author: MANSFIELD, Circuit Judge:

text:
    Louis GARBER, Plaintiff-Appellee, v. Cortes W. RANDELL et al., Defendants-Appellees. Mildred LIPSIG et al., Plaintiffs-Appellees, v. NATIONAL STUDENT MARKETING CORPORATION et al., Defendants-Appellees. Domenick L. NATALE, Plaintiff-Appellee, v. NATIONAL STUDENT MARKETING CORPORATION et al., Defendants-Appellees, and White & Case, Defendant-Appellant.
    Nos. 743, 766, Dockets 72-1820, 73-1339.
    United States Court of Appeals, Second Circuit.
    Argued Jan. 11, 1973.
    Decided April 9, 1973.

      Edwin J. Wesely, New York City (Peter H. Kaminer, Winthrop, Stimson, Putnam & Roberts, New York City, of counsel), for defendant-appellant, White & Case.
    Julius Levy, New York City (Abraham L. Pomerantz, New York City, of counsel), for plaintiffs-appellees.
    John Logan O’Donnell, New York City (Charles M. McCaghey, Jonathan C. Lane, Olwine, Connelly, Chase, O’Donnell & Weyher, New York City, of counsel), for defendant-appellee National Student Marketing Corp.
    William E. Hegarty, New York City (David R. Hyde, Mathias E. Mone, Ca-hill, Gordon, Sonnett, Reindel & Ohl, New York City, of counsel), for plaintiff-appellee, Peat, Marwick, Mitchell & Co.
    Ronald P. Wertheim, Washington, D. C. (David Ginsburg, Lee R. Marks, Ginsburg, Feldman & Bress, Washington, D. C., of counsel), for plaintiff-appellee, Cameron Brown.
    Before LUMBARD, KAUFMAN and MANSFIELD, Circuit Judges.
   MANSFIELD, Circuit Judge:

In these three consolidated class and derivative suits by stockholders of National Student Marketing Corp. et al. (“NSM” herein), which allege violations of the federal securities laws on the part of some 58 defendants, the law firm of White & Case (“W & C” herein), originally named as a defendant in one suit only (the Natale action), appeals from two orders of the District Court for the Southern District of New York entered by Chief Judge Edelstein. The first order, filed on April 20, 1972, directed, among other things, that the three actions (including the Natale suit) be consolidated for pretrial purposes and that plaintiffs file a consolidated amended complaint, which has since been served on June 5, 1972. The second order, dated February 14, 1973, denied W & C’s motion for a severance, 58 F.R.D. 492. We reverse the first order insofar as it directs the filing of a consolidated complaint and in all other respects affirm both orders.

Two of the actions (the Garber and Lipsig suits) are purported class suits by NSM stockholders which charge that during the period from April 1968, to March 1, 1970, the defendants, who include various directors and officers of NSM; Peat, Marwick, Mitchell & Co. (“PMM” herein), its independent auditors; and various stockbrokers, investment banking firms, and public relations firms, used materially false and misleading financial reports, statements, releases, predictions and estimates to inflate the market price of NSM shares, with resulting benefits to some of the defendants and loss to those who purchased shares during the relevant period, all in violation of § 10 of the Securities Exchange Act of 1934, 15 U.S.C. § 78j and SEC Rules issued thereunder, notably Rule 10b-5, 17 C.F.R. § 240.10b-5.

The Natale complaint, which joined W & C as a defendant along with those named in the two earlier suits, contains basically the same allegations on behalf of purchasers of NSM shares during the same period (April 1968 to March 1, 1970) without specifying any conduct on the part of W & C alleged to have violated the federal securities laws. Na-tale’s designation of W & C as a defendant was apparently inspired by the SEC’s inclusion of W & C as a defendant in a suit for injunctive relief instituted by the SEC against most or all of the same defendants in the United States District Court for the District of Columbia shortly before the commencement of the Natale suit here.

The allegations of the Consolidated Amended and Supplemental Complaint are more detailed than those asserted in the three individual complaints and claim violations of both the Securities Act of 1933, 15 U.S.C. § 77a et seq., and the 1934 Act, 15 U.S.C. § 78a et seq. The consolidated complaint is for the most part devoted to charges of artificial inflation of NSM shares during the period from April 1, 1968, to February 17, 1972. Upon the basis of the complaint recently filed by the SEC, Paragraphs 16 to 29 allege, upon information and belief, on behalf of plaintiff Natale only, wholly distinct claims against W & C.

The principal claim against W & C relates to its activities as counsel for NSM in the closing on October 31, 1969, of the merger of Interstate National Corporation (“Interstate” herein) into NSM. It is alleged that in connection with that merger W & C failed to disclose to stockholders of the two companies that a “comfort letter” which was required to be furnished pursuant to the merger agreement by defendant PMM, accountants for NSM, did not conform to the terms of that agreement. According to the consolidated complaint, the comfort letter was to state that certain unaudited financial statements of NSM had been prepared in accordance with generally accepted accounting principles and that NSM had not suffered any material adverse interim change in its financial position or in the results of its current operations; instead, the letter revealed that there had been a material over-statement of NSM’s current earnings in earlier unaudited interim financial statements used to solicit stockholder approval of the merger and that instead of the profit shown on the interim unaudited statement, NSM had suffered a loss for the period ended May 31, 1969, and would show a “break-even” for the year ended August 31,1969.

