author: SETH, Circuit Judge.

text:
    Melvin STEVENS et al., Appellants, v. ROCK SPRINGS NATIONAL BANK, a Bank Corporation chartered under the United States banking statutes, et al., Appellees.
    No. 73-1728.
    United States Court of Appeals, Tenth Circuit.
    May 22, 1974.

      Philip P. Whynott, Cheyenne, Wyo., for appellants.
    Gary M. Greenhalgh, Rock Springs, Wyo., for appellee, Rock Springs National Bank.
    Ted O. Simóla, Cheyenne, Wyo., for appellee, Adams Sales, Inc.
    Frederick G. Loomis, of Loomis, Lazear, Wilson & Pickett, Cheyenne, Wyo., for appellee, Redman Industries, Inc.
    Before CLARK, Associate Justice Retired, and HILL and SETH, Circuit Judges.

       Of the Supreme Court of the United States, Sitting by Designation.

   SETH, Circuit Judge.

The appellants, Mr. and Mrs. Melvin Stevens and Mr. and Mrs. Samuel Hinkle, filed this action on behalf of themselves and others similarly situated, alleging as their principal claim that the appellees, Adams Sales, Incorporated, and Rock Springs National Bank, failed to make various disclosures required by the Truth in Lending Act (15 U.S.C. § 1601 et seq.) in connection with the financing of mobile homes purchased by the appellants.

A pendent state claim was also asserted under Wyo.Stat. § 40-2-403 which provides generally that a seller in a consumer credit transaction may not accept a negotiable instrument other than a check as evidence of the buyer’s obligation. An additional pendent claim was asserted by the Stevens’ against Adams Sales and Redman Industries, Incorporated, based on allegedly fraudulent representations as to the condition of the trailer which they purchased.

On motion by the defendants and after receiving affidavits submitted by the parties, the district court dismissed the Truth in Lending Act claim for the reason that the one-year limitations period prescribed in 15 U.S.C. § 1640(e) had run as to the named plaintiffs. The pendent state claims were thereupon dismissed for lack of subject matter jurisdiction. A finding was also made that the prerequisites for a class action had not been shown.

The principal issue on this appeal is the construction of 15 U.S.C. § 1640(e), which provides:

“Any action under this section may be brought in any United States district court, or in any other court of competent jurisdiction, within one year from the date of the occurrence of the violation.” (Emphasis added.).

The other subsections of section 1640 establish the civil liability of creditors and, in certain instances, their assignees when disclosures required by the Truth in Lending Act have not been made. It is readily apparent that subsection (e) is both a grant of subject matter jurisdiction and a statement of limitations. It is the latter aspect which we must consider here, particularly the reference point which is somewhat ambiguously described as the “date of the occurrence of the violation.”

A chronology of events is helpful in presenting the issues. The record shows that Mr. and Mrs. Stevens arranged for the purchase of their mobile home on July 19, 1971, at which time they executed a purchase agreement, a promissory note, and a security agreement, each on a form provided by the seller, Adams Sales. The purchase agreement form which they signed contained spaces in which terms pertaining to the financing of the purchase could be written. For the most part, these spaces were completed on the Stevens agreement, and in addition Rock Springs National Bank was identified as the creditor.

Mr. and Mrs. Hinkle’s purchase followed a different pattern. On April 4, 1972, they signed a purchase agreement form similar to the one signed by the Stevens. On this form, however, the spaces provided for the credit information were left blank and no identification of the creditor was made. The agreement simply indicated a lump sum which the Hinkles intended to finance. Furthermore, it was not until about two weeks later that the Hinkles signed a promissory note and security agreement in favor of Rock Springs National Bank.

This action commenced with the filing of the complaint on April 13, 1973.

