author: BARRETT, Circuit Judge.

text:
    In the Matter of BARRACO AND COMPANY, Bankrupt. Helen CORBETT, Claimant-Appellant, v. Louis D. TANNENBAUM, Trustee in Bankruptcy of the Estate of Barraco and Company, Appellee.
    No. 72-1449.
    United States Court of Appeals, Tenth Circuit.
    Argued March 27, 1973.
    Decided May 18, 1973.

      Dean R. Mitchell, Salt Lake City, Utah (Phil L. Hansen, Salt Lake City, Utah, on the brief), for appellant.
    Herschel J. Saperstein, Salt Lake City, Utah, for appellee.
    Before PICKETT, HILL and BARRETT, Circuit Judges.
   BARRETT, Circuit Judge.

Helen Corbett appeals from an Order of the United States District Court for the District of Utah affirming a decision of the Referee in Bankruptcy denying her petition to reclaim certain stock certificates from the Trustee.

Corbett purchased 93,000 shares of Classic Mining Company stock between July and October of 1969 through Barraco and Company, a stockbrokerage firm. She paid Barraco the purchase price. Certain Classic Mining Company stock certificates were “tagged” by Barraco for Corbett. They were not, however, delivered to her. These particular stock certificates were received by Barraco for delivery pursuant to orders of purchase made by stock customers other than Mrs. Corbett.

Barraco filed a petition for arrangement under Chapter XI of the Bankruptcy Act on November 5, 1969. On February 5, 1970 Barraco petitioned to be adjudged bankrupt because it was unable to work out an arrangement with its creditors. The Bankruptcy Court entered an order to that effect on that date. Corbett thereafter filed suit to recover her stock.

Barraco was insolvent on October 17, 1969 when the stock certificates were “tagged” for Mrs. Corbett. The “tagging” occurred within four months of the initial petition for bankruptcy on November 5, 1969. The “tagging” occurred when some employee or officer of Bar-raco placed copies of Mrs. Corbett’s purchase order confirmation slips on 93,000 shares of Classic Mining Company stock certificates in its possession.

The District Court made the following Findings of Fact and Conclusions of Law based on stipulations:

FINDINGS OF FACT
1. That the applicant Helen Cor-bett purchased 93,000 shares of the capital stock of Classic Mining Company through the bankrupt above named. That the applicant fully paid the purchase price thereof to the bankrupt.
2. That none of the certificates delivered to the bankrupt pursuant to the orders of purchase made by the applicant were in the possession of the Trustee on the date of the filing of the initial petition herein, November 5, 1969.
3. That on the date of the filing of the initial petition herein, 93,000 shares of Classic Mining Company represented by five separate stock certificates were in the possession of the Trustee tagged for the applicant.
4. None of the certificates so tagged for the applicant were deposited with the bankrupt by the applicant nor delivered to the bankrupt pursuant to the orders of purchase made by the applicant. All of said certificates so tagged were either deposited with the bankrupt by a stock customer other than the applicant or delivered to the bankrupt pursuant to the orders of purchase made by stock customers other than the applicant.
5. That the certificates tagged for the applicant were so tagged within one week prior to October 17, 1969. That the bankrupt was insolvent at the time said certificates were tagged and that said tagging occurred within four months of the filing of the initial petition herein on November 5, 1969. (Emphasis ours).
CONCLUSIONS OF LAW
Based upon the foregoing Findings of Fact, the court concludes that applicant has no specific title to said certificates of stock nor are said securities specifically identifiable within the meaning of Section 60e of the Bankruptcy Act and her application to reclaim securities should be denied.

The sole issue presented is whether Corbett is entitled to reclaim the securities within the custody and control of the Bankruptcy Court pursuant to Section 60(e) of the Bankruptcy Act, which provides:

No cash received by a stockbroker from or for the account of a customer for the purchase or sale of securities, and no securities or similar property received by a stockbroker from or for the account of a cash customer for sale and remittance or pursuant to purchase or as collateral security, or for safekeeping, or any substitutes therefor or the proceeds thereof, shall for the purposes of this subdivision (e) be deemed to be specifically identified, unless such property remained in its identical form in the stockbroker’s possession until the date of bankruptcy, or unless such property or any substitutes therefor or the proceeds thereof were, more than four months before bankruptcy or at a time while the stockbroker was solvent, allocated to or physically set aside for such customer, and remained so allocated or set aside at the date of bankruptcy. 11 U.S.C.A. § 96(e)(4). (Emphasis ours.)

Corbett alleges that the securities were paid for and identifiable under § 60(e)(4), and that the four-month rule and date of Barraco’s insolvency is immaterial. She alleges that since 93,000 shares of Classic were “tagged” with her name thereon, and remained in Bar-raco’s possession in identical form until bankrupcty, that she is entitled to reclaim the stock. We disagree.

We must accept the findings of the Referee in Bankruptcy as approved and adopted by the District Court unless they are clearly erroneous. Ryan v. Rolland, 434 F.2d 353 (10th Cir. 1970); Wolfe v. Tri-State Insurance Company, 407 F.2d 16 (10th Cir. 1969).

According to the stipulations, the stock securities actually “tagged” for Mrs. Corbett were not delivered to Barraco for Corbett’s account, but were received by Barraco for the accounts of other customers; and the particular securities so “tagged” were not received by Barraco pursuant to Corbett’s purchase order or for her account as required by § 60(e)(4). These stipulations are supported by the exhibits admitted into evidence. Trustee’s Exhibit #8 is a business record kept by Barraco for Corbett’s account. Her total purchase order was for 93,000 shares of Classic stock. Exhibit #8 specifically identifies the certificate numbers of stock which Corbett was to receive pursuant to her orders. Corbett’s confirmation slips were tagged to certificates bearing numbers other than those evidenced by Exhibit #8.

Corbett relies on In Re McMillan, Rapp & Co., 38 F.Supp. 40 (E.D.Pa. 1941), aff’d, In Re McMillan, Rapp & Co., 123 F.2d 428 (3rd Cir. 1941), to establish her right to reclaim the “tagged” securities. McMillan is distinguishable. There the certificates were received by the bankrupt for the specific accounts of certain cash customers. The stipulations in the case at bar state that Barraco did not receive the “tagged” certificates for Corbett’s account, but rather for the account of other customers.

Securities are not adequately identifiable within § 60(e)(4) unless they are received for the specific account of a cash customer. Corbett did not establish that the securities were so identifiable. They were not received for her account.

The securities claimed by Mrs. Cor-bett must be administered as part of the single and separate fund for the benefit of all like stock customers of the bankrupt pursuant to § 60(e).

Affirmed.


source: Caselaw Access Project

author: FRIENDLY, Chief Judge:

license: Public Domain

text:
    Jerome ROSENBERG, Plaintiff-Appellee, v. Raymond V. MARTIN, Defendant-Appellant.
    No. 649, Docket 72-2262.
    United States Court of Appeals, Second Circuit.
    Submitted March 28, 1973.
    Decided April 27, 1973.

      Jerome Rosenberg, plaintiff-appellee, pro se.
    Norman Redlich, Corp. Counsel of New York City (Stanley Buchsbaum, and Bernard Burstein, New York City, of counsel), for defendant-appellant.
    Before FRIENDLY, Chief Judge, LUMBARD, Circuit Judge, and THOMSEN, District Judge.

       Of the District Court for the District of Maryland, sitting by designation.

   FRIENDLY, Chief Judge:

Jerome Rosenberg, the successful plaintiff in this civil rights action under 42 U.S.C. § 1983 in the District Court for the Eastern District of New York, had been convicted, upon the testimony of several eyewitnesses, of the felony murder of. two police officers while he was engaged in an armed robbery of the Borough Park Tobacco Company in Brooklyn. After the Governor had commuted his death sentence to life imprisonment, his conviction and that of a co-defendant were affirmed by the New York Court of Appeals, People v. Portelli and Rosenberg, 15 N.Y.2d 235, 257 N.Y.S.2d 931, 205 N.E.2d 857 (1965). One of the contentions on that appeal was that the defendants’ constitutional rights had been violated by denial of their motion for a change of venue because of prejudicial publicity, and the Court of Appeals amended its remittitur to show that it had considered this argument and had held that “no constitutional rights of appellants had been violated.” 16 N.Y.2d 537, 260 N.Y.S.2d 649, 208 N.E.2d 458 (1965). The Supreme Court denied certiorari, Rosenberg v. New York, 382 U.S. 1009, 86 S.Ct. 612, 15 L.Ed.2d 1009 (1966). A petition for federal habeas corpus by Rosenberg on the ground that the pre-trial publicity had denied him a fair trial was denied by Judge Bartels, without an evidentiary hearing, in an unreported opinion, and we affirmed. United States ex rel. Rosenberg v. Mancusi, 445 F.2d 613 (2 Cir. 1971), cert. denied, 405 U.S. 956, 92 S.Ct. 1186, 31 L.Ed.2d 234 (1972).