The claim against W & C is that, notwithstanding its knowledge of the foregoing information and of PMM’s recommendation that the merging companies should consider submission to their stockholders of the corrected financial data prior to proceeding with the closing of the merger, W & C and attorneys for Interstate (Lord, Bissell & Brook) nevertheless proceeded with the closing, respectively issuing opinions that all steps necessary to consummate the merger had been validly taken, without requiring a revision of the financial statements to reflect the material downward adjustment of NSM’s earnings or insisting upon a disclosure of the earnings decline to the stockholders of both companies or to the SEC. It is further alleged that upon learning of the adjustment of earnings the directors of both companies failed to publish the information or notify stockholders and that W & C, acting on behalf of NSM, transmitted to the SEC a Form 8K containing false representations as to NSM’s financial statements, and concealed the existence and contents of the comfort letter. On or about October 31, 1969, certain officers and directors of Interstate allegedly sold 77,000 NSM shares without disclosing the contents of the comfort letter.

Two other discrete claims are asserted against W & C: (1) that on November 20, 1969, it rendered an opinion with respect to NSM’s acquisition of Compujob, Inc. concurring in an opinion by the latter’s legal counsel which falsely. stated that title to its shares had passed to NSM as of August 29, 1969, and (2) that on October 31, 1969, and November 20, 1969, W & C rendered opinions in connection with NSM’s disposition of Collegiate Advertising Ltd., which falsely asserted that title had passed as of the end of August, 1969. The purpose of the alleged backdating of the transactions was to enable profits realized from them to be included in NSM’s August 31, 1969, year-end financial statement.

It is not claimed that W & C profited from any of the foregoing conduct.

The threshold question is whether the district court’s .two orders, being interlocutory, are appealable. We have recognized that consolidation of stockholders’ suits during pretrial stages pursuant to Rule 42 F.R.Civ.P. may benefit both the court and the parties by expediting pretrial proceedings, avoiding duplication and harassment of parties and witnesses, and minimizing expenditure of time and money by all persons concerned. See MacAlister v. Guterma, 263 F.2d 65 (2d Cir. 1958). However, where the claims against, or defenses of, some parties are substantially different from those of others, some may be prejudiced by consolidation, particularly if one general or lead counsel exercises his supervisory power in a way that tends to deprive them of full discovery and preparation of their individual cases. For these reasons the determination in each case as to whether the benefits from consolidation will outweigh the prejudice to individual parties rests in the district court’s sound discretion. MacAlister v. Guterma, supra, at 69-70; United States v. Knauer, 149 F.2d 519 (7th Cir. 1945), aff’d., 328 U.S. 654, 66 S.Ct. 1304, 90 L.Ed. 1500, rehearing denied, 329 U.S. 818, 67 S.Ct. 25, 91 L.Ed. 697 (1946), petition denied, 332 U.S. 834, 68 S.Ct. 210, 92 L.Ed. 407 (1947).

For essentially the same reasons the court’s power to sever claims and order separate trials is likewise discretionary, requiring it to balance the factors of benefit and prejudice that will result from the alternative courses. The denial of a motion for severance will not, therefore, usually be set aside in the absence of a clear showing of abuse of discretion. Walsh v. Miehle-Goss-Dexter, Inc., 378 F.2d 409, 412 (3d Cir. 1967).

Since consolidation and severance are both discretionary and interlocutory, such orders are not ordinarily appealable. Levine v. American Export Industries, 473 F.2d 1008 (2d Cir. 1973) (consolidation); United States v. Garber, 413 F.2d 284, 285 (2d Cir. 1969) (severance).

“An order granting or denying consolidation, or granting or denying separate trials, is an ordinary, nonappealable interlocutory ordér. Severance orders are the same. Such orders are appealable only by certification and permission under 28 U.S.C. § 1292(b) [footnotes omitted].” 9 J. Moore, Federal Practice ¶110.13 [8] at 183 (2d ed. 1972).

The general rule against appealability of interlocutory orders granting or denying consolidation or severance, however, is subject to a well-recognized exception, sometimes labelled the “collateral order” doctrine. Immediate review may be had with respect to that “small class [of interlocutory orders] which finally determine claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated.” Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 1225, 93 L.Ed. 1528 (1949); MacAlister v. Guterma, supra 263 F.2d at 67. Furthermore, since finality must be given a “practical rather than a technical construction,” Cohen v. Beneficial Industrial Loan Corp., 337 U.S. at 546, 69 S.Ct. at 1226 (1949); Brown Shoe Co. v. United States, 370 U.S. 294, 306, 82 S.Ct. 1502, 8 L.Ed.2d 510 (1962), we have, in the interest of minimizing delay and expense, permitted appeal of an otherwise non-appealable order where it is directly related to a final and appealable order under review in a class action by stockholders. Green v. Wolf Corp., 406 F.2d 291, 302 (2d Cir. 1968), cert. denied, 395 U.S. 977, 89 S.Ct. 2131, 23 L.Ed.2d 766 (1969).

