author: LEWIS R. MORGAN, Circuit Judge:

text:
    Lyndon L. DALY, Plaintiff-Appellant, v. Mervil L. MOORE et al., etc., Defendants-Appellees.
    No. 73-1852.
    United States Court of Appeals, Fifth Circuit.
    March 15, 1974.
    Rehearing and Rehearing Eh Banc Denied May 14, 1974.

      Phillip D. Hardberger, San Antonio, Tex., Jim Bushala, Jr., Corpus Christi, Tex., James R. (Ron) Weddington, Austin, Tex., for plaintiff-appellant.
    Tom N. Goodwin, Nat B. King, Laredo, Tex., Canales & Garza, Corpus Christi, Tex., Lawrence A. Mann, Laredo, Tex., for defendants-appellees.
    Before TUTTLE, DYER and MORGAN, Circuit Judges.
   LEWIS R. MORGAN, Circuit Judge:

This is an action for compensatory and punitive damages brought by Lyndon L. Daly, a tenured college professor, against the trustees and president of Laredo Junior College. Plaintiff originally alleged three causes of action: (1) that he had been fired for reasons infringing upon his right to free speech and association; (2) that the decision to terminate his employment was wholly arbitrary and capricious, and (3) that he was denied his procedural rights as set forth in the college’s rules concerning faculty dismissal and was, therefore, denied due process of law.

Trial was had before a jury and that jury found by way of interrogatories that the defendants had in no way violated the plaintiff’s First Amendment rights. The jury did, however, find that defendants, in firing the plaintiff, acted maliciously and awarded $8,000.00 punitive damages. In light of the jury’s negative answer concerning violation of the plaintiff’s First Amendment rights, the judge rendered judgment that plaintiff take nothing. Plaintiff appeals.

Factual History

Laredo Junior College is a community college in Laredo, Texas, financed by local property taxes and state funds. Its governing body is the Board of Trustees and its president is Dr. Laird, all of whom were named as defendants. The plaintiff, Lyndon L. Daly, was hired to teach at the college in 1965, and taught there until the end of the summer session in 1969. There is no question that the plaintiff held a tenured position.

While teaching at Laredo Junior College, plaintiff was an active member of the American Association of University Professors Chapter and the Faculty Senate of the Laredo Junior College. Plaintiff served as the first president of the AAUP Chapter and as vice-chairman of the- Faculty Senate. These organizations were independent of the college administration and on some campuses are considered unfriendly to administrations. Plaintiff testified at trial that at no time did he receive any written or oral communication from the administration that was in any way critical of his membership in or of his activities on behalf of these organizations. In the spring of 1968, after plaintiff had actively participated in the above mentioned organizations, he was granted tenure by the Board of Regents on the recommendation of the president of the college, Dr. Laird.

The record demonstrates that the college administration had a very favorable attitude toward the plaintiff. Dr. Laird appointed the plaintiff to be chairman of the Faculty Library Committee, which had the responsibility of completing a self-study of the library required by the Southern Association of Colleges and Universities. That report was to a certain extent critical of the library and recommended, among other things, that closer communication between the faculty and library be established. The report was adopted as part of the total study program of Laredo Junior College and the report’s recommendations and suggestions were accepted and implemented.

During the school year 1968-69, the plaintiff was elected “Outstanding Male Teacher of the Year,” and Dr. Laird remarked publicly that he wished he had several more teachers like Daly. There is no evidence of any conflict between the plaintiff and the administration.

Plaintiff’s contract was to begin on September 1, 1969, and end May 31, 1970. Plaintiff taught two courses at the college during the summer of 1969. During the latter part of that summer, students began to inquire of the administration whether the plaintiff was going to return in the fall. The president of the college testified that the plaintiff in the past had been absent at least once due to illness, but had notified the administration and provided for substitution. A portion of the plaintiff’s contract specifically states that the teacher is to “notify the president as far in advance as possible his intention to interrupt or terminate his services at the institution.”

During the period between August 25, 1969, and September 1, 1969, the president of the college attempted on numerous occasions to contact the plaintiff, both at his college office and at his home. The best description of what happened can be found in Dr. Laird’s testimony. Under oath, Dr. Laird stated:

There was certain conversation on the campus to the effect that Mr. Daly wasn’t coming back. Students were inquiring whether or not we had a replacement for him. They were convinced that he wasn’t coming back, and they wanted to know if we had anybody to take his place. So this conversation eventually got to me, and I inquired about it, and, yes, there were students who wanted to know if we had somebody to take his place, and I thought I should try to find out about it, so I tried to call Mr. Daly at his campus telephone. I called him several times when I thought he should be there, and I did not get any answer from him. I wrote him a note, a handwritten note, and I put it in his mailbox at the campus. I also tried to call him at his home, and the operator cut in and wanted to know what number I was calling, and I told her, and she said that number had been disconnected. So I then wrote Mr. Daly a letter, I think it was on the 22nd day of August—I’m not positive about the date, but it was the last day of summer school, in which I said, “Please come in to see me. I need to talk with you”, and I mailed that personally in the post office on the 22nd, and he should have gotten it the next day, the 23rd, certainly not later than the 24th. The letter that I sent to him originally—I mean, the letter that I sent later to him did get to him the following day when I mailed it in the post office, he got it the next day.

Dr. Laird received no response to any of his attempted communications. At no time between August 25 and September 1 did the plaintiff communicate with anyone at the college. On September 2, 1969, the first faculty meeting was called and the plaintiff was absent. Dr. Laird was concerned because the plaintiff was the only person qualified to teach certain courses being offered that term, and if the plaintiff was not to be present, certain provisions had to be made immediately. At this first meeting, Dr. Laird heard further rumors from other faculty members, both that the plaintiff was ill and that he was in Houston. Dr. Laird had no way of knowing whether these rumors were true. After consulting the college’s attorney, Dr. Laird mailed the following registered letter on September 3, 1969, to the plaintiff’s Laredo address:

Dear Mr. Daly:
This is to advise that inasmuch as you have failed to appear on September 1, 1969, and assume your duties with the Laredo Junior College as provided for in the contract executed by you and Laredo Junior College, and further in view of the fact that you have failed to contact any member of the staff of the junior college and give any valid reason for your failure to assume your duties as instructor with the college, I have no alternative but to declare your contract has been breached, and, therefore, of no further force and effect. If you have any personal effects at the college which you would like to pick up, you may do so at your earliest convenience. Other than that your relations with the junior college are fully and finally terminated hereby.
Very truly yours,
Ray A. Laird, President

Approximately two years later, plaintiff instituted this action against the college for $50,000.00 damages allegedly resulting from his contract termination. At no time prior to the filing of this suit did plaintiff request a hearing or communicate with the college administration. The jury’s verdict in the district court by way of interrogatories was that none of the plaintiff’s First Amendment rights had been violated. The jury then awarded $8,000.00 in punitive damages. The district court’s judgment refused the punitive damages and plaintiff appeals. We affirm the district court.

The interrogatories given by the trial court to the jury consisted of four questions which dealt only with plaintiff’s First Amendment claims. The court’s interrogatories and the jury’s answers thereto are as follows:

Special Interrogatory No. I
We, the Jury, find that the letter dated September 3, 1969, in evidence as Defendants’ Exhibit No. 3,
_was not_
(insert “was” or “was not”) sent to Plaintiff Daly, in whole or in part, because of his association with American Association of University Professors or the so-called Faculty Senate, or both.
If you have answered the foregoing Special Interrogatory No. I by inserting the word “was” in the blank space, then answer the following Special Interrogatory No. II.
Special Interrogatory No. II
Plaintiff suffered actual damages in the amount of $_
Special Interrogatory No. III
We, the Jury, find that the Defendants, in terminating Plaintiff Daly’s employment relationship,
_Did_
(insert “did” or “did not”) act maliciously or wantonly or oppressively.
If you have answered the foregoing Special Interrogatory No. Ill by inserting the word “did” in the blank space, then answer the following Special Interrogatory No. IV.
Special Interrogatory No. IV
Plaintiff is entitled to punitive damages, as defined by the'Court, in the amount of $8,000.00.

The trial court found the punitive damage award inconsistent with the jury’s other findings. Plaintiff argues on appeal that because his due process rights under the Fourteenth Amendment were violated, the damage award should have been allowed.

The questions in this case are: 1) was the trial court correct in disallowing the jury award of punitive damages, and 2) should the trial court have given the jury more specific instructions or interrogatories concerning plaintiff’s Fourteenth Amendment allegations?

I

Punitive Damages

As has been previously stated, the punitive damage award was disallowed by the trial court because it was not supported by the evidence or the answers to thie other interrogatories. Upon review of the record and the jury’s findings, we find that such action by the trial court was well within the discretion of that court and was not error. Jones v. Mayer, 392 U.S. 409, 88 S.Ct. 2186, 20 L.Ed.2d 1189 (1968); Boehne v. Southwestern Bell Telephone Co., 10 F.Supp. 788 (W.D.Texas, 1935). See 22 Am.Jur.. 2d Damages §§ 241, 242 (1965), Annot. 17 A.L.R.2d 530 § 2 (1951), Cf. Wills v. Trans World Airlines, Inc. (S.D.Cal. 1951), 200 F.Supp. 360.

II

Due Process of Law

During the trial, plaintiff requested certain jury instructions as to the due process requirements of the Fourteenth Amendment. The request was denied. Although not succinctly set out by the appellant, the question now before this court is whether the trial court erred in not submitting to the jury the requested instructions on the due process requirements of the Fourteenth Amendment.

Jury Instructions—Purpose

The purpose of jury instructions is to advise the jury on the proper legal standards to be applied in determining issues of fact as to the case before them. Merchant’s Fast Motor Lines, Inc. v. Lane (5 Cir. 1958), 259 F.2d 336, cert. den., 359 U.S. 935, 79 S.Ct. 651, 3 L.Ed.2d 636. The plaintiff is entitled to special instructions on his theory of the case only if there is sufficient evidence to support such a theory and if a proper request is made. Grice et al. v. Ray McDermott and Co., Inc. (5 Cir. 1972), 465 F.2d 486, Bolden v. Kansas City So. Rwy. Co. (5 Cir. 1972), 468 F.2d 580. A court should refuse a request for an instruction that correctly states a legal abstraction not applicable to the facts. Jackson v. So. Rwy. Co. (5 Cir. 1963), 317 F.2d 532, cert. den., 375 U.S. 837, 84 S.Ct. 77, 11 L.Ed.2d 65.

