author: HASTINGS, Senior Circuit Judge.

text:
    CHICAGO, ROCK ISLAND AND PACIFIC RAILROAD COMPANY, Plaintiff-Appellee, v. Eugene E. WELLS, Defendant-Appellant.
    No. 73-1685.
    United States Court of Appeals, Seventh Circuit.
    Argued April 3, 1974.
    Decided July 9, 1974.
    Rehearing Denied July 31, 1974.
    Harold A. Sanford, Jr., Chicago, 111., for defendant-appellant.
    Emory D. Curlee, Chicago, 111., for plaintiff-appellee.
    Before HASTINGS, Senior Circuit Judge, SPRECHER, Circuit Judge, and STECKLER, District Judge.

       Chief Judge William E. Steckler of the Southern District of Indiana is sitting by designation.

   HASTINGS, Senior Circuit Judge.

In October, 1964, plaintiff Chicago, Rock Island and Pacific Railroad Company (Railroad) discharged defendant Eugene E. Wells from his position of conductor for having violated certain operating rules. Wells conceded the violation and did not then challenge his discharge pursuant to the collective bargaining agreement in force. Months later he sought a leniency reinstatement which the Railroad denied. Thereafter, in October, 1967, Wells filed an ex parte submission with the First Division of the National Railroad Adjustment Board (Division) making claim for reinstatement and full compensation, alleging his discharge to have been wrongful and unjust.

Under procedures followed by the Division at that time, the Railroad had 30 days to reply to Wells’ claim. This time was subject to being extended automatically for three consecutive periods of 30 days each upon request made to the Executive Secretary of the Division. The Division had delegated this authority to the Executive Secretary by formal resolution on June 15, 1954. It was exercised by the Executive Secretary and his Administrative Assistant by regularly granting extensions of time to parties in the conduct of the internal administrative affairs of the Division. However, the Division had no formal rule regulating the manner in which requests for extensions of time should be made.

The Railroad requested and was granted two extensions of time to reply to Wells’ claim, the second of which expired on January 29, 1968. The Railroad prepared a request for a third extension which was dated January 29, 1968, and incorporated it in a letter of that date. There is a dispute as to whether the letter was mailed on the 29th or 30th. However, it is undisputed that the postage meter mark on the letter was dated January 29th and that the official Post Office postmark thereon was dated January 30th. The Division received the letter on January 31st.

The Division went by the postmark of January 30th and ruled that the Railroad’s request was not timely made, being deemed to be one day late. The request was accordingly denied. The Division concedes that if this letter had been postmarked January 29th, instead of January 30th, the extension would have been granted as a matter of course. In short, the Railroad was defaulted because of an untimely request for the third extension of time.

The effect of the denial of the third extension was to foreclose the Railroad from appearing before the Division to contest Wells’ claim. The Division does not customarily conduct hearings in disputes before it. It usually makes its decisions on the basis of the parties’ written submissions, but will, upon request, hear oral arguments limited to matters contained in the written submissions. As a consequence, the Railroad was barred from presenting its written submissions of evidence, its brief, argument and citations of authority.

The Division did not consider the claim of Wells until October 3, 1968, some eight months following its rejection of the Railroad’s third request for a 30-day extension. At that time the Division became deadlocked with respect to Wells’ claim and, because of intervening events, the Division could not proceed further until April 23,1970.

On January 8, 1971, the Railroad filed this action against the First Division and its members (but not against Wells) seeking to enjoin them from conducting further proceedings with respect to the claim of Wells until the Railroad had been afforded an opportunity to appear and make a full defense to the claim. The complaint was grounded upon the Railroad’s claim of denial of its rights to due process under the Fifth Amendment, as well as upon the provisions of the Railway Labor Act, 45 U.S.C. § 151 et seq. Jurisdiction was asserted pursuant to 28 U.S.C. §§ 1331 and 1337. Although service of process was made on all defendants, the Division did not appear or answer the complaint. Separate appearances and answers were entered and filed by the labor members and by the carrier members of the Division.

Thereafter, in a memorandum opinion dated October 7, 1971, the district court denied the Railroad’s prayer for injunctive relief on the ground that it was premature, but without prejudice to its being renewed if the Division should enter an award against the Railroad without permitting it to make a defense. The Division and its members continued to deny the Railroad the right to file its tendered submission or otherwise to present evidence in defense of the claim of Wells. Thereafter, at a hearing held in Chicago on April 17, 1972, without hearing evidence on behalf of the Railroad, an award was entered by the Division sustaining Wells’ claim.

On April 24, 1972, with leave of the district court, the Railroad filed a supplemental complaint in which Wells was added as a party defendant, the prayer for injunctive relief set out in the original complaint was renewed, and a prayer was added requesting the court to review the award in accordance with Section 3 First (q) of the Railway Labor Act, 45 U.S.C. § 153 First (q). Wells appeared and filed his answer to the supplemental complaint and a counterclaim praying for enforcement of the award to him. Thereupon, the Railroad filed a motion for summary judgment, pursuant to Rule 56, Federal Rules of Civil Procedure, which was supported by affidavits.

Although the affidavits in support of summary judgment were not controverted, the district court deemed it would be a wiser course to have a full hearing where all relevant facts could be disclosed, denied the motion for summary judgment and set the matter for hearing. A full hearing was held in open court. On May 18, 1973, the district court made and entered its written findings of fact and conclusions of law and rendered judgment favorable to the Railroad.

The findings of fact stated in great detail the procedural matters above set out as well as supporting factual detail. In particular, Finding 14 is pertinent to the mailing of the request for the third extension of time, and reads:

14. Witnesses for plaintiff included E. E. Margason, its present chief labor relations officer, Guy E. Mallery, who, until he retired December 31, 1971, had been plaintiff’s chief labor relations officer since 1938, and Jack Gilkerson and Donald C. Kraft, plaintiff’s labor relations officers directly responsible for preparing and filing cases before the Division between the years 1962 through 1968. Each of them testified that he had no knowledge that the Division used a U. S. postmark date as the criterion for determining timeliness until the request for extension in the Wells’s case was rejected. Mr. Margason testified that he had searched in vain the records in his department from 1934 to the present time seeking to find directions or instructions concerning timely filings with the Division, particularly with respect to the status of a postmark date. Each of them testified that he had never been informed of the practice whereby extensions of time could be arranged by telephone. Witnesses Gilkerson and Kraft who were responsible for obtaining extensions, when needed, on January 29, 1968 and for six years prior thereto, each testified that the customary practice he followed in obtaining extensions of time from the Division was to dictate a letter to the Division requesting the desired extension, and, when the letter had been typed, to sign it and deposit it in a box on his desk where it would be picked up by a clerk and carried to the company mail-room. Mr. Kraft, who requested the extension which was declined, stated that he followed the normal procedure when requesting the extension in question. Mr. John A. Szafran, the supervisor of plaintiff’s mail center in January 1968, testified with respect to the procedure for gathering company mail and delivering mail to the U. S. Postoffice in January 1968. The procedure was that each department had an employee collect the outgoing mail for the department. The mail would then be brought to the company mail center where the Chicago items would be separated from out-of-town items. It would then be run through a postage meter machine, tied into a package and put into a first-class mail bag. The mail would then be trucked to the U. S. Postoffice in Chicago, Illinois, where it was left on a Postoffice dock. The last mail left plaintiff’s mail center at 5:00 o’clock p. m. No mail is, or was in January 1968, held in the company mail center overnight. None of the foregoing testimony was contradicted, and the Court finds that plaintiff made a good faith effort to make a timely request to the Executive Secretary of the Division for a third “automatic” extension which was declined.

