 (6th Cir. 1963).

The court’s findings in this respect are not “clearly erroneous.” Fed.R. Civ.P. 52(a), and, in my view, satisfy the definition in paragraph “b”. The First Circuit, in Providence, supra, suggested that paragraph “c” requires that “if an act of destruction is not public in the sense that it is openly done [as in a riot], it must be public in the sense of its purpose.” 492 F.2d at 985. For the very same reasons stated in the opinion’s rejection of a motivation test in applying paragraph “a”, I have serious doubts that paragraph “b” or “c” should be interpreted to require terroristic acts with a “public purpose.” And, in any event, assuming arguendo that this requirement should be placed by gloss on the . statute’s plain language, then I would have no difficulty concluding that a labor dispute may have a “public purpose” in any sense required under paragraphs “a” and “b”.

I would remand case No. 73-2044 for more specific findings on the issue whether the claim was liquidated. I agree that the formula for ascertaining the amount in dispute was agreed upon, but it is not at all clear from the record that the amount of the loss was free from dispute. The Government contends that the amount in dispute was not finally determined until April 6, 1973, four years after the first denial of the claim. I believe we should not assume that the Secretary knew that his stated position was erroneous.

      . “Upon disallowance of any claim under col- or of reinsurance made available under this subchapter, or upon refusal of the claimant to accept the amount allowed upon any such claim, the claimant may institute an action against the Secretary on such claim in the United States district court for the district in which a major portion (in terms of value) of the claim arose.”


author: PHILLIPS, Chief Judge.

text:
    Roger Owen HOOBAN, Plaintiff-Appellant, v. Edward J. BOLING et al., Defendants-Appellees.
    No. 74-1159.
    United States Court of Appeals, Sixth Circuit.
    Argued June 5, 1974.
    Decided Oct. 2, 1974.

      Roger Owen Hooban, Knoxville, Tenn., for plaintiff-appellant.
    Ronald C. Leadbetter, Knoxville, Tenn., for defendants-appellees.
    William H. Haltom, Jr., Student Body President, U-T Student Government, Knoxville, Tenn., on brief for amicus curiae Student Body Association.
    Before PHILLIPS, Chief Judge, and CELEBREZZE and ENGEL, Circuit Judges.
   PHILLIPS, Chief Judge.

Plaintiff-appellant, Roger Owen Hoo-ban, a law student at the University of Tennessee at the time the suit was filed, brought this action pursuant to 42 U.S.C. § 1983, claiming that his classification by university officials as “out-of-state” for tuition purposes was “arbitrary, unreasonable and invidious” and, thus, a violation of the Equal Protection Clause of the Fourteenth Amendment and, further, that his classification has violated his right to travel. District Judge Robert L. Taylor, after hearing the ease without a jury, dismissed the action in an opinion reported at 371 F. Supp. 1111 (E.D.Tenn.1973). We affirm.

Appellant and his wife moved to Knoxville, Tennessee, from Arizona on September 17, 1971. He enrolled in and commenced attendance at the University of Tennessee School of Law on September 19, 1971. He was classified as an out-of-state student for tuition purposes. In September 1972, Mr. Hooban requested reclassification to in-state status. His request was denied. On September 26, 1972, Mr. Hooban appealed this denial to the University’s Residency Fee Classification Committee and made an oral presentation to that committee. Subsequent review of his out-of-state classification within the administrative structure of the University proved fruitless. In March 1973, the University’s Board of Trustees denied the request for in-state status. On May 22, 1973, Mr. Hooban filed suit against-Dr. Edward J. Boling, President of the University of Tennessee, and Carl Pierce, Assistant Dean of the Law School, seeking declaratory and injunctive relief and damages.

The issues on appeal are: (1) Whether the University of Tennessee’s regulations for determining residency status for tuition purposes on their face or in their application are violative of the Equal Protection Clause of the Fourteenth Amendment; and (2) did Mr. Hooban’s classification as an out-of-state student serve to penalize him for exercising his right to travel ?

Under the University of Tennessee’s regulations, a full-time student must be domiciled in the State for one year immediately preceding the last date for submitting application for enrollment to qualify as an in-state student for tuition and fee purposes. Regulations, paragraph 3(1), Appendix. Domicile is defined as a person’s “true, fixed and permanent home and place of habitation.” Id. at paragraph 2(3). Moreover, a person is presumed not to have gained instate status if he is a full-time student. Id. at paragraph 4(1). This presumption is not irrebuttable, but may be overcome by clear and convincing evidence. Id. at paragraph 4.