Due Process in Laredo

Did the facts in the case before the district court require that the requested instruction on due process or a similar instruction be given?

A somewhat analogous fact situation to this case existed in Smith v. Board of Regents, State Senior Colleges (5 Cir. 1970), 426 F.2d 492. Smith submitted a letter of resignation to the president of his college and it was accepted. The next month, Smith wrote another letter to the president and referred to the letter of resignation as a “letter of resignation by intimidation,” and requested a conference. The Board of Regents then met to give Smith a hearing as he had requested, but when they realized that they had already accepted his resignation, they refused the hearing. Smith then filed a complaint against the college in which he alleged denial of due process and equal protection guarantees of the United States Constitution, and that his exclusion from employment was arbitrary and in retaliation for his exercise of his First Amendment guarantees of freedom of speech.

Smith was denied relief by the federal district court. This court affirmed the district court and held that although the rules and regulations of the college provided for hearing for any faculty member who requested such a hearing after being discharged, such was not the situation in Smith's case. This court noted that the rules and regulations of the college never came into play because of Smith’s voluntary resignation. Smith then never reached the point where his due process rights were violated.

The facts of the case now before this court are even more compelling. The plaintiff appears to have wilfully terminated his contract by specifically avoiding and neglecting his duties and obligations at Laredo Junior College. He never requested a leave of absence prior to his departure. He notified none of the officials of the college of any of the alleged occurrences which caused him to be absent. During the period while he was in the hospital, he wrote approximately 150 letters, none of which attempted in any way to communicate his absence or the reasons for it to the college. He did, in fact, move his residence address in Laredo and had his telephone disconnected, all without notice to the college. The plaintiff constructively and practically severed all ties with the college for a period of almost two years. No hearing was even requested until after this action was started two years after his departure. The plaintiff contended at trial that he was deprived of his position because of his exercise of his right to free speech and now contends that whether that was true or not is of no consequence because his rights to due process of law were violated, and the district court erred in not so instructing the jury.

The facts before this court dictate only one conclusion. The plaintiff wilfully terminated his contract with Laredo Junior College and never reached the point at which hearing was required. There is no indication in the record of any desire of the college to dismiss the plaintiff for any reason other than his failure to honor his contract commitment to them. There are no facts to support the conclusion that an abridgement of the plaintiff’s First Amendment rights took place, nor was there any evidence that required any consideration of plaintiff’s due process rights to a greater extent than was done by the trial court.

After careful and thorough review of the case on appeal, we find that the district court must be

Affirmed.

      . Dr. Laird testified, “I remember that on another occasion he liad gone to the hospital for a checkup, and he had made proper provisions for a substitute, because he was going to be gone at a time when school was in session. I’m not certain when it was, but I think it was during exams, and he had a proper substitute for him. He notified us in advance that he was going. The dean had told me that he was going to go, that Mr. Daly was going to go for a checkup, and proper substitutions were arranged for him. I’m not positive, but I think his wife substituted for him. She substituted for him for about three days once, and I think that was the time, although I’m not positive.”


source: Caselaw Access Project

author: THORNBERRY, Circuit Judge:

license: Public Domain

text:
    GREAT COMMONWEALTH LIFE INSURANCE CO., Plaintiff-Appellant, v. UNITED STATES of America, Defendant-Appellee.
    No. 73-1504.
    United States Court of Appeals, Fifth Circuit.
    March 18, 1974.

      O. Jan Tyler, Robert K. Sands, Dallas, Tex., for plaintiff-appellant.
    Scott P. Crampton, Gary R. Allen, Asst. Attys. Gen., Meyer Rothwacks, Atty., Tax Div., Dept. of Justice, Lee H. Henkel, Jr., Acting Chief Counsel, IRS, Washington, D. C., Frank D. McCown, U. S. Atty., Martha Joe Stroud, Asst. U.
    S. Atty., Dallas, Tex., for defendant-appellee.
    Before THORNBERRY, GODBOLD and CLARK, Circuit Judges.
   THORNBERRY, Circuit Judge:

In computing its taxable gain from operations for 1966, Great Commonwealth took account of only the net valuation portion of deferred and uncollected premiums. On examination of the return, the Commissioner increased- the taxable income by requiring inclusion of the gross amount of those premiums and assessed a deficiency of $62,260.15 plus interest. Great Commonwealth paid the deficiency and subsequently filed this suit for a refund, which the district court denied. The company contends that it should not have been required to report the gross amount, or, at least, that it should have been allowed a deduction either for additions to a reserve for unearned premiums or for the agents’ commissions attributable to the deferred and uncollected premiums. We hold that the district court was correct in requiring accrual of the gross amounts but that it should have allowed a deduction for the associated commissions.

The proper tax treatment of deferred and uncollected premiums is one of the most difficult and often litigated questions under the Life Insurance Company Income Tax Act of 1959, 26 U.S.C. §§ 801-820. See Franklin Life Insurance Co. v. United States, 7 Cir. 1968, 399 F.2d 757; Jefferson Standard Life Insurance Co. v. United States, 4 Cir. 1969, 408 F.2d 842; Western National Life Insurance Co. v. Commissioner of Internal Revenue, 5 Cir. 1970, 432 F.2d 298; Western and Southern Life Insurance Co. v. Commissioner of Internal Revenue, 6 Cir. 1972, 460 F.2d 8; United Life and Accident Insurance Co. v. United States, D.N.H.1971, 329 F.Supp. 765; Western National Life Insurance Co., 1968, 50 T.C. 285, modified on rehearing, 1969, 51 T.C. 824, rev’d, Western National Life Insurance Co. v. Commissioner of Internal Revenue, supra; Western and Southern Life Insurance Co., 1971, 55 T.C. 1036, rev’d, Western and Southern Life Insurance Co. v. Commissioner of Internal Revenue, supra. Without duplicating the detailed explanations of the problem set out in those cases any more than is necessary, we will define the key concepts for purposes of this opinion.

Definitions

The gross annual premium under a life insurance policy is the consideration paid by the insured for coverage for a policy year, which is a twelve-month period from the date of issuance of the policy (the “anniversary date”). The gross annual premium is composed of two elements. The net valuation portion, referred to as the net valuation premium, is the amount, computed under legally required interest and mortality assumptions, that is added to life insurance reserves for payment of policy claims. The difference between the gross annual premium and the net valuation premium is the loading, which is the portion used to pay agents’ commissions, administrative costs, and other expenses of the company, and to provide the company a profit.

Although some life insurance policies provide for the payment of the gross annual premium in one lump sum on the policy anniversary date, it is not unusual for it to be paid in semi-annual, quarterly, or monthly installments over the policy year. As a result, portions of gross annual premiums may remain outstanding and not as yet received by the company at the end of the taxable year. Deferred premiums are those portions of gross annual premiums which are due to be paid after December 31 but before the next policy anniversary date. Uncollected premiums are annual or installment premiums which, as of December 31, have fallen due but have not as yet been paid. The company is required to continue its life insurance contracts in force for a 31-day grace period after a premium due date, and it customarily carries such policies for up to 60 days. The policyholders are not legally required to pay either deferred premiums or uncollected premiums. If they do not, the policies will lapse, but the company cannot compel payment.

History of the Case

Great Commonwealth filed an annual statement for 1966 with the Texas State Board of Insurance and the appropriate authorities of the other states where it is licensed to do business, using standard forms approved by the National Association of Insurance Commissioners (N.A.I.C.). As required by state law, the company computed its reserves on the assumption that all premiums for all policies in force at the close of the year had been paid in full on the policy anniversary date. Since deferred and uncollected premiums as of December 31 had not in fact been paid, the reserves were overstated in the amount of the net valuation portion of the deferred and uncollected premiums. To offset this overstated reserve liability, the company listed an asset of equal amount. This is the standard industry practice.

In calculating its taxable income, Great Commonwealth used the same accrual assumptions regarding deferred and uncollected premiums as it did for its annual statement. As a result its gross premium income included an amount equal to the net valuation portion of the deferred and uncollected premiums. This was exactly offset by a corresponding increase in the deduction for net increases in life insurance reserves. Therefore, the accrual of the net valuation portion of the deferred and uncollected premiums had no net effect on the company’s taxable income.

The Commissioner required the company to accrue grqss deferred and uncollected premiums rather than merely the net valuation portion, holding that, once the company had accrued a portion of those premiums for some purposes, it was bound to accrue the whole of the premiums for all purposes. This approach has been approved by all circuit courts which have considered the question, including our own. Franklin Life Insurance Co. v. United States, supra', Jefferson Standard Life Insurance Co. v. United States, supra; Western National Life Insurance Co. v. Commissioner, supra-, Western and Southern Life Insurance Co. v. Commissioner of Internal Revenue, supra. This had the effect of increasing the company’s gain from operations in the amount of the loading on the deferred and uncollected premiums, resulting in the increased tax liability at issue here.

I. Accrual of the Gross Amount

The company first contends that it should not have been required to acerue the gross amount of deferred and uncollected premiums, despite our apparent holding to the contrary in Western National Life. In distinguishing that case, the company asserts that it involved “only the question of whether gross deferred and uncollected premiums were assets under the Phase I computation. The Western National Life case did not involve, and, therefore, this Court did not have before it, the question of whether gross deferred and uncollected premiums are includable in premium income under the Phase II computation.”

It is true that the only contested issue in Western National Life was the accrual of gross deferred and uncollected premiums for purposes of the Phase I calculation. Nevertheless, the case is strongly suggestive that gross deferred and uncollected premiums should be accrued for all tax purposes. Although not strictly bound by that suggestion, we find it persuasive and adopt it.

Western National Life was a Phase I taxpayer, in the sense that its taxable investment income was taken into account in determining its taxable income under § 802(b). By the terms of that section, the taxable investment income is taken into account only if it is less than or equal to the gain from operations. § 802(b)(1). In such a case, the company’s taxable income includes the Phase I taxable investment income and one-half of the excess of the Phase II gain from operations over the Phase I taxable investment income. In Western National Life, the Commissioner chose to attack the handling of deferred and uncollected premiums only under the Phase I computation. No doubt he did so because Western National had already accrued the gross amount for the Phase II calculation. Western National Life Insurance Co. v. Commissioner of Internal Revenue, supra, 432 F.2d at 302. In upholding the Commissioner’s approach, the court explicitly approved the reasoning of the Seventh Circuit in Franklin Life and the Fourth Circuit in Jefferson Standard Life, both of which involved the Phase II computations.