The appealability of the orders before us turns, therefore, on whether either order finally determines collateral rights that are too important to be denied review or to be deferred until the entire case is adjudicated. In resolving this issue we are fortunate in having the benefit of some carefully considered opinions of this court in the very area now before us, consolidation of stockholders’ derivative and class suits. See, e. g., MacAlister v. Guterma, supra; Farber v. Riker-Maxson, 442 F.2d 457, 459 n. 1 (2d Cir. 1971). In MacAlister we held that an immediate appeal may be taken from an order denying the consolidation of stockholders’ derivative suits where the refusal to order consolidation “may prove oppressive.” MacAlister v. Guterma, supra 263 F.2d at 67. In affirming the denial of the consolidation, we noted the doubtful authority of the district court to order a consolidated complaint which would have the effect of merging the rights of some parties with those of others in violation of principles established in Johnson v. Manhattan Railway Co., 61 F.2d 934 (2d Cir. 1932), affd., 289 U.S. 479, 53 S.Ct. 721, 77 L.Ed. 1331 (1933):

“ [Consolidation is permitted as a matter of convenience and economy in administration, but does not merge the suits into a single cause, or change the rights of the parties, or make those who are parties in one suit parties in another.” Johnson v. Manhattan Ry. Co., 289 U.S. at 496-497, 53 S.Ct. at 727-728 (1933).

Accord, Greenberg v. Giannini, 140 F.2d 550 (2d Cir. 1944) (per L. Hand, C. J.); Zdanok v. Glidden Co., 327 F.2d 944, 950 n. 6 (2d Cir.), cert. denied, 377 U.S. 934, 84 S.Ct. 1338, 12 L.Ed.2d 298 (1964); Journapak Corporation v. Bair, 27 F.R.D. 509, 510-511 (S.D.N.Y.1961); 5 J. Moore, Federal Practice ¶42.02, at 42-21; 9 Wright & Miller, Federal Practice & Procedure: Civil § 2382 at 255 (1971).

Accepting our admonition that “Cohen must be kept within narrow bounds, lest this exception swallow the salutory ‘final judgment’ rule,” Weight Watchers of Phila. v. Weight Watchers Int., 455 F.2d 770, 773 (2d Cir. 1972), no sound reason is advanced for not following the teaching of Guterma with respect to appealability of interlocutory consolidation orders in these stockholders’ suits. That decision drew the line between an order which merely requires the parties, in the interest of avoiding needless duplicative expenditure of time and money, to join in common pretrial discovery and preparation and an order which goes beyond these permissible objectives to deny a party his due process right to prosecute his own separate and distinct claims or defenses without having them so merged into the claims or defenses of others that irreparable injury will result. This latter kind of order may be reviewed under the “collateral order” doctrine. Applying the teachings of MacAlister here, we find that the district court’s consolidation order, although purporting to be for “pretrial purposes,” went beyond mere consolidation of the three suits for such purposes. In addition it directed the filing of the Consolidated Amended Supplemental Complaint, which superseded the complaints filed in the three separate actions. It further appears that the effect of this consolidation may be to cause serious prejudice to W & C.

The claims asserted against W & C in the consolidated complaint are stated on behalf of only one of the 15 plaintiffs, Domenick L. Natale. Indeed it is questionable whether he could properly represent a class since he acquired his shares prior to October 31, 1969, the date when W & C first allegedly engaged in wrongful conduct, and since he did not purchase them on the open market. Furthermore, at least some of the plaintiffs have disassociated themselves from Natale’s claims against W & C. In a letter to this court dated November 22, 1972, Harry H. Lipsig, writing on behalf of himself and the other five Lipsig plaintiffs, states “neither I nor any of the other Lipsig plaintiffs intended to assert any claims against White & Case or Lord, Bissell & Brook” and “the Lipsig plaintiffs do not desire to have their claims brought against the other defendants consolidated or otherwise merged or combined with claims that other stockholders might wish to assert against those lawyer defendants.”

Aside from the disassociation of some plaintiffs from Natale’s claims against W & C, the three transactions in which W & C allegedly participated are relatively narrow and limited as to scope, subject matter and time, in contrast to the broad claims asserted by all plaintiffs against most of the other 57 defendants. W & C is not claimed to have participated with these numerous other defendants in the extensive manipulative scheme allegedly carried out by them to defraud NSM stockholders, which formed the original basis and principal claim of all three actions. According to the consolidated complaint, this scheme was carried out during the period from April 1, 1968, to February 17, 1972, or for almost four years, and involved the use of scores of false financial reports, statements, releases, predictions and estimates, some 24 of which are specified as examples in Paragraph 11 of the consolidated complaint. Relief is sought on behalf of all purchasers of NSM shares during the four-year period, including the named plaintiffs.

The charges against W & C, on the other hand, are limited to those claims asserted by Natale only in Paragraphs 16 to 29 of Count I. W & C is not even named in Count II. The claims against W & C, furthermore, are limited to three transactions alleged to have occurred during the 2%-month period from October 31, 1969, to January 19, 1970, with most of the alleged wrongdoing having occurred on one day — October 31, 1969. There is no claim that W & C realized any improper gains from these transactions. Assuming the validity of Natale’s claims against W & C, as wé must for the present purposes, it appears likely that only those members of the class who purchased NSM shares after the alleged concealment on October 31, 1969, of the adjustments to the NSM current operating results would be in a position to claim damages. Thus at some point it will become necessary to separate their claims against W & C from the claims of all plaintiffs against most of the other defendants, which cover a much longer period of time.