On April 15, 1968, Rosenberg brought this action under section 1983 against three defendants. The only one who remained in the case after the grant of dismissal motions was Raymond V. Martin, a retired Assistant Chief Inspector of Police. Rosenberg’s complaint alleged, that Martin had “caused him to be convicted, by illegal means in lying and inflaming the public about [him] through various News Media,” and had deliberately fed the news media false information “to slander and influence the courts, people and general public against [him].” Martin served an answer denying these allegations and pleading the statute of limitations as an affirmative defense. Plaintiff, who has been appearing pro se throughout, countered, on December 1, 1969 with a “cross-defense” arguing that Martin’s defense was “void and defeated”; he annexed a “supplement pleading” wherein he moved that “this pleading be amended” under F.R.Civ.P. 15(c) in various respects, including the statement of a claim of assault set forth in the margin 3 Without having expressly acted on the motion to amend, the court, on May 11, 1970, struck the defense of the statute of limitations, citing Swan v. Board of Higher Education, 319 F.2d 56, 59 (2 Cir. 1963), which had held the six-year provision of former N.Y. Civil Practice Act § 48(2) to be applicable to actions under 42 U.S.C. § 1983. At the trial the court allowed plaintiff to present testimony on both claims and instructed the jury that he could recover on either.

The crime occurred on May 18, 1962. As would be expected in a case where two officers had been killed while discharging their duty, the full force of the police was brought to bear on finding the offenders. It is undisputed that there was extensive news coverage of the murder, the police investigation, and the apprehension of the suspected killers, and that the police were largely responsible for this. Rosenberg was unable to establish, however, that anything like all of 'the publicity was attributable to Martin. The first newspaper received in evidence was an issue of The New York Daily News for May 22, 1962, reporting Portelli’s arrest in Chicago on May 21. A reporter from the News identified portions of the article as having emanated from Martin. These included statements that Rosenberg was the man who had accompanied Portelli into the Borough Park Tobacco Company and had rushed out, over the bodies of the two detectives, after the murder; that both Portelli and Rosenberg had been identified by a half dozen witnesses from their rogues’ gallery photos; and that Portelli, Rosenberg and Dellernia were members of a top hoodlum element and formed part of a stick-up mob in Brooklyn. In a set of excerpts from the News of May 23, after Dellernia had surrendered, Martin was referred to as saying that Rosenberg reportedly had been seen in Manhattan, dressed in women’s clothing; that the police had the gun used in the killing and bullets to match; and that the police had positive identification of the three men in ten other Brooklyn holdups.

Late in the evening of May 23 Rosenberg turned himself in at the office of the News. He testified that Martin and other officers arrested him there and that Martin stated before the television cameras covering the scene that he was the killer and that he had a criminal record. Rosenberg was then removed to the 66th Precinct station house in Brooklyn. He testified that he was taken out of the police car a half block away from the station, where television cameras and newsmen were lined up on the street; that, as he was dragged toward the cameras, Martin said “He is the killer, and he is going to burn”; and that he later saw video tapes of the scene, of Martin’s remark, and of the crowd’s angry response. Photographs of the booking of the three men, published in unidentified newspapers, were also received in evidence.

As to the assault claim, Rosenberg testified that at the police station he was brought into a small interrogation room, where Martin and a number of other officers began questioning him. When he refused to answer questions, he testified, “Martin started kicking me,” though “just softly.” Later, “He grabbed my throat and he started choking me” — though this was “slight” and “did no real physical damage” — and told him that “you’re going to suffer as best we could make you suffer.” Rosenberg claimed that after a few hours of unsuccessful interrogation, Martin “placed his hand on my ear, like a suction-cup” and then quickly pulled it away; that his ear started to bleed; and that after a week he could no longer hear out of it. Martin denied having taken any such actions, and there was no evidence that Rosenberg had ever brought the alleged assault to anyone’s attention.

The judge instructed that if plaintiff proved either that he was physically abused and maltreated while in custody or that he “was the object of prejudicial publicity that went beyond the police needs of the situation” he was entitled to recover damages, provided that Martin was acting under color of state law, custom or usage. The judge fleshed out the prejudicial publicity claim by charging that while the police were entitled to publicize the fact of a crime and “such information as is reasonably related to the task of locating the suspect and taking him securely into custody,” it was for the jury to say:

on all the evidence you have heard whether or not you are satisfied that the publications that occurred between the date of the crime and the date of the plaintiff’s trial chargeable to the defendant Martin himself, exceeded the limits of proper police procedure and was prejudicial to the plaintiff in exposing him to defamation, misrepresentation and public obloquy that might háve affected his right to a fair trial and that subjected him to personal humiliation and apprehension or bodily harm.

The jury returned a general verdict of $7,500.

It is elementary that, in order to recover damages in an action under 42 U.S.C. § 1983 in a case like this, the plaintiff must show a deprivation of constitutional rights. Rosenberg’s claims with respect to the publicity preceding his arrest, the televised recording, and the publication of photographs can be read as invoking two constitutionally protected rights — the recently evolved and not yet clearly defined right to privacy, see Griswold v. Connecticut, 381 U.S. 479, 485, 85 S.Ct. 1678, 14 L.Ed.2d 510 (1965), and the Sixth and Fourteenth Amendment right to a fair trial before an impartial jury, see Sheppard v. Maxwell, 384 U.S. 333, 86 S.Ct. 1507, 16 L.Ed.2d 600 (1966).

Little need be said with respect to the first. “Exposure of the self to others in varying degrees is a concomitant of life in a civilized community. The risk of this exposure is an essential incident of life in a society which places a primary value of freedom of speech and of press.” Time, Inc. v. Hill, 385 U.S. 374, 388, 87 S.Ct. 534, 542, 17 L.Ed.2d 456 (1967). It is indisputable that the interest in privacy of a fugitive suspected of serious crime must yield to the public interest in his apprehension and the consequent publication of whatever may reasonably be deemed helpful to that end. However, so far as concerns the constitutional right of privacy, as distinguished from the right to a fair trial, the standard of permissible invasion is not to be so narrowly drawn. The constitutional right to privacy is not to be equated with the statutory right accorded by New York, Civil Rights Law §§ 50-51, McKinney’s Con-sol.Laws, c. 6, and other states. Thus far only the most intimate phases of personal life have been held to be thus constitutionally protected. See, in addition to Griswold v. Connecticut, supra, Eisenstadt v. Baird, 405 U.S. 438, 453-454, 92 S.Ct. 1029, 31 L.Ed.2d 349 (1972); and Roe v. Wade, 410 U.S. 113, 93 S.Ct. 705, 35 L.Ed.2d 147 (1973). This is not to say that no conduct of police officers toward a suspected criminal, even a murderer, may ever constitute a violation of a constitutional right to privacy. If Martin had caused the publication of a photograph of Rosenberg in the nude, compare York v. Story, 324 F.2d 450 (9 Cir. 1963), cert. denied, 376 U.S. 939, 84 S.Ct. 794, 11 L.Ed.2d 659 (1964) (forcing female complainant to' be photographed in indecent postures and circulating the pictures among the police), we would have a quite different ease. But the very court that decided York v. Story has declined to extend it to action of the police in causing publication of charges of criminal conduct, even when the police had concluded that the plaintiff had not in fact committed a crime. Baker v. Howard, 419 F.2d 376 (9 Cir. 1969). See also Mattheis v. Hoyt, 136 F.Supp. 119, 124 (W.D.Mich. 1955). Similarly, the facts presented here fail to state a cause of action under section 1983 for violation of Rosenberg’s constitutionally protected right of privacy. Cf. Felber v. Foote, 321 F.Supp. 85, 88-89 (D.Conn.1970) (three-judge court); Travers v. Paton, 261 F.Supp. 110 (D.Conn.1966).

It would likewise seem plain that in order to recover damages for the deprivation of the right to a fair trial, a plaintiff must show not merely that the police engaged in conduct which “exceeded the limits of proper police procedure” and “might have affected his right to a fair trial,” as the judge instructed, but that the improper conduct in fact had that result. Here Rosenberg meets the obstacle that this very issue was raised before the New York Court of Appeals on his appeal from his conviction and, as appears from its remittitur, was decided against him. Under modern notions with respect to issue preclusion, it is of no moment that the adverse party in the criminal case was the State rather than the police officer who is the defendant here. Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971); Zdanok v. Glidden Co., 327 F.2d 944, 954-956 (2 Cir.), cert. denied, 377 U.S. 934, 84 S.Ct. 1338, 12 L.Ed.2d 298 (1964); Bernhard v. Bank of America, 19 Cal.2d 807, 811-813, 122 P.2d 892, 894-895 (1942) (Traynor, J.); B. R. DeWitt, Inc. v. Hall, 19 N.Y.2d 141, 278 N.Y.S.2d 596, 225 N.E.2d 195 (1967); Ritchie v. Landau, 475 F.2d 151, 155 (2 Cir. 1973). It might be contended against giving the New York judgment preclusive effect that while a state judgment between the same parties on the same claim will operate as res judicata in a federal civil rights action, as we held in Lackawanna Police Benevolent Ass’n v. Balen, 446 F.2d 52 (2 Cir. 1971), a state criminal judgment should have no more effect by way of issue preclusion in a federal civil rights action than it would in federal habeas, as Mr. Justice Douglas argued, although unsuccessfully, with respect even to a federal criminal judgment in dissenting from the denial of certiorari in Lauchli v. United States, 405 U.S. 965, 92 S.Ct. 1182, 31 L.Ed.2d 241 (1972). But in this case Martin can successfully respond with the decision in Rosenberg’s federal habeas proceeding that as a result of the lapse of time between the improper publicity in May 1962 and the trial in January 1963, and the effective voir dire of the jury panel, he received a fair trial. It has thus been conclusively determined, not only by a state but by a federal court, that even though the pre-arrest publicity went considerably beyond what was necessary and Martin’s alleged statement before the television cameras was thoroughly reprehensible, this did not in fact deprive Rosenberg of his constitutionally guaranteed right to a fair trial. We see no reason for according him a third opportunity to litigate in this action an issue that the highest court of New York and this court have both decided against him.

