author: SWYGERT, Chief Judge.

text:
    SUNDSTRAND CORPORATION, a Delaware corporation, Plaintiff-Appellant, v. STANDARD KOLLSMAN INDUSTRIES, INC., an Illinois corporation, et al., Defendants-Appellees.
    Nos. 72-1426, 72-1427.
    United States Court of Appeals, Seventh Circuit.
    Argued April 9, 1973.
    Decided Oct. 18, 1973.
    Rehearing Denied Nov. 8, 1973.

      W. Donald McSweeney, Chicago, 111., Richard M. Schilling, Rockford, 111., for Sundstrand Corp.
    Frank F. Fowle, Paul E. Freehling, Pope, Ballard, Shepard & Fowle, Chicago, 111., for Standard Kollsman Industries, Inc., and John Huarisa.
    Albert E. Jenner, Jr., Donald R. Harris, Lynne E. McNown, Jenner & Block, Chicago, for Henry W. Meers.
    Before SWYGERT, Chief Judge, KILEY and CUMMINGS, Circuit Judges.
   SWYGERT, Chief Judge.

Appeal No. 72-1426 arises out of an action brought by Sundstrand Corporation to secure redress for alleged violations of Section 10(b) of the Securities Exchange Act of 1934 and the related Rule 10b-5 by Standard Kollsman Industries, Inc. (SKI), John B. Huarisa, and Henry W. Meers in connection with the transfer to Sundstrand of an option held by Huarisa to purchase stock of SKI. Sundstrand sought as relief a recission of the transfer and the assessment of damages against the named defendants. At the close of Sundstrand’s case, the district judge granted motions of the several defendants to dismiss the case under Rule 41(b) of the Federal Rules of Civil Procedure. Sundstrand has appealed, taking particular issue with the refusal of the trial judge to allow an amendment of its complaint and his refusal to admit a considerable volume of evidence offered by Sundstrand.

Appeal No. 72-1427 is based upon a counterclaim filed by Huarisa against Sundstrand for specific performance, alleging that Sundstrand owed and had failed to honor a monetary obligation to Huarisa due in connection with the stock option transfer agreement. This claim was dismissed on Sundstrand’s motion, the judge having found that Huarisa had failed to demonstrate his lack of an adequate remedy at law. Huarisa argues that Sundstrand had no standing to object, midway through trial, to his relief in equity, that the trial judge clearly erred in finding an adequate remedy at law, and that the trial judge should have awarded damages in any event rather than dismissing the case. Sundstrand also raises a contractual defense under 15 U.S.C. § 78ec(b).

I

Sundstrand is a Delaware corporation with its principal place of business in Illinois. SKI is an Illinois corporation with numerous subsidiaries, the most prominent of which is the Kollsman Instrument Corporation (KIC). At all times pertinent to this suit, Huarisa and Meers held positions of responsibility at SKI: Huarisa as president and chairman of the board, Meers as a director.

Sometime in the middle of November 1968, Huarisa met with executives of Sundstrand to discuss the possibility of merger between Sundstrand and SKI. In late December 1968, following considerable discussion and negotiation, Meers and Huarisa were presented by Sundstrand with a written proposal providing for the acquisition of SKI’s assets and liabilities in exchange for Sundstrand common stock having an approximate value of $38.25 per share of SKI stock. The proposal was subject to approval by the boards of SKI and Sundstrand and by the stockholders of SKI. On January 2, 1969, Huarisa agreed to open SKI’s books and records to Sundstrand without reservation and, on January 7, a survey team from Sund-strand began an exhaustive investigation of SKI and its subsidiaries. The results of the survey put an end to the merger negotiations. Officers of Sundstrand met with Huarisa and Meers on January 20. As the trial judge found, Sund-strand represented:

. . . that both the [survey] team and they had concluded that (a) the product compatibility which Sund-strand had anticipated prior to the survey as a likely result of a combining of the two companies was no longer anticipated; (b) the combined companies might experience problems with their labor unions; and (c) SKI’s earnings projections were overestimated.

As a result, the two firms agreed to discontinue merger negotiations.

Sundstrand, however, did not emerge from the negotiations unscathed. On January 4, 1969, two days after Sund-strand had tendered its contingent merger proposal, Huarisa informed Sundstrand that a problem had arisen with a quantity of SKI stock. At a meeting on January 6, officers of Sund-strand discovered that a large block of SKI stock' had been offered for sale to Huarisa, pursuant to an agreement made by Huarisa with the Burke family, large stockholders in SKI. That agreement gave Huarisa a right to purchase SKI stock held by the Burkes once they had received a bona fide offer to purchase and had made a decision to sell. The price to Huarisa was to be the same as that specified in the purchase offer. This “right of first refusal” lapsed thirty days after the receipt of an offer by the Burkes. At the January 6 meeting, Huarisa informed Sundstrand that the Burkes had received an offer from Sun Chemical Corporation some twenty-seven days earlier to purchase a sizeable block of SKI stock. Huarisa stated that he did not intend to purchase the stock for his own account and added that an acquisition of the shares by Sun Chemical would provide a substantial impediment to any merger between SKI and Sund-strand.

Taking this cue, Sundstrand expressed a willingness to purchase Huarisa’s rights to the Burke stock and to issue shares in Sundstrand to reimburse Huarisa for his payment of funds due the Burkes within three days. Huarisa accepted this offer. On January 8, he paid the Burkes sufficient funds to hold open his right of first refusal, and executed an agreement with Sundstrand the next day, conveying his purchase rights in return for reimbursement of the monies paid the Burkes.

On February 6, 1969, more than two weeks after it had rejected the possibility of merger with SKI, Sundstrand paid the Burkes $6,360,915 and received the stock of SKI which Sun Chemical had earlier offered to purchase. Huarisa was repaid on March 3, when Sund-strand transferred to him 5,686 shares of its common stock. By its agreement with Huarisa, Sundstrand was to repurchase the shares from him upon fifteen days’ notice at any time within two years of the contract date.

This suit was filed August 8, 1969, after SKI published a report of its financial results for the year 1968. Sund-strand alleged that the actual profit picture for the year 1968 — actually not a profit picture at all, SKI having suffered a net loss equivalent to 15 cents per share — had been concealed from it by Huarisa, Meers, and SKI, as individuals and as a conspiracy. The complaint specifically pointed to a public report of SKI for the first three quarters of 1968 which showed an 86 cents per share profit for that period, a representation by defendants that the earnings of SKI for the year 1968 would be about $1.16 per share, and a statement by defendants that the Avionics Division of KIC was not incurring losses. At the end of Sundstrand’s case, the trial judge granted motions of the defendants to dismiss under Rule 41(b), F.R.C.P.

Following his dismissal of Sund-strand’s action, the district judge proceeded to try Huarisa’s counterclaim, wherein Huarisa alleged that Sund-strand had failed to abide by its contractual obligation to repurchase the 5,686 shares of its common stock which had been transferred to Huarisa in repayment for the Burke option. The claim was dismissed after both sides had presented their evidence, the trial judge having found that Huarisa, being possessed of an adequate remedy at law, was not entitled to the specific performance he sought.

II

As noted, the complaint in No. 72-1426 alleged three specific acts of misconduct on the part of Huarisa and Meers. It also contained a general allegation of wrongdoing, Paragraph 7:

In connection with Sundstrand’s purchase of the 223,190 common shares of SKI stock, the defendants conspired with each other to violate, and each of them did violate, Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C.A. § 78j, and clauses (1), (2) and (3) of Rule 10b-5 of the General Rules and Regulations promulgated thereunder by the Securities and Exchange Commission, 17 C. F.R. § 240.10b-5, by employing a device, scheme or artifice to defraud, by making untrue statements of material facts and omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, and by engaging in an act, practice or course of business which operated as a fraud or deceit upon Sundstrand. Such violations were effected by the use of in-strumentalities of interstate commerce.

At trial, the district judge ruled that this general statement was limited by the specific claims of fraud made in the complaint and refused to admit evidence which Sundstrand sought to introduce as proof of fraud beyond the specific acts alleged in the complaint. This was error.

Pleading is no longer a procedural game of skill at which counsel must be adept in order to insure the decision of his case on its merits. Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L. Ed.2d 80 (1957). Perhaps the most striking development of modern procedure has been the recognition that pleading is important only to inform the opposing party of what is claimed and the grounds upon which the claim rests. And in deciding whether a complaint fairly notifies a defendant of matters sought to be litigated, courts have often looked beyond the pleadings to the pretrial conduct and communications of the parties. See, e.g., Brennan v. Midwestern United Life Ins. Co., 417 F.2d 147, 155 (7th Cir. 1969); State Farm Mutual Auto Insurance Co. v. Scott, 198 F. 2d 152 (5th Cir. 1952); Scruggs v. Chesapeake & Ohio Ry. Co., 320 F.Supp. 1248 (W.D.Va. 1970). The fruits of discovery, in particular, provide a wealth of information relevant to discerning the breadth of a complaint. 4A J. Moore, Federal Practice, fí 33.17 at 33-85 to 33-89 (1971).