Having been enacted in 1968, the Truth in Lending Act and particularly its limitations provisions have been the subject of relatively little litigation. To our knowledge only one other Circuit has considered the meaning of section 1640(e) as applied to circumstances similar to these. This was Wachtel v. West, 476 F.2d 1062 (6th Cir.), which involved the alleged failure to make Truth in Lending Act disclosures in connection with a loan secured by a second mortgage on the plaintiffs’ home. The transaction there occurred on October 28, 1970, and the complaint was filed on April 25, 1972. The plaintiffs argued that the duty to make the disclosures was continuing and that the one-year period had therefore not run. This contention was rejected by the Sixth Circuit with the following analysis:

“It thus appears that a credit transaction which requires disclosures under the Act is completed when the lender and borrower contract for the extension of credit. The disclosures must be made sometime before this event occurs. If the disclosures are not made, this violation of the Act occurs, at the latest, when the parties perform their contract ... In the present case performance of the contract and violation of the disclosure requirement took place on October 28, 1970, and the one-year statute of limitations began to run on that date.”

While in this opinion we do not necessarily adopt the Sixth Circuit’s reference to the date of “performance” as the date on which the violation occurs, we nevertheless agree generally with the proposition that violation of the disclosure requirements, with the possible exception of those respecting the limited right of rescission under 15 U.S.C. § 1635, occurs at a specific time from which the statute will then run. Thus it does not necessarily become a continuing failure or breach.

Additional support for this proposition is provided by other provisions of the Act, and by Regulation Z (12 C.F.R. § 226), the administrative interpretation of the Act by the Board of Governors of the Federal Reserve System. 15 U.S.C. § 1639 identifies the disclosures which must be made with respect to particular types of consumer loans. Subsection (b) of that section requires that, with certain exceptions, those disclosures “shall be made before the credit is extended.” Such timing seems consistent with and essential to the principal objective of the Act which, as stated in 15 U.S.C. § 1601, is to enable the consumer “to compare more readily the various credit terms available to him and avoid the uninformed use of credit.” Regulation Z more definitely prescribes the timing requirement by requiring, that the disclosure be made “before the transaction is consummated.” 12 C.F.R. § 226.8(a). Consummation is defined in another subsection which provides:

“The transaction shall be considered consummated at the time a contractual relationship is created between a creditor and a customer irrespective of the time of performance of either party.” (12 C.F.R. § 226.2(cc); emphasis added).

In the case of Bissette v. Colonial Mortgage Corp. of D.C., 155 U.S.App.D.C. 360, 477 F.2d 1245, the District of Columbia Circuit considered these same provisions in holding that where no contractual relationship had arisen between the mortgagor and mortgagee prior to the time of closing, and where the required disclosures had been made at that time, no violation of the Act occurred. We might also note that in that case the mortgagor had also executed a purchase agreement several months prior to the closing.

Thus, we must hold that under the Act and current regulation, the disclosure requirements may be satisfied without penalty at any time prior to the contracting to extend credit, and no violation can occur until such a credit contract is executed.

Accordingly, we agree with the district court that the one-year limitations period had run as to the Stevens, and they are barred from maintaining their claim under the Act. Since the pendent claim asserted in the third count is theirs alone, dismissal of it was also proper.

A different situation exists with the Hinkle’s claim. The April 4th purchase agreement, aside from indicating an amount to be financed, contained no terms relating to the extension of credit and did not identify the prospective creditor. Thus it does not appear that the Hinkles became bound on the credit aspects of their purchase until April 17, 1972, when they signed the note and security agreement. In view of our discussion, and the cited authorities, we fail to see how the asserted violations could have occurred prior to that time. When the Hinkles filed their complaint on April 13, 1973, they were therefore within the one-year period, and dismissal of the action as to them was improper.

Rock Springs National Bank urges us to affirm dismissal as to it in any event for the reason that it was never responsible for making the disclosures to the Hinkles. This is a matter, however, for the consideration of the trial court.