Finding 15 deals with the evidence relating to the practice of the Division in dealing with extensions of time and reads:

15. Although plaintiff was prevented from making a defense to the claim of Wells in proceedings before the Division because of an alleged violation of the Division’s unpublished “postmark rule,” the evidence when viewed from the standpoint most favorable to the defendants discloses that plaintiff was at most one day late in making its request for a third automatic extension of time. The evidence also shows, however,' that the Division attached so little importance to the first three authorized extensions that it authorized an employee not a member of the Division to grant them automatically without bothering the members of the Division. Moreover, the evidence discloses that the Division itself was quite free in granting additional extensions of time in cases in which the Executive Secretary had granted the three he was authorized to grant. Plaintiff’s Exhibits 13, 14 and 15 reflect that on April 14, 1966 the Division granted three extensions, one of which was the twelfth and another the nineteenth. On June 5, 1970 the Division granted eight extensions, two of which were 21st extensions and five of which were 19th extensions, and on November 12, 1970 granted extensions for the eighth time in one case and for the eleventh time in another. Gene R. Johnson, a labor member of the Division and a witness for the defendants, testified that the Division has granted as many as forty extensions in some eases. The Division did not consider the claim of Wells until October 3, 1968, some eight months following its rejection of plaintiff’s request for a 30-day extension. At that time the Division became deadlocked with respect to the claim of Wells, and on November 4, 1968 the National Mediation Board appointed referee John H. Dorsey of Washington, D. C. to act with the Division to break the deadlock and to enter an award. The plaintiff mailed the referee a copy of the defense it proposed to file with the Division, and for that reason referee Dorsey, having read the submission, disqualified himself. On July 12, 1971 the National Mediation Board approved the disqualification and authorized the referee to withdraw from the proceeding. Meanwhile the merger of four operating railway labor organizations represented on the Division into the United Transportation Union on January 1, 1969 caused the Division to become inactive due to a provision in the Railway Labor Act which prohibited any one union from having more than one representative on the Division. This disability of the Division continued until an amendment to the Railway Labor Act removed it, effective April 23, 1970. The Court finds that none of the defendants would have been prejudiced unfairly if plaintiff had been granted the extension of time which the Division rejected.

In its conclusions of law the district court, inter alia, held that the Division denied the plaintiff Railroad due process under the Fifth Amendment, (1) by arbitrarily refusing to grant the extension of time requested in plaintiff’s written request dated January 29, 1968; (2) when it refused to permit plaintiff to present evidence or otherwise defend the claim of Wells at the hearing of the Division without a referee on October 3, 1968, which resulted in a deadlock; (3) when it refused to permit plaintiff to present evidence in defense to the claim of Wells at a hearing on April 17, 1972, conducted with the aid of referee Quinn; and (4) when it entered a default award on April 19, 1972 against plaintiff. The court finally concluded that the award should be set aside and remanded to the Division with directions that plaintiff be permitted to file a written submission in defense to the claim of Wells and to appear before the Division at a hearing as contemplated by Section 3 First (j) of the Act.

On May 18, 1973, an appropriate judgment order was entered for plaintiff and against the defendants, together with an order restraining the Division and its members from entering an award with respect to the claim of Wells until the procedure above ordered was carried out.

The Division itself neither entered an appearance nor answered the complaint. It appears that in connection with the consideration of the proposed findings and conclusions by the district court, by agreement of the parties all carrier and labor members of the Division were dismissed as parties defendant. Defendant Wells has appealed from the judgment order entered on May 18, 1973. We affirm.

I.

Based upon our examination of the record as a whole, we find and hold that the findings of fact made by the district court are amply supported by the evidence and are not clearly erroneous. Rule 52(a), Federal Rules of Civil Procedure. In fact, most of the evidence was either undisputed or stipulated.

It appears that when the written request for a third automatic extension was delivered to the Division in an envelope which bore the timely postage meter date of January 29, 1968, and the one-day late postmark of January 30, 1968, the Executive Secretary referred the plaintiff’s request to the Division for instructions on February 2, 1968. The Division considered the matter on February 6, 1968, declined the plaintiff’s request, and instructed the Executive Secretary to inform plaintiff that its request was declined because of “a late postmark.” The next day plaintiff wrote a letter of protest but to no avail.

The Division had no rule .at that time adopting a United States postmark as the criterion for determining the timeliness of a request or tender. It was not until June 5, 1970, nearly two and one-half years after defaulting plaintiff, that such a rule or policy was adopted. Such new rule or policy was not made public and the evidence was that plaintiff had no knowledge of it. To find plaintiff in default without giving it an opportunity to establish that the mailing was timely, or if not, whether there were sufficient extenuating circumstances to warrant granting the extension, is at best harsh action and at worst inexcusable.

It further appears from the record that on a number of occasions in 1966 extensions were granted or filings were accepted when the requests made were clearly late. On other occasions reply submissions were accepted when received late in envelopes bearing illegible postmarks. Another late request was granted when stamped with a timely postage meter date. Other parties were permitted to obtain extensions by telephone, a practice not generally known and one that was not made known to plaintiff at that time. In short, the practice of the Division indicates that the extension would probably have been granted if the envelope had borne only the postage meter date and not the added postmark dated one day later; if the telephone practice had been made known to plaintiff; or if the postmark on the envelope had been smeared or otherwise made illegible. Indeed, the Division is hard put to justify this illogical pattern. It certainly is not in keeping with its proclaimed policy of liberality. By contrast, it was shown in some cases extensions had been granted as many as 8, 11, 19, 21 and even 40 times.

Even more indicative of the unfairness of this review by the Division is’ the lack of prejudice that would have resulted if it had granted the extension,, or at least have permitted plaintiff an opportunity to make its showing. Plaintiff was defaulted on February 6, 1968. The Division did not consider the claim of Wells until October 3, 1968. Because of intervening circumstances, the Division could not consider proceeding further until April 23, 1970. This litigation was not originally filed until January 8, 1971. It is clear that there can be no claim that the Division’s default of plaintiff was necessary to efficiently expedite the case.

We have no difficulty in finally concluding that there is more than adequate factual support to uphold the district court’s determination that in this proceeding plaintiff was denied due process of law under the Fifth Amendment.

II.

Appellant Wells asserts that the district court was without jurisdiction to review the “finding of untimely filing” by the Division within the meaning of Section 3 First (q) of the Act, since -such a ruling was conclusive on the parties and was not subject to review, citing Gunther v. San Diego & Arizona Eastern Ry. Co., 382 U.S. 257, 264-265, 86 S.Ct. 368, 15 L.Ed.2d 308 (1965); Barrett v. Manufacturers Ry. Co., 8 Cir., 453 F.2d 1305, 1307 (1972); Union Pacific R. Co. v. Price, 360 U.S. 601, 609, 79 S.Ct. 1351, 3 L.Ed.2d 1460 (1959); Brotherhood of Locomotive Engineers v. Louisville & Nashville R. Co., 373 U.S. 33, 38, 83 S.Ct. 1059, 10 L.Ed.2d 172 (1963). However, in these cases all parties to the disputes involved were before appropriate Divisions of NRAB and were heard either on the merits of their positions or were permitted to at least state their positions. Here, the Railroad was not even permitted to state its position. Further, in none of these cases were procedural defects of constitutional dimensions involved as in the instant case.

In Transportation-Communication Employees Union v. Union Pacific R. Co., 385 U.S. 157, 165 n. 4, 168, 87 S.Ct. 369, 17 L.Ed.2d 264 (1966), the Court held that under Section 3 First (q) the district court was empowered to remand proceedings to the Adjustment Board for lack of an indispensable party, since the Board had failed to use procedures which allow for an informed and fair understanding of the dispute between the parties.

In Order of Railroad Telegraphers v. New Orleans, Texas & Mexico Ry. Co., 8 Cir., 229 F.2d 59, cert. denied, 350 U.S. 997, 76 S.Ct. 548, 100 L.Ed. 861 (1956), the Eighth Circuit held that an award by the Adjustment Board against the Railway Company sustaining a claim of the telegraphers to restoration of telegraphers to positions to which clerks had been assigned was void since it had been rendered without notice to members of the clerks’ union and without an opportunity for them to be heard. The award was further held unenforceable for want of indispensable parties. The court cited Allain v. Tummon, 7 Cir., 212 F.2d 32 (1954), as well as other cases from the Seventh Circuit, 229 F.2d at 63-67.

In Allain v. Tummon, supra, a suit was brought by members of a class of railroad employees known as “lounge or tavern car attendants” to enjoin enforcement of an award by the Third Division of the NRAB to “dining car stewards” of the defendant union. The district court denied enforcement and our court affirmed. We held that the award violated plaintiffs’ right to due process of law, stating in relevant part:

“It was established herein that had the plaintiffs or their union obtained the knowledge that the claim of the dining car stewards was pending before the Board, they would not have been permitted to file a written submission, offer testimony, cross-examine witnesses, make an argument, or otherwise participate in the hearing. * * * Notice without the opportunity to be heard does not satisfy the requirements of due process.” 212 F.2d at 35-36.

In light of the foregoing, we hold that the district court had jurisdiction to review the “finding of untimely filing” by the Division within the meaning of the Act, and that the court correctly held that the plaintiff Railroad was denied due process of law.