It would be highly inconsistent to require accrual of the gross deferred and uncollected premiums under Phase I but only the net under Phase II. This inconsistency would be particularly glaring in cases in which the company’s gain from operations exceeds its taxable investment income, since overall taxable income in those cases includes both Phase I and Phase II elements. This would add unnecessary complexity to an already complex tax formula. Great Commonwealth offers no justification for this procedure, and we certainly perceive none. Therefore, the district court was correct in requiring the accrual of the gross deferred and uncollected premiums.

II. Reserve for Unearned Premiums

Great Commonwealth next argues that, if required to accrue the gross deferred and uncollected premiums, it should be allowed to set up a reserve for unearned premiums under § 801(c)(2) in the amount of that portion of the loading attributable to life insurance coverage to be provided in the succeeding taxable year. This would generate a deduction for increases in reserves under § 809(d) (2).

There is considerable doubt, however, whether the term “unearned premiums” has any application to premiums on life insurance policies at all. It appears that the term has consistently been confined to the casualty insurance field. Alinco Life Insurance Co. v. United States, 1967, 373 F.2d 336, 178 Ct.Cl. 813; Travelers Equitable Insurance Co., 1931, 22 B.T.A. 784. Moreover, loading is not a proper item for inclusion in an insurance reserve at all. Treasury Regulation § 1.801-3(e) defines “unearned premiums” as “those amounts which shall cover the cost of carrying the insurance risk for the period for which the premiums have been paid in advance.” The loading portion of deferred and uncollected premiums for insurance coverage provided in the succeeding taxable year fails to meet this definition in two respects. First, by definition, loading covers expenses and other items apart from the cost of carrying the insurance risk. The net valuation premium covers the cost of carrying that risk. Second, far from being paid in advance, deferred and uncollected premiums have not been paid at all. The district court was correct in refusing to allow a deduction for additions to reserves for unearned premiums.

III. Agents’ Commissions

Finally, the company contends that, if required to accrue the gross deferred and uncollected premiums, it should at least be allowed to accrue the agents’ commissions on those premiums and take corresponding deductions. The government responds that these expenses are not accruable, since the liability for them is not fixed and definite. The company will be liable to pay the commissions only if the premiums are in fact paid. As noted before, there is no assurance that they will ever be paid, although the policies will lapse if they are not.

There is no doubt that the government is entirely correct when it asserts that these agents’ commissions are not accruable under generally accepted accounting principles. Treasury Regulation § 1.461-1 (a) (2) provides that

[u]nder an accrual method of accounting, an expense is deductible for the taxable year in which all the events have occurred which determine the fact of the liability and the amount thereof can be determined with reasonable accuracy. . . . [N]o accrual shall be made in any case in which all of the events have not occurred which fix the liability

Accrual of deductions has consistently been denied where not all the events necessary to fix the taxpayer’s liability have occurred. Brown v. Helvering, 1934, 291 U.S. 193, 54 S.Ct. 356, 78 L.Ed. 725; Trinity Construction Co. v. United States, 5 Cir. 1970, 424 F.2d 302; Commissioner of Internal Revenue v. H. B. Ives Co., 2 Cir. 1961, 297 F.2d 229; Pierce Estates v. Commissioner of Internal Revenue, 3 Cir. 1952, 195 F.2d 475. Under these authorities the commission expenses clearly are not properly aecruable.

In our view, however, this is not the end of the question. We must not forget that we are, in Judge Drennan's colorful phrase, in the “fantasy world of life insurance company accounting and taxation.” Western National Life Insurance Co., 51 T.C. 824, 830. It is no answer to say that the commissions are not properly aecruable. The premiums themselves are not properly aecruable, either, but the company must report them as though they were. Unavoidably, then, the company’s income has already been distorted by that requirement. It would only distort that income yet further not to permit the company to accrue the commission expense deductions, which are only contingent to the same extent that receipt of the premiums themselves is contingent. The company cannot receive premiums without incurring corresponding commission liabilities. We therefore hold that the district court should have permitted the company to accrue deductions for commissions on the deferred and uncollected premiums, and we remand for a determination of those commissions.

In reaching this result we are aided by few of the authorities cited by the parties. Great Commonwealth asserts that a rule allowing the accrual of commissions in the year of accrual of the associated income is established by Ohmer Register Co. v. Commissioner of Internal Revenue, 6 Cir. 1942, 131 F.2d 682; Air-Way Electric Appliance Corp. v. Guitteau, 6 Cir. 1941, 123 F.2d 20; Central Cuba Sugar Co. v. Commissioner of Internal Revenue, 2 Cir. 1952, 198 F.2d 214; and The Warren Co., 1942, 46 B.T.A. 897, aff’d on other grounds, 5 Cir. 1943, 135 F.2d 679. In support of its position that accrual of deductions is permissible only when the liability therefore is fixed and definite, even if the associated income is aecruable in an earlier year, the United States cites American Automobile Association v. United States, 1961, 367 U.S. 687, 81 S.Ct. 1727, 6 L.Ed.2d 1109; Schlude v. Commissioner of Internal Revenue, 1963, 372 U.S. 128, 83 S.Ct. 601, 9 L.Ed.2d 603; ABKCO Industries, Inc. v. Commissioner of Internal Revenue, 3 Cir. 1973, 482 F.2d 150; and W. S. Badcock Corp., 1972, 59 T.C. 272, which is presently pending on appeal in this court. All of these cases deal with properly accrued income items, and the issue in them is whether the associated expenses are properly aecruable. In this case, however, it is agreed that neither the premium income nor the associated commission expenses are properly aecruable, in the sense that neither the right to receive nor the obligation to pay is fixed and definite. The company’s eases do no more than follow the usual rule that expenses are deductible in the year in which the liability becomes fixed and definite, while the government’s cases merely establish that the goal of matching income and its related expenses in the same taxable year, so as to clearly reflect income, does not override the necessity of following normal accrual rules, so long as those rules have not already been violated in the treatment of income items. The issue before us is whether to permit accrual of the commission deductions to the same extent accrual of the premium income is required, in view of the fact that both items are subject to precisely the same contingencies.

This particular issue seems to have been presented to only two courts. In Occidental Life Insurance Co. v. United States, C.D.Cal.1970, 25 Am.Fed.Tax R.2d 796, the commission deduction was denied, but an opposite result was reached in United Life and Accident Insurance Co. v. United States, D.N.H. 1971, 329 F.Supp. 765. We think the New Hampshire district court reached the sounder result, although we disagree with its conclusion that the expenses associated with the deferred and uncollected premiums are properly aceruable under generally accepted accrual accounting principles. We base our holding on the need to avoid undue distortion of income.

The Commissioner’s power to require a change in the treatment of items in computing taxable income is grounded on § 446(b), which provides in part that “if the method [of accounting] used does not clearly reflect income, the computation of taxable income shall be made under such method as, in the opinion of the Secretary or his delegate, does clearly reflect income.” In the exercise of the discretion granted him, the Commissioner could reasonably feel that the company’s income would not be clearly reflected by accrual of only the net valuation portion of the deferred and uncollected premiums, and he has been consistently upheld in requiring accrual of the gross amount. The statutory objective of clear reflection of income will be hindered, however, if the expenses necessarily associated with that gross premium income are not also taken into account. This does no further violence to the usual accrual rules, which would not permit accrual of either the premiums or the commissions. In fact, it tends to mitigate the distortion of income caused by the Commissioner’s deviation from those rules in requiring the accrual of the gross amount of the premiums.

Not only would disallowal of commission deductions create an inconsistency in the treatment of income and its associated expenses, it would also create an inconsistency in the treatment of these deductions and the deduction for net in-

creases in life insurance reserves under § 809(d)(2). The company’s reserve liability with regard to the net valuation portion of the deferred and uncollected premiums will not in fact accrue until the premiums themselves accrue. Yet the Commissioner has not merely allowed the company to accrue this item, which generates the § 809(d)(2) deduction, he has used that very accrual as the ,sole basis for requiring accrual of the gross amount of the deferred and uncollected premiums. Since the Commissioner does not challenge the deduction under § 809(d)(2), we see no basis for allowing a challenge to the deduction for agents’ commissions, which are no more contingent than the reserve liability.

In requiring accrual of the gross amount of the deferred and uncollected premiums, the Seventh Circuit explained the need to use consistent accrual assumptions.

The District Court would permit the taxpayer to accrue a full year’s liability without a corresponding accrual of the related year’s asset in point of time. Such a result would attribute to Congress an intention that in the same statutory equations, exclusions and deductions attributable to reserves are to be based on the assumption that the annual premium is fully paid up and yet the amounts in the same equation from which these figures are to be subtracted are to be determined on the assumption that the annual premium is not fully paid up. This is, in effect, saying that Congress, when it specified accrual accounting, must have meant one rule to apply to reserve deductions and exclusions and another different accrual rule to apply to determining the amount from which the former are to be subtracted. We perceive nothing from which intent to impose such a dual standard of tax accounting can be presumed.

Franklin Life Insurance Co. v. United States, supra, 399 F.2d at 761. We think the same reasoning applies with equal force here. We do not think that Congress meant for one standard to apply to reserve deductions and a different rule to apply to commission deductions.

Conclusion

The result we reach is admittedly an imperfect one. None of the amounts under discussion are properly accruable under normal accounting practices. It would be far more accurate, we think, for the company to disregard deferred and uncollected premiums for all' tax purposes, with the Commissioner’s approval, of course. § 446(e); Treas.Reg. § 1.446-1 (e). This would create some variance in accounting between the N. A.I.C. reports and the tax returns, but it is well settled that there is no necessary agreement between the two as noted by the courts in Franklin Life, Jefferson Standard Life, and Western National Life. We hold only that, once the company accrues the net valuation portion of the deferred and uncollected premiums, it must accrue the gross amount of those premiums for all tax purposes, and that it is also entitled to accrue commissions payable on those premiums.

Affirmed in part, reversed in part, and remanded for further proceedings not inconsistent with this opinion.

      . All citations herein are to 26 U.S.C.