To permit such limited claims against W & C to be joined with numerous unrelated claims by other purchasers against some 50-odd other defendants in one “mixed bag” type of consolidated complaint would be fundamentally unfair and would violate the principles underlying our decision in MacAlister v. Guterma, supra, and the unbroken line of authority going back to Johnson v. Manhattan Railway Co., supra. Nor is the prejudice to W & C alleviated by designation of the claims against it separately in Paragraphs 16 to 29 as claims asserted solely by Natale. This mere change in form does not serve to avoid the harm threatened by the merger of all claims into a single cause. Accordingly, we reverse the district court’s consolidation order insofar as it directs that a consolidated complaint be filed against W & C Upon remand the separate Natale complaint will be reinstated.

Turning to the district court’s denial of W & C’s motion for a severance, W & C urges reversal on several grounds: First it contends that in view of the very limited nature of the claims against it and its unique issues and defenses, it will be severely prejudiced by a joint pretrial and trial of the consolidated claims, whereas none of the other parties would be prejudiced by a severance. It appears that despite W & C’s non-participation in most of the alleged misconduct it will be subject to the heavy burden, absent a severance, of participating in voluminous pretrial discovery in a mammoth proceeding that may last for years. If the limited claims against it were severed, on the other hand, pretrial discovery could be completed without delay and the issues with respect to W & C promptly tried within a fraction of the time needed to dispose of the numerous other issues with respect to other defendants. Furthermore, it is asserted, the novel claims against W & C have led to a great deal of speculation and uncertainty on the part of the public and the bar as to the personal vulnerability of lawyers to heavy damages for action taken by them solely in their capacity as such.

Were the foregoing the entire picture, we might be persuaded, because of the unique circumstances of this case, to hold that denial of a severance here amounts to an abuse of discretion. However, it does not appear that a severance would enable W & C to escape the prejudice complained of or gain the benefits it seeks. In the pending action by the SEC against W & C and the other defendants, Judge Barrington D. Parker of the United States District Court for the District of Columbia entered, on March 7, 1973, an order, followed by a memorandum decision dated March 22, 1973, which denied W & C’s motion for a severance of the claims asserted against it in that proceeding and for a transfer of those claims to the Southern District of New York. Thus W & C, even assuming a severance of the Natale suit against it here, may face in the District of Columbia the very pretrial and trial problems sought to be avoided by it, including involvement, expense and delay in pretrial discovery and trial in' the parallel proceeding instituted there by the SEC against it and the other defendants, and it is doubtful whether an immediate trial of the Natale claims against W & C would bar trial of the same claims against it by the SEC.

The picture is further complicated by the fact that some other “lawyer defendants” (e. g., Lord, Bissell & Brook, Meyer, Schauer, Katz and Eppley) are in substantially the same position as W & C. Furthermore, PMM contends that the claims against it, being based on essentially the same facts, are inextricably involved with those against W & C and that a severance of the latter would prejudice PMM’s cross-claim against W & C. Lastly, notwithstanding Judge Edelstein’s assumption that the MultiDistrict Panel had in effect granted a “de facto” severance of the claims here against W & C, that Panel recently ordered transfer of those claims to the District of Columbia for pretrial consolidation with the SEC’s claims there and vacated its order only because of the pendency of this appeal.

In view of these complications we cannot conclude that the district court’s denial of a severance in this case constituted an abuse of discretion, particularly since it was without prejudice to a motion by W & C pursuant to Rule 42(b) for a separate expedited trial of the claims against it. Thus, assuming the Multi-District Panel transfers the claims here on appeal to the District of Columbia, the way is open for W & C to apply to Judge Parker for an order expediting and giving priority to discovery with respect to the claims against it so that these claims may, upon completion of that discovery, be retransferred to the Southern District of New York for an expedited trial here on the merits.

The district court’s consolidation order is reversed to the extent that it directs the filing of a consolidated complaint. In all other respects both orders are affirmed.

      . The actions consolidated by the district court’s April 20, 1972, order were Garber v. Randell, 70 Civ. 835, begun on March 2, 1970; Lipsig v. National Student Marketing Corp., 70 Civ. 2006, begun on May 15, 1970; and Natale v. National Student Marketing Corp., 72 Civ. 721, begun on February 18, 1972.

      . Although consolidation or severance or-tiers may he challenged by way of a petition for a writ of mandamus, see United States v. Garber, 413 F.2d 284, 285 (2d Cir. 1969); Nelson v. Grooms, 307 F.2d 76 (5th Cir. 1962); American Pacific Dairy Products v. District Court of Guam, 217 F.2d 589 (9th Cir. 1955), such relief will be granted only upon a showing of extraordinary circumstances or such gross abuse of discretion as to amount to action beyond the court’s power, Regec v. Thornton, 275 F.2d 801 (6th Cir. 1960).

      . Natale was an attorney representing a company acquired by NSM in 1968, who received from NSM restricted shares in payment for legal services rendered by him to the acquired company.