It is not necessary for us to reach the issue raised concerning the applicability of the Administrative Procedure Act, Title 5, U.S.C. § 551 et seq. We have considered all other questions and authorities advanced by defendant, but are not persuaded thereby.

The judgment of the district court is in all things affirmed.

Affirmed.

      . This is the third occasion on which issues arising out of Wells’ discharge have come before this court. See Chicago, Rock Island & Pacific R. Oo. v. National Mediation Board, 7 Cir., 435 F.2d 339 (1970), cert. denied, 402 U.S. 944, 91 S.Ct. 1621, 29 L.Ed.2d 113 (1971); Wells v. Order of Railway Conductors & Brakemen, 7 Cir., 442 F.2d 1176 (1971).

      . Section 153 First (q) reads: “If any employee or group of employees, or any carrier, is aggrieved by the failure of any division of the Adjustment Board to make an award in a dispute referred to it, or is aggrieved by any of the terms of an award or by the failure of the division to include certain terms in such award, then such employee or group of employees or carrier may file in any United States district court in which a petition under paragraph (p) could be filed, a petition for review of the division’s order. A copy of the petition shall be forthwith transmitted by the clerk of the court to the Adjustment Board. The Adjustment Board shall file in the court the record of the proceedings on which it based its action. The court shall have jurisdiction to affirm the order of the division or to set it aside, in whole or in part, or it may remand the proceeding to the division for such further action as it may direct. On such review, the. findings and order of the division shall be conclusive on the parties, except that the order of the division may be set aside, in whole or in xsart, or remanded to the division, for failure of the division to comply with the requirements of this chapter, for failure of the order to conform, or confine itself, to matters within the scope of the division’s jurisdiction, or for fraud or corruption by a member of the division making the order. The judgment of the court shall be subject to review as provided in sections 1291 and 1254 of Title 28.”


source: Caselaw Access Project

author: PER CURIAM:

license: Public Domain

text:
    Macaria Navarro de HERNANDEZ, Petitioner, v. IMMIGRATION & NATURALIZATION SERVICE, Respondent.
    No. 72-2494.
    United States Court of Appeals, Ninth Circuit.
    June 11, 1974.

      John F. Sheffield (argued), Norman B. Silver, Esq., Los Angeles, Cal., for petitioner.
    Dzintra I. Janavs, Asst. U. S. Atty. (argued), Frederick M. Brosio, Jr., Asst. Atty. Gen., Crim. Div., U. S. Dept, of Justice, Washington, D. C., Joseph Surreck, Regional Counsel, I&NS, San Pedro, Cal., Bernard Hornbach, I&NS, San Francisco, Cal., District Director, I&NS, Los Angeles, Cal., for respondent.
    Before TRASK and SNEED, Circuit Judges, and POWELL, District Judge.

       Honorable Charles L. Powell, United States District Judge from the Eastern District of Washington, sitting by designation.

   PER CURIAM:

Macaría Navarro de Hernandez (Petitioner) appeals from a decision of the Board of Immigration Appeals which upheld the Immigration & Naturalization Service order for her deportation. This court has appellate jurisdiction pursuant to 8 U.S.C. § 1105a.

The petitioner, a citizen of Mexico, was admitted to the United States on a permanent resident visa on April 26, 1967. Pursuant to 8 U.S.C. § 1251(a) (1), deportation proceedings were brought against the petitioner in 1970 on the grounds that at the time of her entry she was excludable under 8 U.S.C. § 1182(a) (31), for knowingly and for gain assisting the illegal entry of another alien. Evidence in support of this charge presented at the deportation hearing included: (1) a sworn statement made by the petitioner on August 17, 1965, during detention by United States officials in which the petitioner confessed to having attempted that day to bring two aliens into the United States for $100 compensation; (2) a sworn statement made by the petitioner on April 7, 1970, (shortly before the deportation proceedings were formally begun) which identified the 1965 statement as genuine and affirmed the truthfulness of the statements contained therein; this statement further included the admission that the petitioner was returned to Mexico in 1965 because she had smuggled two men into the country; (3) sworn statements of the two individuals who the petitioner allegedly smuggled into -the United States who identified “Mjs. Navarro” as the smuggler. On the basis of this evidence and the petitioner’s failure to refute or rebut her previous sworn testimony, the Special Inquiry Officer ordered deportation. This order was affirmed by the Board of Immigration Appeals and the petitioner now seeks review.

Petitioner attacks the proceedings on the ground that she was denied her right to cross-examine the persons who had stated that she had smuggled them into the United States from Mexico and also upon the ground that for reasons of fairness and justice the Immigration & Naturalization Service should be es-topped from deporting petitioner.

8 U.S.C. § 1252(b) states that:

“[T]he alien shall have a reasonable opportunity to examine the evidence against him, to present evidence in his own behalf, and to cross-examine witnesses presented by the Government ft

Here, petitioner argues, the affidavits of the two smuggled aliens were improperly admitted into the record of the hearing before the Special Inquiry Officer. These affidavits identified petitioner as the person who undertook for money to smuggle them into the United States on August 16, 1965. Objection was made upon the ground that the statements were hearsay and that the witnesses were not available for cross-examination at this October 1970 hearing. The Special Inquiry Officer admitted the affidavits provisionally upon the condition that the affiants be produced in person for cross-examination. Two adjournments of the hearing were ordered in order to give the Immigration & Naturalization Service an opportunity to produce the witnesses. A record of the unsuccessful search for them was then introduced, and their affidavits were then admitted. At the conclusion of the hearing the Special Inquiry Officer rendered an oral decision granting voluntary departure or deportation to Mexico if voluntary departure was not made.

In Navarrette-Navarrette v. Landon, 223 F.2d 234 (9th Cir. 1955), cert. denied 351 U.S. 911, 76 S.Ct. 700, 100 L.Ed. 1444 (1956), we held:

“An alien, in deportation proceedings, must be afforded due process of law, including a fair hearing. But it is well settled that administrative tribunals, such as here involved, are not bound by the strict rules of evidence which apply in judicial proceedings.”

In that case on facts remarkably similar to those here, written statements of four aliens were admitted without production of the individuals in person. We held that this failure did not render the proceeding unfair where it was shown that their whereabouts were unknown after a search had been made to locate them. Their absence is of even less consequence here where the affidavit of petitioner herself, corroborates the information contained in the affidavits under question.

Finally, the petitioner asserts that the government is estopped from deporting her because it originally granted her permanent resident status. Reliance is upon a number of cases supporting this argument. Since appellant’s briefs have been filed the Supreme Court in United States Immigration & Naturalization Service v. Hibi, 414 U.S. 5, 94 S.Ct. 19, 38 L.Ed.2d 7 (1973), has held that except for “affirmative misconduct” on the part of the Government, the United States could not be estopped from denying citizenship under the facts existing there. Id. at 8, 94 S.Ct. 19. We find nothing in the facts here which could distinguish Hibi and hold that estoppel is not applicable.

We have reviewed the administrative record including the Transcript of Hearing and find nothing upon which a reversal could be justified. The decision of the Board of Immigration Appeals is affirmed.

      . 8 U.S.C. § 1182(a) (31) provides in pertinent part:

        Excludable classes of aliens

      “(a) Except as otherwise provided in this chapter, the following classes of aliens shall be ineligible to receive visas and shall be excluded from admission in the United States: . . .
      “(31) Any alien who at any time shall have, knowingly and for gain, encouraged, induced, assisted, abetted, or aided any other alien to enter or to try to enter the United States in violation of law.”


author: JOHN W. PECK, Circuit Judge.

text:
    Jerry DAWN et ux., Plaintiffs, United States Fidelity and Guaranty Company and Eastman Kodak Company, Intervening Plaintiffs, v. ESSEX CONVEYORS, INC., Appellant. PROCESS EQUIPMENT ENGINEERING COMPANY, INC., Appellant, v. TENNESSEE EASTMAN COMPANY, a Division of Eastman Kodak Company, Appellee.
    Nos. 73-2174 through 73-2179.
    United States Court of Appeals, Sixth Circuit.
    Argued April 12, 1974.
    Decided June 20, 1974.