      . In 1966, the company’s gain from operations computed under § 809 was less than its taxable investment income computed under § 804, and there were no subtractions from the policyholders’ surplus account under § 815. Therefore, its taxable income was computed only under § 809. See § 802(b).

      . § 809(c)(1).

      . §§ 809(d)(2), 810(c)(1).

      . It is true that the life insurance company’s share of investment yield, a taxable item under § 809(b)(1)(A), was affected by inclusion of the net valuation portion of deferred and uncollected premiums in reserves. The life insurance company’s share is the difference between the overall investment yield and the share set aside for policyholders. The share set aside for policyholders, in turn, varies directly with the size of the reserves. § 809(a)(2)(B). Therefore, an increase in reserves leads to an increase in the size of the share set aside for policyholders and a corresponding decrease in the insurance company’s share. However, any reduction in the life insurance company’s share is a washout, since the company’s deduction for net increases in reserves under § 809(d) (2) is reduced by the amount of the share of investment yield set aside for policyholders. § 810 (b). Therefore, the only effect on the company’s taxable gain from operations came through the increases in gross premium income and net increase in reserves, which also precisely cancelled each other.

      . The calculation of a life insurance company’s taxable investment income under § 804 is often colloquially called the Phase I computation.

      . This is the colloquial term for the calculation of a life insurance company’s gain from operations under § 809.


author: PER CURIAM:

text:
    Terry Lee ROSS, Petitioner-Appellant, v. J. D. HENDERSON, Warden, U. S. Pen., Atlanta, Ga., et al., Respondents-Appellees.
    No. 73-1858
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    March 15, 1974.
    Terry Lee Ross, pro se.
    John W. Stokes, Jr., U. S. Atty., Anthony M. Arnold, Asst. U. S. Atty., Atlanta, Ga., for respondents-appellees.
    Before GEWIN, GODBOLD and CLARK, Circuit Judges.

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

   PER CURIAM:

On December 8, 1972 the petitioner, a prisoner at the United States Penitentiary, Atlanta, Georgia, sought mandamus relief regarding the actions of prison officials in seizing a sexually oriented book which he had ordered by mail. The petition was denied on its merits on February 28, 1973. During the pendency of this appeal the Bureau of Prisons instituted an administrative procedure at this institution for review of grievances of the type advanced by petitioner here. The Northern District of Georgia now consistently requires that this procedure be exhausted. See Singleton v. Henderson, CA # 19339, November 13, 1973; Parker, et al v. Henderson, CA # 19023, September 24, 1973; and Tánger v. Henderson, CA # 18922, September 5, 1973.

Pursuant to the provisions of 28 U.S. C. § 2106, the order denying relief on the merits is vacated and this cause is remanded to the district court for reconsideration in the light of these intervening events.

Vacated and remanded.


text:
    S. K. BROWN, Plaintiff-Appellant, v. GEORGIA POWER COMPANY et al., Defendants-Appellees.
    No. 73-3569
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    March 14, 1974.
    Percy J. Blount, Augusta, Ga., J. Nat Hamrick, Rutherfordton, N. C., for plaintiff-appellant.
    Robert C. Norman, Augusta, Ga., Michael C. Murphy, Atlanta, Ga., for defendants-appellees.
    Before WISDOM, GOLDBERG and GEE, Circuit Judges.

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

   PER CURIAM:

The judgment of the district court is affirmed on the basis of the well-reasoned opinion below. Brown v. Georgia Power Co., 371 F.Supp. 543 (S.D.Ga. 1973). The proper forum for plaintiff’s troubling complaints of denial of procedural due process in the state trial court is the appellate courts of Georgia.

Affirmed.


text:
    Edward Leon COEN, Plaintiff-Appellant, v. C & H TRANSPORTATION COMPANY, INC., Defendant-Appellee.
    No. 73-3413
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    March 15, 1974.

      C. Ronald Patton, Rome, Ga., for plaintiff-appellant.
    L. Robert Lake, George A. Haas, Atlanta, Ga., for defendant-appellee.
    Before BROWN, Chief Judge, and THORNBERRY and AINSWORTH, Circuit Judges.

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

   PER CURIAM:

Plaintiff, Edward Leon Coen, appeals from an order of the district court granting summary judgment in favor of C & H Transportation Company, Inc. Under diversity jurisdiction plaintiff sought damages for an alleged breach by C & H of a lease agreement under which he leased to defendant his truck-tractor and agreed to drive the vehicle as an employee of the company. Plaintiff alleges that according to the contract C & H was required to pay him 70 per cent of the gross revenue derived from the truck, less 5 per cent on backhaul freight, less driver’s gross pay. The contract was executed on November 19, 1966. Plaintiff thereafter received monthly checks together with accompanying settlement sheets itemizing the deductions and calculating the payment due each month to plaintiff. Plaintiff made no objection to those calculations and accepted and cashed the checks. In July 1969 he allegedly became aware that payments were computed on the net, rather than the gross, revenue and filed the instant complaint.

The district court found after examining the monthly statements that it was obvious that plaintiff’s compensation was calculated after deductions of the expenses and that plaintiff should not be allowed to reap benefits of the contract for three years and now allege a breach because of unawareness. Based on the principle of an implied accord and satisfaction, summary judgment was granted. We agree with the district court.

Affirmed.


text:
    SCOTT PAPER COMPANY and International Paper Company, Plaintiffs-Appellants, v. GULF COAST PULPWOOD ASSOCIATION, INC., et al., etc., Defendants-Appellees.
    No. 73-3262.
    United States Court of Appeals, Fifth Circuit.
    March 18, 1974.
    Frank McRight, Kirk C. Shaw, Mobile, Ala., for Scott Paper.
    R. F. Adams, Brock B. Gordon, Mobile, Ala., for Int’l Paper.
    John J. Coleman, Jr., Samuel H. Franklin, Birmingham, Ala., for MacMillan Bloedel Inc., amicus curiae.
    Harry H. Riddick, Joseph M. Allen, Jr., Mobile, Ala., for J. B. Jones Timber Co., and others, amicus curiae.
    James U, Blacksher, Mobile, Ala., John G. Ratcliff, Hattiesburg, Miss., William H. Allison, Jr., Louisville, Ky., for defendants-appellees.
    Before COLEMAN, AINSWORTH and GEE, Circuit Judges.
   PER CURIAM:

The parties have briefed and argued this appeal, in general, as if it were from a final judgment on the merits. This was caused by an order of the District Court, possibly an inadvertence, which denied “motions for temporary and permanent injunctions”. The fact nevertheless remains that the record is bereft of any order, before or after the commencement of the hearing, directing a trial of the ease on the merits, consolidated with the hearing of the application for a preliminary injunction, Rule 65(a)(2), Federal Rules of Civil Procedure. Consequently, only the action on the preliminary injunction is presently reviewable.

We are of the view that there was no abuse of discretion in the denial of the preliminary injunction. Pending the development of a full and complete record in a trial, and a final judgment, we abstain from a discussion of the merits. We do note, however, that the trial, if and when held, should be limited to the named defendants.

In view of the thorough exposition of the law of preliminary injunctions recently written by Judge Thornberry, there is no necessity to resurvey that ground, see Canal Authority of State of Florida v. Callaway, 5 Cir., 1974, 489 F.2d 567. Neither the District Court nor counsel had the benefit of Canal Authority in handling this case below.

We therefore affirm the denial of the preliminary injunction and remand to the District Court for further proceedings.

Affirmed and remanded.


text:
    UNITED STATES of America, Plaintiff-Appellee, v. Jeffrey Davis BLAKELY, Defendant-Appellant.
    No. 73-2975.
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    March 15, 1974.
    Rehearing Denied April 16, 1974.

      Hal H. McCaghren, West Palm Beach, Fla., for defendant-appellant.
    Robert W. Rust, U. S. Atty., David F. McIntosh, Asst. U. S. Atty., Miami, Fla., for plaintiff-appellee.
    Before THORNBERRY, GOLDBERG and RONEY, Circuit Judges.

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

   PER CURIAM:

Jeffrey Davis Blakely was convicted of failing to report for induction into the Army and for failing to keep his local draft board apprised of his address. 50 U.S.C.A. App. § 462. This Court had previously affirmed Blakely’s I-A classification based on his ineligibility for a discretionary III-A classification. The factual background is set forth in that opinion. Blakely v. S.S.S. Local Board #143, 455 F.2d 795 (5th Cir. 1972).

Although Blakely alleges fourteen points of error on this appeal, summary treatment is sufficient for most. Only his sufficiency of the evidence contentions and the due process argument concerning proper classification merit discussion. Finding no error, however, we affirm.

(1) It is undisputed that Blakely failed to report for induction. His defense is that the Government produced no evidence establishing that he received the induction notice. Blakely argues that he was traveling during the period in May 1972 when the notices were mailed and when he was ordered to report. He also claims that his mail service was sporadic, especially concerning forwarded mail, due to his not infrequent changes of address.

The record reflects, however, that induction notices were sent to all of Blakely’s known addresses and to his attorney. None were returned. The factual determination whether Blakely received the induction order is a jury question. It was answered adversely to defendant.

Fisher v. United States, 413 F.2d 1034 (9th Cir. 1969), relied on by Blakely, is factually distinguishable from this case. In Fisher, the registrant had failed to report for induction on the specified date due to temporary absence from his home address which precluded notification of the order to report. Upon his return, however, Fisher requested a new induction date. The Government prosecuted instead. Blakely, conversely, never fulfilled his continuing obligation to report as prescribed by 32 C.F.R. § 1641.5. This neglect, coupled with the proliferation of notices and their subsequent nonreturn, is a sufficient basis upon which the jury could find “knowing and willful failure” to report. See United States v. Lee, 458 F.2d 32 (9th Cir. 1972).

(2) Count II of the indictment alleged that as of May 21, 1972, Blakely had not advised his local board of an “address where mail would reach him.” A registrant is required to keep his local board “currently informed in writing of (1) the address where mail will reach him. . . .”32 C.F.R. § 1641.1(a). This duty is satisfied “when the registrant, in good faith, provides a chain of forwarding addresses by which mail, sent to the address which is furnished the board, may be by the registrant reasonably expected to come into his hands in time for compliance.” Bartchy v. United States, 319 U.S. 484, 489, 63 S.Ct. 1206, 1208, 87 L.Ed. 1534 (1943). To be in violation of this duty, there must be evidence of a “deliberate purpose on the part of the petitioner not to comply with the Selective Service Act or the regulation issued thereunder.” Ward v. United States, 344 U.S. 924, 73 S.Ct. 494, 97 L.Ed. 711 (1953).