We hold that the one year residency requirement and the rebuttable presumption of out-of-state status do not violate the Equal Protection Clause, nor do they violate appellant’s right to travel. Vlandis v. Kline, 412 U.S. 441, 452 & n. 9, 93 S.Ct. 2230, 37 L.Ed.2d 63 (1973); Hayes v. Board of Regents, 495 F.2d 1326 (6th Cir. 1974); Kelm v. Carlson, 473 F.2d 1267 (6th Cir. 1973); Sturgis v. State of Washington, 368 F.Supp. 38 (W.D.Wash.), aff’d mem., 414 U.S. 1057, 94 S.Ct. 563, 38 L.Ed.2d 464 (1973); Starns v. Malkerson, 326 F.Supp. 234 (D.Minn.1970), aff’d mem., 401 U.S. 985, 91 S.Ct. 1231, 28 L.Ed.2d 527 (1971).

Appellant has also challenged as being violative of the Equal Protection Clause that part of the regulations that permits the unemancipated children of residents who have just moved to Tennessee to be eligible immediately for in-state tuition if their parents establish domicile and are not full-time students. Regulations, paragraph 3(3), Appendix hereto. Furthermore, it is also argued that the policy of allowing new teachers at the University of Tennessee, and their families, the in-state tuition rate is violative of the Equal Protection Clause. Specifically, appellant contends that these classifications are “arbitrary, unreasonable and invidious.”

The test by which these distinctions must be measured is whether they bear a rational relationship to a legitimate state objective. Hayes, supra, 495 F.2d at 1328; Kelm, supra, 473 F.2d at 1271; Sturgis, supra, 368 F.Supp., at 41; Starns, supra, 326 F.Supp. at 239.

In Dandridge v. Williams, 397 U.S. 471, 485, 90 S.Ct. 1153, 1161, 25 L.Ed.2d 491 (1970), a leading case dealing with the application of the Equal Protection Clause to state regulation, the Court stated:

“In the area of economics and social welfare, a State does not violate the Equal Protection Clause merely because the classifications made by its laws are imperfect. If the classification has some ‘reasonable basis,’ it does not offend the Constitution simply because the classification ‘is not made with mathematical nicety or because in practice it results in some inequality.’ Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 78 [31 S.Ct. 337, 340, 55 L.Ed. 369]. ‘The problems of government are practical ones and may justify, if they do not require, rough accommodations — illogical, it may be, and unscientific.’ Metropolis Theatre Co. v. City of Chicago, 228 U.S. 61, 69-70 [33 S.Ct. 441, 443, 57 L.Ed. 730]. ‘A statutory discrimination will not be set aside if any state of facts reasonably may be conceived to justify it.’ McGowan v. Maryland, 366 U.S. 420, 426 [81 S.Ct. 1101, 1105, 6 L.Ed.2d 393].”

A state has a “legitimate interest in protecting and preserving the quality of its colleges and universities and the right of its own bona fide residents to attend such institutions on a preferential tuition basis.” Vlandis, supra, 412 U.S. at 453, 93 S.Ct. at 2237.

We hold that the regulation that allows the unemancipated children of new, non-student residents who have established a domicile within the state to qualify for in-state tuition is reasonable and has a rational basis to a legitimate state objective. A primary justification for a one year waiting period in the case of full-time students is to achieve a partial cost equalization through the payment of the higher out-of-state tuition rate. This justification is present in the case of new, non-student domiciliaries. A non-student resident who is domiciled in the State may be expected to contribute to the economy of the State through employment, taxes and other expenditures. Moreover, it is wholly reasonable to expect a bona fide domiciliary to make intangible contributions to the State. The fact that the regulation requires the new resident to establish domicile and not be a full-time student is justified by the anticipation that he will shoulder in some way the burdens of his citizenship.

The classification is also- justified as an effort by the State to insure that only bona fide domiciliaries will be given the preferential lower tuition rate. It is reasonable to expect that a non-student who has become domiciled in the State did not establish that domicile to take advantage of a lower tuition rate. On the other hand, a full-time student who is claiming in-state status may very well be motivated solely by a desire to escape the tuition surcharge. We believe that it is reasonable for a State to require a full-time student to reside in the State for one year as an element of domicile. Such a requirement does no more than demonstrate a student’s bona fides and provide a period in which the State will receive some benefit, whether tangible or intangible, from the student’s presence.