Prior to the trial of this ease, defendants Huarisa and SKI requested by interrogatory that Sundstrand “describe in detail” the facts supporting its claim in Paragraph 7 of the complaint. Sundstrand filed a lengthy response describing considerably more fraudulent conduct on the part of defendants than was specified in the complaint. The answer was prefaced with this comment:

All of the facts referred to in the following statement are parts of the device, scheme or artifice to defraud Sundstrand and the act, practice or course of business which operated as a fraud or deceit upon Sundstrand. Many of these facts are summarized in Sundstrand’s complaint herein.

Defendants, then, knew that events other than those detailed in the complaint were a subject of suit as Sundstrand viewed the case, knew that Sundstrand intended to prove the occurrence of these events in support of its case, and knew the substance and particulars of Sundstrand’s version of each such event. They cannot now argue, nor should the trial judge have allowed them to argue, that proof of Paragraph 7 was limited to proof of the specific allegations of fraud in the complaint.

Meers, accepting this conclusion ar-guendo, goes on to assert that the narrow reading of the complaint by the trial judge worked no prejudice to Sund-strand’s ease against him, the trial judge having admitted evidence against Meers as though he had taken a broad view of the complaint. We cannot accept this argument. Not only is it factually incorrect; it fails to recognize that the trial judge must have limited himself to ruling on the allegations of the complaint as he narrowly viewed it. True, evidence of the Burke Report was admitted against Meers. But this could have done Sundstrand little good, for the Burke Report and Meers’ failure to disclose it to Sundstrand were not specifically mentioned in the complaint. The failure of the trial judge to mention the Burke Report in his findings strongly suggests that he viewed the document and related conduct to be without relevance to Sundstrand’s case.

We conclude that Sundstrand must have a new trial in the district court. We reverse the dismissal by the district judge and remand the case for that purpose.

Ill

In his counterclaim against Sund-strand, Huarisa alleged that Sundstrand had failed to meet its contractual obligation to repurchase stock which it had transferred to him as repayment for his purchase of the Burke option. As relief, Huarisa requested: Sundstrand made no objection to the grant of equitable relief until after it had presented its case as counterde-fendant; it then sought to dismiss the counterclaim, suggesting that Huarisa had an adequate remedy at law and was not entitled to specific performance. The trial judge agreed and dismissed the counterclaim with prejudice.

A. That an order of specific performance of the provisions of Paragraph 4(a) of the Agreement dated January 9, 1969, relating to his right to sell to Sundstrand 5,686 shares of Sund-strand common stock for the cash price of $58,875, be entered in his favor and against Sundstrand.
B. That such other and additional relief as is just and equitable be awarded to him and against Sundstrand.

Huarisa claims this to be reversible error. Since, he argues, the defense of an adequate remedy at law is an affirmative one under Illinois law, and since Illinois law governs that question in federal diversity cases, Sundstrand was barred from raising his adequate remedy at law by its failure to affirmatively plead the point in its answer. We disagree.

It has long been settled that the burden of proof on a particular issue of a diversity case is a matter of substantive law, and, hence, a variable of local law which federal courts must observe under Erie Ry. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Palmer v. Hoffman, 318 U.S. 109, 63 S. Ct. 477, 87 L.Ed. 645 (1943); Cities Service Oil Co. v. Dunlap, 308 U.S. 208, 60 S.Ct. 201, 84 L.Ed. 196 (1939). What is not as clear is whether a determination that a defendant bears the burden of proof on a particular issue under local law is necessary to a conclusion that the issue comprises an affirmative defense which the defendant must plead under Rule 8(c), F.R.C.P., or whether, if the burden is on the plaintiff, the defendant must nevertheless sometimes plead a point affirmatively under the rules. Some courts have held that a defendant must plead as an affirmative defense any issue specifically included in the listing of Rule 8(c), no matter where the burden of proof lies under state law. See Cincinnati, N. O. & J. P. Ry. Co. v. Eller, 197 F.2d 652 (6th Cir. 1952); Sampson v. Channell, 110 F.2d 754 (1st Cir.), cert. denied, 310 U.S. 650, 60 S.Ct. 1099, 84 L.Ed. 1415 (1940). In our view the better rule is that a defendant need plead affirmatively only those defenses upon which he bears the burden of proof. Owens Generator Co. v. H. J. Heinz Co., 23 F.R.D. 121 (N.D. Cal. 1958); 2A J. Moore, Federal Practice, |[ 8.27[2] at 1849-50 (1971); See Francis v. Humphrey, 25 F.Supp. 1 (E.D. Ill. 1938). When as in this case, Rule 8 (c) does not specifically list an issue as an affirmative defense, resort to state law dealing with burdens of proof is the only logical method to ascertain the pleading character of a defense; to require a defendant to plead defenses enumerated under Rule 8(c) without reference to the burdens of proof thereon under state law is an inconsistent approach and an unduly strict and unnecessarily mechanical interpretation of the federal rules. An obvious corollary of this view is that the label which a state court may affix to a defense is as irrevelant to pleading under Rule 8 as is the listing made in section (e) of that Rule.

In support of his contention that adequacy of legal remedy is an affirmative defense under Illinois law, Huarisa cites Law v. Ware, 238 Ill. 360, 87 N.E. 308 (1909), and Chapman v. Barton, 345 Ill.App. 110, 102 N.E.2d 565 (1951). But neither is apposite; each involved a suit in chancery wherein the defendant failed to raise an objection based on plaintiff’s adequate remedy at law until after a trial had been held on the merits of the action. The Law court ruled:

[I]f the court is able to grant the relief asked for, and defendant submits himself to the jurisdiction of the court without specifically pointing out the objection in the answer, it will be regarded as waived. An objection that the court ought not to assume jurisdiction because there is an adequate remedy at law comes too late after filing an answer in which the objection is not affirmatively set out and relied on. 238 Ill. at 364, 87 N.E. at 309.

No view was intimated, there or in Chapman, that a defendant would have borne the burden of proving the substance of his objection had it been timely made. More pertinent for our purposes is Barton v. De Wolf, 108 Ill. 195 (1883), a suit for specific performance of a contract to sell stock. In affirming a decree dismissing the case, the court stated:

To authorize a decree for the performance of such a contract specifically, it must appear that the remedy at law is inadequate. This, from all of the adjudged cases, seems to be indispensable. Then, has appellant brought himself within the exceptional rule? We think not. If there was a contract for the sale of the shares of the stock, and a breach of the contract, he can be fully compensated in damages at law. No such peculiar case is made by appellant as requires a court of equity to interfere. No such special circumstances are shown as to take the ease out of the general rule. 108 Ill. at 198 (emphasis supplied).

As this language indicates, the burden rests on an Illinois plaintiff to prove the inadequacy of his legal remedy. See also Campbell v. Potter, 147 Ill. 576, 586, 35 N.E. 364 (1893); Pierce v. Plumb, 74 Ill. 326 (1874). This view, moreover, is consistent with other authorities. Trainor v. Mutual Life Ins. Co., 131 F. 2d 895 (7th Cir. 1942). Pomeroy, in his treatise on equity jurisprudence, writes:

It is the settled rule in England and in the United States that contracts for public securities, government stocks, bonds, etc., will not be enforced, since they can always be bought in the market. In the United States all such securities are ordinarily purchasable in the market, and the rule is settled by the weight of authority that contracts concerning stocks and bonds of corporations, like those concerning government securities, will not be specifically enforced. [Specific performance is, however, frequently decreed where the contract involves corporate stock of a peculiar or special value to the complainant, or where the subject of the contract is of unknown and of not easily ascertainable value, or where other sufficient grounds are present for the interposition of equity.] 4 Pomeroy’s Equity Jurisprudence § 1402 (1941).

At least in cases involving stock contracts, specific performance is an exceptional remedy. The clear import of this view is that a plaintiff must prove the exception to gain his relief, not that the defendant must prove the negative proposition that the case is not an exception. It is the plaintiff, after all, who claims the inadequacy of his redress at law. We conclude that Huarisa bore the burden of proving the inadequacy of his legal remedy, and that Sundstrand was not required to plead the same as an affirmative defense.

Did Huarisa successfully carry his burden? The trial judge held that Huarisa had not, and we cannot characterize his factual findings as clearly erroneous. One finding of particular importance is this:

The shares with which the parties here are concerned are bought and sold on the New York Stock Exchange; they are easily bought and sold on the market. The shares of stock carry with them no uniqueness nor significance.