We turn therefore to the claim of damages for assault which Rosenberg sought to add on December 1, 1969. We assume that brutal police conduct violates a right guaranteed by the due process clause of the Fourteenth Amendment. See Collum v. Butler, 421 F.2d 1257 (7 Cir. 1970); Jenkins v. Averett, 424 F.2d 1228 (4 Cir. 1970). But we hold that the court erred in striking the defense of the statute of limitations with respect to this claim.

The first point requiring determination is whether the assault claim “arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading,” so that the amendment would relate back under F.R.Civ.P. 15(e). If it did, the plaintiff could readily surmount the limitation barrier, since we have held, Swan v. Board of Higher Education, supra, 319 F.2d at 59, that the applicable period for civil rights claims was the six years allowed under former N.Y. Civil Practice Act § 48(2) for actions “to recover upon a liability created by statute,” and here the assault occurred on May 24, 1962, and the complaint was filed on April 15, 1968.

If the test were merely temporal, the assault claim would fall within Rule 15(c), since the alleged assault came within a short time after the exhibition before the television cameras. However, the test is not contemporaneity but rather adequacy of notice. As said by Judge Laramore in Snoqualmie Tribe v. United States, 372 F.2d 951, 960, 178 Ct.Cl. 570 (1967), “the inquiry in a determination of whether a claim should relate back will focus on the notice given by the general fact situation set forth in the original pleading.” Under that test the case for relation back conspicuously fails. On the most liberal reading not a word in the complaint even suggested a claim of physical assault. This case is rather strikingly similar to Griggs v. Farmer, 314 F.Supp. 1185 (E.D.Va. 1969), aff’d, 430 F.2d 638 (4 Cir. 1970), where the court refused to permit a “relating back” amendment of a complaint alleging breach of promise to marry to include a claim for assault at the time of the breach.

Since the assault claim must be deemed not to have been asserted until December 1, 1969, it was time-barred unless the six year statute of limitations had been tolled. New York’s tolling provision in behalf of certain prisoners affords Rosenberg no aid. Both former Civil Practice Act § 43 and present CPLR § 208 are limited to persons who are imprisoned “on a criminal charge or conviction for a term less than for life”; Rosenberg’s original sentence was death, later commuted to life imprisonment. Ortiz v. LaVallee, 442 F.2d 912 (2 Cir. 1971), on which Rosenberg relies, does not assist him. We there rejected a contention by the State that, despite the literal applicability of the tolling provision to Ortiz, who was serving sentences for fixed terms, there should be no tolling since the provision was intended to alleviate the effect of the “civil death” statute, now N.Y. Civil Rights Law § 79, and the latter had been held inapplicable to federal actions under 42 U.S.C. § 1983, Beyer v. Werner, 299 F.Supp. 967, 969-970 (E.D.N.Y.1969), and cases there cited. Although the court, relying on a 1958 Report of the New York Advisory Committee on Practice and Procedure which referred to the practical difficulties in the way of a prisoner’s suit, concluded that the tolling provision “was intended to apply even where a prisoner has the legal capacity to sue,” it does not follow that the existence of such difficulties permits a federal court to create a tolling provision more liberal than the state legislature has seen fit to enact.

The judgment is reversed, with instructions to dismiss the complaint.

      . A mis-trial had been declared as to a third defendant, Dellernia, whose role was allegedly to assist in the get-away but who drove off at the sound of gunfire. He was subsequently acquitted.

      . The complaint was not formally filed by the Clerk of the District Court until May 20, 1968, because filing had to await Judge Mishler’s disposition of Rosenberg’s motion for leave to proceed in forma pau-peris, which was received along with the complaint. This motion was granted on May 20, and the complaint filed. Judge Dooling held, however, that “The action must be treated as commenced on April 15, 1968, when the Clerk of Court received the complaint.” We agree.

      . Defendant also assaulted plaintiff while handcuffed various times causing an infliction of harm to the left ear internally causing loss of hearing, at time of interrogation on May 23, 1962.

      . There was other testimony of extensive television coverage of the murder and the ongoing investigation, but the extent to which these were incidents for which Martin may have been responsible apparently was not brought out.

      . Rosenberg’s complaint contained allegations that statements made by Martin were “lies”, “maliciously false”, and “slander” ; and the district judge charged the jury that the plaintiff’s constitutional right “to be free of gratuitous prejudicial publicity” was an aspect, not only of his right to a fair trial, but “of his rights not to be defamed or misrepresented while under the custody of the law by those who were in charge with his custody.” To the extent that the complaint might be viewed as stating a cause of action for defamation, such a claim does not implicate any federally-protected rights and is not cognizable under 42 U.S.C. § 1983. Association for Preservation of Freedom of Choice, Inc. v. Simon, 299 F.2d 212, 214 (2 Cir. 1962) ; Heller v. Roberts, 386 F.2d 832 (2 Cir. 1967). See also Church v. Hamilton, 444 F.2d 105 (3 Cir. 1971) ; Morey v. Independent School District #492, 312 F.Supp. 1257 (D.Minn.1969), aff’d, 429 F.2d 428 (8 Cir. 1970).

      . For other cases see Friendly, Federal Jurisdiction: A General View 101-02 n. 113 (1973).

      . As stated in this court’s opinion, 445 F.2d at 617:
      At the voir dire of the jury, each prospective juror and alternate was questioned separately outside of the presence of the other veniremen. Each side was granted a total of thirty peremptory challenges. The twelve jurors and three alternates were finally selected after 109 prospects had heen questioned. From the record of the voir dire it appears that there was only one juror who remembered any of the details of the crime. This juror, Mr. Westbrook, stated that he remembered that Rosenberg was alleged to have a prior criminal record, but, upon questioning, he insisted that he could decide the case solely on the basis of evidence adduced at trial. After the court rejected a challenge for cause, the defense failed to exercise what would have been its first peremptory challenge. The remaining jurors only vaguely remembered the case, and indeed no more than what was already apparent from the voir dire.

      . It could be argued that, under F.R.Civ.P. 15(a), Martin should have' repleaded the statute of limitations as a defense to the amended pleading. However, as pointed out above, the judge made no formal order allowing the amendment. It seems plain from the record that the court and the parties considered that the amendment bad been made and that plaintiff’s motion to strike the defense of limitations was addressed to this as applied to both claims. Indeed, plaintiff’s principal contention in support of his motion, that because of Ms “civil death” the statute of limitations was tolled, was quite unnecessary to the claim of prejudicial publicity.

      . The period for actions “to recover upon a liability created by statute” was shortened to three years, effective September 1, 1963, by CPLR § 214(2), but CPLR § 218(b) provides that any cause of action not barred on that date would have the benefit of the six years previously allowed.


author: DYER, Circuit Judge:

text:
    Kenneth J. HAMPTON, d/b/a Hampton Vending Supply, Plaintiff-Appellant, v. GRAFF VENDING COMPANY et al., Defendants-Appellees.
    No. 72-3276.
    United States Court of Appeals, Fifth Circuit.
    May 9, 1973.
    Rehearing Denied June 11, 1973.

      James L. Branton, San Antonio, Tex., for plaintiff-appellant.
    Earl Luna, Dallas, Tex., for defendants-appellees.
    Before TUTTLE, THORNBERRY and DYER, Circuit Judges.
   DYER, Circuit Judge:

Hampton brought this action under section 2(a) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C.A. § 13(a), claiming that Graff Vending Company had illegally lowered its prices in the San Antonio and Houston areas. The district court found that Graff’s actions did not have the effect of substantially lessening competition, that they did not operate to discriminate against Hampton, and that Graff acted reasonably to meet competition; pursuant to these findings judgment was entered for Graff and Hampton appealed. Because we are of the view that Hampton successfully established a case of primary line price discrimination as to some of Graff’s activities, we reverse.

1. Facts

The basic facts are essentially undisputed. Because the application here of the correct principles of law requires an understanding of the competitive situation, however, we must set out an accurate description of the market involved.