      . Our decision should not be construed as implying that under no circumstances would an order directing the filing of a consolidated complaint be proper. There may be Circumstances, e. g'., the existence of substantially complete identity between the claims and defenses in all actions, where a consolidated complaint would be appropriate. As we said in MacAlister: “We do not attempt here to prescribe a rule of universal application to orders granting or denying consolidation.” (263 F.2d at 67).


source: Caselaw Access Project

author: ALDRICH, Senior Judge.

license: Public Domain

text:
    Walter BOSTROM, Plaintiff-Appellant, v. ASTRO CRECIDO CIA, NAV. S.A. et al., Defendants-Appellees.
    No. 72-1296.
    United States Court of Appeals, First Circuit.
    Heard March 6, 1973.
    Decided April 6, 1973.

      Michael B. Latti, Boston, Mass., with whom Carroll E. Ayers and Kaplan, Latti & Flannery, Boston, Mass., were on brief, for appellant.
    Ansel B. Chaplin, Boston, Mass., with whom Joseph P. Rooney and Gaston, Snow, Motley & Holt, Boston, Mass., were on brief, for appellees.
    Before COFFIN, Chief Judge, ALDRICH and McENTEE, Circuit Judges.
   ALDRICH, Senior Judge.

Plaintiff, a longshoreman, was part of a gang discharging the S.S. Oriental Explorer, a Greek vessel, at the port of Boston. After the hatch to which he was assigned had been opened, the three beams that had supported the boards were lifted and deposited by the winch-man on the deck, close to the side of the vessel. The beams could not go directly against the hull because of angular stiffeners rising thereto from the deck. Each beam was 22 feet long, and 8 inches wide at the top and bottom. The bottom, lengthwise, was gibbous, in a sweep or curve, to give more strength in the middle, and at the deepest point the beam was three feet from top to bottom. The gibbous shape is in old-fashioned, foreign design, rarely seen in the port of Boston.

According to plaintiff’s witnesses it is the Boston practice to stow beams on their side, one on top of the other, during unloading, but if the beams are high they are sometimes placed upright on their bottoms, side by side, to conserve deck space. In spite of the fact that the Oriental Explorer’s beams had a sweep bottom, the latter alternative was adopted on the day in question. Concededly the upright position, even with flat-bottomed beams, is less safe. Plaintiff testified that when he was gang boss he never stowed beams upright for this reason. One of plaintiff’s witnesses testified that the instant beams were particularly unsteady when so placed, which would, in fact, seem obvious.

When beams are stowed upright, it is the custom to lash them with a line to the outer rail, or bulwark. Plaintiff was doing this, standing in the process, on top of the beam nearest the hull, when he felt the beam “give,” and he slipped and fell into the space between the beam and the hull, injuring himself. Before he fell a witness, and afterwards plaintiff, assertedly saw paper and “gooey stuff,” on top of a beam in the area in which he had stood. Plaintiff testified that he fell because of this substance and the beam’s moving. No officer or member of the crew of the vessel was present at any time.

Plaintiff sued the owner of the vessel in two counts; one for negligence, the second for unseaworthiness. The jury found for him on the first count, but for the defendant on unseaworthiness. Various motions were filed by the parties, the upshot of which was the ordering of judgment n. o. v. for the defendant on count one. Plaintiff appeals therefrom.

If the jury had found for the plaintiff on unseaworthiness, which is almost any unsafe condition no matter how transitory, Mitchell v. Trawler Racer, 1960, 362 U.S. 539, 80 S.Ct. 926, 4 L.Ed.2d 941 (fish gurry on the rail), he would, if we may mix metaphors, be on solid ground. The fact that the unseaworthy condition had been the fault of his employer, and not the defendant, would have been immaterial. Alaska S.S. Co. v. Petterson, 1954, 347 U.S. 396, 74 S.Ct. 601, 98 L.Ed. 798. We may wonder to what extent the verdict for the defendant on this issue constitutes a denial of the existence of the paper, etc., that had materialized subsequent to plaintiff’s description in his answers to interrogatories of the factual cireumstances that allegedly caused the accident. But even apart from this, if we take all the evidence most favorable to plaintiff, we cannot see negligence on the part of the defendant. If there was a substance on the beam before the longshoremen took over, it was not evident to the defendant, but concealed under the hatch-boards. Nor was there any evidence bringing home to the defendant a reason to suppose that the beams would be stowed on their bottoms, so that someone might have to stand on them to make them fast, particularly where their unstable nature due to their design was open and obvious. Clearly the defendant was not obliged to design beams so that they could be stood up, when it was perfectly feasible to lay them down.

Even if the Boston practice which, in the light of experience related to rectangular beams, had been uniformly to stow them upright, the maximum obligation of the defendant would have been to warn the stevedore to treat its beams differently, if such a warning was needed. It was the gang boss himself, however, who noted that as soon as the beams landed on deck their design made them unsteady. No further warning was necessary. There was no reason shown to charge the defendant with anticipating that the stevedore would engage in knowingly negligent conduct. Cf. Guarracino v. Luckenbach S.S. Co., 2 Cir., 1964, 333 F.2d 646, cert. denied 379 U.S. 946, 85 S.Ct. 439, 13 L.Ed.2d 543. For such expectation there should be a heavy burden on the plaintiff.