      Ernest F. Smith, Kingsport, Tenn., for appellants.
    M. Lacy West, Charlton R. DeVault, Jr., Kingsport, Tenn., on brief, for Essex Conveyors, Inc.
    Edwin L. Treadway, F. Allan Kelly, John P. Chiles, Kingsport, Tenn., on brief, for Process Equipment Engineering Co., Inc.
    H. E. Wilson, Kingsport, Tenn., on brief, for appellee.
    Before PECK and McCREE, Circuit Judges, and CECIL, Senior Circuit Judge.
   JOHN W. PECK, Circuit Judge.

The appeals in this diversity case arose out of a products liability action to recover damages for personal injuries sustained by an employee in a Tennessee industrial accident that occurred in 1970. The plaintiffs, Jerry Dawn, and his wife, Wanda Dawn, filed a complaint against Essex Conveyor, Inc. (hereinafter “Essex”) and Process Equipment Engineering Company, Inc. (hereinafter “Process”), appellants herein, alleging that they negligently designed and manufactured a “senior skip hoist dumper” used by Mr. Dawn’s employer, Tennessee Eastman Company (hereinafter “Eastman”) in its Kingsport, Tennessee plant, and that due to the alleged faulty design and manufacture, the dumper portion of the hoist fell on and grievously injured Dawn.

Essex and Process responded by filing general denials. The Eastman Kodak Company (Eastman’s parent corporation) and its compensation insurance carrier filed an intervening complaint against Essex and Process to protect their statutory subrogation rights against any recovery by the plaintiffs in order to recoup the value of workmen’s compensation benefits paid on Eastman’s behalf. Appellants filed third-party complaints against Eastman for indemnity on the theory of active-passive negligence under the law of Tennessee, but the district court, by order entered March 19, 1973, dismissed the third-party complaints. Appellants moved the court to alter and amend that order to permit an immediate appeal, but the court did not act on the motion. Subsequently, they filed cross-claims against each other and counterclaims against Eastman for indemnity. By order of September 6, 1973, the district court entered judgment on the pleadings in favor of Eastman on the counterclaims.

The main action involving the Dawns’ claim against Essex and Process and the cross-claims between the appellants came on for jury trial in October 1973. Eastman did not participate in the proceedings. After eight days of trial, the litigants announced to the court that a settlement of all claims and cross-claims had been reached, but that the agreement did not affect any possible third-party actions or counterclaims against Eastman.

Appellants requested that the court make final its March 19 and September 6 orders. The court, after noting that the third-party complaints and counterclaims had been disposed of by the above orders, and that all other claims and cross-claims had been settled, determined that “all the respective claims as to all the parties . . . have been finally determined or otherwise disposed of,” and entered final judgment. Essex and Process each perfected separate appeals from the March 19 and September 6 orders, and from the final judgment. All six separately docketed appeals involve the same issue, were consolidated in the briefs and on oral argument, and will be considered as one herein.

The issue before us is simply stated: Can an employer who has paid an injured employee benefits due under the Tennessee Workmen’s Compensation Law, T.C.A. § 50-901 et seq., be liable for indemnity to a third-party tortfeasor under the Tennessee active-passive negligence doctrine?

In this diversity, action our answer to the above question must be formulated in accord with the dictates of Tennessee law. Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Unfortunately, no Tennessee appellate court has addressed itself to this issue, leaving for us the task of trying to determine what result would be reached by a Tennessee appellate court if it were deciding this case. West v. American Telephone & Telegraph Co., 311 U.S. 223, 61 S.Ct. 179, 85 L.Ed. 139 (1941). We are not, however, without guidance in this endeavor. This question has been the topic of discussion in at least three case notes in the Tennessee or Vanderbilt Law Reviews. Other jurisdictions have wrestled with this or similar issues. And finally, there have been four opinions rendered by federal district courts sitting in Tennessee (not including the decision in the instant case) which have undertaken to anticipate the ruling of the appellate courts of Tennessee on this question.

The holdings in the first three district court cases referred to above were summarized in the latest decision, from which we quote at some length.

“The earliest of these [decisions] is Roberson v. Bitner, D.C.Tenn. (1963), 221 F.Supp. 279. In an opinion by the author of this opinion, it was held that the Tennessee Workmen’s Compensation Law does not bar third-party actions if the respective third-party plaintiffs are found to be entitled to indemnity under some substantive right recognized by Tennessee law. Ibid., 221 F.Supp. at 281 [1]. Four years afterward, (now Chief) Judge Frank W. Wilson, of the Eastern District of Tennessee, declined to follow Roberson, supra. Smith v. Illinois Central Railroad Company, D.C.Tenn. (1967), 263 F.Supp. 70, 72. The following year, (now Chief) Judge Frank Gray, Jr., of the Middle District of Tennessee, reviewing the two aforementioned precedents, opted for the Smith, supra, rule. Union Carbide Corp. v. Dunn Bros. General Contractors, Inc., D.C.Tenn. (1968), 294 F.Supp. 704, 706-707 [4-8]. No appeal appears to have been taken from any of those adjudications.” McCoy v. Wean United Inc., Civil Actions Nos. 3098 & 3099 (E.D.Tenn., filed April 25, 1974).

In McCoy, Judge Charles Neese chose to overrule his earlier Roberson decision and to follow the Smith and Union Carbide opinions. He did so because he concluded that “Tennessee courts would hold that the Tennessee Workmen’s Compensation Law, T.C.A. § 50-908, bars . . . third-party actions .” McCoy, supra. For reasons hereinafter appearing, we reach the same conclusion.

The district court in the instant case dismissed the third-party complaints and counterclaims for indemnity because appellants would be unable to meet the requirements of the active-passive negligence doctrine advanced as the basis for Eastman’s liability. This doctrine, the court noted, required that appellants prove, among other things, that their own negligence was only passive and that they shared, with Eastman, a common tort liability to plaintiffs. The court was of the opinion that these burdens could not be met because (1) any judgment against appellants arising from allegations of plaintiffs’ complaint would necessarily involve more than passive negligence, and (2) under Tennessee law (Workmen’s Compensation Law) Eastman was not liable to plaintiffs in tort and thus no common tort liability could exist. We express no opinion as to the validity of the district court’s first theory, but we are in accord with the rationale expressed in the second.

The Tennessee Workmen’s Compensation Law, like similar compensation laws in other states, replaced with statutory benefits all common law rights an injured employee might have had against his employer for work related injuries. T.C.A. § 50-908 provides as follows:

“Right to compensation exclusive. —The rights and remedies herein granted to an employee subject to the Workmen’s Compensation Law on account of personal injury or death by accident, including a minor whether lawfully or unlawfully employed, shall exclude all other rights and remedies of such employee, his personal representative, dependents, or next of kin, at common law or otherwise, on account of such injury or death.”

Nearly every workmen’s compensation law contains an equivalent section. In interpreting the above section the Tennessee Supreme Court has held that “[t]his Act constitutes a complete substitute for previous remedies in tort on the part of an employee. . . . ” Liberty Mutual Ins. Co. v. Stevenson, 212 Tenn. 178, 182, 368 S.W.2d 760, 762 (1963). There can be no doubt that plaintiffs herein could not have brought a tort action against Eastman.

Essex and Process propose an indemnity action against Eastman on the basis of the active-passive negligence theory. While such actions are generally permitted under Tennessee law, Cohen v. Noel, 165 Tenn. 600, 56 S.W.2d 744 (1933), indemnity is allowed only where both the active and passive tort-feasors share a common liability in tort to the injured party. The logic of this requirement is manifested in the following summary of the theory behind indemnity actions: “[I]ndemnity shifts the entire loss from one tortfeasor who has been compelled to pay it to the shoulders of another who should bear it instead.” Prosser, Law of Torts, § 51 Indemnity, p. 310 (4th ed. 1971). As the court in Scarbrough v. Murrow Transfer Co. stated, “while an action for . . . indemnity will lie in Tennessee as between joint tortfeasors, . no such action will lie in the absence of a common tort liability unto the injured party.” 277 F.Supp. 92, 96 (E.D.Tenn. 1967). Here, there was no common liability because Eastman was not liable to plaintiffs in tort. *

The above argument, that common liability is required in indemnity actions, is often employed by courts in those jurisdictions which have rejected contribution and indemnity suits against employers bound by workmen’s compensation laws. It has been suggested by some writers that the common liability demanded in contribution cases (which courts dealing with indemnity questions have relied upon to a great extent) should not be similarly demanded in indemnity actions. While it is true that the problems encountered in a situation where there is contractual indemnity are substantially different from those faced in a contribution situation, indemnity under the active-passive negligence theory is more “akin to contribution between tortfeasors, and should be governed in this regard by the principles applied to contribution.” Chamberlain v. McCleary, 217 F.Supp. 591, 597 (E.D.Tenn.1963).