Huarisa’s claim of an inadequate legal remedy is based largely on his contention that the shares of Sundstrand transferred to him are not registered under the Securities Act of 1933 and that he will be subject to a serious risk of civil and criminal action if he attempts to sell them. Yet he introduced no evidence at trial to support a finding that the Sundstrand shares were unregistered. Because of this failure, he now asserts that the shares are unregistered as a matter of law, relying largely on the restrictive covenant of his agreement with Sundstrand. Unless the shares transferred are unregistered, Huarisa argues, there would be “no other conceivable reason” for his investment representation. Several texts are cited in support: 1 Loss, Securities Regulation 665-66 (2d ed. 1961); Wheat, Report of the Disclosure Policy Study, Disclosure to Investors (The Wheat Report) 163, 171-72 (March, 1969); and Goldberg, Private Placements & Restricted Securities, § 2.5 (1972). These sources do not, however, state that the only inference to be drawn from an investment representation is that the shares transferred are unregistered, and we refuse to take that step. On the record as it stands, Huarisa’s shares in Sundstrand are in no way unique or difficult to value, and we agree with the trial judge that he is not entitled to specific performance.

Moreover, Huarisa would not be entitled to specific performance on his own version of the facts. If the shares are unregistered, and if the sole reason for his investment representation was to allow Sundstrand to transfer those shares without registration, Huar-isa is perfectly free, under both the securities laws and his contract with Sundstrand, to resell the shares as long as he offers them privately in conformity with the law surrounding the private placement exemption of the Securities Act of 1933, 15 U.S.C. § 77d(2). See generally, 1 Loss, Securities Regulation, 665-96 (2d ed. 1961). The shares may be difficult to value, but they are undoubtedly saleable, and Huarisa would have no right to specific performance. Only where shares have no market value and cannot easily be disposed of elsewhere will specific performance to compel their repurchase be decreed. See Smurr v. Kamen, 301 Ill. 179, 188, 133 N.E. 715, 719 (1921).

A remaining question is whether the trial judge erred in dismissing the case rather than awarding damages to Huarisa. Rule 54(c), F.R.C.P., provides in part:

[E]very final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in his pleadings.

This raises some interesting problems where, as here, plaintiff has focused entirely on equitable relief in his proof and pleadings and has failed to prove his entitlement thereto. If the case is dismissed with prejudice, a subsequent suit for damages would be barred by res judicata. This certainly fails to comport with Rule 54(c), to say nothing of the incongruity of dismissing a suit because of the availability of adequate remedy at law when that remedy exists in vacuo, without a right. Yet it is equally clear that a trial judge cannot award damages without proof on the issue by the claimant. The best solution, we think, is to remand the case for a hearing on damages; rather than dismissing the case after refusing to decree specific performance, the judge should have retained jurisdiction of the cause for a hearing on the issue of damages.

Huarisa is not entitled to a hearing on damages, however, if Sundstrand proves that the contract sued upon was made in violation of the Securities Exchange Act of 1933. See 15 U.S.C. § 78cc(b). At the trial of the counterclaim, Sundstrand attempted to introduce into evidence all of the matter it had previously introduced in attempting to make a case against Huarisa under Section 10(b) and Rule 10b-5. Yet by then the trial judge had ruled that Sundstrand had failed to prove actionable fraud on the part of Huarisa in connection with the sale of Burke stock, and the judge correctly accepted Huarisa’s contention that Sundstrand was collaterally es-topped to attempt proof of the same violations of the securities laws. Because we have ordered a new trial in No. 72-1426, this defect no longer inheres in Sundstrand’s offer. Its defense to Huarisa’s counterclaim will rise or fall with the outcome of the retrial of its fraud claim against Huarisa.

No. 72-1427 is also reversed and is remanded for a hearing on damages, subject to Sundstrand’s failure to prove a violation of Section 10(b) and Rule 10b-5 by Huarisa in connection with the contract sued upon. The case is remanded under Circuit Rule 23 to be assigned to another district judge.

      . 15 U.S.C. § 78j.

      . 17 C.F.R. § 240.10b-5.

      . That the trial judge took the opposite view is apparent from the record :
      MR. FROEHLING:
      [Paragraph 15] is the only paragrapli where they spell out what fraud the defendants are charged with, and there is not one word your Honor, in Paragraph 15 about any of the matters that Mr. Montgomery relates to your Honor now. There’s not a word in there about other mergers, about false statements of receiving offers of $45 per share, or anything like it, and your Honor, the answers to interrogatories which the plaintiff Sundstrand filed in this case simply will not do as a substitute for a pleading. The pleading in his case has not been amended.
      THE COURT:
      I interrupt you to say that I agree with that. That is not what interrogatories are used for. They might lead to an amendment of a pleading, but I agree with you, they are not a substitute for a pleading.

      . Meers must be included, since he does not contend that the contents of the answer were unknown to him.

      . See Tr. 2695-2706.

      . The Burke Report was a document prepared in mid-1968 which suggested to SKI’s Board of Directors that SKI was engaged in dangerous and improper accounting practices. Sund-strand alleged that Meers’ failure to disclose this report was an omission of a material fact under Rule 10(b)-5.

      . In this connection, it is noteworthy that the trial judge ruled the Burke Report and related documents to be inadmissible against Huarisa and SKI by reason of irrelevance. He offered the same ruling to counsel for Meers. Though the offer was declined, counsel did add: “I am confident that in failing to join that motion [of SKI and Huarisa] I have not waived any right to keep out irrelevant evidence.”

      . Significantly, Rule 8(c) was formulated before Erie and reflects established federal practice as it existed before that decision came down.

      . This view is not inconsistent witli Law and Chapmam. Unlike the federal judicial system, Illinois courts are divided into separate jurisdictions of law and equity. A plaintiffs adequate remedy at law entirely defeats the jurisdiction of an Illinois chancery court since it may grant only equitable relief. For this reason, and with considerations of judicial economy in mind, Law held that a defendant may not raise the issue of remedy at law once the pleadings have been settled, just as a defendant in federal cases may waive certain jurisdictional objections by failing to raise them before trial. See Rule 12(h)(1), F.R. C.P.
      In a federal court, where the failure of equitable remedy leaves available the entire range of redress at law, the fact of an adequate remedy at law has no jurisdictional dimension whatever, since plaintiff’s absence of a right to equitable relief does not defeat the jurisdiction of the court. Thus Rule 12 (h) (1) does not list the defense of adequate legal remedy among those defenses which must be made before trial.

      . “Huarisa represents and warrants that he is acquiring the said Sundstrand shares for investment and not with a view to the public distribution thereof.”

      . Huarisa may prove both these propositions if Sundstrand elects to sue him for his sale of stock.

      . A defendant will not be prejudiced by this procedure. As his pleadings made evident, Huarisa wanted equitable, not legal, relief. He introduced no evidence of damage at trial. If he had, the trial judge could properly have refused to hear it if its introduction came as a surprise to Sundstrand. In that event, the issue of damages would properly have been deferred until resolution of the claim for equity and until both sides were prepared to deal with the issues. Were the defendant not surprised, proof on the issue could rightly have been taken forthwith. The distinct advantage of this arrangement is that plaintiff need not present evidence bearing on all possible forms of relief which the trial judge might see fit to grant him. He may focus narrowly on the particular relief to which he feels most entitled and save eon-siderable trial time whenever he loses his ease on its merits or gains the relief which he most desires or which he feels most likely to obtain.

      . Counsel for Huarisa stated :
      Your Honor, the counter-claimant objects to the offer of proof or offer of evidence by Sundstrand. The law of the case in this matter is that the plaintiff’s evidence as presented during its case was insufficient to prove the alleged misrepresentations set forth in the complaint. Accordingly, the evidence offered by Sundstrand at this time is clearly irrelevant to the issues in the counterclaim, the court having found there was no fraud and the court having necessarily found that the plaintiff has failed to prove fraud.


source: Caselaw Access Project

author: HASTIE, Circuit Judge.

license: Public Domain

text:
    CONSUMERS OIL CORPORATION OF TRENTON, NEW JERSEY, a New Jersey corporation, Appellant, v. PHILLIPS PETROLEUM COMPANY, a Delaware corporation.
    No. 73-1597.
    United States Court of Appeals, Third Circuit.
    Argued Sept. 4, 1973.
    Decided Nov. 12, 1973.
    As Amended Nov. 29, 1973.

      Philip J. Albert, Levy, Levy, Albert & Marcus, Trenton, N. J., for appellant.
    Howard P. Danzig, Newark, N. J., on the brief, Charles Danzig, Newark, N. J., of counsel, Riker, Danzig, Scherer & Brown, Newark, N. J., for appellee.
    Before HASTIE, VAN DUSEN and GIBBONS, Circuit Judges.
   OPINION OF THE COURT

HASTIE, Circuit Judge.

In this diversity action, Consumers Oil Corporation, a New Jersey jobber, asked the District Court for the District of New Jersey to restrain Phillips Petroleum Co., a national refiner of petroleum products, from terminating the franchise under which Consumers buys gasoline from Phillips for resale. Consumers contends that Phillips’ attempt to terminate the franchise violates the New Jersey Franchise Practices Act, N. J.S.A. 56:10, even though Phillips is acting strictly in accordance with express terms of the contract that created the franchise and provided for its termination.