In these circumstances plaintiff is driven to argue that the defendant was negligent because it did not furnish him a safe place to work, regardless of who caused the unsafety. This is just an attempt to equate negligence with unseaworthiness, and is going full circle in the wrong direction. Unseaworthiness is a doctrine of liability which grew out of the belief that in certain circumstances, and to certain parties, there should be liability without fault. The jury found, from which there was no appeal, that plaintiff had not proved such a case. He cannot get back aboard by saying that the defendant is an insurer under the negligence count. Plaintiff’s case of Beard v. Ellerman Lines, Ltd., 3 Cir., 1961, 289 F.2d 201, rev’d on other gr’ds, Atlanta & Gulf Stevedores v. Ellerman Lines, 369 U.S. 355, 82 S.Ct. 780, 7 L.Ed.2d 798, involved a shipowner’s own negligence in stowage and in permitting a dangerous method of discharging cargo. To the extent that language in the opinion could be read to equate, under all circumstances, unsafeness of a place to work, with negligence, we do not agree with it. Arena v. Luckenbach S.S. Co., 1 Cir., 1960, 279 F.2d 186, cert. denied 364 U.S. 895, 81 S.Ct. 222, 5 L.Ed.2d 189; cf. Usner v. Luckenbach Overseas Corp., 1971, 400 U.S. 494, 91 S.Ct. 514, 27 L.Ed.2d 562. The maximum duty was “reasonable care.” West v. United States, 1959, 361 U.S. 118, 123, 80 S.Ct. 189, 4 L.Ed.2d 161.

Affirmed.

       Throughout this opinion by “defendant” we mean the shipowner. In point of fact the appeal is being resisted by the stevedoring company, third party defendant, on whom ultimate liability would fall on account of its warranty of performance.


author: OAKES, Circuit Judge:

text:
    Rafael SANTANA, Appellant, v. UNITED STATES of America, Appellee.
    No. 436, Docket 72-2075.
    United States Court of Appeals, Second Circuit.
    Argued Feb. 14, 1973.
    Decided April 20, 1973.
    Joseph I. Stone, New York City, for appellant.
    Nicholas Figueroa, Asst. U. S. Atty. (Whitney North Seymour, Jr., U. S. Atty., S. D. N. Y., John W. Nields, Jr., Asst. U. S. Atty., of counsel), for appellee.
    Before FRIENDLY, Chief Judge, OAKES, Circuit Judge, and DAYIS, Judge.

       Of the United States Court of Claims, sitting by designation.

   OAKES, Circuit Judge:

This appeal raises the question whether a judgment on a plea of guilty may be set aside where the use at trial of the evidentiary presumptions in the statute is subsequently invalidated. The plea here was to an indictment charging receipt of illegally imported cocaine, 21 U.S.C. § 174. The statutory presumptions in effect at the time of appellant’s plea in 1957 were that importation of the cocaine and knowledge of that importation could be inferred from possession. These presumptions were invalidated in Turner v. United States, 396 U.S. 398, 90 S.Ct. 642, 24 L.Ed.2d 610 (1970), which held that possession at least of less than one gram of cocaine (14.68 grams of a cocaine-sugar mixture of which 5 per cent was cocaine) did not warrant the statutory presumptions, since considerable cocaine (as opposed to heroin) is manufactured in the United States, 396 U.S. at 418-419, 90 S.Ct. 642, and n. 39. While appellant has long since served his five-year mandatory sentence on this charge, he seeks to set aside his conviction by writ of habeas corpus, 28 U.S.C. § 2255, denied below, because he has subsequently been charged with other drug offenses — indeed, was sentenced to a term of 15 years on February 17, 1966, in a second offender status.

Because appellant’s original charge related to possession of only one-half ounce of cocaine or 14.75 grams, he contends that he fell within the Turner case’s protection from the presumptions. Our own United States v. Gonzalez, 442 F.2d 698, 709 (2d Cir.) (en banc), cert. denied subnom., Ovalle v. United States, 404 U.S. 845, 92 S.Ct. 146, 30 L.Ed.2d 81 (1971), refers to small amounts as “of the order of 10 grams.” For purposes hereof we will assume that appellant’s case is identical to Turner’s in amount and time. We also recognize that we held in United States v. Liguori, 438 F.2d 663 (2d Cir. 1971) (Liguori II), that Turner is retroactive, and that failure to object to the use of the presumptions during trial would not have affected a waiver of the Turner issue.

But here, unlike Liguori II, appellant did not go to trial, he pleaded guilty, and the Liguori II court specifically declined to express any opinion on the validity convictions without trial. 438 F.2d at 670. Appellant argues, however, that since his plea was based upon his (or presumably his attorney’s) knowledge that the now invalidated presumptions could be used against him at trial, he should now be allowed to withdraw that plea.

McMann v. Richardson, 397 U.S. 759, 90 S.Ct. 1441, 25 L.Ed.2d 763 (1970), and Brady v. United States, 397 U.S. 742, 90 S.Ct. 1463, 25 L.Ed.2d 747 (1970), require us to reject appellant’s claim. In McMann the defendant’s claim that his guilty plea was induced by a coerced confession — inadmissible under later decisions — was rejected, the Court saying that he was “convicted on his counseled admission in open court that he committed the crime charged against him” and that the fact that his lawyer might have advised him otherwise had “no bearing on the accuracy of the defendant’s admission that he committed the crime.” 397 U.S. at 773, 90 S.Ct. at 1450. So, too, in Brady the Court rejected the defendant’s claim that his guilty plea to a kidnaping charge was induced by a statutory provision — later invalidated — permitting imposition of the death penalty only upon a recommendation of a jury, the Court saying, in even broader language, that “a voluntary plea of guilty intelligently made in the light of the then applicable law does not become vulnerable because later judicial decisions indicate that the plea rested on a faulty premise.” 397 U.S. at 757, 90 S.Ct. at 1473.