The second count of the complaint, stating a pendent state claim under a Wyoming statute by the Hinkles, was dismissed because the supporting federal claim had been dismissed. The dismissal is set aside, but in so doing we express no view as to whether it should be entertained as a pendent claim. Such a decision is within the sound discretion of the trial court.

The relationship between the limited right of rescission under 15 U.S.C. § 1635, which must also be disclosed in appropriate transactions, and the one-year limitations period prescribed in section 1640(e) presents special problems outside the scope of this decision.

Finally, we note that the district court found that the prerequisites for a class action had not been shown. While in Wilcox v. Commerce Bank of Kansas City, 474 F.2d 336 (10th Cir.), we acknowledged that a class action might be brought under the Truth in Lending Act, we do not believe the trial court abused its discretion in not allowing this action to be so maintained. The record demonstrates that the facts varied considerably between the Stevens and Hinkle transactions. Such variations would likely affect the rights and liabilities of the parties and would presumably occur in Adams Sales’ other transactions as well. This alone would be sufficient reason to deny the class action.

The judgment of the district court is affirmed in part, reversed in part, and the case is remanded for further proceedings consistent herewith.


source: Caselaw Access Project

author: PER CURIAM:

license: Public Domain

text:
    PILOT FREIGHT CARRIERS, INC., Appellee, v. INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WARE-HOUSEMEN AND HELPERS OF AMERICA, et al., Appellants. PILOT FREIGHT CARRIERS, INC., Plaintiff-Appellee, v. LOCAL 391, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, et al., Defendants-Appellants.
    Nos. 74-1454, 74-8036.
    United States Court of Appeals, Fourth Circuit.
    Argued April 29, 1974.
    Decided May 8, 1974.

      David Previant, Milwaukee, Wis. (L. N. D. Wells, Jr., Dallas, Tex., Ian D. Lanoff, Washington, D. C., Norman B. Smith, Greensboro, N. C., Hugh J. Beins, Milwaukee, Wis., and Renn Drum, Jr., Winston-Salem, N. C., on brief), for appellants in Nos. 74-1454 and 74-8036.
    J. W. Alexander, Jr., Charlotte, N. C. (William Kearns Davis, Winston-Salem, N. C., Blakeney, Alexander & Machen, Charlotte, N. C., and Deal, Hutchins & Minor, Winston-Saiem, N. C., on brief), for appellee in Nos. 74-1454 and 74-8036.
    Before HAYNSWORTH, Chief Judge, and RUSSELL and WIDENER, Circuit Judges.
   PER CURIAM:

In this ease, the district court relied on Monongahela Power Company v. I. B. E. W., 484 F.2d 1209 (4th Cir. 1973) and Boys Markets, Inc. v. Retail Clerks Union, 398 U.S. 235, 90 S.Ct. 1583, 26 L.Ed.2d 199 (1970), in issuing a preliminary injunction enjoining members of Teamsters Local 391 from refusing to cross a picket line set up by Teamsters Local 512 at the Kernersville, N. C. terminal of Pilot Freight, Inc. (Pilot). The employer, and Local 391 are parties to the National Master Freight Agreement, and the district court found that the relationship between Article 44, the no-strike clause of the agreement, and Article 9, a clause which gave individual union members the right to refuse to cross a primary picket line, was an arbitrable matter. Further, the court held that the issue of whether the picketing was primary or not was arbitrable. The union was then successful in obtaining a stay pending appeal under F.R.A.P. 8 from a judge of this court on April 8, 1974. Expedited appeal was granted from both these decisions.

We conclude that the district court reached the correct result in its determination that these matters were arbitrable, but erred in enjoining the individual union members from crossing the picket line. Therefore, we vacate the district court injunction insofar as it applies to individual union members, reinstate the injunction so that Local 391 may not engage in a strike until the issue is further considered by the district court, and, accordingly, vacate the stay pending appeal insofar as it would allow Local 391 to respect the picket line. Further, since we are advised arbitration has already begun on these issues, and is now pending at the level of the Eastern Conference Joint Area Committee, we remand this case for the district court to determine whether the injunction should remain in effect until the arbitration proceeding is final.