Blakely informed the local board of his Palm Beach and Tallahassee, Florida, addresses. By his own admission, he did not, however, personally inform the board in writing of his Texas address to which he moved in August 1971 and remained until July 1972. He contends that the board should have known of this address since he requested an unknown, unnamed employee of the Arlington Clinic to mail his medical records containing the address to the local board after his examination at the clinic. The credibility of this testimony was a question for the jury. A letter from his attorney to the local board, dated January 30, 1973, enclosed the 1971 clinical report because “a check of the record of your office does not indicate that you received it.” Blakely’s neglect to inform the board himself is framed in a fact pattern of prior induction notices and litigation which substantiates that he knew the local board was interested in him and had been for sometime. There was sufficient evidence to support a finding by the jury that Blakely had deliberately not informed the board of an address at which mail could reach him.

A “home address” or address of someone who knows of the registrant’s whereabouts is also maintained in the registrant’s Selective Service file. See United States v. Chudy, 474 F.2d 1069 (9th Cir. 1973); United States v. Burton, 472 F.2d 757 (8th Cir. 1973). Blakely listed his parents as the “person who will always know” his whereabouts. In sending induction notices to Blakely, the local board attempted to contact his parents but were unsuccessful because Blakely did not inform the local board of his parents' change of address. Thus, his “home address” was incorrectly listed. The mail was evidently not forwarded to the parents’ new address. The evidence is sufficient to support a finding that Blakely did not “provide a valid chain of forwarding addresses to his local board.” United States v. Read, 443 F.2d 842, 844 (5th Cir. 1971), cert. denied, 404 U.S. 943, 92 S.Ct. 294, 30 L.Ed.2d 258 (1972). See United States v. Secoy, 481 F.2d 225 (6th Cir. 1973).

(3) Blakely’s due process arguments were answered in his civil suit against the local board. Blakely v. S.S. S. Local Board #143, 455 F.2d 795 (5th Cir. 1972). He asserted that he was entitled to a discretionary III-A deferment on the basis of paternity. Prior to the 1967 statutory change in the Draft Act, Blakely was mandatorily classified II-S as an undergraduate student. After the effective date of the statutory changes, he was again classified II-S for undergraduate work. His subsequent request for a discretionary III-A deferment was denied because

a registrant who is classified in Class II-S after the date of enactment of the Military Selective Service Act of 1967 shall not be eligible for reclassification in Class III-A ....

32 C.F.R. § 1622.30(a) (1970).

Plotner v. Resor, 446 F.2d 1066 (5th Cir. 1971), is distinguishable from the case at bar. Although Plotner had received a II-S deferment after the enactment of the 1967 Act, it was a discretionary graduate school deferment, as opposed to a mandatory undergraduate deferment. This Court found no statutory authority upon which to automatically deny a III-A classification to any registrant who had held the discretionary II-S graduate classification. Blakely received the mandatory II-S undergraduate deferment and falls squarely within the provisions of the Act.

The remaining opportunity for Blakely to receive a III-A classification is predicated upon 32 C.F.R. § 1622.-30(b) (1970) and its requirement of extreme hardship. He now claims that notifying the local board of his second child’s birth in June 1971 was sufficient to establish a prima facie ease of extreme hardship for the III-A dependency classification and necessitated the reopening of his classification. The birth occurred, however, while Blakely's original induction order of May 23, 1969, was still pending. To establish a prima facie case under that fact situation, he must show a change in status due to circumstances beyond his control. 32 C.F.R. § 1625.2. See Ehlert v. United States, 402 U.S. 99, 91 S.Ct. 1319, 28 L.Ed.2d 625 (1971). The conception of his child is not a circumstance over which Blakelyhad no control. Blakely v. S.S.S. Local Board #143, 455 F.2d 795 (5th Cir. 1972); United States v. Dell’Anno, 433 F.2d 1198 (9th Cir. 1971).

Affirmed.

      . (1) Beginning in January 1965, Blakely was classified II-S while attending a junior college. He was reclassified I-A on certain occasions, but continued to be placed back in a II-S category during his studies. In December 1967, Blakely executed a request for a II-S undergraduate deferment under § 6 (h) (1) of the Military Selective Service Act of 1967, which included the following waiver:
      No person who has received a student deferment under the provisions of this paragraph shall thereafter be granted a deferment under this subsection, . . . except for extreme hardship to dependents (under regulations governing hardship deferments), or for graduate study, occupation, or employment necessary to the maintenance of the national health, safety, or interest.
      Blakely received this II-S undergraduate deferment while a student at Florida Atlantic University.
      (2) Appellant married in July of 1968, and after receipt of his baccalaureate degree, he was classified I-A on January 28, 1969.
      (3) On January 30, 1969, Blakely received his notice to report for induction on February 13, 1969. He submitted a dependency questionnaire to the local board showing that he was married and that his wife was pregnant and requested a reopening and reclassification. The local board denied his request and an appeal board affirmed and continued the registrant’s I-A classification.
      (4) On April 28, 1969, Blakely was again ordered to report for induction, but the board postponed this action until July to allow him to complete a teaching contract.
      (5) On June 4, 1969, Blakely’s son was born and the board was notified. However, his July induction date was again postponed to October because of this grandmother’s illness.
      (6) Beginning in September 1969, there was another flood of letters and appeals. In October, the board reviewed Blakely’s file and obtained information from the local welfare department relating to the dependency of his wife and child. The board advised Blakely that he had not presented facts warranting a reopening of his classification. lie was ordered to report for induction on December 2, 1969.
      (7) On November 28, 1969, this suit was filed in the District Court and Blakely did not report for induction.
      The District Court held that appellant Blakely was not entitled to the III-A fatherhood or dependency classification and ordered that his complaint be dismissed. 455 F.2d 795, 796-797 (5th Cir. 1972).

      . (1) Blakely’s motion to dismiss the indictment because it charged in a single count the conjunctive failure to report for and submit to induction was denied by the United States Magistrate. After this denial, Blakely did not request a hearing before the District Court judge nor did he request a bill of particulars to clarify the indictment. Since the indictment apprised Blakely with reasonable certainty of the charge against him, we find no error. United States v. Farinas, 448 F.2d 1334. 1340, (2d Cir. 1971), cert. denied, 405 U.S. 934, 92 S.Ct. 946, 30 L.Ed.2d 810 (1972).
      (2) Adequate discovery was afforded the defendant through either the criminal action or his previous civil litigation, Blakely v. S.S.S. Local Board No. 143, 455 F.2d 795 (5th Cir. 1972).
      (3) Blakely’s motion for a continuance was made in relation to the discovery request. Denial of the motion was not an abuse of discretion in light of the court’s disposition of the discovery motion.
      (4) The denial of defendant’s motion for oral voir dire examination was within the discretion of the trial judge. Stone v. United States, 324 F.2d 804 (5th Cir. 1963), cert. denied, 376 U.S. 938, 84 S.Ct. 793, 11 L.Ed.2d 659 (1964).
      (5) The trial judge did not err in denying Blakely’s motion for aquittal.
      (6) The request by the Court to admit defendant’s entire Selective Service file into evidence was not prejudicial error. The defendant had previously requested that most of the file be admitted and did not object to the time saving device of admitting the remainder in its entirety.
      (7) Blakely objected to a portion of the prosecutor’s summation argument. The objection was sustained. Now he contends another portion was highly prejudicial. His failure to object, request curative instruction, or move for a mistrial precludes reversal in the absence of clear error.
      (8) The District Court’s refusal to admit Blakely’s proffered evidence concerning alleged preferential treatment afforded other Selective Service registrants was not error. The evidence was received in the civil case which decided as a matter of law that there was no prejudicial preferential treatment to Blakely’s detriment. 455 F.2d at 797-798.

        (9) The charge given by the trial judge correctly reflects the law.
      (10) Since there is a continuing duty on the inductee’s part to report for induction after notification, the trial judge did not err in reading that requirement from 32 C.F.R.
      (II) The District Court charged the jury that the correctness of Blakely’s classification, previously determined in a civil suit, was not within the parameters of their deliberations. The validity of a registrant’s classification is a question of law. Cox v. United States, 332 U.S. 442, 68 S.Ct 115, 92 L.Ed. 59 (1947) ; United States v. Ponto, 454 F.2d 657 (7th Cir. 1971).

      . McIntosh: Well, my question is: When is the last time that you personally told the Selective Service Board where you [lived], over your own signature or through your own phone call or in person or by telegram? Blakely: Probably, I would say when it was 690 North County Road, North Palm Beach.

      . Q. Mr. Blakely, is your testimony that you first became aware of your parents’ new address sometime in April of 1972?
      A. That’s correct, Mr. McIntosh.
      Q. Have you ever given that new address to your Local Board?
      A. No, Sir, I have not.

      . Blakely’s second II-S undergraduate classification spanned the period from March 26, 1968, to January 28, 1969.


text:
    Wilbert HERRING, Petitioner-Appellant, v. W. J. ESTELLE, Director, Texas Department of Corrections, Respondent-Appellee.
    No. 73-2672.
    United States Court of Appeals, Fifth Circuit.
    March 15, 1974.
    Rehearing and Rehearing En Banc Denied April 16, 1974.

      William T. Armstrong, Staff Counsel for Inmates, Weldon, Tex., Harry H. Walsh, Huntsville, Tex., James H. Randals, Staff Counsel for Inmates, Huntsville, Tex., for petitioner-appellant.
    Thomas M. Pollan, Asst. Atty. Gen., Austin, Tex., for respondent-appellee.
    Before BELL, THORNBERRY and DYER, Circuit Judges.
   THORNBERRY, Circuit Judge:

In this § 2253 habeas corpus appeal, Herring contends that he unknowingly and involuntarily pled guilty to a robbery charge because his appointed counsel was too poorly prepared to give him effective assistance in deciding how to plead. We agree and order that the writ be granted.

This case began with a May 30, 1962, jailbreak at the Tom Green County (Texas) Jail. When the jailer entered a cell to aid a bleeding inmate, three inmates rushed forward, grabbed his keys, beat him and escaped, leaving the keys in the jail’s back door. The State charged Herring, one of the escapees, with robbery by assault on the theory that he had taken the jailer’s keys by force. The trial court appointed Herring’s lawyer on the day set for trial, July 17, 1962. He pled guilty the same day.