Both Hampton and Graff expend their profit making efforts in what is known as the bulk vending supply business. This business consists of the sale of ball gum and charms and of the sale of vending machines through which the gum and charms are sold to the public. The distributive channels for these products are not uniform throughout the industry, but frequently the items are sold by the manufacturer to a functional wholesaler, who in turn resells them to an operator who actually places and fills the machines at their retail locations in grocery stores, gas stations, etc. Additionally, certain wholesalers function partially as operators and certain large operators buy direct from some manufacturers.

Graff, according to its own advertising, is the world’s largest bulk vending distributor, with its home office in Dallas, Texas. It has outlets in many states and has several warehouses in Texas, including ones in San Antonio and Houston. Graff functions primarily as a wholesaler, but does operate some retail routes in other parts of the country and does own some retail routes in San Antonio. The source of most of Graff’s gum is W. R. Grace Company of Chicago, Illinois, which manufactures Leaf gum. Graff serves as the almost exclusive distributor of Leaf gum in Texas and purchases at list price less 19% and less some freight allowances.

Hampton’s functional role is not as easily characterized and must be viewed, to some extent, historically. Since 1965 Hampton has been an operator of vending machines in the San Antonio area. Sometime in 1969 he became an employee of Graff and ran its San Antonio office, in addition to continuing his own business as an operator. At the end of 1970 Hampton quit working for Graff and added a wholesale element to his business reselling some gum to other operators. From early 1971 to the present, Hampton has maintained this functional stance, working primarily in the San Antonio — south-Texas area with occasional sales to other parts of Texas and to other states.

The heart of this controversy concerns Hampton’s source of gum and the price paid for it. When Hampton left Graff’s employ and began wholesaling as well as operating, he purchased his gum through his father, who had a large volume contract with Graff. Under this contract Hampton’s father purchased Leaf gum from Graff at list price less 10% and he passed this price on directly to his son. Hampton in turn used some of this gum on his own routes and resold the rest to various operators at list.

During 1971 and into the first months of 1972, while Hampton was functioning both as an operator and a wholesaler, Graff experienced a steady decrease in sales in the San Antonio and Houston areas. In Februai’y 1972, in the midst of these decreased sales, Graff’s contract with Hampton’s father came up for renegotiation and Graff decreased the discount it would offer on Leaf gum from 10% to 8%. Hampton’s father would not purchase from Graff at this rate and the contractual relationship, and Hampton’s source of gum, terminated on May 15, 1972. Efforts by Hampton to negotiate a satisfactory contract with Graff directly also failed.

With his source of Leaf gum becoming less attractive Hampton looked elsewhere for gum and contacted American Gum Company. This led to his placing a 1000 case order with American at a price of list less 17 % and freight allowances. Because the list prices for American and Leaf gums were approximately equal, this price constituted a substantial savings over the price he previously paid to Graff via his father.

Shortly after Hampton contracted with American, Graff implemented a previously arranged sale on Leaf gum for all sales out of its San Antonio and Houston offices. This sale was supported by Leaf who had been asked for help in these two marketing areas and who had agreed to lower prices to Graff by $1.50 per case on some gum and by $.90 per case on other gum if Graff would pass the savings along. The resulting price at which Graff would sell to anyone, including small operators, was approximately equal to the price American charged Hampton. Correspondingly, Hampton’s resale price to operators was now considerably higher than Graff’s resale price to operators.

The impact of Graff’s new price structure was almost immediate. Its sales recovered sharply from their year and one-half slide and Hampton’s sales dropped from previous months. Hampton then filed this suit.

II. The Court Below

Hampton’s argument below was tied completely to his status as a wholesaler and a direct competitor of Graff. As a result, he attempted to show a case of primary line discrimination. Graff, on the other hand, seemed to prefer to view the case as a secondary line case, and then in turn met this argument with the assertion that its lower prices were available to everyone, including Hampton. In the alternative, it argued that its lower prices were justified as a good faith effort to meet competition (said to be that of American) and to regain Hampton and others as customers.

The district court, faced with a complex case involving businesses functioning at more than one level of distribution, framed its findings of fact and conclusions of law in terms of a secondary line case and entered judgment for Graff. While we feel that some of Graff’s contentions have merit, we conclude that they must be reevaluated in light of Hampton’s primary line argument.

III. Prima Facie Case of Primary Discrimination

The presence of most of the requisite elements in Hampton’s case was not questioned below and has not been questioned here. Three elements, however, merit our attention — Hampton’s status as a functional competitor, the existence of price discrimination, and the effect on competition.

Hampton’s role as a competitor wholesaler is obscured by two other relationships he had with the San Antonio market. First, until just prior to this suit, he had been a customer of Graff. Nevertheless, that position does not bar him now from asserting rights incident to his functional position. In fact, the record clearly shows that even when he was a customer of Graff, he was able to compete successfully with Graff for wholesale business. Furthermore, in his current position, he is a completely independent competitor.

The second relationship Hampton has with the current market that belies his status as a wholesaler is his continuing business as an operator. Graff has not suggested that this in any way bars Hampton from suing as a wholesaler and the fact that 90% of Hampton’s business is wholesale indicates that this is his true position in the distributive scheme. We, therefore, consider him to be a functional competitor of Graff.

The occurrence of price discrimination is more easily discerned. Graff readily admitted that it requested support from Leaf for its price cut only for the San Antonio and Houston areas. At its offices throughout the remainder of Texas and in other states, Leaf gum continued to be sold at list price. The fact that within these two Texas markets the prices were the same to all customers is irrelevant. “[A] price discrimination within the meaning of [section 2(a)] is merely a price difference,” FTC v. Anheuser-Busch, Inc., 1960, 363 U.S. 536, 549, 80 S.Ct. 1267, 1274, 4 L.Ed.2d 1385, and Hampton has shown and Graff has admitted a geographic price difference.

The final element about which there could be a question is whether the effect of Graff’s actions “may be to substantially lessen competition.” In considering this, we are first met with the district court’s finding that the sale “would not” have that effect. This finding, however, is not entitled to the mantle of protection normally afforded district court findings under Rule 52(a), Fed.R.Civ.P., because the court’s findings had obvious reference to a case of secondary line discrimination. While we have no quarrel with the finding in that context, it is in no way binding on us when the case is properly construed as primary line discrimination. See Shultz v. First Victoria National Bank, 5 Cir. 1969, 420 F.2d 648. See also United States v. Singer Manufacturing Co., 1963, 374 U.S. 174, 194 n. 9, 83 S.Ct. 1773, 10 L.Ed.2d 823; Manning v. M/V “Sea Road”, 5 Cir. 1969, 417 F.2d 603.

When the discrimination alleged here is evaluated at the wholesale level the deleterious impact on competition becomes apparent. This is exemplified by Hampton’s personal situation. Before Graff’s sale, for example, he was able to purchase his No. 933 gum from American at $7.73 per case and was selling it at $9.74. Graff’s corresponding figures were $7.40 and $9.70. Given some difference in the quantity in each case (see footnote 2), the prices were roughly comparable, and this resulted in a competitive market based largely on the quality of the wholesaler’s service.

This relationship was shattered when Graff requested and received an additional discount of up to $1.50 per case, which allowed it to purchase an identical case of No. 933 Leaf gum at $5.95 and to sell it at $8.20. To meet this price Hampton, or any other competing wholesaler, would have to lower his resale price almost to the level of his cost of acquisition. In Hampton’s position that would reduce gross income before costs to approximately $.50 per case. From the testimony of Graff’s director of sales and marketing, it is apparent that no wholesaler could continue to compete with only that amount of markup.

Although the above comparison was made only between Hampton’s and Graff’s prices, we are not unaware that the Robinson-Patman Act is concerned primarily with possible injury to competition and not to competitors. See Borden Co. v. FTC, 5 Cir. 1967, 381 F.2d 175. Our review of the record, however, reveals no existing, or potential, wholesale competitor in the San Antonio area who was able to compete, or would be able to compete, with Graff’s sale prices. Certainly, no wholesaler purchasing from Graff could hope to resell at a profit because Graff offered the sale price to everyone and granted no discounts whatsoever off that price. Similarly, the evidence indicates that American had no instituted price system to match Graff’s price on Leaf gum and thus no wholesaler could compete by purchasing from that source. Leaf also was unavailable as a direct source of reduced price gum because Graff received a very special concession for this sale and because Graff had a virtually exclusive distributorship of Leaf products in Texas. Finally, although other companies manufacture comparable gum, the evidence indicated no substantial competitive activity by them in the San Antonio area before the sale, much less during it.

Consequently, we are confronted with a wholesale gum market in which, immediately following the price cut, Graff increased its market share by as much as 50% and Hampton’s share dropped approximately 39%. Therefore, with no definable end for the sale in question and with no viable wholesale competitor in the area, we conclude, after a careful review of the record, that there is both a reasonable possibility, and a reasonable probability, that the effect of Graff’s reduced prices on Leaf gum products may be to substantially lessen competition.