After an evidentiary hearing, the district court denied a motion for preliminary injunction. Consumers has appealed from that order.

Under successive contracts, Consumers has been a Phillips franchisee since 1961. The contract now in controversy related to gasoline only and became effective July 1, 1970. It granted a franchise for a stated term of one year and provided that automatic extensions for like periods would follow unless either party, at its pleasure, should terminate the contract by written notice at least 90 days prior to the end of the first or any subsequent contract year.

The New Jersey Franchise Practices Act became effective December 21, 1971, when the contract between the parties was in its second year. Thereafter, neither party elected to terminate the contract as of June 30, 1972, although on June 16, 1972 Phillips notified Consumers and all other jobbers similarly situated throughout its “northeast marketing area” that it did not intend to renew or extend its existing contractual commitments to them. Consistent with that announcement, Phillips thereafter gave Consumers timely formal notice of termination of their contract effective July 1, 1973.

Neither party has expressed dissatisfaction with the performance of the other. The record contains an affidavit, filed by appellant, stating that the contract with Consumers had been and was likely to continue to be profitable to Phillips. Moreover, there is evidence that Phillips could continue to supply Consumers with gasoline from the pipeline in northern New Jersey despite termination of its other New Jersey activities. However, the district court found that, before the occurrence of the present gasoline shortage, Phillips had decided to withdraw entirely from its northeast marketing area (the New England states, New York, New Jersey, Delaware and all of Pennsylvania except a small area, centering on Harrisburg and contiguous to Maryland) because in totality its operations there had proved unprofitable.

Section 56:10-5 of the New Jersey Franchise Practices Act, after authorizing termination of a franchise where the franchisee has either abandoned the franchise or been convicted of certain wrongdoing, continues as follows:

“It shall be a violation of this act for a franchisor to terminate, cancel or fail to renew a franchise without good cause. For the purposes of this act, good cause for terminating, canceling, or failing to renew a franchise shall be limited to failure to substantially comply with those requirements imposed upon him by the franchise.” Section 56:10-8 reads:
“This act shall not apply to a franchise granted prior to the effective date of this act, provided, however, that a renewal of a franchise or an amendment * to an existing franchise shall not be excluded from the application of this act.”

The district court found that denial of a preliminary injunction would result in irreparable harm to Consumers but nevertheless denied relief. It reasoned that the franchise had been granted before the December 1971 effective date of the Act and that, within the meaning of Section 56:10-8, it had not been “amended” or “renewed” since that time. Accordingly, the court concluded that the Act did not apply to this case. However, in our view, the extension of the present franchise for one year beginning July 1, 1972 can reasonably be considered a “renewal” within the meaning of the Act.

Section 56:10-8 was included in the Act because of doubt about the constitutionality of retroactive application. In substance, the doubt was resolved by restricting the Act to those pre-existing franchises that should be extended voluntarily after the Act’s adoption. The meaning of “renewal” can rationally be said to be as broad as this purpose. Here, the parties drafted their agreement as a one year contract that would be extended automatically for successive one year terms unless either party, at its option and without penalty, should give timely notice during any contract year that the contract would not be extended beyond the end of the year. Thus, when the Franchise Practices Act became law, neither party was obligated beyond June 30, 1972. The acquiescence of both parties was required for the extension of their contract beyond that date. This suggests that, for purposes of the Act, it makes no difference whether the agreed method of making acquiescence manifest was by affirmative action or by nonaction. In either event, the necessity for a manifestation of assent by both parties to the continuation of the franchise beyond June 30, 1972, made the extension of the contract voluntary and probably within the intended legislative reach. If a decision favorable to Consumers on this issue could dispose of the case, we would be inclined, on the basis of the preceding analysis, to reverse the district court. But disposition of a second issue, which we must face if we rule that the franchise was renewed in 1972 within the meaning of the statute, renders actual decision of the renewal question both unnecessary and ill-advised.

The fact that the attempted termination of appellant’s franchise occurred in the context of Phillips’ undertaking to discontinue marketing its products throughout its 8-state “northeast marketing area” of which New Jersey is part, precipitates the other question of statutory construction. Is the Act to be read and interpreted as precluding a franchisor’s comprehensive withdrawal from the New Jersey market, as distinguished from mere discontinuance of a particular New Jersey franchise while the franchisor’s marketing in New Jersey continues through other franchisees or through its own direct operations? On its face the Act is silent concerning this question, for it is drafted in terms of problems and dissatisfactions that may arise in connection with a particular franchise. Thus, only delinquency or dereliction of the franchisee is stated as “good cause” for a refusal to renew a franchise. On the one hand, it can be inferred that in adopting this scheme of regulation the legislature did not undertaken to regulate franchise terminations incidental to a discontinuance of all marketing within the state. On the other hand, one might reason that in specifying and limiting those shortcomings in the franchisee’s performance that justify termination of a franchise, the legislature meant to disapprove all other justifications, including a determination to discontinue business throughout the state.

We have examined the legislative history of the Act and do not find it decisive on this question of interpretation. Witnesses who testified in support of the bill expressed concern about capricious action by franchisors, coercive uses of the threat of termination to impose onerous burdens on franchisees and refusal to renew one successful franchise in order to give that business opportunity to a more favored entrepreneur. Certainly, these were the problems and conceived injustices upon which legislative attention focused. We have found nothing to indicate whether the legislature even considered such a problem as this case presents, much less whether the statute was intended to apply so comprehensively.

In our view, these circumstances call for consideration of whether, in a case where jurisdiction is based solely upon diversity of citizenship, a federal court should abstain from attempting to anticipate the answer New Jersey courts would give to doubtful questions of interpretation of a New Jersey statute. Our concern is heightened by awareness that an interpretation of the Franchise Practices Act as prohibiting Phillips from discontinuing its operations throughout the State would precipitate substantial constitutional questions. For it is arguable that to prohibit a franchisor from discontinuing all business within the state would unreasonably burden commerce, or deprive the franchisor of liberty or property without due process of law, or both. And if an imposed obligation to continue marketing in New Jersey is thought to be justified by the franchisor’s election to grant or renew franchises in the State with knowledge of the statutory requirement, the doctrine of “unconstitutional conditions” may well be invoked against the statute. Whether or not such attacks would prevail, we are persuaded that they would not be frivolous.

Since these constitutional questions are substantial and the New Jersey courts might interpret the statute in a way that would avoid them, we think it appropriate that the federal courts abstain from deciding the merits of the present controversy at this time. In so ruling, we are mindful that the Supreme Court recently vacated a federal decision that the Franchise Act of Puerto Rico was intended to apply retroactively and, as thus interpreted and applied, was unconstitutional. In the Supreme Court’s view, it was appropriate and desirable that the federal courts abstain from ruling upon the matters in issue until the Supreme Court of Puerto Rico should have had an opportunity to interpret the statute and, in so doing, perhaps avoid the constitutional question. Fornaris v. Ridge Tool Co., 1970, 400 U.S. 41, 91 S. Ct. 156, 27 L.Ed.2d 174, Accord, Lake Carriers’ Ass’n v. MacMullan, 1972, 406 U.S. 498, 92 S.Ct. 1749, 32 L.Ed.2d 257, where the Court said: “the paradigm case for abstention arises where the challenged state statute is susceptible of ‘a construction by the state courts that would avoid or modify the [federal] constitutional question.’ ”

For these reasons the judgment denying a preliminary injunction will be affirmed and the cause will be remanded with direction to retain jurisdiction but stay proceedings in appropriate exercise of the policy of federal abstention pending Consumers’ expeditious resort to a state court for a determination whether the Act, properly construed in the two particulars discussed in this opinion, applies to this case. Since the question whether the Act, authoritatively construed, is- constitutional will still be pending in the federal forum, the parties need not ask for a state court decision on this ultimate question.

The order of this court staying the termination of the franchise in suit pending the outcome of this appeal shall remain in force and effect until January 1, 1974, at which time Consumers, upon a showing that it is proceeding expeditiously in a state court, may obtain a further stay in the district court. The district court can then dispose of this case as may be appropriate in the light of authoritative interpretation of the statute. Cf. England v. Louisiana State Board of Medical Examiners, 1964, 375 U.S. 411, 84 S.Ct. 461, 11 L.Ed.2d 440.

Neither party shall be awarded costs on this appeal as against the other.

      . The Supreme Court of New Jersey has indicated that it is sensitive to such danger. See, e. g., City of Clifton v. Passaic County Board of Trustees, 1958, 28 N.J. 411, 147 A.2d 1.