The decision in this case in no way affects the validity of third-party actions for indemnity based upon express or implied contract. We note, in this regard, that the majority of jurisdictions which have considered the question have held that compensation laws do not bar such actions. See, e. g., Ryan Stevedoring Co. v. Pan-Atlantic S.S. Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956); General Electric Co. v. Moretz, 270 F.2d 780 (4th Cir. 1959) (interpreting Tennessee law). And, in fact, that is the result reached by this Court in Brogdon v. Southern Ry. Co., 384 F.2d 220 (6th Cir. 1967), where we had occasion to deal with the same section of the Tennessee Workmen’s Compensation Law.

We conclude that third-party indemnity actions under the active-passive negligence doctrine are barred by T.C.A. § 50-908, and the judgment of the district court dismissing their indemnity claims is affirmed.

      . 13 Vand.L.Rev. 772 (1960) : 24 Tenn.L. Rev. 1068 (1957) ; 4 Vand.L.Rev. 379 (1951).

      . For a compilation of cases prior to 1956, see 24 Tenn.L.Rev. 1068 (1957). Examples of more recent cases: Cacchillo v. H. Leach Machinery Co., 305 A.2d 541 (R.I.1973); Lampada v. State Sand & Gravel Co., 58 Wis.2d 315, 206 N.W.2d 138 (1973) ; Kamali v. Hawaiian Elec. Co., 54 H. 153, 504 P.2d 861 (1972) ; Dale v. Whiteman, 388 Mich. 698, 202 N.W.2d 797 (1972) ; Leech v. Georgia-Pacific Corp., 259 Or. 161, 485 P.2d 1195 (1971) ; Hilzer v. MacDonald, 169 Colo. 230, 454 P.2d 928 (1969).

      . 13 Vand.L.Rev. 772, 783, and cases cited therein.


author: MURRAH, Circuit Judge.

text:
    HAYS LIVESTOCK COMMISSION COMPANY, INC., a Kansas corporation, Plaintiff-Appellee, v. MALY LIVESTOCK COMMISSION COMPANY, INC., a foreign corporation, Defendant-Appellant, Universal Surety Company, a foreign corporation, et al., Defendants. PLAINVILLE LIVESTOCK COMMISSION COMPANY, INC., a Kansas corporation, Plaintiff-Appellee, v. MALY LIVESTOCK COMMISSION COMPANY, INC., a foreign corporation, Defendant-Appellant, Universal Surety Company, a foreign corporation, et al., Defendants. RUSH COUNTY SALES COMPANY, a partnership composed of Henry Reifschneider, et al., Plaintiffs-Appellees, v. MALY LIVESTOCK COMMISSION COMPANY, INC., a foreign corporation, Defendant-Appellant, Universal Surety Company, a foreign corporation, et al., Defendants.
    Nos. 73-1236, 73-1237.
    United States Court of Appeals, Tenth Circuit.
    Argued Nov. 12, 1973.
    Decided June 13, 1974.

      Malcolm D. Young, Omaha, Neb. (Kenneth A. Nickolai, Omaha, Neb., and Terry L. Bullock, Topeka, Kan., with him on the brief), for defendant-appellant, Maly Livestock Comm. Co., Inc.
    Wayne W. Wallace, Wichita, Kan. (Robert Martin, Wichita, Kan., of counsel, Martin, Pringle, Schell & Fair, Wichita, Kan., with him on the brief), for defendant-appellant, Universal Surety Co.
    Thomas C. Boone, Hays, Kan., for plaintiffs-appellees, Hays Livestock Comm. Co. Inc. and Plainville Livestock Comm. Co., Inc.
    Marvin E. Thompson of Thompson, Holland & Arthur, Russell, Kan., for plaintiff-appellee, Rush County Sales Co.
    Before LEWIS, Chief Judge, and MURRAH and HOLLOWAY, Circuit Judges.
   MURRAH, Circuit Judge.

These consolidated appeals are from separate judgments of the district court sustaining separate reparation orders by the Secretary of Agriculture under the Packers and Stockyards Act of 1921 (7 U.S.C. § 201, et seq.) against Wenzl, a registered and bonded livestock dealer, and Maly, a registered and bonded marketing agent. (See §§ 203, 204.) We affirm the judgments with modifications to be noted.

The Packers and Stockyards Act was designed to comprehensively regulate packers, stockyards, marketing agents and dealers. The “chief evil” sought to be prevented or corrected is monopolistic practices in the livestock industry. Mahon v. Stowers, 42 U.S.L.W. 3577, 416 U.S. 100, 94 S.Ct. 1626, 40 L.Ed.2d 79 (1974). See also Denver Stockyard v. Livestock Ass’n, 356 U.S. 282, 78 S.Ct. 738, 2 L.Ed.2d 771 (1958); Stafford v. Wallace, 258 U.S. 495, 42 S.Ct. 397, 66 L.Ed. 735 (1922). As a means to that end, various sections of the Act proscribe unjust, unfair, unreasonable or discriminatory practices. These cases are predicated on § 208, which prohibits “every unjust, unreasonable, or discriminatory regulation or practice” in respect to the furnishing of stockyard services. The reparation orders were issued pursuant to investigations and hearings conducted under § 210(a) of the Act on separate complaints by three registered Kansas sales barns. Complainants alleged that Maly and' Wenzl violated the Act by dishonoring four drafts in the context of an arrangement whereby Wenzl drew bank drafts on Maly for purchases of livestock at complainants’ sales barns in Kansas for delivery to Maly, which sold the livestock on commission at its pens in Omaha, Nebraska.

Jurisdiction in the district court is based on § 210(f) of the Act, which is also the statutory grounds for awarding of attorneys’ fees to appellees. The district court found that the conditions of bonds, required by § 204, had also been violated and ordered payments, to the extent of the bonds, by Wayne McCaslin and Universal Surety Company, bondsmen for Wenzl and Maly, respectively. Only Maly and Universal have appealed.

Basic Facts

The basic facts are common to all three cases. Wenzl purchased livestock from appellees by drawing drafts on Maly. Nieman, the vice-president of Maly, had openly authorized Wenzl to draw such drafts as long as Wenzl “had cattle in our pens to cover [the drafts] when the drafts were presented.” Wenzl had been doing business with Maly for “several” years and had been drafting on Maly for at least one year before these complaints were filed with the Secretary of Agriculture. The complaints were precipitated when a total of four drafts drawn by Wenzl in three separate but contemporaneous transactions for the purchase of cattle in early November, 1967, at the three different sales barns were dishonored by Maly and in each case the proceeds from the sale of the livestock applied to Wenzl’s account.

Specific Facts

Rush

Rush sold 55 cattle and one hog to Wenzl at its sales barn on November 3, 1967, and accepted in payment a draft drawn on Maly. Five cattle were not shipped and were sold by Rush without notifying Maly, although the proceeds of this sale-were later credited by Rush to the amount it claims is owed by Maly on the dishonored draft. Maly received the cattle shipped on November 4 and sold them two days later, crediting Wenzl’s account, which was then in arrears. The draft in question was dishonored by Maly when presented on November 9, although it was later determined that Wenzl had sufficient cattle in Maly’s pens to cover it on that date. Wenzl had drawn and Maly paid several prior drafts payable to Rush, and Maly’s vice-president, Nieman, had on at least one occasion traveled to the Rush sales barn with Wenzl and had been in his company when a draft was drawn on Maly. Maly had also once forwarded f15,000 to a Rush account for the credit of Wenzl. Maly points out, however, that money was forwarded to Wenzl only because he had cattle in the pens to cover it; that there is no specific evidence Rush relied on any direct or indirect drafting authorization given by Maly; and that Rush improperly sold the five cattle covered by Maly’s draft without notifying Maly.

Hays

On November 1, 1967, Hays sold 188 cattle to Wenzl at one of its regular auctions, accepting two drafts drawn on Maly in payment. Maly received the cattle on November 2 and sold all of them by the end of the next day, applying the proceeds to Wenzl’s account. Maly dishonored the drafts when they were presented on November 6, although it had honored a draft given to Hays by Wenzl a week before, on October 25, and had confirmed by telephone on October 26 that the October 25 draft would be paid. Likewise, one day after the November 1 sale an employee of Maly responded to a telephone call from Hays stating that Hays would be called back if that draft were not honored. No such return telephone call was made. Maly asserts that there is no evidence that there were sufficient cattle in the pens to Wenzl’s account when the draft arrived; that there is no evidence Hays knew of Wenzl’s extensive shipments of cattle to Maly from other barns or that Hays relied on any specific assurances by Maly; that the telephone call from Hays on October 26 related only to the October 25 draft, which was paid; and that the November 2 telephone call from Hays indicates that Hays was not relying on any prior assurances from Maly.