IV. Defense Against Prima Facie Price Discrimination Case

The showing that Hampton was Graff’s functional competitor, that price discrimination occurred, and that it resulted in the proscribed effect on competition does not constitute an irrebuttable violation of the Robinson-Patman Act. Instead, the Act allows a person against whom a prima facie case has been established to justify his actions by raising any of three affirmative defenses built into the Act itself. The chief defensive effort by Graff that retains any validity in a primary line case is aimed at the so-called “good faith meeting competition defense” incorporated in section 2(b) of the Act.

The section 2(b) defense, if proved, does constitute an absolute defense to a prima facie price discrimination case, regardless of the anti-competitive effect shown to exist. Jones v. Borden Co., 5 Cir. 1970, 430 F.2d 568. The burden of proving the defense, however, is squarely on the price discriminator, see Surprise Brassiere Co. v. FTC, 5 Cir. 1969, 406 F.2d 711, and it is a burden that is not easily met. For Graff to prevail on this point the record must at least demonstrate “the existence of facts which would lead a reasonable and prudent person to believe that the granting of a lower price would in fact meet the equally low price of a competitor.” FTC v. A. E. Staley Manufacturing Co., 1945, 324 U.S. 746, 759-760, 65 S.Ct. 971, 977, 89 L.Ed. 1338, see Callaway Mills Co. v. FTC, 5 Cir. 1966, 362 F.2d 435.

Perhaps the most fundamental element of the defense is that the price met must be that of a competitor. In a primary line case such as this, it would be reasonable then for Graff to try to show that Hampton’s prices, or those of some other wholesaler, were lower than its own and that it tried to match them. For the period from January 1971 to May 15, 1972, Graff has failed to do this. During that time Hampton purchased from Graff and resold at exactly the same price that Graff sold directly to operators. No other wholesaler was shown to have sold at a lower price during this period.

After May 15, 1972, Graff has at least shown that, among local wholesalers, Hampton sold American gum at a price somewhat below Graff’s price for Leaf gum. This small difference, however, attributable to more gum balls being packed in an American case than in a Leaf case, is completely insufficient to justify price cuts of $1.50 and $.90 for certain kinds of Leaf gum.

Therefore, most of Graff’s effort at establishing a competitive relationship for section 2(b) purposes was not directed at San Antonio wholesalers, but at American itself. As unusual as this approach is in a primary line case, it is not without merit. The reason is that, although Hampton did compete with Graff as a wholesaler throughout this period, he had also been a substantial customer of Graff until May 1972. As such, it would be unreasonable for us to bar Graff completely from using the 2(b) defense in this special situation. where a former customer had been induced away by a manufacturer otherwise competing with Graff’s supplier.

The competitive relationship thus established is merely the first step in claiming the protection of this defense. Graff is still required to prove that its prices, within reasonable limits, were just low enough to meet but not beat the competitive price. Jones, supra, 430 F.2d at 573; Callaway, supra. In this respect, as we demonstrate hereinafter, Graff has failed to show a good faith effort to meet American’s prices.

It is clear from the record that Hampton purchased gum from American at list less 17%. This fact alone does not justify the sweeping price cuts on Leaf products to all purchasers, however. Graff has shown no other sales by American to San Antonio purchasers at prices below Leaf’s list price and no sales, other than American’s to Hampton, at anything approaching $1.50 off the list price on a case of gum. Despite the absolute lack of such evidence, Graff now claims that it was justified in offering the reduced prices to all purchasers in San Antonio, large or small, wholesaler or operator. We conclude that this was an unreasonable competitive tactic.

Although the exact details of American’s pricing schedule are not before us, it is beyond question that Hampton was able to receive his 17 % discount only because he made a large volume order. This quantity discount approach was not foreign to the industry; both Graff’s director of sales and marketing and its San Antonio area representative testified that they knew American would only sell at a discount similar to Hampton’s if the purchaser made a volume purchase of upwards to 20-25 cases. Nevertheless, possessing a generally accurate picture of its competitor’s sales policy and well aware that it itself only gave discounts to volume purchasing accounts, Graff lowered its prices to approximately the level Hampton got from American and then offered these prices to all, including the smallest operator able to purchase only one case at a time.

To suggest that such a sales policy was a good faith, reasonable effort to meet competition is unthinkable. Graff, who might have engineered a carefully drawn sales compaign to regain the business of Hampton and perhaps any other customers lost to American, instead resorted to a severe price cut which, contrary to the normal practice in the industry, gave to the small operator the price offered by American only to quantity purchasers. See FTC v. Standard Brands, Inc., 2 Cir. 1951, 189 F.2d 510. We conclude that Graff has not established a good faith meeting competition defense within the meaning of section 2(b) of the Robinson-Patman Act.

V. Available Relief

In his original complaint, Hampton requested damages, costs, a reasonable attorney’s fee, a preliminary injunction, and “such other and further relief as is just.” After obtaining a preliminary injunction, he was denied all requested relief including a permanent injunction. Because we have found that he proved a prima facie case and that Graff did not successfully establish a 2(b) defense, we must consider what relief is now appropriate.

Hampton’s counsel at oral argument urged that we remand the case so that the district court could receive further evidence on damages; in the alternative he urged that the case be remanded so that the district court could make a finding on damages based on the record as it presently stands.

Because the proceeding below was a full hearing on the merits, Hampton’s first position is utterly without merit. His second position is also untenable. Near the close of the hearing the following exchange occurred between the court and Hampton’s counsel.

THE COURT: I don’t think there is any proof of loss, as to the amount of loss of damages or earnings at this time. Now, it may be that before Mr. Branton rests, there will be. But at the present time I don’t think he has established any damages. Have you, Mr. Branton? I haven’t heard any figures mentioned.
MR. BRANTON: I don’t think I have. I think we have established that he has suffered a loss and that there is a decline in his business, but there is no—
THE COURT: But there is no evidence. I haven’t heard any figures mentioned or anything. I think we are prolonging this thing.

Hampton thereafter introduced no further evidence and has not demonstrated to this court any compelling reason, in the record or otherwise, for us to ignore his admission. Hampton must have felt that his proof had failed to nail down clearly ascertainable damages or that it was impossible to place a dollar value on them. Since upon a full trial there was a failure of proof of actual damages, that is the end of the matter.

That there is no entitlement to damages, however, is not dispositive of the question of permanent injunctive relief. Authorized under 15 U.S.C.A. § 26, a permanent injunction can be issued by a federal district court exercising equitable jurisdiction because it has “broad power to restrain acts which are of the same type or class as unlawful acts which the court has found to have been committed or whose commission in the future unless enjoined, may fairly be anticipated from the defendant’s conduct in the past.” Zenith Radio Corp. v. Hazeltine Research, Inc., 1969, 395 U.S. 100, 132, 89 S.Ct. 1562, 1581, 23 L.Ed.2d 129, quoting NLRB v. Express Publishing Co., 1941, 312 U.S. 426, 435, 61 S.Ct. 693, 85 L.Ed. 930. In the present posture of this case, however, the initial determinations of whether an injunction should issue, and what its scope should be if issued, are peculiarly within the competence of the district court and we intimate no predisposition on either question. We, therefore, remand this aspect of the case for a reevaluation of the record with respect to possible injunctive relief.

The final relief prayed for was a reasonable attorney’s fee and costs, in accordance with 15 U.S.C.A. § 15. Such relief is addressed to the sound discretion of the district court and, under the facts of this case, we think it appropriate for that court to examine the question first. See Poster Exchange, Inc. v. National Screen Service Corp., 5 Cir. 1970, 431 F.2d 334, cert. denied, 1971, 401 U.S. 912, 91 S.Ct. 880, 27 L.Ed.2d 811.

We reverse and remand for further proceedings not inconsistent with this opinion.

Reversed and remanded.

      . Section 13(a) provides in pertinent part:
      (a) It shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality, where either or any of the purchases involved in such discrimination are in commerce, where such commodities are sold for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, and where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them. .

      . Although Graff had operated some routes in San Antonio 2 or 3 years prior to this suit, it now just owns the master contract with several grocery store chains in the city; other people, who purchase supplies from Graff, actually work these routes.

      . From the record, the following is an example of the per case price that Hampton paid to Graff prior to May 15, 1972, and to American after that date.

        Mfg’s list, No. 9SS

        Gum tall gum Hampton’s cost

      Leaf * $ 9.70 ** $8.73 (list less 10%)
      American* $10.15 $7.73 (list less 17%
      and frt.)
      * The per case price is not exactly comparable because a Leaf case has a 5550 count and an American case has a 5670 count.
      ** The list price of one case of Leaf No. 933 ball gum increased from $9.40 to $9.70 on March 15, 1972. Other Leaf products increased in price at the same time.

      . Hampton’s complaint alleged that Graff had cut its price in all areas of sales— gum, charms, and machines. It is clear from the record, however, that he only adduced evidence concerning alleged price discriminations with respect to Leaf gum. Consequently, it is on this ground alone that Hampton must prevail, if at all.