      . Burden on commerce: Compare, South Carolina State Highway Dept. v. Barnwell Bros., 1938, 303 U.S. 177, 58 S.Ct. 510, 82 L.Ed. 734, with, Pennsylvania v. West Virginia, 1923, 262 U.S. 553, 43 S.Ct. 658, 67 L.Ed. 1117; Southern Pacific Co. v. Arizona, 1945, 325 U.S. 761, 65 S.Ct. 1515, 89 L.Ed. 1915, and Bibb v. Navajo Freight Lines, Inc., 1959, 359 U.S. 520, 79 S.Ct. 962, 3 L.Ed.2d 1003.
      Deprivation of property without due process : Compare, Pennsylvania Coal Co. v. Mahon, 1922, 260 U.S. 393, 43 S.Ct. 158, 67 L. Ed. 322, with, Goldblatt v. Hempstead, 1962, 369 U.S. 590, 82 S.Ct. 987, 8 L.Ed.2d 130.
      Unconstitutional conditions: For discussion of this doctrine and the cases in which it has been invoked, see Hale, Unconstitutional Conditions and Constitutional Bights, 1935, 35 Col.L.Rev. 321; Note, Unconstitutional Conditions, 1960, 73 Harv.L.Rev. 1595.

      . Although our decision to abstain is based primarily on our uncertainty regarding the second issue discussed, we think that, since the case must be presented to the New Jersey courts for that reason, the controversy over the meaning of the term “renewal” should be tendered as well. That question, too, could be decided in a way that would render the constitutional issues moot. The disposition of Clay v. Sun Insurance Company, Ltd. 1960, 363 U.S. 207, 80 S.Ct. 1222, 4 L.Ed.2d 1170, on remand, 5th Cir. 1967, 319 F.2d 505, 508 n. 2, which presented a similar situation, supports our decision to abstain from deciding either question.

      . If the state courts should decline to construe the statute while the district court retains jurisdiction over this case and the ultimate constitutional issue, the district court should proceed to decide all issues, including those of statutory construction, essential to the disposition of this controversy.


author: SEITZ, Chief Judge.

text:
    James Harvey JOHNSON, Appellee, v. Warden Noah ALLDREDGE and Corrections Officer Cronrath, Appellants.
    No. 73-1177.
    United States Court of Appeals, Third Circuit.
    Argued Sept. 26, 1973.
    Decided Dec. 12, 1973.

      Thomas J. Renehan, JT., Philadelphia, Pa., for appellee.
    Harlington Wood, Jr., Asst. Atty. Gen., S. John Cottone, U. S. Atty., Barbara L. Herwig, Walter H. Fleischer, Greer S. Goldman, Attys., Dept, of Justice, Washington, D. C., for appellants.
    Before SEITZ, Chief Judge, and HUNTER and WEIS, Circuit Judges.
   OPINION OF THE COURT

SEITZ, Chief Judge.

Plaintiff, a federal prisoner, brought this action under 28 U.S.C. § 1331 (1970) against the prison warden, Alldredge, and a prison guard, Cronrath, seeking $35,000 damages for the alleged unconstitutional taking of his property and interference with his access to the courts. Defendants moved for dismissal and both plaintiff and defendants moved for summary judgment. In support of their motions the defendants urged, inter alia, that they are immune from damage liability for their official acts. The District Judge denied the motions, declaring that plaintiff had stated a cause of action for damages and that there was at least one disputed material issue of fact: “whether Defendants were acting within the outer perimeter of their authority and duties and are therefore immune from liability for the acts alleged.” On defendants’ motion, the District Judge amended his order to indicate that a controlling question of law existed, decision of which would advance termination of the litigation, and this Court granted defendants leave, pursuant to 28 U.S.C. § 1292(b) (1970), to appeal from the denial of their motion for summary judgment.

Before addressing ourselves to the issues raised by the parties, one preliminary matter requires our attention. In his amending order, the District Judge stated that “the controlling question of law ... is whether destruction of a prisoner’s legal materials, properly seized as contraband, is automatically within the outer perimeter of the authority and duties of prison officials or, on the other hand, is within this perimeter only if it is shown to be reasonably related to the maintenance of discipline within the prison.” Were we limited to decision of this question, we have serious doubts whether review under § 1292(b) would be appropriate. These doubts are occasioned by our belief that, while an answer to the question posed by the District Court could control disposition of the litigation, the question is not one “of law as to which there is substantial ground for difference of opinion” as required by § 1292(b). The District Court’s question comprehends factual as well as legal matters, requiring a factual decision as to the defendants’ duties as well as a legal decision as to the relationship that official action, to be immunized, must bear to the official’s duties.

The parties did not brief or argue the question set forth by the District Judge. Instead, the parties’ contentions involved the availability of any immunity to defendants, the standard for determining if immunity exists, and the sufficiency of the affidavits to establish such immunity as a matter of law. We presume that the court below intended these legal questions concerning defendants’ immunity, which were raised in the motion seeking certification from the District Judge, to be considered under his statement of the controlling question.

Even were this not so, we would have jurisdiction to decide the issues presented to us. 28 U.S.C. § 1292(b) (1970) does not speak of the court of appeals deciding a question certified by the district court. Under § 1292(b) the district court is required to certify that an “order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation . . . . ” Once the district court makes this certification, we may, in our discretion, permit appeal from the order. The district court has made the necessary certification ; and we find that controlling questions of law, those briefed by the parties, exist. Since under the clear terms of § 1292(b) we are called upon not to answer the question certified but to decide an appeal, we do not find ourselves bound by the District Judge’s statement of the issue. See J. Moore, Moore’s Federal Practice, § 110.25 [1]. In keeping with the purpose of § 1292(b) to permit decision of legal issues as to which there is considerable question without requiring the parties first to participate in a trial that may be unnecessary, we proceed to a determination of the legal issues raised by the parties. See 1958 U.S. Code Cong. & Ad.News 5255-5257.

We are concerned here only with the correctness of the District Court's denial of defendants’ motion for summary judgment. That denial must be affirmed if there was . any material factual issue properly put in dispute by the parties. We summarize briefly the facts set forth in the affidavits, first outlining the facts not in dispute.

Following his conviction for bank robbery, plaintiff filed an appeal and a petition for habeas corpus, proceeding pro se in both actions. Later he sought the aid of a fellow inmate, Richard Hen-drickson, in preparing supplemental briefs for those actions and provided Hendrickson with a large quantity of legal materials. Although there was a prison regulation in force at that time prohibiting any inmate from keeping another inmate’s materials in his cell without prior authorization, neither Johnson nor Hendrickson applied for or received such authorization. While Hendrickson was still in possession of plaintiff’s materials, Hendrickson was placed in disciplinary segregation. Cronrath, in compliance with standing orders, cleaned out Hendrickson’s cell and removed all legal materials.

A factual dispute exists concerning the disposition of the legal materials. For our purposes, plaintiff’s version must be accepted. Cronrath states that he saw no materials belonging to plaintiff. Plaintiff alleges that Cronrath destroyed his materials and his affidavit further states that Cronrath admitted having done so. Warden Alldredge took no disciplinary action against Cronrath, although requested to do so by plaintiff.

Defendants do not think the dispute over the disposition of the legal papers is material. They contend that summary judgment was required because the facts demonstrate that defendants, who are federal executive officers, are being sued for actions taken with authorization in performance of their official duties and, thus, are entitled to immunity. Clearly, the dispute over disposition of plaintiff’s papers is material unless defendants are immune. The District Judge concluded that a dispute also existed as to whether defendants’ actions were authorized, i. e., that a factual dispute existed as .to whether defendants were immune.

Plaintiff argues that the decision below was correct, but not for the reason given by the District Judge. Plaintiff argues that defendants cannot, under the facts stated in the affidavits, enjoy immunity from damage liability. In support of this argument, plaintiff advances two theories, either one of which would require affirmance here. First, he claims that executive officers have no immunity from suits alleging deprivation of constitutional rights. Second, plaintiff claims that these defendants cannot enjoy immunity because they are not officials of the type covered by executive immunity. The parties have thus joined issue on the nature and scope of the- doctrine of official immunity. We turn now to consideration of that doctrine.

THE BARR DOCTRINE

In Barr v. Matteo, 360 U.S. 564, 79 S.Ct. 1335, 3 L.Ed.2d 1434 (1959), the Supreme Court attempted to delineate the immunity accorded federal executive officials. Barr was a libel suit against the acting Director of the federal Office of Rent Stabilization. The plaintiffs, former employees of the Office of Rent Stabilization were allegedly libelled by the acting Director’s issuance of a press release explaining his reasons for discharging the plaintiffs. The Supreme Court held that the Director’s remarks were absolutely privileged.