The Court in McMann and Brady, while recognizing that subsequent judicial actions might have changed the thinking that resulted in the guilty pleas there involved, nonetheless refused to find the pleas invalid for a combination of reasons. First, the plea was made in open court on advice of competent counsel and the defendant fully recognized that he would sustain severe punishment because of his plea. Nothing in the record of those cases indicated that the pleas were either inaccurate or unreliable indicia of guilt. Brady, 397 U.S. at 758, 90 S.Ct. 1463. Second, the Court felt that ordering a new trial years after the original sentencing would make it very difficult for both the accused and the State to marshal the relevant evidence. Third, the State would be faced with reopening a very large number of cases in which guilty pleas had been entered. United States v. Liguori, 430 F.2d 842, 848-849 (2d Cir. 1970), cert. denied, 402 U.S. 948, 91 S.Ct. 1614, 29 L.Ed.2d 118 (1971) (Liguori I). The case now before us presents these same three difficulties. (1) Here the defendant voluntarily pleaded guilty on advice of counsel. Although he may have been influenced by the greater likelihood of conviction stemming from the statutory presumptions of importation and knowledge in the later invalidated 21 U.S.C. § 174, that increased likelihood of conviction is exactly parallel to the increased likelihood of conviction stemming from the admission of the coerced confession in McMann. (2) It would be for all practical purposes impossible to have a retrial that was other than a sham when the alleged offense took place 15 years ago. (3) It would place an extraordinary burden on the Government to have to retry the substantial number of pre-Turner 21 U.S.C. § 174 convictions based on guilty pleas which would likely result from a reversal in this case.

Nor does the decision in Liguori I, supra, avail appellant. There the defendant had pleaded guilty to a violation of the marijuana transfer tax act, to the prosecution of which, as was later held by Leary v. United States, 395 U.S. 6, 89 S.Ct. 1532, 23 L.Ed.2d 57 (1969), a timely assertion of the privilege against self-incrimination was a complete defense. Liguori I held that a plea of guilty was not a waiver of the privilege and accordingly reversed the conviction, distinguishing McMann, Brady and Parker v. North Carolina, 397 U.S. 790, 90 S.Ct. 1458, 25 L.Ed.2d 785 (1970), on the three bases discussed above. A still more important distinction is that in Liguori I, as the court there pointed out, it was not a question whether the unconstitutional statute had tended to influence the defendant to plead guilty, but rather whether the statute took away the privilege against self-incrimination by imposing a statutory scheme the purpose of which was to punish for failing to incriminate oneself. 430 F.2d at 849. Thus, in Liguori I, unlike this case and the McMann, Brady and Parker trilogy, the punishment would have been unjustified even if the procedures leading to the conviction were correct. 430 F.2d at 849.

This case fits squarely within McMann, Brady and Parker.

Judgment affirmed.


author: ALFRED T. GOODWIN, Circuit Judge:

text:
    UNITED STATES of America, Appellee, v. Robert Theodore BASS, Appellant.
    No. 72-2715.
    United States Court of Appeals, Ninth Circuit.
    March 27, 1973.

      Michael J. Lightfoot, Deputy Federal Public Defender (argued), Los Angeles, Cal., for appellant.
    Barry Russell, Asst. U. S. Atty. (argued), William D. Keller, U. S. Atty., Eric Nobles, Asst. U. S. Atty., Los Angeles, Cal., for appellee.
    Before ELY and GOODWIN, Circuit Judges, and SCHWARTZ, District Judge.

       The Honorable Edward J. Schwartz, Chief Judge, United States District Court for the Southern District of California, sitting by designation.

   ALFRED T. GOODWIN, Circuit Judge:

Robert Theodore Bass was found guilty of unarmed bank robbery (18 U.S.C. § 2113(a)), and acquitted on a charge of armed bank robbery (18 U.S.C. § 2113 (d)). He contends on appeal that he was prejudiced in presenting his defense of insanity because the district court refused to authorize payment for a thorough psychiatric examination.

Approximately three weeks before the date set for trial, Bass moved for the appointment of a psychiatrist of his choice under the provision of the Criminal Justice Act of 1964 which makes “investigative, expert, or other services necessary to an adequate defense” available to indigent defendants. 18 U.S.C. § 3006A(e). It is conceded that Bass was indigent. His motion was accompanied by an affidavit swearing that Bass’s father had died in a mental institution, that Bass had twice attempted suicide, and that he had received treatment for mental problems in prison.

Because this unverified information called into question Bass’s competency to stand trial, the court postponed the trial, deferred action upon the § 3006A motion, and, on its own motion, appointed a psychiatrist, Dr. Marcus Crahan, to examine the defendant pursuant to 18 U.S.C. § 4244. This statute, whether or not an accused is indigent, authorizes the court to appoint a psychiatrist to evaluate the present mental competence of the accused to stand trial. The district judge at the same time ordered Dr. Crahan to investigate and report upon Bass’s sanity at the time of the alleged offense.