Plainville

On November 4, 1967, Wenzl paid for 41 cattle and one hog purchased from Plainville at its sales barn by a draft drawn on Maly. The livestock was received by Maly on November 5, sold the next day, and the proceeds retained by Maly as a credit to Wenzl’s account. The draft was dishonored upon presentment on November 9. The record reveals that Wenzl had been giving Plain-ville drafts drawn on Maly for approximately one year, none of which had been previously dishonored, and that Maly had informed Plainville in February, 1967, that drafts given by Wenzl would be honored if there were sufficient cattle in the pens when the drafts arrived. Maly asserts that there was no evidence that Plainville relied on any prior assurances that drafts would be honored, nor any evidence that there were sufficient cattle in the pens to Wenzl’s account when the draft arrived.

After investigation and a full hearing which developed the foregoing facts, the Secretary concluded that Maly had a “working arrangement with Wenzl, to pay for the latter’s livestock purchases, to be reimbursed from the proceeds of resale”; that this type of an arrangement was “not unusual” in the livestock industry; and that Maly’s previous acts and representations established a species of agency by estoppel between Wenzl and Maly. The Secretary also held that it was an unjust and unreasonable practice for Maly to retain the proceeds from the resale of the livestock knowing that the shippers of the livestock had not been paid.

Section 210(f) of the Act provides in material part that if the defendant does not comply with an order of the Secretary, the complainant may file in federal district court an enforcement petition and “[s]uch suit in the district court shall proceed in .all respects like other civil suits for damages except that the findings and orders of the Secretary shall be prima facie evidence of the facts therein stated . . . . ” In these suits to enforce the Secretary’s orders the trial court took the cases on a stipulated record. And giving due prima facie weight and effect to the Secretary’s orders, agreed with the Secretary, reasoning that:

One who represents that he will honor drafts given by another for the purchase of cattle, and establishes a practice of doing so, thereafter, if the promisor receives such cattle, or has cattle in his pens to cover such drafts, is liable to the person to whom such drafts are given, and may not, after receiving such cattle, dishonor the drafts given pursuant to such representations and practice, and apply the proceeds from the sale of such cattle to a previous indebtedness which he has permitted the drawer of the drafts to create.

And further:

Where a market agency has advised auction sales that it will honor drafts of a dealer for the purchase of cattle shipped to the market agency by the dealer, and over a long period of time the market agency honors such drafts, the auction sale to which a draft was given by such dealer for cattle shipped to the market agency is entitled to rely upon the previous advice of the market agency and the course of dealings thus established, and the market agency is estopped to deny its liability on the draft.

The relevant case law is both controversial and helpful. In Capitol Packing Company v. United States, 350 F.2d 67 (10th Cir. 1965), a case in which we directly reviewed § 213(a) cease and desist orders, we noted the absence of any statutory definition of the critical phrase “unfair, unjustly discriminatory or deceptive practice”; that its meaning “must be determined by the facts of each case within the purposes of the Packers and Stockyards Act,” (at 76) ; and that “the responsibility for efficient regulation of market agencies and packers lies with the Secretary of Agriculture .... The proper scope of judicial review is limited to the correction of errors of law and to examination of the sufficiency of the evidence supporting the-factual conclusions.” (at 72). See also Glover Livestock Commission Company v. Hardin, 454 F.2d 109 (8th Cir. 1972); Bowman v. United States Department of Agriculture, 363 F.2d 81 (5th Cir. 1966); § 10(e) Administrative Procedure Act, 5 U.S.C. § 1009(e). This is, of course, the prevailing rule in administrative law. See Davis, Administrative Law Treatise § 29.01. It is consistent with the admonition that “[w]hen faced with a problem of statutory construction” courts are bound to give “great deference to the interpretation given the statute by the officers or agency charged with its administration.” Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1964). See Trafficante v. Metropolitan Life Ins., 409 U.S. 205, 210, 93 S.Ct. 364, 34 L.Ed.2d 415 (1972); and cf. Consolo v. Federal Maritime Comm’n, 383 U.S. 607, 618-621, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1965). Upon careful analysis of the findings and facts in the Capitol case, we sustained those findings supported by the evidence and rejected others which were not supported. We rejected the notion that one can be penalized for “almost” violating the Act and held that “ . . . specified methods of dealing which are not themselves violations of the Act cannot, when added together, become a violation.” (at 76-77).

Federal courts have been at pains to point out that the Packers and Stockyards Act did not make of the Secretary a collecting agency. More specifically, the Act was not designed to provide a remedy for every worthless check or dishonored draft. Adams v. Greeson, 300 F.2d 555 (10th Cir. 1962); Guenther v. Morehead, 272 F.Supp. 721 (S.D.Iowa 1967); Lewis v. Goldsborough, 234 F.Supp. 524 (E.D.Ark., W.D.1964); McClure v. E. A. Blackshere Company, 231 F.Supp. 678 (D.Md.1964). In Adams, a case involving recovery of damages for the conversion of livestock, possession of which was obtained by payment with a worthless check, federal jurisdiction was predicated and sustained under 28 U.S.C. § 1352 on a bond made pursuant to an Administrative Regulation authorized by § 204 of the Packers and Stockyards Act. State law was invoked, clearly governing the rights of the parties, and we held that “[t]he act does not have the effect of altering in part or superseding in whole the respective rights of the immediate parties under state law to a transaction of that kind.” (at 557-558). The most recent and final authority on this subject is Mahon v. Stowers, supra. That case involved the priorities of claimants to funds held by a trustee in bankruptcy. After noting the “important” differences between packers and marketing agencies in the application of the Act, the court stated that “ . . . the Act and regulations do not ex proprío vigore oyerride the provisions of Texas law determining priorities to the funds in question . . . . ”

Relying upon the reasoning in Capitol, Adams, Mahon, and the district court cases, Maly contends that its dishonoring of four drafts in three separate and distinct cases was not a “practice” prohibited by § 208 of the Act. Moreover, Maly observes that it had agreed to hon- or drafts drawn by Wenzl only as long as Wenzl had sufficient cattle in the pens to cover the drafts when they arrived; that there is no evidence in the Hays and Plainville cases that there were sufficient cattle in the pens to cover the drafts; and that the sales barns assumed the risk of loss if Wenzl failed to have sufficient cattle in the pens when the drafts were presented. Finally, Maly says that it is in no way responsible for Wenzl’s conduct, and points out that, in each case, Wenzl purchased the livestock on his own account; that waybills for trucking and accounting sheets were issued to Wenzl as purchaser and owner; that Wenzl, as owner, shipped the livestock to Maly in Omaha; and that Wenzl received all profits and absorbed all losses upon resale of the cattle.

We think Maly’s reliance upon the cited cases is unjustified when considered in light of the important differences between those cases and our own. Here, the crucial factual findings by the Secretary, when accorded prima facie weight under § 210(f) and buttressed by the judgment of the district court, are supported by substantial evidence and therefore have binding effect. Moreover, the Secretary’s interpretation of the facts, to the effect that Maly engaged in an unjust and unreasonable practice violative of § 208, is as we have seen entitled to great deference. In Capitol, however, the facts did not support all of the findings, and some of the conclusions by the Secretary regarding unfair practices fell with the failure of the facts. Nor are Adams and Stowers directly apposite, since neither case involves the issue on which this case turns —i. e., an unjust and unreasonable practice by a marketing agency. Finally, the cited district court cases are distinguishable since we find much more involved in our case than a few “isolated acts.” In any event, to the extent that the district court cases are not factually distinguishable, we respectfully decline to follow them.

We think our ease is more identifiable with Branscome v. Schoneweis, 361 F.2d 717 (7th Cir. 1966). There, it was held that defendant Schoneweis was estopped to deny liability on dishonored checks written by his apparent partner, Wood-rum, and that Schoneweis’ failure to pay the checks was prohibited by the Packers and Stockyards Act. The case was precipitated by a complaint to the Secretary, who conducted a hearing and issued a reparations order. The findings and order of the Secretary were appealed under § 210(f) of the Act and, as here, upheld by the district court.