Barr established first that all executive officials are potentially covered by the immunity doctrine. Despite a passing reference to the fact that defendant Barr was an officer “of policy making rank”, the plurality opinion in Barr makes clear that the claim of immunity is not restricted to certain specific federal officials. The four-justice plurality discussed the Court’s earlier decision in Spalding v. Vilas, 161 U.S. 483, 16 S.Ct. 631, 40 L.Ed. 780 (1896), holding the Postmaster General immune from suit, and noted that lower federal courts had not interpreted that decision as limited to cabinet officers. 360 U.S. at 572, 79 S.Ct. 1335. The plurality declared that official immunity “is not a badge or emolument of exalted office, but an expression of a policy designed to aid in the effective functioning of government.” 360 U.S. at 572-573, 79 S.Ct. at 1340. We, thus, find merit in defendants’ argument that official immunity from damage actions may extend to any federal executive official.

Barr also makes clear that executive officials are not automatically immune from all damage suits. Both the plurality and Justice Black’s concurring opinion follow the previously established law regarding executive immunity, requiring that two criteria be met before such immunity is found. First, as Barr makes clear, immunity protects officers from liability only for actions having a policy-making or judgmental element. This requirement has sometimes been phrased as permitting officials to enjoy immunity from liability for the exercise of “discretionary” but not “ministerial” functions. It reflects the purpose for which immunity is granted to executive, as well as judicial and legislative,, officers : to ensure that important decisions are made free from the fear of personal liability or harassing suits.

The second requirement, also noted in Barr, is that the allegedly wrongful acts must have been “within the outer perimeter” of the defendant-official’s duties. This requirement embodies the distinction drawn in Spalding v. Vilas, supra, “between action ... in reference to matters which are manifestly or palpably beyond [the officer’s] authority, and action having more or less connection with the general matters committed by law to his control or supervision.” A clearer manner of stating this requirement, borrowing language from the law of agency, might be that, for immunity purposes, the defendant-official’s authority includes any action that he reasonably believed authorized.

Having identified the two prerequisites for a grant of executive immunity,' we must inquire whether those prerequisites are met as to the defendants here.

APPLICATION OF BARR TO OFFICER CRONRATH

The first of the two requirements set forth above is that the challenged action involve an exercise of judgment. We recognize that all or nearly all official action involves some minimal exercise of judgment. It is, however, possible to separate routine determinations, strictly controlled by statutory or administrative guidelines, from determinations arrived at by the decision-maker relatively unconstrained by specific directives.

Cronrath cleaned out Hendrickson’s cell and, according to plaintiff’s statements, destroyed the plaintiff’s legal materials that had been kept by Hendrick-son. It appears clearly from Cronrath’s own affidavit that specific prison regulations, standing orders to the guards, and direction from superior officers controlled his actions in cleaning out the cell, removing and, accepting plaintiff’s factual statement, destroying contraband material. These routine tasks do not involve an exercise of judgment of the type fairly contemplated by the immunity doctrine. It follows that Cronrath may not rely upon the doctrine as a defense to this action and, therefore, that summary judgment based on immunity grounds was properly denied.

We note in passing that immunity from suit is only one of the protections traditionally accorded government officers. At common law, specific privileges and defenses were recognized that, safeguarded officials from liability for various actions that would otherwise have constituted torts. See, e. g., Pierson v. Ray, 386 U.S. 547, 555-556, 87 S.Ct. 1213, 18 L.Ed.2d 288 (1967). The applicability of such other defenses is not involved in this appeal.

APPLICATION OF BARR TO WARDEN ALLDREDGE

We first consider whether the challenged actions involved an exercise of judgment within the doctrinal meaning of these words. Warden Alldredge is charged (1) with having regulated the transfer of materials among prisoners and (2) with not disciplining Officer Cronrath. Thése actions were products of decisions made under a general grant of authority. The regulation of the transfer of materials embodied a decision of policy to be followed, absent amendment by the warden, at all times by all the guards and inmates at the penitentiary. It thus had those qualities of permanence and breadth characterizing policy judgments. The decision not to discipline Officer Cronrath appears adjudicatory in nature. While administrative adjudicatory decisions, reflecting the application of policy to facts, may in some instances be constrained within such narrow limits as not to merit immunity, that is not the case where, as here, the decision is made by the official responsible for setting the policy to be applied. See Boulware v. Parker, 457 F.2d 450, 452 (3d Cir. 1972).

Alldredge also satisfies the second requirement for immunity: that the actions be within the outer perimeter of his authority. Affidavits submitted by Alldredge and by his immediate superior, the Director of the Bureau of Prisons, establish that Alldredge is authorized to regulate the security and discipline of prisoners and the conduct and discipline of guards. In Boulware v. Parker, supra, we affirmed a summary judgment in favor of federal prison warden on immunity grounds. We noted that it was incumbent upon the plaintiff to file an affidavit in opposition to defendant’s stating facts that would support the conclusion that defendant’s actions were beyond the outer bounds of his authority. Here, plaintiff’s affidavit in no wise controverts the statements in Alldredge’s affidavits concerning the scope of his authority. It therefore fails to create an issue as to scope of the warden’s authority.

The foregoing analysis shows that Alldredge is entitled-to the benefit of the immunity doctrine here. However, plaintiff contends that Alldredge is not so entitled because the regulation concerning possession of materials belonging to another inmate violates plaintiff’s constitutional right to seek legal advice of other inmates. Without indicating any opinion as to the existence or boundaries of such a right, we note that the challenged regulation did not prohibit inmates from seeking the advice of other prisoners, but merely required permission for the transfer of materials between inmates. In any event, the constitutionality of the regulation is not relevant to the determination of defendant’s authority for immunity purposes. Cf. Kilbourn v. Thompson, 103 U.S. 168, 26 L.Ed. 377 (1881); Bradley v. Fisher, 80 U.S. (13 Wall.) 335, 20 L.Ed. 646 (1872); Gregoire v. Biddle, 177 F.2d 579 (2d Cir. 1949) (L. Hand, J.), cert. denied, 339 U.S. 949, 70 S.Ct. 803, 94 L.Ed. 1363 (1950). The immunity of an officer from damage liability is dependent not upon the legality of his action but upon its having sufficient connection with his duties that the officer could reasonably believe his action authorized. Alldredge’s actions were clearly within his authorization.

Since Warden Alldredge’s actions are of the type entitled to immunity protection, and, as established by his affidavits without contradiction by plaintiff’s, those actions were within his authority, Warden Alldredge is immune from damage liability for his actions. His motion for summary judgment should have been granted.

IMMUNITY FROM SUIT FOR VIOLATION OF CONSTITUTIONAL RIGHTS

In light of our ruling respecting Warden Alldredge, we must dispose of one additional contention. Plaintiff urges us to hold that even if Alldredge is entitled to immunity under the doctrine applied in Barr, he is not immune from liability for the violation of constitutional rights. This contention is composed of three related arguments: (1) this action for violation of plaintiff’s Fifth Amendment rights is the federal analogue of a suit against state officials under 42 U.S.C. § 1983 (1970) ; (2) § 1983 restricts or abrogates common law immunities; and (3) it would be anomalous for federal officials to be immune from suits alleging violation of rights for which state officers would be liable. We assume without deciding that points (1) and (3) of plaintiff’s contention are correct. Point (2), however, we cannot accept.

While some courts have stated that § 1983 should be read as limiting the immunity recognized at common law, this Court, sitting in banc has ruled that § 1983 does not abrogate immunities recognized at common law. Bauers v. Heisel, 361 F.2d 581, 586-588 (3d Cir. 1965), cert. denied, 386 U.S. 1021, 87 S.Ct. 1367, 18 L.Ed.2d 457 (1967). The Bauers decision concerned the immunity of judicial officers to damage suits under § 1983. Adhering to the reasoning of the Supreme Court’s decision in Tenney v. Brandhove, 341 U.S. 367, 71 S.Ct. 783, 95 L.Ed. 1019 (1951), that state legislators were immune from § 1983 damage suits, we overruled an earlier decision of this Court and held that state prosecutors are immune from damage actions brought under § 1983. Our reasoning was that the statute creating the § 1983 right of áction should not be construed to be in derogation of the common law, absent express declaration or unavoidable implication in the statute. Id., 361 F.2d at 586-588. Both majority and dissent noted that there may have been some justification for concluding that the statute had such effect, but this Court felt bound by the Supreme Court’s decision in Tenney v. Brandhove. See also Pierson v. Ray, 386 U.S. 547, 87 S.Ct. 1213, 18 L.Ed.2d 288 (1967). This panel feels similarly constrained by our decision in Bauers to hold that officials immune from damage suits at common law would also be immune from such suit under § 1983.

It may be suggested that this decision and our prior decision in Boulware v. Parker, supra, are in conflict with our statement in Gaito v. Ellenbogen, 425 F.2d 845 (3d Cir. 1970), that “a state prison official, is not . . . clothed with immunity. . . .” 425 F.2d at 849. Gaito involved claims by a state prisoner for habeas corpus and for § 1983 relief against the state prison warden and other officials. Boulware, which held a federal warden immune from damage liability was a tort suit by a federal prisoner. Reading Gaito and Boulware together, it could be argued that the dis-stinction must be between suits under § 1983 and “ordinary” tort suits. Our decision in Bauers v. Heisel, however, negates this line of reasoning. The statement in Bauers that § 1983 cannot be construed to be in derogation of common law immunities is essential to the holding in that case.