      . Graff asked for these price reductions only for San Antonio and Houston, despite the fact that it was experiencing decreased sales in at least several other major marketing areas.

      . The following is an example of the prices available to a small operator in San Antonio after the beginning of Graff’s sale.
      Case of No. 933 Ball Gum

        Seller List Discounts Costs Price

      Graff/Leaf $ 9.70 1.50 + 19% + frt. $5.95 $8.20
      Hampton/American $10.15 17% + frt. $7.73 $9.74 *
      * Hampton sold a case of American No. 933 ball gum at below list to make the gum more competitive with Leaf gum from Graff, which had been sold at list price prior to the sale in question.

      . An injury to the primary line of commerce is one that affects competition among sellers. It was the subject of the first federal statute dealing exclusively with price discrimination and is still covered by the Robinson-Patman Act. See FTC v. Anheuser-Busch, Inc., 1960, 363 U.S. 536, 542-543, 80 S.Ct. 1267, 4 L.Ed.2d 1385. It differs from secondary line price discrimination in which competition is usually affected because some customers of a seller do not receive prices as low as certain “favored” customers.

      . The facts of this case differ from those of several other primary line cases in that the geographic price difference here was not absorbed by the discriminator, but was underwritten by the manufacturer at the discriminator’s request. This has not been raised as a distinguishing factor and, where a large national wholesaler is able to request and receive this kind of preferential treatment, the potential force of any such argument is lost.

      . There is some indication in the record that, on many sales, Hampton’s gross income would be still less. According to Hampton’s trial brief, in addition to overhead expenses, he has to pay the freight on his shipments to non-local customers while Graff does not. This one item, claims Hampton, increases his cost on over one-half of his delivered cases of No. 933 American gum from $7.73 to $8.18 a case.

      . Mr. Goldstein stated that Graff could not maintain the sale price ($8.20 per case on No. 933 gum) if it were required to revert to its old price schedule from Leaf ($7.40 per case) ; this would yield a maximum of $.80 per case, and, with other costs and overhead included, would allow no more than a few cents profit on a case. According to Mr. Goldstein, such a profit level is insufficient to support a continuing wholesale business.

      . Compare FTC v. Morton Salt Co., 1948, 334 U.S. 37, 68 S.Ct. 822, 92 L.Ed. 1196, and Borden Co., supra with, Foremost Dairies, Inc. v. FTC, 5 Cir. 1965, 348 F.2d 674, 680 n. 11, cert. denied, 382 U.S. 959, 86 S.Ct. 435, 15 L.Ed.2d 362.

      . Based on the findings of the district court, Graff has continued to assert that no discrimination occurred because the sale price was available to Hampton. This secondary line argument carries no weight in a primary line case.

      . Section 2(b) of the Act, 15 U.S.C.A. § 13(b) provides:
      Upon proof being made, at any hearing on a complaint under this section, that there has been discrimination in price or services or facilities furnished, the burden of rebutting the prima-facie case thus made by showing justification shall be upon the person charged with a violation of this section, and unless justification shall be affirmatively shown, the Commission is authorized to issue an order terminating the discrimination : Provided, however, That nothing herein contained shall prevent a seller rebutting the prima-facie case thus made by showing that his lower price or the furnishing of services or facilities to any purchaser or purchasers was made in good faith to meet an equally low price of a competitor, or the services or facilities furnished by a competitor.

      . For example, Hampton sold a 5670 count case of No. 933 American gum for $9.74. At that price level, Graff would have been justified in lowering the price, to operators, on its 5550 count case from $9.70 to $9.53 — a total of $.17. Even when some amount is added for a reasonable uncertainty over Hampton’s exact prices in a competitive situation, the technically allowed cut of $.17 cannot grow to $1.50.

      . Hampton testified that he was required to place a 100 case order to get the 17% discount plus freight.

      . The district court’s findings to the effect that Graff’s sale was a reasonable way to meet competition and that Graff’s prices were not unreasonably low are not binding on us when the case is properly viewed as primary line discrimination. Furthermore, because Graff has failed to prove a 2(b) defense, we need not consider whether Graff’s price cuts were a proper response to individual competition situations, or whether the new price structure was an illegal plan or system for meeting competition. Compare Calla-way, supra, with Surprise, supra.


author: FEINBERG, Circuit Judge:

text:
    Jane DOE et al., Plaintiffs-Appellants, v. James D. HODGSON, Secretary of Labor, et al., Defendants-Appellees.
    No. 606, Docket 72-1744.
    United States Court of Appeals, Second Circuit.
    Argued March 22, 1973.
    Decided May 1, 1973.
    Burt Neuborne, New York City (New York Civil Liberties Union, Norman Dorsen, New York University Law School, New York City, on the brief), for plaintiffs-appellants.

      T. Gorman Reilly, Asst. U. S. Atty. (Whitney North Seymour, Jr., U. S. Atty., S. D. New York; Taggart D. Adams, Asst. U. S. Atty., on the brief), for federal defendants-appellees.
    Stephen P. Seligman, Asst. Atty. Gen. (Louis J. Lefkowitz, Atty. Gen. of New York; Samuel A. Hirshowitz, First Asst. Atty. Gen., Irving L. Rollins, Asst. Atty. Gen., on the brief), for New York State defendants-appellees.
    Before SMITH, FEINBERG and MANSFIELD, Circuit Judges.
   FEINBERG, Circuit Judge:

Nine migrant agricultural workers, protected by pseudonyms, challenge the constitutionality of provisions in various federal and state statutes which operate to exclude them and others so situated from the beneficial provisions of social legislation in such areas as unemployment compensation, minimum hours and wages, social security and workmen’s compensation. Plaintiffs’ complaint sought the convening of a three-judge court, a declaratory judgment, and “appropriate equitable relief in the nature of injunction or mandamus enforcing plaintiffs’ rights and defendants’ responsibilities under the First, Fifth, Thirteenth and Fourteenth Amendments. . . .” The United States District Court for the Southern District of New York, Marvin E. Frankel, J., refused to convene a three-judge court and dismissed the complaint, 344 F.Supp. 964 (1972), because of the controlling effect of Romero v. Hodgson, 403 U.S. 901, 91 S.Ct. 2215, 29 L.Ed.2d 678 (1971), summarily affirming 319 F.Supp. 1201 (N.D.Cal.1970) (per curiam). Although we believe that as an original matter plaintiffs’ basic equal protection claim merits the closest judicial attention, we conclude that under applicable precedent we should not now engage in that pursuit. Because the plight of migrant workers as portrayed in plaintiffs’ complaint is so unfortunate, we reach this conclusion, and consequently affirm, with considerable hesitation.

In Romero v. Hodgson, supra, a divided three-judge court sustained the Federal Unemployment Tax Act, one of the statutes under attack here, against an equal protection challenge. Faced with the argument that the exclusion of agricultural labor from the coverage of the statute was no longer justifiable on the grounds originally relied upon by the Supreme Court in 1937, the majority nevertheless sustained the exclusion, 319 F.Supp. at 1203, because it could

be seen as an indirect subsidy of a “beneficent enterprise,” or as an effort to save the compensation fund from the drain which would result from the inclusion of another large “deficit industry,” or even as a necessary political compromise without which it would have been impossible to inaugurate a most important reform in American institutions.

Judge Zirpoli filed a strong dissent, arguing that the exclusion was now factually unsupportable and therefore irrational. The dissent pointed out that while administrative hardship for small farmers might have justified the original exemption of agricultural workers, “in 1964, 89 per cent of all hired farm workers . . . were employed by large commercial agricultural corporations” ; in addition, unemployment compensation has been extended to other industries which “fiscally speaking, are much greater drains on the compensation fund,” thus making “untenable the . . . argument that agriculture has been excluded as a ‘deficit’ industry” (footnote omitted); and, finally, the “Unemployment Tax Act is not an industrial subsidy; it is social welfare legislation.” Id. at 1205. With the issues thus clearly spelled out, on direct appeal to the Supreme Court the judgment of the district court was summarily affirmed.

Plaintiffs argue that such a disposition should not be controlling in this case. They point to the heavy Supreme Court caseload and the observations of Supreme Court scholars (including the recent report of a study group chaired by Professor Paul A. Freund) to the effect that summary disposition of cases on the appellate docket “is not a satisfactory equivalent for the judgment on the merits it is supposed to be.” Plaintiffs thus contend that summary affirmance is entitled to no more — or little more — precedential weight than is the denial of a petition for a writ of certiorari. However, we have ruled to the contrary. See United States ex rel. Epton v. Nenna, 446 F.2d 363, 366, cert. denied, 404 U.S. 948, 92 S.Ct. 282, 30 L.Ed.2d 265 (1971); Heaney v. Allen, 425 F.2d 869, 870-871 (1970); Port Authority Bondholders Protective Committee v. Port of New York Authority, 387 F.2d 259, 262-263 n. 3 (1967). We are aware that the Ninth Circuit has stated that a summary affirmance by the Supreme Court of a case within its “obligatory appellate jurisdiction has very little precedential significance.” See Dillenburg v. Kramer, 469 F.2d 1222, 1225 (1972). For now, however, we continue to believe that we are bound by the Supreme Court’s summary affirmances “until such time as the Court informs us that we are not.” United States ex rel. Fein v. Deegan, 410 F.2d 13, 22 (2d Cir.), cert. denied, 395 U.S. 935, 89 S.Ct. 1997, 23 L.Ed.2d 450 (1969).