Herring argues that his poorly prepared appointed counsel failed to provide information essential to a knowing and voluntary plea. At the time of his plea, Texas law provided a maximum prison term of two years for aggravated assault and five years for escape, a total of seven years. But the State instead charged him with robbery by assault, which carries a maximum penalty of life imprisonment. Herring contends that any reasonably competent lawyer would have known that he had not committed robbery because the Texas Court of Criminal Appeals has ruled that robbery requires a taking with the intent to keep the booty permanently, not temporarily. That the escapees left the keys in the jailhouse door is conclusive evidence that they took the keys for temporary use only. But Herring’s lawyer failed to tell him that his taking the keys probably could not be construed as robbery. Consequently Herring entered a plea of guilty in exchange for a twenty-five-year sentence. When he realized that his escape probably should have brought a maximum term of seven years, the bargain lost its luster and he sought habeas corpus relief.

I.

The Sixth and Fourteenth Amendments gave Herring the right to effective assistance of counsel. This circuit set its standard for determining whether counsel has provided constitutionally satisfactory services in MacKenna v. Ellis:

We interpret the right to counsel as the right to effective counsel. We interpret counsel to mean not errorless counsel, and not counsel judged ineffective by hindsight, but counsel reasonably likely to render and rendering reasonably effective assistance.

MacKenna v. Ellis, 5th Cir. 1960, 280 F.2d 592, 599, cert. denied, 368 U.S. 877, 82 S.Ct. 121, 7 L.Ed.2d 78. Since 1960 we have/applied the “reasonably effective assistance” standard many times.

In 1965, however, a panel of this circuit seemed to adopt a different standard. In Williams v. Beto the court said:

It is the general rule that relief from a final conviction on the ground of incompetent or ineffective counsel will be granted only when the trial was a farce, or a mockery of justice, or was shocking to the conscience of the reviewing court, or the purported representation was only perfunctory, in bad faith, a sham, a pretense, or without adequate opportunity for conference and preparation. [Citations omitted.]

Williams v. Beto, 5th Cir. 1965, 354 F.2d 698, 704. For several years following 1965, Williams’ “farce-mockery” language appeared in our opinions with some frequency. But a close reading of Williams v. Beto reveals that that opinion did not intend to adopt the farce-mockery test in lieu of the reasonably effective assistance standard. The passage quoted above, after stating the general rule, cited eleven eases from other circuits as support; it cited no cases from this circuit. Thus the panel was saying that the farce-mockery test was the general rule in other circuits but not in ours. In the next paragraph the panel said:

This court has considered lack of effective counsel cases before and has laid down standards which we now reaffirm and again call to the attention of the Bar of this Circuit. We have not hesitated to grant habeas corpus relief when justified. Cf. Pineda v. Bailey, 5 Cir., 340 F.2d 162 (1965); Johnson v. United States, 8 Cir., 329 F.2d 600 (1964); MacKenna v. Ellis, 5 Cir., 280 F.2d 592 (1960).

Williams v. Beto, supra, 354 F.2d at 705.

The Johnson case cited above had nothing to do with assistance of counsel; there the sole issue was sufficiency of the evidence. MacKenna, of course, instituted the reasonably effective assistance test, and Pineda applied that test. Therefore the paragraph quoted above reaffirmed the MacKenna standard for effective assistance of counsel. Williams did not replace MacKenna’s reasonably effective assistance standard with a farce-mockery test.

The two tests, moreover, can be reconciled. The governing standard is reasonably effective assistance. One method of determining whether counsel has rendered reasonably effective assistance is to ask whether the proceedings were a farce or mockery. The farce-mockery test is but one criterion for determining if an accused has received the constitutionally required minimum representation (reasonably effective assistance). See Bendelow v. United States, 5th Cir. 1969, 418 F.2d 42, 50, cert. denied, 400 U.S. 967, 91 S.Ct. 379, 27 L.Ed.2d 387. One may receive ineffective assistance of counsel even though the proceedings have not been a farce or mockery. United States v. Edwards, 5th Cir. 1974, 488 F.2d 1154 at pp. 1164, 1165 [1974]. Other circuits may adhere solely to the farce-mockery test, but we do not. Pennington v. Beto, 5th Cir. 1971, 437 F.2d 1281, 1285-1286; Brown v. Beto, 5th Cir. 1967, 377 F.2d 950, 957-958. Our standard is reasonably effective assistance. .

Reasonably effective assistance is an easier standard to meet in the context of a guilty plea than in a trial, but counsel still must render competent service. See Tollett v. Henderson, 1973, 411 U.S. 258, 93 S.Ct. 1602, 36 L.Ed.2d 235. It is the lawyer’s duty to ascertain if the plea is entered voluntarily and knowingly. Lamb v. Beto, 5th Cir. 1970, 423 F.2d 85, 87, cert. denied, 400 U.S. 846, 91 S.Ct. 93, 27 L.Ed.2d 84. See Walker v. Caldwell, 5th Cir. 1973, 476 F.2d 213; Colson v. Smith, 5th Cir. 1971, 438 F.2d 1075; O’Neal v. Smith, 5th Cir. 1970, 431 F.2d 646. He must actually and substantially assist his client in deciding whether to plead guilty. Walker v. Caldwell, supra, 476 F.2d at 224. It is his job to provide the accused an “understanding of the law in relation to the facts.” Id. at 218. The advice he gives need not be perfect, but it must be reasonably competent. Colson v. Smith, supra, 438 F.2d at 1081 n. 5. His advice should permit the accused to make an informed and conscious choice. Id. at 1079. In other words, if the quality of counsel’s service falls below a certain minimum level, the client’s guilty plea cannot be knowing and voluntary because it will not represent an informed choice. And a lawyer who is not familiar with the facts and law relevant to his client’s ease cannot meet that required minimal level.

II.

Having reviewed this circuit’s standard for effective assistance of counsel, we turn now to Herring’s case. He alleges, and the State does not deny, that his attorney was appointed on the day of the trial and spent a negligible amount of time familiarizing himself with his client’s case. The lawyer’s lack of preparation, contends Herring, deprived him of effective assistance of counsel and caused him to enter an involuntary guilty plea.

While counsel must devote sufficient time to ensure an adequate defense in order to render effective assistance, it is the rule in this circuit that “. . . time spent [in preparation] is only one of the elements to be considered and the totality of the facts may not be over-ridden by a judicial stop watch.” Doughty v. Beto, 5th Cir. 1968, 396 F.2d 128, 130. Accord, Woodard v. Beto, 5th Cir. 1971, 447 F.2d 103, cert. denied, 404 U.S. 957, 92 S.Ct. 325, 30 L.Ed.2d 275; Evans v. Beto, 5th Cir. 1969, 415 F.2d 1129. Therefore appellant must show more than counsel’s brief preparation period. Appellant attempts to meet this requirement by arguing that if counsel had made a minimal effort to prepare himself, he would have discovered that taking jail keys for temporary use does not fit the Texas definition of robbery.

We think Herring is correct. Even a cursory perusal of two cases from the Texas Court of Criminal Appeals provides dramatic evidence that Herring’s lawyer prepared himself too poorly to give effective assistance. In Bailey v. State, 139 Tex.Cr.R. 260, 139 S.W.2d 599 (1904), the State had charged the accused with robbery because he had taken a jailer’s keys and hidden them in his bunk. In reversing his conviction the court said that robbery requires . .an intent to permanently appropriate the property and to deprive the owner thereof of its value.” 139 S.W.2d at 600. The court believed that one could not infer that Bailey intended to keep the keys permanently because they had no other use than aiding his escape. In a later case the court upheld the robbery conviction of an escapee who did not leave the keys behind but instead kept them in his possession after making his departure from the jail. Fitzgerald v. State, 160 Tex.Cr.R. 414, 271 S.W.2d 428 (1954). The court found that Fitzgerald’s keeping the keys distinguished his case from Bailey. His actions proved his intent permanently to appropriate the keys.

Since Herring left the keys in the jail door, one can make a strong argument that he conclusively demonstrated his intent not to keep them permanently. Without an intent to keep the keys permanently, his actions cannot constitute robbery as defined by Bailey and Fitzgerald. Given the strong parallel between Herring’s case and Bailey, we must conclude that reasonably effective counsel either would have advised Herring to plead not guilty or, at the very least, would have explained to him the Texas law of robbery and the pronouncement in Bailey. See Cooks v. United States, 5th Cir. 1972, 461 F.2d 530, 532. By failing to advise Herring how the facts of his case related to the Texas law of robbery, counsel made certain that his client’s plea could not be knowingly and voluntarily entered.

The judgment of conviction is vacated. The case is reversed and remanded to the district court with directions to issue the writ of habeas corpus discharging appellant, subject to the right of the State, if it wishes to do so, to try him on the indictment here involved within ninety days of the time the mandate of this court reaches the district court. Should the State desire to try appellant, he will be permitted to withdraw his guilty plea and plead anew.

Reversed and remanded.

      . Article 1148 of the Texas Penal Code provided :
      The punishment for an aggravated assault or battery shall be a fine not less than Twenty-five Dollars ($25) nor more than One Thousand Dollars ($1,000), or imprisonment in Jail not less than one (1) month nor more than two (2) years, or both such fine and imprisonment.
      Vernon’s Tex.Penal Code Ann. art. 1148 (1901).

      . Article 353b of the Texas Penal Code provided in pertinent part:
      If a prisoner confined in the penitentiary or while he is permitted to be at large as a trusty, or a prisoner confined in any other prison, or while in the lawful custody of any officer shall voluntarily, with or without force, escape, he shall upon conviction for such escape be confined in the penitentiary for not less than two (2) nor more than five (5) years.
      Tex.Penal Code Ann. art. 353b, § 2 (1952).

      . Article 1408 of the Texas Penal Code provided :
      If any person by assault, or violence, or by putting in fear of life or bodily injury, shall fraudulently take from the person or possession of another any property with intent to appropriate the same to his own use, he shall be punished by confinement in the penitentiary for life, or for a term of not less than five years; and when a firearm or other deadly weapon is used or exhibited in the commission of the offense, the punishment shall be death or by confinement in the penitentiary for any term not less than five years.
      Tex.Penal Code Ann. art. 1408 (1953).