The dispute arose when Teamsters Local 512, which was attempting to organize the Jacksonville, Florida, terminal of Pilot, established roving picket lines at Pilot terminals throughout its system. Many of Pilot’s Kernersville employees, who were members of Local 391, refused to cross the picket line and go to work, contending that even though the National agreement had an express no-strike clause, the contract clause allowing them to refuse to cross a primary picket line was an express exception to the no-strike clause. Thus, the union has taken the position from the outset that no arbitrable dispute had arisen, and that whether the picket line was secondary or primary was not arbitrable. The union also contends on this appeal that Pilot has already had these issues arbitrated by the National Grievance Committee in a proceeding which took place while this suit was being heard, and, having lost in that arbitration, cannot arbitrate the same issues again.

Pilot argues that Boys Markets and this court’s decision in Monongahela Power Company, supra, control disposition of this case since, even though Article 9 may protect the right of individual employees to respect picket lines, the scope of Article 9 is nevertheless arbitrable. Pilot also contends that the arbitration proceeding already accomplished by the National Grievance Committee did not consider all of the questions raised here. The thrust of Pilot’s allegation is that the national Teamsters union has encouraged, financed, fostered and ordered its members to refuse to cross the picket lines of Local 512 which has had the effect of causing a system-wide strike, and that the union has thus attempted to mask this strike as being protected by the rights granted by Article 9 of the agreement. Article 9, Pilot concedes, does give individual employees the right to refuse to cross a primary picket line, but would not allow a directed and concerted refusal on behalf of Local 391.

We first reach the issue of whether Pilot has already had opportunity to arbitrate these issues. That arbitration proceeding was initiated by a grievance filed by Teamsters Local 728, of Atlanta, Georgia, against Pilot. The factual setting at Atlanta was the same as here, in that Pilot had sought, pending arbitration, an injunction prohibiting Local 728 from respecting Local 512’s picket line at their Atlanta facility. A temporary restraining order and order to arbitrate was granted by the district court in Atlanta on March 6, 1974, which order was directed to Local 728, Local 515, and certain individually named members of the two Locals. Local 728 promptly filed its grievance contending that Pilot had violated the rights of its members under Article 9 of the agreement. The grievance was heard by the National Grievance Committee in Chicago, Illinois, on March 20 and 22, 1974. At that hearing, Pilot complained at great length that it had never been informed what specific acts it was charged with doing that violated Article 9. The union responded that Pilot had violated Article 9 by seeking an injunction against individual employees for doing what they were clearly allowed to do under Article 9 of the agreement. The National Committee limited their consideration to this charge, and concluded that Pilot did violate Article 9 by bringing injunctive proceedings against individual employees. After this arbitration hearing, the Atlanta district court, although noting that the National Committee had not dealt with all of the issues in dispute between the parties, nevertheless dissolved the preliminary injunction it had issued because it concluded that Pilot’s employees were protected in the factual situation there by Article 9 of the agreement. The Local 728 arbitration, however, necessarily held that the individual employees were protected in their refusal to cross the picket line.

However, we do not think all of the issues raised in the case at hand were arbitrated by that Committee. Pilot presses on appeal that, although individual members may be protected in their refusal to cross picket lines, the national union acting in concert with the local may not further, encourage, finance, or order its members to refuse to cross such picket lines, and that so doing is a violation of the no-strike clause of the collective bargaining agreement.

The National Master Freight Agreement in the present case does have a mandatory grievance procedure (Article 8) regarding any dispute under the contract. The relationship between the no-strike clause and the clause allowing individual employees to refuse crossing a primary picket line was, we think, an arbitrable matter, as is Pilot’s contention about the underlying dispute, whether the local union or national union had directed or influenced concerted activity not to cross the picket line, as opposed to individual employees’ decisions not to cross it. On the merits, the arbitration must decide whether Article 9, whatever its scope is found to be, had been complied with or whether the union is using Article 9 as a subterfuge to strike in violation of the agreement. We think the parties intended to submit disputes of this nature to arbitration, and, in any event, we must construe the agreement liberally in favor of arbitration. United Steelworkers of America v. Warrior and Gulf Navigation Co., 363 U.S. 564, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960).