We do not believe that our Gaito decision contradicts what we said in Bau-ers. We note initially that Gaito made no explicit claim for damages, although this Court generously treated his ambiguous complaint as comprehending a claim for damages. More importantly, the statement in Gaito that prison officials are not immune from damage suits was not required for the disposition of that case: dismissal of the complaint against the warden for failure to state a claim. The short treatment of possible immunity for the warden may indicate that the Court did not intend to rule on the warden’s immunity. Instead, the reference to his non-coverage by immunity seems designed only to distin-. guish the warden from the other Gaito defendants, all of whom were clearly immune under decisions of this Court or of the Supreme Court, to allow disposition of the complaint against the warden to rest on another ground, namely failure to state a claim.

For these reasons, we reject plaintiff’s contention that the common law immunity accorded executive officers is inapplicable here.

We reverse so much of the order below as denied summary judgment to Warden Alldredge and affirm that order insofar as it denied summary judgment to Officer Cronrath.

      . The denial of defendants’ motion to dismiss is not before us. We assume, without deciding, that plaintiff has stated a claim against the defendants unless they are immune from damage liability,

      . See Kendall v. Stokes, 44 U.S. (3 How.) 87, 98, 11 L.Ed. 506 (1845) ; Carter v. Carlson, 144 U.S.App.D.C. 388, 447 F.2d 358, 361-363 (1971), rev’d on other grounds sub nom., District of Columbia v. Carter, 409 U.S. 418, 93 S.Ct. 602, 34 L.Ed.2d 613 (1973) ; Franklin v. Meredith, 386 F.2d 958, 960-961 (10th Cir. 1971).

      . See Barr v. Matteo, 360 U.S. 564, 571, 79 S.Ct. 1335, 3 L.Ed.2d 1434 (1959) ; Bivens v. Six Unknown Named Agents, 456 F.2d 1339, 1345-1346 (2d Cir. 1972) ; Gregoire v. Biddle, 177 F.2d 579, 581 (2d Cir. 1949), cert. denied, 339 U.S. 949, 70 S.Ct. 803, 94 L.Ed. 1363 (1950).

      . 161 U.8. at 498, 16 S.Ct. at 637.

      . The law of agency in fact appears to have been the original basis for official immunity, deriving from the immunity of the principal, the sovereign. See Jaffe, Suits Against Governments and Officers: Damage Actions, 77 Harv.L.Rev. 209 (1963).

      . The District Court in this case indicated that the test of authority for immunity purposes was whether the defendants’ actions constituted “an appropriate exercise of [their] discretion.” The language employed by the lower court to frame that test is taken from Justice Harlan’s opinion in Barr. Defendants contend, we think rightly, that the District Court has taken those words out of context. Justice Harlan employed that phrase in examining the general undefined authority possessed by an agency head, attempting to ascertain whether the particular function involved, issuance of a press release, was arguably authorized under the defendant’s general discretionary powers. Barr v. Matteo, 360 U.S. 564, 574-575, 79 S.Ct. 1335, 3 L.Ed.2d 1434 (1959).

      . Cf. Bivens v. Six Unknown Named Agents, 456 F.2d 1339, 1346 (2d Cir. 1972).

      . In cases where the authority of the official or the nature of the actions taken by him were unclear, we have deferred decisions regarding immunity until further development of those facts. E. g., United States ex rel. Moore v. Koelzer, 457 F.2d 892, 894 (3d Cir. 1972). Where, however, as here, such facts are clearly established by affidavits, we have disposed of the immunity issue and have not required further proceedings. E. g., Lockhart v. Hoenstine, 411 F.2d 455, 460 (3d Cir.), cert. denied, 396 U.S. 941, 90 S.Ct. 378, 24 L.Ed.2d 244 (1967).

      . See, e. g., Sostre v. McGinnis, 442 F.2d 178 (2d Cir. 1971) (en banc), cert. denied sub nom., Oswald v. Sostre, 405 U.S. 978, 92 S.Ct. 1190, 31 L.Ed.2d 254 (1972).


author: KAUFMAN, Chief Judge:

text:
    UNITED STATES of America, Appellee, v. John Paul De MARCO et al., Defendants-Appellants.
    Nos. 488, 489, 604 and 605, Dockets 73-1768, 73-2567, 73-2678 and 73-2679.
    United States Court of Appeals, Second Circuit.
    Argued Nov. 13, 1973.
    Decided Dec. 12, 1973.

      Richard Insogna, Amsterdam, N. Y., for appellant John Paul De Marco.
    John S. Hall, Warrensburg, N. Y., for appellants Joseph D. De Marco and Richard W. Snyder.
    Lawrence P. Justice, Albany, N. Y., for appellant Stephen F. De Marco.
    Joseph R. Brennan, Asst. U. S. Atty., N. D. N. Y. (James M. Sullivan, U. S. Atty., N. D. N. Y., on the brief), for ap-pellee.
    Before KAUFMAN, Chief Judge, and SMITH and OAKES, Circuit Judges.

      . This issue is raised on appeal by all four appellants. Although, as we note below, Snyder was the only appellant involved in the discussion immediately preceding the search, all appellants have standing to question the legality of the search because possession of the seized goods is an essential element of the crime charged. Simmons v. United States, 390 U.S. 377, 390, 88 S.Ct. 967, 19 L.Ed.2d 1247 (1968) ; Jones v. United States, 362 U.S. 257, 263-264, 80 S.Ct. 725, 4 L.Ed.2d 697 (1960) ; United States v. Mapp, 476 F.2d 67, 72-73 (2d Cir. 1973) ; United States v. Pastore, 456 F.2d 99 (2d Cir. 1972). Cf. Combs v. United States, 408 U.S. 224, 227 n. 4, 92 S.Ct. 2284, 33 L.Ed.2d 308 (1972).

   KAUFMAN, Chief Judge:

John Paul De Marco, Joseph D. De Marco, Stephen F. De Marco, and Richard Snyder appeal from convictions for possession of stolen property (18 U. S.C. 659 and 2) and for conspiracy (18 U.S.C. 371) entered after a jury trial before Judge Foley. The defendants were sentenced to 18 months imprisonment on each of two counts, to run concurrently. On appeal, the appellants raise numerous claims of error, but extended discussion is warranted only to decide whether Snyder voluntarily consented to a warrantless search. For the reasons stated below, we find that the consent was valid. But, because of an oversight in the trial judge’s charge going to an essential element of the conspiracy count, which regrettably was not called to his attention by counsel — nor, even raised by them on appeal — we reverse the conspiracy convictions of all four appellants. The convictions on the substantive count are affirmed.

I.

Since the voluntariness of the consent is to be determined from the totality of circumstances, Schneckloth v. Bustamonte, 412 U.S. 218, 93 S.Ct. 2041, 36 L.Ed.2d 854 (1973), we proceed to the relevant facts surrounding the search. At 7:10 a. m. on October 9, 1971, in the course of their normal patrol, Officers Burns and Waters of the Troy, New York, Police Department, stopped a heavily overloaded U-Haul rental van on a back road in North Troy. While Burns and Waters remained in the police car, the driver of the rented truck, Richard Snyder, left the vehicle and approached the officers. During the ensuing discussion, which from all accounts was amiable, Burns asked to see Snyder’s driver’s license and vehicle registration. Snyder was unable to produce either document. The record is unclear, but at some point during this encounter, the officers left their police car and continued to converse with Snyder while all three stood between the police car and the truck. When the officers asked to see the truck’s cargo, Snyder agreed without hesitation and promptly opened the unlocked van himself. As Snyder lifted the van’s back door, 30 rolls of s/ie inch copper rods, weighing approximately 7500 pounds, were readily visible to the police. The officers immediately asked where he had acquired the cargo. Instead of a direct response, Snyder answered only that he had gotten the truck from Stephen De Marco.

After the discovery of the copper rods, Officer Waters observed two men — Joseph and John Paul De Marco —seated in the truck’s passenger cabin. Several additional officers were then summoned and the three occupants of the van were requested to accompany the police to the station house “to clear up this mess.” At the police station, Snyder was arrested for driving without a license, New York Vehicle and Traffic Law § 401, subd. 4, McKinney’s Consol. Laws, c. 775, and the De Marcos for misuse of a vehicle. Subsequent investigation by local police and the FBI established that the 30 rolls of copper rods found in the van were part of a shipment from the Rome Wire Company in Rome, New York, intended for delivery to the Simplex Wire Company in North Berwick, Maine. When the shipment arrived at Simplex 33 rolls were missing.