Dr. Crahan examined Bass for one hour. He reported to the court that Bass had told him that Bass’s father had died in a mental hospital, probably of syphilis, that Bass’s mother was mentally defective, and that Bass had a history of three suicide attempts, two mental commitments, and heroin addiction. Dr. Crahan concluded that, nevertheless, Bass was able to understand court proceedings and assist in his defense. Pursuant to the judge’s request, but outside the scope of the § 4244 examination, Dr. Crahan also reported that in his "opinion Bass was sane, for the purposes of the criminal law, at the time of the offense charged.

The court found Bass competent to stand trial, and Bass renewed his motion under § 3006A(e) for the appointment of a psychiatrist to assist in his defense. Bass again nominated Dr. Michael Co-burn. He advised the court that Dr. Coburn had been apprised of Dr. Crahan’s evaluation and had stated that before Dr. Coburn could reach a firm conclusion as to Bass’s sanity at the time of the offense he would require various neurological and psychological tests for brain damage.

The court granted the motion for Dr. Coburn’s appointment as a defense expert. But before Dr. Coburn could examine Bass, the government moved for a second § 4244 competency examination to be performed by a third psychiatrist, Dr. Harold Deering. The court thereupon ordered Dr. Deering to report his opinion on the present and past sanity of Bass. Dr. Deering interviewed Bass, concluded Bass was sane at all relevant times, and reported this to the court.

Bass notified the court that Dr. Co-burn, after considering Dr. Deering’s report, remained of the opinion that specific neurological and psychological tests were necessary before he could make an accurate determination of sanity at the time of the robbery. Bass objected to any rescission of the order appointing Dr. Coburn. In view of the reports of the two court-appointed psychiatrists the district judge ruled that there was now no need for Dr. Coburn to proceed or to perform any tests.

Bass was then tried to the court on a stipulated statement of facts, and was found guilty of unarmed bank robbery. We reverse because Bass was not given the opportunity to develop his theory of his defense as provided by § 3006A(e).

Where expert services are necessary to an adequate defense the court must authorize them. E. g., Christian v. United States, 398 F.2d 517, 519, 6 A.L.R.Fed. 1001 (10th Cir. 1968). A clear standard for deciding what constitutes “necessity” under § 3006A(e) has not yet been stated in this circuit. We agree with the views of Judge Wisdom, concurring in United States v. Theriault, 440 F.2d 713, 716-717 (5th Cir. 1971). The statute requires the district judge to authorize defense services when the defense attorney makes a timely request in circumstances in which a reasonable attorney would engage such services for a client having the independent financial means to pay for them.

The initial affidavit in support of Bass’s motion set forth enough facts to require the appointment of a psychiatric expert under § 3006A(e). Bass’s family and personal history indicated that an insanity defense might be appriate. His own expert was necessary to assist counsel in the exploration, preparation, and presentation of such a defense. See United States v. Taylor, 437 F.2d 371, 377 n. 9 (4th Cir. 1971). If his client had adequate financial resources, counsel could reasonably be expected to seek the services of an expert in these circumstances. Cf. United States v. Schultz, 431 F.2d 907, 911 (8th Cir. 1970). An indigent defendant is entitled to the same type of service.

The appointment of two experts to investigate Bass’s competency and sanity did not obviate the defendant’s right to his own expert under § 3006A (e). Under § 4244 the court appoints a psychiatrist who examines the accused and reports to the court. The § 4244 expert is expected to be neutral and detached. The § 3006A(e) expert fills a different role. He supplies expert services “necessary to an adequate defense.” He can be a partisan witness. His conclusions need not be reported in advance of trial to the court or to the prosecution. And his services embrace pretrial and trial assistance to the defense as well as potential trial testimony. United States v. Theriault, 440 F.2d at 715.

Bass requested the appointment of a psychiatrist who was on the district court’s panel of psychiatrists qualified and available for the assistance of indigents. It is ordinarily desirable to appoint under § 3006A(e) a psychiatrist preferred by the defendant. If this is not practicable, then the psychiatrist should be one acceptable to the defendant. In any event, the prosecutor should have no influence in the selection. See United States v. Matthews, 472 F.2d 1173 (4th Cir., 1973); Report of the Judicial Conference of the United States, 36 F.R.D. 277, 374 (1965).

The government can obtain no help from our recent decision in United States v. Valtierra, 467 F.2d 125 (9th Cir. 1972), for two reasons. First, Valtierra’s belated motion for a second psychiatric report was not made until the day of the trial, and granting it would have occasioned substantial delay. Second, Valtierra’s motions did not appear to invoke the provisions of § 3006A(e). The second psychiatrist was not requested in order to do anything his predecessor failed to do. No consideration was given to the relationship between § 4244 and § 3006A(e). We held that the court, under those circumstances, had no duty to appoint successive psychiatrists.

Because the procedure followed by the district court deprived Bass of an important right under the Criminal Justice Act, we must vacate the judgment. While we cannot predict the outcome of an examination conducted by a § 3006A (e) defense expert, Bass should have the opportunity to utilize the services of such an expert. The district court should enter an order authorizing the employment of the requested expert.

Reversed and remanded.