The preliminary injunction of the district court, then, must be vacated as to the individual members, but its preliminary injunction as to the union defendants reinstated. The stay pending appeal is dissolved. Upon remand the district court will consider whether its preliminary injunction should remain in effect as directed to the union defendants during the pending arbitration before the Eastern Conference Joint Area Committee in the proceeding there styled R-125-74, Pilot Freight Company, Inc. v. Local 391.

The mandate will issue forthwith.

Remanded.


author: PER CURIAM.

text:
    Roy C. REYNOLDS, Petitioner, v. A. L. LOCKHART, Superintendent, Cummins Unit, Arkansas Department of Corrections, Respondent.
    No. 74-1157.
    United States Court of Appeals, Eighth Circuit.
    May 17, 1974.
    Roy C. Reynolds, pro se.
    Jim Guy Tucker, Atty. Gen., Little Rock, Ark., for appellee.

      Before HEANEY and STEPHENSON, Circuit Judges.
   PER CURIAM.

The petitioner was convicted by an Arkansas state trial jury of first degree rape and kidnapping, and was sentenced to two concurrent ninety-nine year terms in prison. The petitioner’s petition for a writ of habeas corpus was denied by the District Court. He comes now before this Court seeking appointment of counsel, and raises the following grounds for issuance of the writ:

1. He was compelled to participate in a lineup without assistance of counsel and without notice that the lineup was to be conducted.

2. He was not informed of his constitutional rights pursuant to Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966).

3. He was denied effective assistance of counsel.

4. He was denied an appeal of his conviction to the Supreme Court of Arkansas because he was indigent and illiterate.

We find the petitioner’s first two issues to be without merit, and we find that the petitioner has failed to exhaust his state remedies with regard to his allegations of ineffective assistance of counsel and the denial of a direct appeal. Therefore, we deny the petitioner’s motion for appointment of counsel and dismiss the appeal pursuant to our Local Rule 9(a).

With regard to the petitioner’s argument that he was compelled to participate in a lineup without assistance of counsel and without notice that the lineup was to be conducted, this Court has previously decided this issue in Reynolds v. Lockhart, 470 F.2d 161 (8th Cir. 1972). With regard to his argument that he incriminated himself without having been given the required warnings, there appears to be a valid question whether the petitioner was advised of his rights as required by Miranda v. Arizona, swpra. However, none of the petitioner’s incriminating statements was admitted at trial, and we find that all evidence admitted at trial was obtained independently of the petitioner’s incriminating statements. Consequently, the exclusionary rule has no application here, and the petitioner has failed to show any prejudice arising out of the alleged failure to give the Miranda warnings. Wong Sun v. United States, 371 U.S. 471, 83 S.Ct. 407, 9 L.Ed.2d 441 (1963); Silverthorne Lumber Co. v. United States, 251 U.S. 385, 40 S.Ct. 182, 64 L.Ed. 319 (1920).

With regard to the petitioner’s arguments that he was denied effective assistance of counsel and that he was denied his right to a direct appeal of his conviction because of his indigency, the petitioner contends that the following series of events occurring upon his conviction shows the merits of his allegations. His attorney, who was retained during the trial, filed a notice of appeal, but advised the petitioner and his mother that he would not represent him on appeal unless he was paid an additional fee. The petitioner and his family apparently were unable to pay additional sums. The petitioner’s mother then wrote to the Legal Aide to the Governor of the State of Arkansas, asking for advice as to the conviction of her son. The government officials replied to her letter as follows:

I regret that we cannot comply with your request for advice regarding the conviction of your son in Circuit Court of the crime of rape. It is generally considered impossible for us in these matters concerning the judiciary since we represent the executive branch of the government. The decision on whether to appeal the judgment is something you will have to make. If I were you and had experi enced the difficulty you apparently have experienced with your son and assuming further that you do not have the financial ability to withstand this type of expense, I would be very hesitant to spend additional funds. [Emphasis supplied.]