The orders and decisions in Schoneweis were based upon a finding of partnership by estoppel between Schoneweis and Woodrum. The Secretary in our case relied upon an estoppel theory in much the same way. And Maly argues that there can be no estoppel here for want' of the requisite reliance on the representations incident to the drafting practice. The Secretary also held, however, that it' was unjust and unreasonable for Maly to retain the proceeds from the resale of livestock with knowledge that the shippers of the livestock had not been paid. We are persuaded by this reasoning and hence do not reach the issue of estoppel.

Our primary concern is to effectuate the policy of a federal Act prohibiting “every unjust, unreasonable, or discriminatory regulation or practice.” We think it would be wrong to predicate our interpretation and application of this crucial language of a national Act on the vagaries of state law. Technical legal labels and equitable principles, such as “agency by estoppel,” may be helpful in our reasoning process, but the scope and breadth of the Packers and Stockyards Act should not be made to depend upon them. We prefer to rest our affirmance of the judgment on the Secretary’s secondary finding and the broad policy of the Act.

We think it is fair to say that Maly used the drafting arrangement with Wenzl to facilitate the interstate movement of large amounts of livestock from the sales barns to its pens in Omaha, Nebraska, where Maly sold the livestock on commission. To paraphrase Chief Justice Taft in Stafford, Wenzl, as the buyer of the livestock at the sales bams in Kansas, was “at the elbow” of Maly in Nebraska.

Maly’s vice-president stated that the drafting arrangement was the “common way” Wenzl was shipping livestock to his company. It must have been clear to him that when he sold the livestock shipped by Wenzl a draft for their purchase would probably follow in due course to Maly. Maly’s dishonoring of drafts in this context, with knowledge that the sales barns had not been paid for the cattle they shipped, placed an inordinate burden on the barns, contrary to the purpose of the Packers and Stockyards Act “to secure the free and unburdened flow of livestock.” The Secretary’s ruling that such conduct was an unjust and unreasonable practice prohibited by § 208 is not without a rational basis in law and fact. Certainly we cannot say that the trial court’s judgment approving and enforcing the orders is clearly wrong. This is not to say that the practice of drafting in the livestock industry or of not correlating drafts with the purchased livestock is, in itself, prohibited; it simply means that when a drafting arrangement such as that developed by Maly is used, and the market agency knows that the livestock which it has sold was purchased by customers’ drafts drawn on it, the integrity of the marketing process requires that the drafts be honored.

Liability on the Bond

Universal argues that its bond does not cover damages arising from án unjust or unreasonable practice prohibited by § 208. This contention is wholly without merit.

As we have seen, Universal’s bond was executed pursuant to regulations issued by the Secretary (9 C.F.R. §§ 201.29-34) as authorized by § 204 of the Act, which stipulates that such bonds are to “secure the performance of [the] obligations” of those being bonded. Jurisdiction in the district court over such a bond is assured by the language of the bond itself (“any person damaged by the breach of any condition hereof may maintain an action on this bond . . . . ”) and by 28 U.S.C. § 1352. The bond states that Universal is liable if Maly sells on commission and fails to “pay when due to the person or persons entitled thereto the gross amount, less lawful charges, for which all livestock is sold for the accounts of others by said principal.” Universal’s liability becomes manifest once we hold, as we do, that the sales barns are “entitled” to the proceeds from Maly’s resale sufficient to pay the outstanding drafts.

Award of Attorneys’ Fees

The district court awarded attorneys’ fees for services rendered in the reparation proceedings and these enforcement proceedings. The court also awarded attorneys’ fees in connection with Maly’s effort in the Nebraska federal courts to enjoin the enforcement of the reparation orders. Maly contends that the awarding of attorneys’ fees as costs in the reparation proceedings and in the Nebraska suit was unauthorized and that the cases should be remanded for proof of the reasonableness of the attorneys’ fees in the enforcement proceedings. The sales barns respond that the issue is moot — as the fees have already been paid out of Wenzl’s forfeited bond. We don’t think so.

We hold that the question of attorneys’ fees in this case is not moot since Maly will continue to “encounter adverse effects of the event in issue.” Justin v. Jacobs, 145 U.S.App.D.C. 355, 449 F.2d 1017, 1019 (1971). See also Sigma Chi Fraternity v. Regents of University of Colorado, 258 F.Supp. 515, 523 (D.Colo. 1966). Cf. Powell v. McCormack, 395 U.S. 486, 89 S.Ct. 1944, 23 L.Ed.2d 491 (1969). Maly is adversely affected by the distribution of funds, at least to the extent that the attorneys’ fees were illegally assessed and paid. This is so because the practical effect of the award will require Maly to pay more damages than otherwise would have been the case. Maly neither agreed to nor acquiesced in the distribution of the funds from Wenzl’s bond and has superseded the total judgment. It has standing to raise the question on appeal.

We need to remember that attorneys’ fees “are not ordinarily recoverable in the absence of a statute or enforceable contract providing therefor.” Fleischmann Corp. v. Maier Brewing, 386 U.S. 714, 87 S.Ct. 1404, 18 L.Ed.2d 475 (1967). If so authorized, the reasonableness of the attorneys’ fees as determined by the trial court is not to be disturbed on appeal “unless under all of the facts and circumstances it is clearly wrong.” United States v. Anglin & Stevenson, et al., 145 F.2d 622 (10th Cir. 1944).

We have, of course, no contract authorizing attorneys’ fees in this case and must rely on § 210(f) of the Packers and Stockyards Act. That provision authorizes complainants to file suit in the district court to enforce reparation orders and “if the petitioner finally prevails, he shall be allowed a reasonable attorney’s fee to be taxed and collected as a part of the cost of the suit.” This language is almost identical to that contained in § 8 of “the Act to Regulate Commerce,” an Act which provided for issuance of reparation orders by the Interstate Commerce Commission and enforcement in the district courts. Interpreting the cited language auihorizing attorneys’ fees, the Supreme Court held that “in our opinion the services for which an attorney’s fee is to be taxed and collected are those incident to the action in which the recovery is had and not those before the Commission It is only when the damages are covered by suit that a fee is to be allowed . . . . ” Meeker & Co. v. Lehigh Valley R. R., 236 U.S. 412, 432, 35 S.Ct. 328, 336, 59 L.Ed. 644 (1914).

In line with Meeker, we hold that the plain language of § 210(f) precludes recovery of attorneys’ fees incurred in reparation proceedings before the Secretary or in collateral suits to enjoin the Secretary’s orders. Only fees authorized “as a part of the cost of the suit” to enforce reparation orders in the district court are allowable.

The several judgments are accordingly modified to deduct the erroneously awarded attorneys’ fees. As modified, the judgments are affirmed.

      . Sections 206, 208, 211, 212 and 213 regulate stockyards and dealers. Section 206 prohibits unjust or discriminatory rates; § 208 prohibits unreasonable or discriminatory practices generally; § 211 provides for orders by the Secretary to remedy unjust or discriminatory practices; § 212 permits the Secretary to prescribe rates and practices to prevent discrimination between intra and interstate commerce; and § 213 authorizes the Secretary to issue cease and desist orders to prevent unfair, discriminatory or deceptive practices.

      . The district court also cited § 213 of the Act and an Administrative Regulation of the Department of Agriculture, 9 O.F.R. § 201.-43(b), as jurisdictional authority. However, § 213 requires issuance of a cease and desist order by the Secretary and is not applicable here. The Administrative Regulation is also inapplicable and not relied upon on appeal.

      . Section 210(a) specifically authorizes the Secretary to entertain complaints by aggrieved persons for violations of §§ 205-207 or § 208 or of orders of the Secretary made under §§ 201-203, 205-217a.

      . The proceeds of Wenzl’s bond in the sum of $18,000 have been paid into the district court and appropriated among the sales barns for payment of attorneys’ fees.

      . There is no direct evidence of a common understanding among the sales barns of the authority given by Maly to Wenzl.