      . E. g., United States v. Woods, 5th Cir. 1973, 487 F.2d 1218; United States v. Beasley, 5th Cir. 1973, 479 F.2d 1124; Sloan v. Wainwright, 5th Cir. 1972, 469 F.2d 390; Williams v. United States, 5th Cir. 1971, 443 F.2d 1151; United States v. Rubin, 5th Cir. 1970, 433 F.2d 442, cert. denied, 401 U.S. 945, 91 S.Ct. 961, 28 L.Ed.2d 228; Lamb v. Beto, 5th Cir. 1970, 423 F.2d 85, cert. denied, 400 U.S. 846, 91 S.Ct. 93, 27 L.Ed.2d 84; Caraway v. Beto, 5th Cir. 1970, 421 F.2d 636; Bendelow v. United States, 5th Cir. 1969, 418 F.2d 42; Calloway v. Powell, 5th Cir. 1968, 393 F.2d 886; Brown v. Beto, 5th Cir. 1967, 377 F.2d 950; Pineda v. Bailey, 5th Cir. 1965, 340 F.2d 162.

      . E. g., Cooks v. United States, 5th Cir. 1972, 461 F.2d 530; United States v. Zarzour, 5th Cir. 1970, 432 F.2d 1; United States v. Long, 5th Cir. 1969, 419 F.2d 91; Foster v. Beto, 5th Cir. 1969, 412 F.2d 892; Mosley v. Smith, 5th Cir. 1968, 404 F.2d 346; White v. McHan, 5th Cir. 1967, 386 F.2d 817; Quarles v. Dutton, 5th Cir. 1967, 379 F.2d 934; Odom v. United States, 5th Cir. 1967, 377 F.2d 853, writ of cert. dismissed, 400 U.S. 23, 91 S.Ct. 112, 27 L.Ed.2d 122; Bell v. Alabama, 5th Cir. 1966, 367 F.2d 243, cert. denied, 386 U.S. 916, 87 S.Ct. 859, 17 L.Ed.2d 788; Bushy v. Holman, 5th Cir. 1966, 356 F.2d 75.

      . “Effective counsel includes familiarity of counsel with the case and an opportunity to investigate it if necessary in order meaningfully to advise the accused of his options.” Windom v. Cook,, 5th Cir. 1970, 423 F.2d 721, quoting from Calloway v. Powell, 5th Cir. 1968, 393 F.2d 886, 888.


text:
    UNITED STATES of America, Plaintiff-Appellee, v. John FANNON, Defendant-Appellant.
    No. 73-2151.
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    March 15, 1974.

      John Fannon, pro se.
    Robert W. Rust, U. S. Atty., Miami, Fla., for plaintiff-appellee.
    Before THORNBERRY, GOLDBERG and RONEY, Circuit Judges.

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

   THORNBERRY, Circuit Judge:

John Fannon was convicted after a jury trial of conspiring to import, actually importing, and possessing with intent to distribute some 2700 pounds of marihuana, in violation of 21 U.S.C. §§ 963, 952, and 841(a)(1). He was sentenced to serve concurrently three five-year sentences, followed by a special parole period of two years. On this direct appeal, appellant presents us with nine claims of reversible error, only two of which warrant extended discussion.

During the evening hours of November 29, 1972, appellant and several other men were observed by law enforcement officers unloading large bundles from a small boat on the Dynamite Rock at North Key Largo, Florida, and loading them into a Winnebago mobile camping vehicle. This surveillance was the culmination of a lengthy investigation of smuggling activity, an investigation which began the previous July and centered around Donald Troise and John Goodwin, two of the men charged in this conspiracy. Late in the evening of the 29th, while the unloading and loading continued, customs agents abruptly announced their presence from nearby bushes and called upon the smugglers to submit to arrest. The invitation was first met with gunfire. But the officers soon arrested the appellant, and three others charged as co-conspirators were arrested the following day. At the time of appellant’s arrest, 2707 pounds of marihuana were seized.

The evidence presented at trial left little doubt concerning the appellant’s complicity. Fannon was identified as the man who had rented the Winnebago motor vehicle used in the smuggling attempt and who had leased a spot in a campground in North Key Largo. Special agents of the U.S. Customs Service testified about the elaborate surveillance of the parties suspected in this smuggling operation. One of the agents saw the appellant get into a Volkswagon belonging to Donald Troise the night of the 29th, drive away, return an hour later, and drive off again in the Winnebago. Another agent testified that he saw Fannon drive up to the shore in the camper and then load marihuana into the vehicle from the boat which had pulled ashore. When the officers announced their presence and attempted arrests, Fannon attempted to flee by diving into the water. He quickly reconsidered that course, however, came out of the water, and was arrested. All during the melee, a Dade County helicopter hovered above the scene lighting the area with a powerful searchlight. After a special agent informed Fannon of his rights, the appellant admitted that he had been hired to drive the Winnebago to deliver the marihuana.

Brendin Reimbold, a co-defendant who pleaded guilty to the first count of the indictment, charging conspiracy, testified against Fannon. He described the conspiracy’s genesis in Jamaica and the events leading up to the attempt to bring the contraband ashore. Although he testified that he had never seen Fan-non before the eventful 29th, he did place Fannon at the scene of the crime and he described Fannon’s loading of the camper with packages of marihuana.

In order to rebut this rather convincing evidence of guilt, Fannon took the stand in his own defense. He admitted knowing the co-conspirators Troise, Goodwin, and the captain of the ship which carried the marihuana from Jamaica to the Florida coast. He admitted renting the camper, traveling to the campground, and waiting at the dock at night for Troise and the ship. He admitted unloading the bundles of marihuana from the ship and loading them into the camper.

To explain this otherwise admitted criminal activity, Fannon testified that his actions were coerced by men in the ship carrying guns. His sole purpose, he claimed, in being at the dock was to bring in illegally poached lobsters. But at the dock, he claimed at trial, he was threatened with bodily injury when he momentarily refused to help with the smuggling. On cross examination, however, he admitted that he knew nothing about commercial fishing, or about storing fish, and that he had never worked in the fishing business in any manner. He further admitted that the Winnebago vehicle, which he claimed was to be used to transport the lobsters, had not been equipped for that purpose. He also admitted that he had been twice convicted for securities fraud. On this record appellant has not contended that the evidence was insufficient to prove his guilt beyond a reasonable doubt.

Nevertheless, appellant recognizes, as do we, that even the most guilty are entitled to a constitutionally fair determination of guilt. Appellant contends that this was denied him and directs our attention to the circumstances surrounding the testimony of Brendin Reimbold. Reimbold originally pleaded not guilty to all three counts in the indictment, but shortly before Fan-non’s trial, he changed his plea to one of guilt as to count I, the conspiracy charge, and the remaining two counts were dismissed. Fannon was not present in the courtroom when the district judge accepted Reimbold’s plea of guilty, and Fannon was not aware of the terms of Reimbold’s plea bargain. But Fannon’s appointed counsel was present in the courtroom and was aware of the terms of the plea bargain because he was also Reimbold’s appointed counsel. Fannon’s interrelated objections are that none of the parties to his trial—his attorney, the prosecutor, or, the district judge—ever disclosed to the jury the existence of plea bargaining negotiations with a key government witness, that his attorney labored under a conflict of interest, and that the resulting prejudice requires reversal.

Both common sense and formidable authority compel us to scrutinize the record with great care when such allegations are made, for they drive at the heart of the American system of criminal justice by challenging the faithfulness to duty of defense counsel, prosecutor, and judge.

It is true that defense counsel, the prosecutor, and the district judge were cognizant of Reimbold’s position since each had a role in the plea bargaining. Only the jury was not aware of the existence or substance of the witness’ plea bargain. Nevertheless, even if Reimbold’s testimony could have been thoroughly impeached by the introduction of his plea bargain, there is no reasonable likelihood that this impeachment could have affected the verdict of the jury. Napue v. Illinois, 1969, 360 U.S. 264, 79 S.Ct. 1173, 3 L.Ed.2d 1217. Even if Reimbold had not testified at all, the evidence would have been more than sufficient for the jury to find the defendant guilty beyond a reasonable doubt. And thus any. error in failing to apprise the jury of the plea bargain was harmless beyond a reasonable doubt. Harrington v. California, 1969, 395 U.S. 250, 89 S.Ct. 1726, 23 L.Ed.2d 284.

It is likewise clear that appellant has not demonstrated any actual conflict of interest. For once appellant took the stand and admitted the substance of Reimbold’s testimony, defense counsel could gain nothing from impeaching Reimbold. Fannon has not alleged that he would not have testified had his attorney attempted to impeach Reimbold. Indeed, in his brief, appellant adheres to his defense of coercion.

Ordinarily prejudice will be assumed from the existence of a conflict, but, to be sure, a conflict will not be inferred from the mere fact of joint representation. Although an accused need not delineate the precise manner in which he has been prejudiced, there must be some showing of prejudice, however remote, or an actual, not theoretical, conflict before a reviewing court will find the dual representation constitutionally defective.

While there was no prejudice or actual conflict of interest here, this case illustrates the dangers involved in dual representation. In cases such as appellant’s, both defense counsel and the district judge should exercise the greatest care to determine whether joint appointment and representation is consistent with the attorney’s duty to give his client untrammeled, unimpaired, and faithful assistance. Glasser v. United States, 1942, 315 U.S. 60, 62 S.Ct. 457, 86 L.Ed. 680; Holland v. Henderson, 5th Cir. 1973, 460 F.2d 978.

Our careful review of the record convinces us that Fannon’s problem in this case had nothing to do with lack of effective representation or due process, but was derived from the simple fact that he knew, and his counsel knew, that the prosecution was in full possession of clear and admissible proof of his guilt. See United States v. Jones, 6th Cir. 1971, 436 F.2d 971, 972.

The convictions are

Affirmed.

      . We have considered each of the following contentions and have found each of them to be without merit: that the district court erred in denying appellant’s request for the services of an investigator; that the trial court improperly set appellant’s bail; that the trial court ignored pre-trial defense motions ; that the trial court ignored appellant’s motions involving the grand jury proceedings; that the prosecution refused to supply Jencks Act material; that the trial court erred in admitting inculpatory statements by appellant into evidence; and that the trial court refused to charge the jury on a theory of defense.

      . At the time of Fannon’s trial, Goodwin had pleaded guilty to a conspiracy charge, and Troise had escaped from custody.