Plaintiffs also argue that even if the affirmance in Romero is entitled to pree-edential weight, differences between that case and this are so significant that the affirmance in the former cannot foreclose the claims made here. Romero, they say, challenged only one statute, while this case attacks many in an effort to establish a “pattern or practice” of systematic exclusion of migrants from curative social legislation. Second, plaintiffs contend that they can here demonstrate a “causal relationship” between the exclusions and deprivation of fundamental rights, e. g., association, speech, right to travel, and that strict equal protection review is thus appropriate. Finally, plaintiffs urge that Romero was decided prior to cases from the last Term in which the Supreme Court invested “rational basis” review under the equal protection clause with considerably more bite and realistic application than had previously been thought appropriate.

These arguments, particularly the last, are by no means frivolous. However, as to the first two, we cannot in good conscience hold that either the presence of four federal statutes under attack instead of one or the bare assertion that “fundamental rights” of migrants are jeopardized by the statutory exclusions justifies our disregarding Romero. As to the last argument, we have ourselves noted the apparent, post-Romero, trend toward a less deferential application of the “rational basis” standard of equal protection, although not without some disagreement. See Boraas v. Village of Belle Terre, 476 F.2d 824 (2d Cir. 1973) (Timbers, J., dissenting from 4-4 denial of en banc reconsideration). Were we writing on a clean slate, we would take very seriously the assertion that on these facts the statutory exclusions cannot be sustained. But given Romero, the slate is not clean; plaintiffs must obtain any further writings on it in this case from the Supreme Court.

Judgment affirmed.

      . The complaint challenges the Federal Unemployment Tax Act, 26 U.S.O. § 3306 (c) (1), (k) ; the Fair Labor Standards Act, 29 U.S.C. § 206(a)(5) ; the Social Security Act, 42 U.S.O. § 409(h) (2) ; the New York Unemployment Insurance Act, N.Y.Labor Law § 511(6) (a) (McKinney’s Consol.Laws, c. 31, 1965) ; the New York Minimum Wage Act, id. § 651(5) (b), id. §§ 671(6), 673 (1972-73 Supp.) ; and the New York Workmen’s Compensation Law, N.Y.Wkmn’s Comp.Law § 201 (6) (A) (McKinney’s Consol.Laws, c. 67 1965). Plaintiffs also attack exclusion from and misapplication of the National Labor Relations Act, 29 U.S.C. §§ 152(3), 158(b) (4).
      In their briefs in this court, plaintiffs refer to only one state statute, the workmen’s compensation law. In view of our disposition, we think it unnecessary to resolve any inconsistency.

      . E.g., none of the plaintiffs earns more than $3,000 per year; they are randomly subject to enforced periods of unemployment ranging up to weeks without any compensation, during which they are “reduced to utter destitution”; although subjected to serious occupational hazards posed by mechanized equipment and noxious pesticides, plaintiffs are without the disability protections of workmen’s compensation laws.

      . Because we agree with Judge Frankel’s resolution, we need not consider alternative objections to relief, pressed by appellees and alluded to by the district court, i. e., whether plaintiffs’ prayer for injunctive relief is sufficiently concrete to merit three-judge consideration, and whether plaintiffs seek to enjoin assessment or collection of federal taxes, as prohibited by 26 U.S.O. § 7421(a). See 344 F.Supp. 967 & n. 3.

      . Carmichael v. Southern Coal & Coke Co., 301 U.S. 495, 512-513, 57 S.Ct. 868, 81 L.Ed. 1245 (1937).

      . Mr. Justice Douglas would have noted probable jurisdiction.

      . Report of the Study Group on the Caseload of the Supreme Court 26 (1972) ; see authorities cited in United States ex rel. Epton v. Nenna, 318 F.Supp. 899, 906 n. 8 (S.D.N.Y.1970).

      . Although these cases considered the stare decisis effect of a Supreme Court dismissal, for want of a substantial federal question, of an appeal from a state court, their reasoning applies with at least as much force to summary affirmances on direct appeals from three-judge courts. This difference in disposition is without significance, explained only by history. R. Stem & E. Gressman, Supreme Court Practice 233 (4th ed. 1969).

      . Accord, Serrano v. Priest, 487 P.2d 1241, 1264 & n. 35 (Cal.1971) (dictum).

      . In particular, while the three-judge district court Romero majority noted “something rigid” about the choice between the strict standard of review and one “as deferential as any known to the law,” 819 F.Supp. at 1202, it is precisely this sharp dichotomy which we have found considerably narrowed. See, e.g., Boraas v. Village of Belle Terre, 476 F.2d 806, 814-815 (2d Cir. 1973) ; Green v. Waterford Board of Education, 473 F.2d 629, 633-634 (2d Cir. 1973) ; City of New York v. Richardson, 473 F.2d 923, 930 (2d Cir. 1973) ; Aguayo v. Richardson, 473 F.2d 1090, 1108 (2d Cir. 1973).


author: ROSENN, Circuit Judge.

text:
    AMALGAMATED WORKERS UNION OF the VIRGIN ISLANDS et al., Appellants, v. HESS OIL VIRGIN ISLANDS CORP.
    No. 72-1653.
    United States Court of Appeals, Third Circuit.
    Argued Jan. 31, 1973.
    Decided April 23, 1973.

      John M. O’Quinn, Brown, Kronzer, Abraham, Watkins & Steely, Houston, Tex., J. Michael Spencer, St. Croix, Virgin Islands, for appellants.
    Alexander A. Farrelly, Birch, de-Jongh & Farrelly, Charlotte, Amalie, St. Thomas, V.I., for appellee.
    Before VAN DUSEN, ROSENN, and HUNTER, Circuit Judges.
   OPINION OF THE COURT

ROSENN, Circuit Judge.

Plaintiffs (appellants) in this case are the Amalgamated Workers Union of the Virgin Islands and four of its members, suing on behalf of- all members of the union who have worked a “rotating shift” for defendant Hess Oil Virgin Islands Corporation. Plaintiffs instituted this suit as a class action in the District Court for the Virgin Islands in January 1972 alleging that Hess was violating the Virgin Islands Fair Labor Standards Act by requiring employees to work the “rotating shift” without overtime compensation. Defendant moved to dismiss the suit as a class action because there were superior procedures available to plaintiffs before the Commissioner of Labor. On May 22, 1972, the district court entered an order remanding the case “to the Department of Labor for determination on the merits.” ******Plaintiffs appeal that decision. For the reasons stated below we reverse.

The rights allegedly violated are conferred by 24 V.I.C. § 20, which establishes that overtime at the rate of at least one and one-half times the employee’s regular rate must be paid any employee who works more than five consecutive days or longer than forty hours in a work week. The available remedies derive from 24 V.I.C. § 17. Section 17(a) provides that an employer who pays any employee less than the applicable rate shall be liable to the employee for the full amount of the applicable rate, for any costs, and reasonable attorney’s fees allowed by the court. Subsection (b), upon which the district court apparently relied, authorizes the Commissioner of Labor to sue on behalf of an employee. It provides:

(b) At the written request of any employee paid less than the wage to which he is entitled under or by virtue of this chapter, the Commissioner may take an assignment of such wage claim in trust for the assigning employee and may bring any legal action necessary to collect such claim, and the employer shall be required to pay the costs and such reasonable attorney’s fees as may be allowed by the court.

One can read the district court’s dismissal of the action to have been predicated on any of three different, independent theories: (1) The Department of Labor has the expertise and personnel to make a superior adjudication and thus must be preferred under the requirements of F.R.Civ.P. 23(b)(3); or, (2) Application must be first made to the Department of Labor and its administrative remedies exhausted before court adjudication; or, (3) All wage litigation must be channelled through the Department. We find no merit in any of these theories.

The district court’s first possible theory constitutes a misapplication of the “superiority requirement” of Rule 23(b)(3). Rule 23(b)(3) provides one of three alternative prerequisites for a class action, in addition to the requirements of subsection (a). It provides that a class action may be maintained if “the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy.” (Emphasis added.) It then delineates factors pertinent to this question:

(A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action.

As we view it, it would appear that the rule was not intended to weigh the superiority of a class action against possible administrative relief. The “superiority requirement” was intended to refer to the preferability of adjudicating claims of multiple-parties in one judicial proceeding and in one forum, rather than forcing each plaintiff to proceed by separate suit, and possibly requiring a defendant to answer suits growing out of one incident in geographically separated courts.