The petitioner then filed a petition for a writ of habeas corpus in the United States District Court shortly following his conviction. Whether this action was a result of his inability to pay his trial counsel and his lack of knowledge of his right to appointment of counsel has not been ascertained. The District Court dismissed the petition for failure to exhaust state remedies, whereupon the petitioner filed a post-conviction petition in the state court one month after his notice of appeal was filed, asserting issues different from those raised here. At this point, the petitioner’s mother wrote to the United States District Court judge seeking appointment of counsel for the state post-conviction hearing. The judge wrote and informed her that he had no authority to appoint counsel in a state matter. The petitioner’s case was set for hearing; and on the day of the hearing, the petitioner’s trial counsel, who had come to the hearing to appear as a witness, was appointed as counsel for the petitioner for the post-conviction proceeding. Counsel conferred with the petitioner for a few moments, and then announced that the petitioner wished to submit his case solely on his petition. Consequently, no evidence was heard, and the state court denied the post-conviction petition. The denial was affirmed by the Arkansas Supreme Court in Reynolds v. State, 248 Ark. 153, 450 S.W.2d 555 (1970).

From this factual situation, it appears to this Court that the petitioner raises a serious question when he alleges he was denied his right to appeal due to his indigency. It is clear that the petitioner and his family could not afford retained counsel, and did not know of the petitioner’s right to appointed counsel. The petitioner’s mother asked for aid from a state official who, instead of advising her of her son’s right to appointed counsel, advised her to drop the appeal. The petitioner’s attorney testified that while it was his practice to inform clients that if they could no longer afford his services in a criminal case they were entitled to appointment of counsel, he could not specifically recall advising the petitioner of this fact.

An indigent is entitled to appointment of counsel on appeal. Douglas v. California, 372 U.S. 353, 83 S.Ct. 814, 9 L.Ed.2d 811 (1963). The remedy for failure to provide counsel to an indigent on appeal is a fair appellate review of the conviction, Williams v. United States, 416 F.2d 1064 (8th Cir. 1969), or, if no appellate review is afforded, issuance of a writ of habeas corpus. Joseph v. White, 404 F.2d 322 (5th Cir. 1968). The law is settled that even where a defendant is represented by a retained attorney at trial, if at the appeal state he is without funds but desires to appeal, and makes such desire known, failure to inform him of his right to appointment of counsel is grounds for habeas corpus relief. Willey v. Coiner, 464 F.2d 525 (4th Cir. 1972); Goforth v. Dutton, 409 F.2d 651 (5th Cir. 1969).

Although it appears to us that the petitioner’s claim regarding his right to appointment of counsel on appeal has merit, we have examined the record of the state post-conviction action, and find that the petitioner has failed to present this claim and the claim of ineffective assistance of counsel to the state court. Failure of a petitioner to exhaust state remedies, absent a showing that resort to the state courts would be futile, constitutes grounds to dismiss a petition for a writ of habeas corpus. United States ex rel. Condon v. Erickson, 459 F.2d 663 (8th Cir. 1972). Argument can be made that resort to the state courts would be futile in this instance. The Supreme Court of Arkansas, when it denied the petitioner’s post-conviction petition, did state that:

* * * It is plain enough that the petitioner is merely going through the motions of exhausting his “remedy” in the state courts as a preliminary step to instituting some sort of proceeding in the federal courts. In the circumstances we see no reason to dignify the petitioner’s maneuver by discussing it at length. Henceforth similar appeals, if any should be received, will be disposed of by a per curiam reference to this opinion.