At trial the government introduced statements given to FBI agents by each of the defendants — after receiving Miranda warnings — in which they individually denied complicity in the theft but conceded that they were each offered approximately $200 for moving the truck a short distance and that this caused them to suspect that the cargo was stolen. During the trial the defendants objected to the introduction of the copper rods m evidence on the ground that they were the products of an illegal search. They claimed in their application to suppress made in the district court, as they do on appeal, that Snyder’s consent was obtained under duress because he was under arrest at the time of the search and the officers were, therefore, duty-bound to inform Snyder of his right to refuse to submit to the search.

If Snyder had in fact been arrested prior to the search, this case would have presented a close question for determination. The issue was explicitly reserved by the Supreme Court in Schneckloth v. Bustamonte, supra, 412 U.S. at 240 n. 29, 93 S.Ct. 2041. Since Judge Foley, however, clearly credited the evidence of Officers Burns and Waters, who testified fully on the circumstances in issue, that the arrest did not occur until after the occupants of the truck arrived at the police station, we need not reach the more difficult question as to the standard to be applied in determining the validity of a consent to search given by a person who has been placed in custody.

Sehneckloth teaches that in noncustodial search cases, the subject’s knowledge of his right to refuse to give his consent is one factor among the totality of circumstances the trial judge must weigh in determining whether the consent has been “freely and voluntarily given,” Bumper v. North Carolina, 391 U.S. 543, 548, 88 S.Ct. 1788, 20 L.Ed.2d 797 (1968). Although it is conceded that Snyder was not apprised of his rights prior to the search, the record clearly reveals that the events surrounding the search at the vehicle stopping do not manifest any coercion. On the basis of testimony by Officers Burns and Waters, and the statement Snyder gave to the FBI, Judge Foley properly rejected appellants’ contentions of duress and explicitly found that Snyder freely opened the truck.

II.

Although none of the issues raised by appellants reveals infirmities in the procedures underlying the convictions, our review of the record indicates a serious defect in the judge’s charge which compels us, sua sponte, to reverse the convictions of all four appellants on the conspiracy charge. In instructing the jury on the elements of the conspiracy count, Judge Foley stated that the government had the burden of proving beyond a reasonable doubt that the defendants conspired to possess goods that had been stolen from an interstate shipment, knowing such goods to be stolen. Later in the charge, when it was unclear whether he was referring only to the substantive count or to both counts, he said:

I charge you that the evidence in this case need not establish — this is important to keep in mind — that any of the defendants, any or all of them actually knew the goods mentioned constituted a part of an interstate shipment. That means that the government does not have to prove knowledge on the part of the defendants that these goods, if you so find were in their possession, that the defendants knew that they came from an interstate shipment.

This instruction is, of course, entirely proper with regard to the substantive crime of possession of goods stolen from interstate commerce. But, as we held in United States v. Fields, 466 F.2d 119, 121 (2d Cir. 1972), a necessary component of conspiracy to violate 18 U.S.C. 659 is the knowledge not only that the goods were stolen, but that they were stolen from an interstate shipment. The distinction between the scienter component of the conspiracy and' substantive charges arises from the notion that although an individual may commit some crimes unwittingly, he cannot conspire to commit a specific crime unless he is aware of all the elements of the crime. In Learned Hand’s classic phrase,

While one may, for instance, be guilty of running past a traffic light of whose existence one is ignorant, one cannot be guilty of conspiring to run past such a light, for one cannot agree to run past a light unless one supposes that there is a light to run past.

United States v. Crimmins, 123 F.2d 271, 273 (2d Cir. 1941).

Failure to charge an essential element of the offense, in most instances, affects a defendant’s substantial rights within the meaning of Fed.R. Crim.P. 52(b). United States v. Alsondo, 486 F.2d 1339 (2d Cir. 1973); United States v. Fields, 466 F.2d 119, 121 (1972). In this case, the absence of an instruction that knowledge of the interstate character of the goods was an essential component of the conspiracy charge was exacerbated by a contrary, albeit proper, instruction on the substantive count. Accordingly, although counsel inexcusably did not except to the charge nor question its validity on appeal, we cannot avoid noticing the plain error. See On Lee v. United States, 343 U.S. 747, 750 n. 3, 72 S.Ct. 967, 96 L.Ed. 1270 (1952).

Our reversal on the conspiracy count, however, does not affect the propriety of the convictions on the substantive count. See United States v. Alsondo, supra, on petition for rehearing 486 F.2d at 1346. From the evidence adduced at trial the jury clearly could have found both that the copper rods in appellants’ possession were in fact stolen from an interstate shipment and that all the appellants believed the goods they possessed were stolen — even if appellants may not have known the interstate character. Judge Foley’s charge on the substantive count was free of fault and therefore the jury’s verdict will stand.

Since the trial court imposed identical concurrent sentences on the substantive and conspiracy counts for all four appellants and we today have reversed the conspiracy convictions, it is appropriate that we remand the case to the district court for review of sentence. We do so because of the possibility that conviction on both counts might have affected the punishment set for each. See United States v. Mancuso, 485 F.2d 275 (2d Cir. 1973); United States v. Mapp, supra, 476 F.2d at 82; cf. United States v. Febre, 425 F.2d 107, 113 (2d Cir.) cert. denied, 400 U.S. 849, 91 S.Ct. 40, 27 L.Ed.2d 87 (1970). Of course, we do not imply any views as to whether the sentences should be modified in any respect. We leave the sentences to be imposed entirely to the discretion of the trial judge.

      . Judge Foley interrupted the trial to conduct a hearing on defendants’ motions to suppress evidence. Fed.R.Crim.P. 41(e). The police testimony at the hearing essentially duplicated the evidence presented at trial. None of the defendants testified either at the hearing or the trial.

      . It should be noted that the officers did not enter the truck at the scene of the stopping.

      . The government established at trial that Stephen De Marco had rented the truck at a service station in Waterford, New York, at 8 p. m. on October 7,1971.

      . Richard Snyder was driven to the police station by Officers Burns and Waters in the police car. Joseph and John Paul De Marco travelled in the truck, which was driven by Patrolman Lamberson. Although the men were not arrested for vehicle violations until after they arrived at the police station, Judge Foley properly found that the officers’ request, and the circumstances of the trip to the station house, placed the appellants in a custodial status. See Terry v. Ohio, 392 U.S. 1, 16, 88 S.Ct. 1868, 20 L. Ed.2d 889 (1968).

      . The appellants have not, either in the lower court or on appeal, questioned the propriety of the police action in initially stopping the truck, and in requesting Snyder’s license and registration. The government relies on New York Vehicle and Traffic Law § 401, subd. 4, which authorizes officers to demand production of vehicle registrations and operator’s licenses. Although appellants do not claim that the officers abused their authority in this case, we note that since the stopping of a moving vehicle involves some curtailment of freedom of movement, Henry v. United States, 361 U.S. 98, 80 S.Ct. 168, 4 L.Ed.2d 134 (1959), at least one court has ruled that, in the absence of probable cause to believe that a violation of the vehicle code exists, an officer may not stop an individual vehicle for inspection purposes, see Commonwealth v. Swanger, 307 A.2d 875, 879 (Pa.1973). Cf. United States v. Turner, 442 F.2d 1146 (8th Cir. 1971). We need not decide that question, however, for we believe from the officers’ testimony concerning the heavily overloaded appearance of the truck they could reasonably have concluded the truck was a safety hazard.

      . We note, however, that although “the mere fact that a suspect is under arrest does not negate the possibility of a voluntary consent,” United States ex rel. Lundergan v. McMann, 417 F.2d 519, 521 (2d Cir. 1969), the close relationship between custody and coercion requires the government to meet a heavier burden of proof before consent given by an arrestee will be deemed voluntary. United States v. Mapp, supra, 476 F.2d at 78.

      . The appellants claim also that Judge Foley unduly restricted cross-examination of government witnesses. Our examination of the record indicates the contrary and discloses that the patient trial judge afforded ample latitude to the appellants. It is a well-established principle that the trial judge has broad discretion in determining the permissible scope of cross-examination — and we do not perceive any indication that the trial judge even came close to the line of abusing his discretion. See, e. g., Alford v. United States, 282 U.S. 687, 694, 51 S.Ct. 218, 75 L.Ed. 624 (1931) ; United States v. Kahn, 472 F.2d 272, 280-281 (2d Cir.) cert. denied 411 U.S. 982, 93 S.Ct. 2270, 36 L.Ed.2d 958 (1973). The record discloses that Judge Foley’s rulings during the cross-examinations of the police officers, railroad officials, and expert witnesses, at the very most, sought to avoid repetition of testimony already elicited. Accordingly, we reject this contention. We note, moreover, that the other issues raised by appellants are merit-less.

      . It is with great reluctance that we must perform a task that is rightly counsel’s responsibility. In fairness to Judge Foley, we add that it is virtually certain that if counsel asked him to give the appropriate charge, or called the omission to his attention, the experienced trial judge would have readily complied.