With respect to the policy of allowing new teachers at the University of Tennessee and their families the benefit of the in-state tuition rate, we see no equal protection violation. A State is entitled to offer in-state tuition to a new teacher and his family as part of the employment package, i. e., as a fringe benefit, even though the family has not resided in the State for one year. To hold otherwise might hamper the University’s chances of attracting highly qualified teachers from other States.

We further hold that the “right to travel” contention of appellant is completely without merit.

Finally, Mr. Hooban contends that, even if the regulations are constitutional it was, nevertheless, “arbitrary, unreasonable and invidious” to refuse to classify him as an in-state student.

In Kelm v. Carlson, supra, 473 F.2d at 1271-1272, we recognize that it would not be arbitrary or unreasonable for a university to put a strong burden of proof as to change of residence on a former out-of-state student who was claiming in-state status. The University of Tennessee has adopted a clear and convincing evidence standard. Regulation, paragraph 4, Appendix. The regulations list a number of factors that a student may submit as evidence to overcome the presumption of continued out-of-state status. These considerations are listed in paragraph 5 of the Appendix, and are not all-inclusive as evidenced by item 6. Other factors that would also be relevant to a determination of domicile include: 1) car registration in State, 2) driver’s license in State, 3) city or county sticker for car, 4) voter registration and voting in State, 5) payment of State and local taxes, 6) participation in community and professional activities in the State, 7) presence of immediate family and relatives in the State and 8) length of time in the State. See Vlandis, supra, 412 U.S. at 454, 93 S.Ct. 2230, 37 L.Ed.2d 63.

Any determination of domicile seeks to use the foregoing objective criteria to aid in establishing a subjective concept, i. e., intent to remain in the State. The concept of domicile is subject to no formula, but rather depends on the facts of each case. For example, in Hayes v. Board of Regents, supra, 495 F.2d at 1328, we noted that voter registration within a State “is but one of a number of relevant factors which may reasonably be considered in the determination of residency status for tuition purposes.” The relative weight to be given each objective factor is not capable of quantification. The question to be answered in each case is whether the student came to the State solely to attend school or whether he intends to make the State his home.

The University of Tennessee held that Hooban had not met his burden of establishing that he had been domiciled for one year. The district court, upon an extensive trial record, found that the University’s action was not arbitrary, unreasonable, capricious or invidious. We agree, and hold the district court’s determination to be not clearly erroneous.

In so holding, we do not express any view as to whether Mr. Hooban became domiciled subsequent to the action of the University officials. We, therefore, are unable to consider many of the factors that Mr. Hooban has argued. These include events that were not only subsequent to the action of the University of Tennessee, but also occurred subsequent to the decision of Judge Taylor.

Affirmed.

APPENDIX

PARAGRAPH 1. INTENT. It is the intent that the public institutions of higher education in the State of Tennessee shall apply uniform rules, as described in these regulations and not otherwise, in determining whether students shall be classified as in-state or out-of-state students for fees and tuition purposes.

PARAGRAPH 2. DEFINITIONS. Wherever used in these regulations:

(1) The word “institution” shall mean a university or community college supported by appropriations made by the Legislature of this State.

(2) The word “residence” or “reside” shall denote continuous and permanent physical presence within this State, provided that temporary absence for short periods of time shall not affect the establishment of a residence.

(3) The word “domicile” shall denote a person’s true, fixed, and permanent home and place of habitation. It is the place where he intends to remain, and to which he expects to return when he leaves without intending to establish a new domicile elsewhere.

(4) The term “emancipated person” shall mean a person who has attained the age of eighteen years, and whose parents have entirely surrendered the right to the care, custody, and earnings of such person and who no longer are under any legal obligation to support or maintain such deemed “emancipated person.”

(5) The word “parent” shall mean a person’s father or his mother; or if one parent has custody of an unemancipated person, the person having cutody; or if there is a guardian or legal custodian of an unemancipated person, then such guardian or legal custodian; provided, that there are not circumstances indicating that such guardianship or custodianship was created primarily for the purpose of conferring the status of an instate student on such unemancipated person.

(6) Attendance at a school or schools in this State shall be deemed “continuous” if the person claiming continuous attendance has been enrolled at a school or schools in this State as a full-time student, as such term is defined by the governing body of said school or schools, for a normal academic year or calendar year, or the appropriate portion or portions of such years, since the beginning of the period for which continuous attendance is claimed. Such person need not attend summer session or other such inter-sessions beyond the normal academic year in order to render his attendance “continuous.”

(7) The word “his” shall apply to the female as well as the male sex unless the context otherwise clearly requires.