      . The Secretary cited an Agriculture Decision, Stockton Livestock v. Kuhlman, 25 A. D. 504 (1966). There, Kuhlman purchased cattle in the name of K & It Livestock Commission Company, which received and sold the cattle but failed to pay the shippers the full amount due. The judicial officer held that “. . . the liability of K & R in this particular transaction may be established even absent evidence of agency..... K & R was not a bona fide purchaser, knowing that the cattle had not been paid for.”


author: MOORE, Circuit Judge:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Ferris Jacob ALEXANDER, Defendant-Appellant. Ferris Jacob ALEXANDER, Petitioner-Appellant, v. UNITED STATES of America, Appellee.
    Nos. 289, 595, Dockets 73-2044, 73-2479.
    United States Court of Appeals, Second Circuit.
    Argued Jan. 14, 1974.
    Decided June 17, 1974.
    Robert J. Milavetz, Minneapolis, Minn., for Ferris Jacob Alexander.
    Michael C. Eberhardt, Sp. Atty., Joint Strike Force for the S. D. N. Y., New York City (Paul J. Curran, U. S. Atty., for the S. D. N. Y., New York City, and John D. Gordan, III, Asst. U. S. Atty., of counsel), for the U. S.
    Before MOORE, FRIENDLY and ANDERSON, Circuit Judges.
   MOORE, Circuit Judge:

Two appeals are presented together, the first (No. 73-2044) is an appeal from an order (March 5, 1973), denying defendant’s application for disclosure of the contents of the pre-sentence report, the second (No. 73-2479) is an appeal from an order (September 10, 1973), denying defendant’s motion pursuant to 28 U.S.C. § 2255 to vacate his conviction.

No. 73-20U

Defendant with others was convicted of interstate transportation of obscene material, 18 U.S.C. § 1465, and conspiracy, 18 U.S.C. § 371. His conviction was affirmed by this court, United States v. Manarite, 448 F.2d 583 (2 Cir., 1971), cert. denied, 404 U.S. 947, 92 S.Ct. 281, 30 L.Ed.2d 264 (1971).

While incarcerated, defendant moved pursuant to Rule 35, F.R.Cr.P., for a reduction of sentence and disclosure of the pre-sentence report, F.R.Cr.P. 32(c)(2). The motion was denied but upon appeal this court remanded the case to the trial judge to exercise his discretion with respect to disclosure of all or part of the report. Again the trial court after it had “reviewed and carefully reconsidered the report” declined to disclose it as “not in the interest of justice.” This appeal followed.

We affirm the trial judge’s exercise of discretion in denying disclosure. The trial judge examined the presentence report; we have examined it. Nothing therein contained would have benefited defendant by disclosure or indicated that the sentence imposed was in any way influenced adversely to defendant by the facts therein contained. Defendant’s claims of violation of his Fifth and Sixth Amendment rights are wholly without merit.

No. 73-2479

While the appeal (No. 73-2044) was pending, defendant by petition pursuant to 28 U.S.C. § 2255, sought to set aside his conviction on the ground that the Supreme Court had “newly announced obscenity standards in Miller v. California,” 413 U.S. 15, 93 S.Ct. 2607, 37 L.Ed.2d 419 (1973).

Despite the fact that he was convicted under the older, apparently more limited, definition of obscenity found in Memoirs v. Massachusetts, 383 U.S. 413, 86 S.Ct. 975, 16 L.Ed.2d 1 (1966), appellant claims that he is presently entitled to a new trial so that the so-called “newer” standards of Miller can measure his conduct. He makes this contention in the face of the fact that Miller did not reverse the conviction but rather remanded the case to the California appellate court for further consideration in light of its decision.

We agree with the Fifth Circuit, which concluded in United States v. Thevis, 484 F.2d 1149, 1154 (5th Cir. 1973), that in the Miller decisions the Supreme Court intended merely “that all obscenity cases which had not reached final adjudication should be re-examined in light of its clarification of the previous standards and its declaration of new standards.” It did not indicate any intention that convictions that were final on June 21, 1973, should be subject to reconsideration in the light of the decisions of that date.

Even if appellant’s case were entitled to further consideration in light of Miller (and we have so considered it), there cán be no doubt that under the standards set by that case the conviction should stand. Appellant notes that Miller sets out “three independent tests which must be met before a challenged work may be found obscene,” namely:

(1) whether the average person, applying contemporary community standards, would find that the work, taken as a whole, appeals to the prurient interest; and (2) whether the work depicts or describes, in a patently offensive way, sexual conduct specifically defined by the applicable state law; and (3) whether the work, taken as a whole, lacks serious literary, artistic, political, or scientific value.

413 U.S. at 24.

These three tests have been more than met by the material before the court. We need say no more than was said by Judge Lumbard in his opinion on the appeal on the merits that the “materials graphically depict nude (or virtually nude) men and women, men and men, and women and women engaged in various sexual acts, including sexual intercourse, fellatio, cunnilingus, sodomy and the like in numerous permutations and combinations.” 448 F.2d 583, 589, cert. denied, 404 U.S. 947, 92 S.Ct. 281, 30 L.Ed.2d 264 (1971). The material is presented almost entirely in photographs and graphically portrays the models photographed engaged in their activities in grotesque and contortionistic poses. There can be no doubt that they are obscene under any present (.Miller and related cases) standard.

The Supreme Court in the Miller case did not declare that statutory language such as that in Section 1465 was unconstitutional because of vagueness. Previously in Roth v. United States, 354 U.S. 476, 491-494, 77 S.Ct. 1304, 1312, 1 L.Ed.2d 1498 (1957), that Court had specifically upheld the language “obscene, lewd, lascivious or filthy” against such a challenge. In United States v. 12 200-Foot Reels of Super 8 MM. Film, 413 U.S. 123, 130 n. 7, 93 S.Ct. 2665, 2670, 37 L.Ed.2d 500 (1973), the Court construed the same language as limited to “patently offensive representations or descriptions of that specific ‘hard core’ sexual conduct given as examples in Miller v. California, supra.Those examples were:

(a) Patently offensive representations or descriptions of ultimate sexual acts, normal or perverted, actual or simulated.
(b) Patently offensive representations or descriptions of masturbation, excretory functions, and lewd exhibition of the genitals.

413 U.S. at 25.

The Court continued that “At a minimum, prurient, patently offensive depiction or description of sexual conduct must have serious literary, artistic, political, or scientific value to merit First Amendment protection.” (413 U.S. at 26).

Since there is no text accompanying the photographs of fellatio, cunnilingus and sodomy and none is required if heed be given to the adage that a picture is worth more than a 1,000 words, “literary” can be ruled out. Likewise, “artistic,” except as some depictions might resemble a lewd attempt to imitate the Laocoon group. Nor can politics or science derive any benefit from the pictures.

Therefore, there is no occasion for us to consider borderline eases as did the First Circuit in Palladino in which it decided that the pseudo-historical approach of the two volumes of “Anal and Oral Love” which treated in a literate manner “sex practices from early man, through the major ancient civilizations, up to Victorian times . . .”, 475 F.2d at 68, and hence was within the First Amendment protection as a matter of law. Other books in that case apparently were considered sufficiently borderline to be remanded for jury consideration in light of Miller, 490 F.2d 499 at 501-502.

In United States v. Thevis, 484 F.2d 1149 (5th Cir. 1973), the Fifth Circuit, making their own independent constitutional judgment under Jacobellis v. Ohio, held that six magazines were worthy of protection, hence requiring conviction reversal and six not, hence justifying conviction affirmance. However, to make sure that their opinion rested on a foundation of double strength, the court held that “the twelve magazines are to be tested for obscenity under both [Memoirs and Miller'] standards, with the appellants in every instance to receive the benefit of the most favorable standard.” 484 F.2d at 1152. Applying the same test, we can without hesitation give appellant the benefit of the most liberal interpretation of the Supreme Court's definitions and hold that he has transgressed under Memoirs, Miller or under the “plain examples” suggested by that Court.

Defendant prophetically states (Br. p. 11) that “The Supreme Court is prepared in the future to construe the federal statutes to limit them to depictions of ‘hard core sexual conduct’ which were for the first time and as of June 21, 1973 specifically set forth in Miller.” With equal clairvoyance we are prepared to say that one glance at the material here depicted would cause the Supreme Court to place it in the proscribed category but in advance of such an improbable eventuality, we so place it at this time and, hence, deny the § 2255 petition to set aside defendant’s conviction.

Motion for reduction of sentence and to disclose the presentence report, denied.

Petition to set aside conviction denied.

      . United States v. Palladino, 475 F.2d 65 (1st Cir. 1973). This case was remanded to the First Circuit by the Miller decision and it is its treatment there on remand, 490 F.2d 499 (1st Cir. 1974), that is discussed below.

      . 378 U.S. 184, 190, 84 S.Ct. 1676, 12 L.Ed.2d 793 (1964).