That possible administrative remedies were not intended to be considered as “other available methods” in deciding whether the class action is maintainable under Rule 23 is suggested by several considerations. Initially, the “superiority requirement” is stated in the same sentence that requires that the questions of law and fact common to the class members predominate over any questions affecting only individual members. Secondly, the factors stated to be pertinent to the two findings all relate to the desirability of having one suit instead of multiple suits. Finally, and perhaps most importantly, the advisory committee notes on the requirement focus on the question whether one suit is preferable to several. F.R.C.P. 23, Notes of Advisory Committee on Rules. We find no suggestion in the language of Rule 23, or in the committee notes, that the value of a class suit as a superior form of action was to be weighed against the advantages of an administrative remedy. We leave this question, however, for disposition in an appropriate case.

We are unable to perceive any reason why the “remedy” in section 17(b) of the Virgin Islands Fair Labor Standards Act, if cognizable under Rule 23, would be superior to the class action. The expertise of the Commissioner is immaterial, since the ultimate decision on the merits must be by the district court. The Commissioner is not authorized to make any preliminary findings. He is authorized only to bring a suit on behalf of the employee in the district court. Moreover, the deterrent value of a suit for judicial vindication of statutory rights under the Virgin Islands Fair Labor Standards Act would, in all likelihood, be diminished by precluding a class action and thereby requiring each individual employee to file his complaint with the Commissioner. On the other hand, an appropriate class action for multiple claims based on violations of “wage and hour laws” may very well serve a prophylactic function. For these reasons, we think the district court relied on improper factors and abused its discretion in determining that subsection (b)(3) does not justify this class action.

We also note that the requirements of Rule 23(b) (3) need not be met if the requirements of one of the other subsections of Rule 23 are met. Subsection (b) also provides that a class action may be maintained if the prerequisites of subsection (a) are satisfied, and in addition:

(1) the prosecution of separate actions by or against individual members of the class would create a risk of
(A) inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or
(B) adjudications with respect to individual members of the class which would as a practical matter be disposi-tive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or
(2) the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunc-tive relief or corresponding declaratory relief with respect to the class as a whole; . . . .

We think subsections (b)(1) and (2) might well apply to this suit because wage and hour litigants in the Virgin Islands would in the future, under the decision of the district court, have to press claims with the Commissioner of Labor, and any adjudication on the merits would establish a precedent applicable to all. Therefore, on remand, the district court should consider the applicability of subsections (b)(1), (2), and (3).

The district court’s second possible theory, the doctrine of exhaustion of administrative remedies, does not depend on the class nature of the suit. If applicable, it would require named plaintiffs, as well as any class they represent, first to take their complaints to the Commissioner of Labor. This doctrine, however, is inapplicable to this case because the administrative agency does not have authority to grant the relief requested. See American Federation of Government Employees v. Resor, 442 F.2d 993, 995 (3d Cir.1971). None of the actions the Commissioner is empowered to take would provide relief for the plaintiffs. He cannot impose penalties, and his investigatory powers, although they might be helpful in litigation, would not result in an award of back pay to plaintiffs.

For this reason, the argument that plaintiffs are required to press the suit through the Commissioner is not really an argument that plaintiffs should exhaust administrative remedies; it is an argument that the statute requires wage and hour litigation be channelled through the Commissioner. This third possible theory for dismissing the action is also inapplicable to this case. Section 17(b) contains no explicit language requiring that the employee request the Commissioner to prosecute his suit and imposes no other limitations upon his right to sue. It appears that the provision authorizing the Commissioner to sue for the employee was intended merely as an alternative for the employee who could not afford private counsel or, for one reason or another, preferred to have the suit prosecuted under official auspices. It no doubt serves a useful function in protecting an employee from fear of recrimination, and it may relieve him from embarrassment in pursuing his employer with legal action.

Two federal statutes provide instructive comparisons. The Fair Labor Standards Act, 29 U.S.C. § 216(c), is analogous to the Virgin Islands statute. It has been interpreted to permit suit by an employee without first requesting prosecution of the claim by the Secretary of Labor, even though the Secretary can bring suit at employee request. See DeFigueiredo v. Trans World Airlines, Inc., 322 F.Supp. 1384, 1388 (S.D.N.Y.1971); Mitchell v. All-States Business Products Corp., 250 F.Supp. 403, 406 (E.D.N.Y.1965) (dictum). Similarly, the courts have uniformly interpreted an analogous provision in the Labor Management Relations Act, 29 U.S.C. § 464(a), to allow a union member to maintain a private action to challenge a union trusteeship without first filing a complaint with the Secretary of Labor. See, e.g., Hotel & Restaurant Employees and Bartenders International Union v. Del Valle, 328 F.2d 885, 886 (1st Cir.), cert. denied, 379 U.S. 879, 85 S.Ct. 146, 13 L.Ed.2d 86 (1964); Parks v. International Brotherhood of Electrical Workers, 314 F.2d 886, 923-924 (4th Cir. 1963).

We need not reach the issue apparently raised for the first time on appeal whether exhaustion of remedies under the collective bargaining agreement is required. Appellee has not made an application to the court requesting a stay pending exhaustion of internal remedies and has not demanded that plaintiffs pursue any such remedies.

The judgment of the district court will be reversed and the ease remanded for proceedings consistent with this opinion.

      . Although the district court memorandum and order are ambiguous, we interpret its action as a dismissal of the complaint. The decision was entered upon a motion to dismiss the “action as a class action,” and there was no indication that the court intended merely to stay the action or that it retained jurisdiction. In effect, the decision necessarily amounted to a dismissal of the action, since the remand was to an agency that had no power to provide relief. The use of the term “remand” was inappropriate since the case originated in the district court, not in the Department of Labor. To “remand” a cause is to send it back to the court from which it came. Black’s Law Dictionary 1457 (Revised 4th ed. 1968). See Northern Pacific Terminal Co. v. Lowenberg, 18 Fed. 339, 341 (Cir.Ct., D.Oregon 1883).

      . The pertinent portion of the opinion of the district court reads as follows:
      I am not convinced that a class action in the instant case is a superior method of adjudicating the claims of the plaintiffs. Plaintiffs have an administrative remedy in the first instance with the Commissioner of Labor. That department has far greater expertise and personnel available to determine the merits of the claims advanced herein. For that reason, I therefore remand this case to the Department of Labor.

      . AVe do not suggest that the inability to provide the specific relief requested by the plaintiff will always preclude application of the exhaustion doctrine. In Laveson v. Trans World Airlines, 471 F.2d 76 (3d Cir. 1972), we applied the related primary jurisdiction principle to preclude a treble damage antitrust suit prior to consideration of the issues in the case by the CAB, even though that agency had no power to award damages. Laveson is different from this case, however, because the CAB did have the power to exempt the alleged wrongdoing from the antitrust laws. Here, the Commissioner has no power to grant exceptions to the employer from the minimum and overtime wage requirements.

      . 3 V.I.C. § 356(a)(4)(A) directs the Department of Labor to administer and enforce the laws pertaining to wages and hours. We do not read that general mandate as an authorization to make an award of monetary damages for an aggrieved employee. We note that 24 V.I.C. § 5, part of the Fair Labor Standards Act, lists the powers of the Commissioner with respect thereto, but does not mention the power to award monetary damages to an aggrieved employee.
      Counsel for defendants has also called our attention to 24 V.I.C. § 11(a), which provides that any aggrieved person in any occupation for which a “wage order” has been issued may obtain judicial review in the district court. This provision concerns the issuance of orders prescribing minimum wages under 24 V.I.C. § 10. It does not contain any authorization, implicit or otherwise, as suggested by defendants, for an order awarding back pay to employees. We are naturally reluctant to find an implicit authorization when an explicit one would be so easy to provide. Moreover, it would seem anomalous, on the one hand, to authorize the Commissioner to award an employee his claim of back pay, and, on the other, to authorize him in the terms of 24 V.I.C. § 17 (b) to bring a legal action to collect such claim.
      AVe also note that the Commissioner of Labor has not promulgated any rules or regulations for the conduct of hearings to adjudicate wage claims although he has promulgated rules and regulations for the conduct of hearings to carry out his statutory authority to adjudicate unfair labor practice claims.

      . Construing the analogous provisions in the United States Fair Labor Standards Act, 29 U.S.C. § 216, the court in Shultz v. Wheaton Glass Co., 319 F.Supp. 229, 231 (D.N.J.1970), aff’d, 446 F.2d 527 (3d Cir. 1971), noted:
      Congress was well aware that, in many instances, employees were reluctant to bring direct wage and hour actions against their employers for fear of subsequent retaliation.

      . It provides in relevant part:
      When a written request is filed by any employee with the Secretary of Labor claiming unpaid minimum wages or unpaid overtime compensation under section 206 or section 207 of this title, the Secretary of Labor may bring an action in any court of competent jurisdiction to recover the amount of such claim. . .

      . It provides in relevant part:
      Upon the written complaint of any member . . . of a labor organization alleging that such organization has violated the provisions of this sub-chapter . . . the Secretary shall investigate the complaint and if the Secretary finds probable cause to believe that such violation has occurred he shall . . . bring a civil action in any district court. . . .