Reynolds v. State, supra, 450 S.W.2d at 556.

While this statement might be construed as indicating the Supreme Court of Arkansas’s intent to dismiss any of the petitioner’s appeals filed in the future, in view of the seriousness of the petitioner’s allegations and the factual circumstances surrounding the original conviction and post-convictions appeal, we hold that the state courts should have the opportunity to determine the merits of the petitioner’s allegations.

We deny the petition for a writ of habeas corpus and appointment of counsel.

      . It would appear, from a careful reading of the record, that the petitioner could raise issues as to the sufficiency of the evidence and the propriety of the instructions if a direct appeal were granted to him.


author: WEIS, Circuit Judge.

text:
    UNITED STATES of America, Appellee, v. Herman Eugene LARDIERI, Appellant.
    No. 73-1750.
    United States Court of Appeals, Third Circuit.
    Submitted Jan. 9, 1974.
    Decided May 14, 1974.

      Richard L. Thornburgh, U. S. Atty., Carl L. LoPresti, Michael P. Lesniak, Special Attys., U. S. Dept, of Justice, Pittsburgh, Pa., for appellee.
    Louis J. Grippo, Pittsburgh, Pa., for appellant.
    Before ADAMS, HUNTER and WEIS, Circuit Judges.
   OPINION OF THE COURT

WEIS, Circuit Judge.

The issues raised by the appellant in this criminal appeal are not sufficient to require reversal, but a point not presented by the parties give us some concern.

The defendant, Herman Lardieri, was convicted of a violation of 18 U.S.C. § 1623 (1970) for giving false testimony before a grand jury. While he was originally indicted on three counts, the petit jury found him guilty on only one charge — that of denying that he signed certain cheeks.

The grand jury was investigating possible income tax violations by one Sorrentino who had a financial interest in a small restaurant in Altoona, Pennsylvania. Apparently, Sorrentino lived in New York and since he spent little time in Altoona, made arrangements for Lardieri to look after the restaurant business there. The extent to which the defendant participated in the enterprise is a matter of dispute, but he was authorized to write checks on the restaurant account to meet payroll expenses.

While being questioned before the grand jury by the government attorney, the defendant admitted that he had “made out” checks for payroll purposes for Sorrentino’s restaurant but denied several times that he had signed them. He professed not to remember whose signatures were on the checks and claimed to have little knowledge of Sorrentino’s activities. The interrogation became heated with both the attorney and the witness shouting at each other. When Lardieri complained that he had been told he would be there for only an hour, the prosecutor retorted, “I will keep you here all day.”

At one point the prosecutor asked if the defendant knew what perjury was, and Lardieri responded, “You have to tell the truth and if you don’t tell the truth, you wind up in jail.” To this the government attorney added, “And there is a $10,000 fine as well.”

Later, in referring to a statement which Lardieri had given to the Internal Revenue agents a year previously, the prosecutor stated, “See, we have records of what you said.” Lardieri acknowledged that, and the attorney continued, “You know that is basis for perjury, you know that?”

At another point, the defendant was told that he had not been truthful, and the prosecutor said, “I will tell you what I am going to do. I am going to give you a chance to straighten out your testimony ... Is there anything that you have said in here today that you would like to modify or change?” To this the defendant replied, “No, just put down what I said. Why don’t you ask me the same question you asked me a little while ago in front of these people or don’t you remember? You asked me if I always work for nothing.”

At the trial defendant admitted, as he had years earlier in the statement to the IRS, that he in fact had signed the checks. He contended that he had made the false statements before the grand jury because he was tired after not having slept for 36 hours, lost his temper, did not know what he was doing, and was not in the right frame of mind.

The defendant contends that the trial court erred in finding that the statements were material and in failing to charge on the elements of willfulness. He also points to allegedly prejudicial remarks in the government’s closing argument as a third ground for reversal. After consideration of these contentions, we conclude that they do not constitute grounds for reversal.