PARAGRAPH 3. RULES FOR DETERMINATION OF STATUS.

(1) Every person having his domicile in this State for one calendar year immediately preceding the last date for submitting application to an institution for enrollment in the institution shall be entitled to classification as an in-state student for fee and tuition purposes. No person having his domicile elsewhere than in this State shall be eligible as an in-state student for tuition purposes.

(2) The domicile of an unemancipated person is that of his parent.

(3) Upon moving to this State, an emancipated person, who provides persuasive evidence of domicile, may apply for in-state classification for his un-emancipated children; and provided that said person is not himself in this State primarily as a full-time student, his un-emancipated children may at once be so classified, and may continue to be so classified so long as said person continues his domicile in this State.

(4) Any person who remains in this State when his parent, having theretofore been domiciled in this State, removes from this State, shall be entitled to classification as an in-state student as long as his attendance at a school or schools in this State shall be continuous.

(5) An unemaneipated person whose parent is a member of the armed forces and stationed in this State or at Fort Campbell pursuant to military orders shall be classified as an out-of-state student, but shall not be required to pay out-of-state tuition. The student, while in continuous attendance toward the degree for which he is currently enrolled, shall not be required to pay out-of-state tuition when his parent thereafter is transferred on military orders.

(6) Part-time students who reside in Tennessee and are employed full-time in the State or at Fort Campbell pursuant to military orders and who would be classified out-of-state in accordance with other provisions of these regulations will be classified out-of-state, but will not be required to pay out-of-state tuition while enrolled as a part-time student.

PARAGRAPH 4. PRESUMPTIONS. Unless the contrary appears from clear and convincing evidence, it shall be presumed that:

(1) No emancipated person shall be deemed to have gained residence while attending any educational institution in this State as a full-time student, as such status is defined by the governing board of such institution.

(2) The domicile of a married person shall be determined by the provisions of these regulations independent of the residence of the spouse.

(3) A person does not gain or lose in-state status for reason of his presence in any State or country while a member of the armed forces of the United States; provided that a member of the armed forces may obtain in-state status for himself and his dependents by establishing his domicile in this State.

PARAGRAPH 5. KINDS OF EVIDENCE TO BE CONSIDERED FOR ESTABLISHMENT OF DOMICILE. If a person asserts that he has established domicile in Tennessee for a period of one calendar year immediately preceding the last date for submitting application to an institution for enrollment in the institution, he has the burden of proving he has done so. The following kinds of evidence will be considered in reviewing an assertion by a person that he is domiciled in Tennessee, but having evidence of any of these will not necessarily result in a finding that a student is domiciled in the State.

(1) Home Ownership. Dwelling in a house on the person’s real property.

(2) Continued Residency. Probability that a person will remain in Tennessee beyond his completion of attendance at the institution.

(3) Military Service. Entering the military service from the State of Tennessee, home of record and permanent address at the time of discharge in the State of Tennessee, and return after discharge to live or attend school in Tennessee.

(4) Marriage. Marriage to bona fide Tennessee resident.

(5) Source of Income. No regular substantial financial assistance from his parent.

(6) Any other evidence the person may present which may aid in determining whether he has established domicile in Tennessee.

PARAGRAPH 6. APPEAL. All resident classifications shall be made by the Dean of Admissions at each institution in accordance with these regulations. The decision of the Dean of Admissions may be appealed to the Committee on Residency Classifications on each campus of the University, which shall, after granting a hearing and fully considering the merits of each case, recommend the appropriate resident classification of the student to the Chancellor, who shall then classify the student. The decision of the Chancellor may be appealed to the President of the University and his decision may be appealed to the Board of Trustees of the University.

PARAGRAPH 7. EFFECTIVE DATE FOR RECLASSIFICATION. If a student classified nonresident applies for in-state residency classification on or before the last day of registration of a quarter or semester and is subsequently so classified, his in-state residency classification shall be effective for the quarter or semester in which he applied for reclassification.

PARAGRAPH 8. EFFECTIVE DATE. These regulations supersede all previously adopted regulations by the Board, and having been approved by the Governor, become effective January 1, 1973.

      . We view the prayer for injunctive relief as moot since Mr. Hooban already has graduated from the law school.

      . The regulations under which Mr. Hooban was classified as an out-of-state student in September 1971 and the fall of 1972 were superseded by new regulations which became effective January 1, 1973. For purposes of this appeal, only the more recent regulations are relevant. They are made an appendix to this opinion.