      . Fannon contends that he was not given his Miranda warnings and that the confession was involuntary. After questioning the agent wlio testified to Fannon’s confession, the district judge concluded that the agent had properly warned Fannon and that the confession was admissible. Fannon has presented us with no good reason for disturbing the district judge’s determination.

      . See Giglio v. United States, 1972, 405 U.S. 150, 92 S.Ct. 763, 31 L.Ed.2d 104; Glasser v. United States, 1942, 315 U.S. 60, 62 S.Ct. 457, 86 L.Ed. 680.
      See also United States v. Tashman, 5th Cir. 1973, 478 F.2d 129; United States v. Smith, 5th Cir. 1973, 480 F.2d 664; United States v. Fontenot, 5th Cir. 1973, 483 F.2d 315; United States v. Cawley, 5th Cir. 1973, 481 F.2d 702, 706; Government of the Virgin Islands v. John, 3rd Cir. 1971, 447 F.2d 69, 74; Holland v. Henderson, 5th Cir. 1972, 460 F.2d 978.

      . United States v. Pine, 5th Cir. 1971, 452 F.2d 507, 508; Baker v. Wainwright, 5th Cir. 1970, 422 F.2d 145, 148; White v. United States, 5th Cir. 1968, 396 F.2d 822, 824; United States v. DeBerry, 2nd Cir. 1973, 487 F.2d 448 [Nov. 7, 1973]; Walker v. United States, 3rd Cir. 1970, 422 F.2d 374, 375, cert. denied, 399 U.S. 915, 90 S.Ct. 2219, 26 L.Ed.2d 573; United States v. Rundle, 3rd Cir. 1971, 442 F.2d 234; Manuel v. Salisbury, 6th Cir. 1971, 446 F.2d 453; Annot., 34 A.L.R.3d 470; Annot., 27 A.L.R.3d 1431.

        See also Austin v. Erickson, 8th Cir. 1973, 477 F.2d 620, 624; United States v. Gougis, 7th Cir. 1967, 374 F.2d 758, 761; Kaplan v. United States, 9th Cir. 1967, 375 F.2d 895, 898, cert. denied, 389 U.S. 839, 88 S.Ct. 67, 19 L.Ed.2d 103.


author: MERRILL, Circuit Judge: IRVING HILL, District Judge

text:
    GENERAL INSURANCE COMPANY OF AMERICA, Plaintiff-Appellee, v. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Defendant-Appellant.
    No. 71-1592.
    United States Court of Appeals, Ninth Circuit.
    Jan. 15, 1974.

      Chester F. Relyea, Regional Atty. (argued), EEOC San Francisco, Cal., Equal Employment Oppoi'tunity Comm., Washington, D. C., for defendant-appellant.
    Bruce Maines, H. Weston Foss (argued), J. David Andrews of Perkins, Coie, Stone, Olsen & Williams, Seattle, Wash., for plaintiff-appellee.
    Before MERRILL and HUFSTEDLER, Ciz’cuit Judges, and HILL, District Judge.

       Honorable Irving Hill, United States District Judge for the Central District of California, sitting by designation.

   MERRILL, Circuit Judge:

Three charges have been filed with the Commission asserting that petitioner-appellee has been guilty of unfair employment practices. The Commission, dissatisfied with the extent of information voluntarily produced, served the petitioner with a Demand for Access to Evidence. Petitioner then initiated these proceedings with its petition for an order setting aside the demand. The Commission countered with a motion for entry of an order of enforcement. The District Court entered an order denying the Commission’s motion and the Commission has appealed.

The District Court refused enforcement of the demand on two grounds.

1. It concluded that as to one charge the Commission lacked jurisdiction by reason of failure of the charging party to seek relief through state authorities before filing a charge with the Commission. We disagree.

Section 706(b) of the 1964 Civil Rights Act, 42 U.S.C. § 2000e-5(b), requires such deference to state proceedings in the case of a state “which has a state or local law prohibiting the unlawful employment practice alleged, and establishing or authorizing a State or local authority to grant or seek relief from such pz’actice or to institute criminal proceedings with respect thereto upon receiving notice thereof.” The charge in question was wage discrimination due to sex which is prohibited by Washington law and is made a misdemeanor. RCW 49.12.175. However, no state or local authority is established either to seek relief or institute criminal proceedings.

We reject the argument of appellee that the state or county prosecuting attorney can qualify as such agency through his general authority to institute criminal proceedings. What the section requires is a showing of such state concern in the specific area of unfair employment practices as to result in the establishment or authorizing of an agency to act in this area. If it had been intended that the general authority of the state attorney to prosecute crime should suffice, there would have been no need to provide that the state or local authority should be empowered to institute criminal proceedings. All that would have been necessary would have been to make the offense a crime.

Appellee contends that Washington law does establish the necessary state authority in providing for an Industrial Welfare Committee. RCW 43.-22.28Ó. The duties of that committee are set forth in RCW 49.12.040. It is given no power or function in the field of sex discrimination in employment. To the contrary, it is to ascertain the wages and conditions of labor of women and minors and recommend protective legislation in that area. By RCW 49.-12.070, the committee is authorized to hold hearings and is given subpoena power. Nowhere cited to us, however, do we find power or authority to seek relief (other than through its recommendations respecting legislation) or institute criminal proceedings.

An affidavit filed by the State Supervisor of Women in Industry states that the committee would receive, investigate and attempt to conciliate a proper complaint under RCW 49.12.175. The point is, however, that the state has not seen fit to authorize the committee to seek relief or institute criminal proceedings, nor has the state established the committee for that purpose. Such action as the committee may choose to take will be taken, not in discharge of its responsibilities under law, but as the voluntary action of concerned citizens or local agencies. This is not such a show of state interest as requires deference by the Commission to state procedures under § 706(b). Knowledge of the committee’s willingness to intervene, now brought to the attention of the Commission, may result in voluntary deference in the nature of federal comity. That, however, is up to the Commission.

We conclude that it was error to hold that the Commission lacked jurisdiction to entertain the claim in question.

2. The second reason for denial of enforcement of the Commission’s demand was that the demand was too broad to be “relevant or material to the charge[s] under investigation.” 42 U. S.C. § 2000e-9(a).

The demand was indeed a broad one, and we cannot say that a holding that it was unduly broad constituted abuse of discretion. It reached back in time nearly eight years. It demanded evidence going to forms of discrimination not even charged or alleged.

Upon this ground the order appealed from is affirmed, but without prejudice to the right of the Commission to amend its demand.

IRVING HILL, District Judge

(specially concurring):

I concur in the result reached by the majority and in their articulation of the grounds upon which the result is reached. I do not fully join in the opinion and write this special concurrence only to indicate my view that Footnote 2 should not be a part of the opinion. Being unnecessary to the decision of the case, the footnote is dictum. It discusses a situation not presented in the instant case, i. e., the disposition in the trial court of a case in which the Commission acted without deferring to state authority and the trial court (or appellate court) later holds that it should have deferred. Since our holding in the instant case is that the Commission was not required to defer to state authority, I deem it unwise and inappropriate to comment upon what should be done in other eases involving a different result. As the Supreme Court said in United States and Interstate Commerce Commission v. Alaska Steamship Company, et al., 253 U.S. 113, 40 S.Ct. 448, 64 L.Ed. 808 (1920):

“ . . . [I]t is a settled principle in this court that it will determine only actual matters in controversy essential to the decision of the particular ease before it. . However convenient it might be to have decided the question of the power of the Commission to require the carriers to comply with an order prescribing bills of lading, this court ‘is not empowered to decide moot questions or abstract propositions, or to declare, for the government of future cases, principles or rules of law which cannot affect the result as to the thing in issue before it. . . . ’ California v. San Pablo & Tulare R. R. Co., 149 U.S. 308, 314 [13 S.Ct. 876, 878, 37 L.Ed. 747]; United States v. Hamburg-American Line, 239 U.S. 466, 475, 476 [36 S.Ct. 212, 60 L.Ed. 387] and previous cases of this court therein cited.” 253 U.S. at 116, 40 S.Ct. at 449.

My commitment to judicial self-restraint in opinion-writing is so deeply held that I feel it necessary to place this special concurrence on the record.

      . “49.12.175. Wage discrimination due to sex prohibited—Penalty—Civil recovery. Any employer in this state, employing both males and females, who shall discriminate in any way in the payment of wages as between sexes or who shall pay any female a less wage, be it time or piece work, or salary, than is being paid to males similarly employed, or in any employment formerly performed by males, shall be guilty of a misdemeanor. If any female employee shall receive less compensation because of being discriminated against on account of her sex, and in violation of this section, she shall be entitled to recover in a civil action the full amount of compensation that she would have received had she not been discriminated against. In such action, however, the employer shall be credited with any compensation which has been paid to her upon account. A differential in wages between employees based in good faith on a factor or factors other than sex shall not constitute discrimination within the meaning of ROW 29.12.010 through 49.12.180.” (Enacted Laws 1943, c. 254, § 1, p. 786.)

      . The Commission contends that even should we hold that deference to state authority was required before this claim could be entertained under § 706(b), the District Court at the most should defer enforcement rather than deny it outright. The Commission refers to the form of mandate employed by this court in Motorola, Inc. v. EEOC, 460 F.2d 1245, 1246 (9th Cir. 1972). There the District Court was instructed to retain jurisdiction while the Federal Commission notified the appropriate state commission and “allow[ed] that commission the statutory deferral period.”
      The source of this procedure was a suggestion by the Solicitor General made to the Supreme Court in Crosslin et vir v. Mountain States Telephone and Telegraph Co., 400 U.S. 1004, 91 S.Ct. 562, 27 L.Ed.2d 618 (1971). The Supreme Court declined to intimate any view as to the merits of the suggestion but vacated the judgment of this court (appearing at 422 F.2d 1028, 9th Cir.) and remanded the case to the District Court to appraise the suggestion. The District Court embraced it.
      The trouble with this procedure is that it permits the Commission, contrary to legislative intent, to roil the waters with its own investigation and conciliatory efforts and defer to state authority only if required by court order to do so and then at a time when its own unsuccessful efforts have rendered any subsequent state efforts meaningless.

        The Commission would, we think, be wise to recognize that while the procedure followed in Motorola may be appropriate where the Commission’s neglect was due to good faith oversight or error of law, it would hardly be appropriate otherwise.