Lardieri concedes that his statement regarding his signature on checks for the restaurant was false but argues that it was immaterial because it did not hinder the grand jury’s investigation into Sorrentino’s tax liability. 18 U.S.C. § 1623 provides that a sworn witness who “knowingly makes any false material statement” before a court or grand jury can be fined no more than $10,000 and/or imprisoned for no more than five years.

The element of materiality is also a requirement of the general perjury statute, 18 U.S.C. § 1621. It is well established that a perjurious statement is material under that section if it has a tendency to influence, impede, or hamper the grand jury from pursuing its investigation. United States v. Cohn, 452 F.2d 881 (2d Cir. 1971), cert. denied, 405 U.S. 975, 92 S.Ct. 1196, 31 L.Ed.2d 249 (1972), and United States v. Stone, 429 F.2d 138 (2d Cir. 1970). The test for materiality is the same under both sections 1621 and 1623. United States v. Koonce, 485 F.2d 374, 380 (8th Cir. 1973) and United States v. Ceceerelli, 350 F.Supp. 475, 477 (W.D.Pa.1972).

The purpose of a grand jury’s investigation is to uncover facts which will support formal charges against an individual. Hence, leads to additional facts may be material even though they do not directly reflect on the ultimate issue being investigated. Because the defendant’s grand jury investigation was not directly significant in terms of Sorrentino’s tax liability, Lardieri urges that his false statements were immaterial and thus not within the purview of § 1623. This argument fails to comprehend the effect of Lardieri’s false statements on the course of the grand jury’s investigation. Since his false denial of a check-signing role for the restaurant tended to cloud the true nature of Sorrentino’s income producing operations, the investigation was affected, and the statement was material.

Lardieri next cites as error the district judge’s failure to instruct the jury that a false statement must be made “willfully” for it to be an offense under 18 U.S.C. § 1623. The gist of Lardieri’s defense is that he had been harassed by the government attorney, that he was fatigued when he testified before the grand jury, that his false statements were uttered out of emotion, rather than reason, and that they were therefore not made willfully.

Unlike the general perjury statute, § 1623 requires that a false statement be made “knowingly,” rather than “willfully.” The district judge charged the jury as follows:

“Now, then, it must be knowingly made. Now knowingly, of course, means intentionally, voluntarily, as distinguished from mistakenly or accidentally or inadvertently.”
* *****
“Now, then, you come to the second count which is about signing checks. Well, there seems to be little doubt at this stage of the case that actually this defendant did sign checks. So the question arises why did he tell the Grand Jury that he didn’t. Well, if you find that by reason of fatigue or anxiety about getting back to cater his banquet or by reason of anger or annoyance at delay in getting him out of the Grand Jury Room he actually did not know what he was talking about and that he actually did forget that he had signed checks and had actully believed that he didn’t, then you would acquit him. On the other hand, if you believe that in spite of all these circumstances surrounding his situation in the Grand Jury Room he did in fact know that he signed the checks and falsely and knowingly answered that he did not when he said no, then you would convict him.”

The instruction adhered to the express terms of § 1623 and is proper. Although the predecessor perjury statute, § 1621, provides that the false testimony must have been made “willfully,” Congress, when it enacted § 1623 in 1970, chose to change that term by substituting the word “knowingly.”

Lardieri’s remaining contention on this appeal is that the prosecutor’s closing remarks to the jury disregarded the evidence and denied him a fair trial. We have reviewed these comments and find that they do not require the grant of a new trial.

We are troubled, however, about another point in this case which was neither briefed nor raised below. Because the record does not develop the matter fully, we cannot meet the issue but feel that some discussion is appropriate.

When Congress enacted the portion of the Organized Crime Control Act of 1970 now codified as § 1623 involved in this case, it confined its operations to false declarations before grand juries and courts. The requirements for a conviction were relaxed from that of the previous general perjury statute, perhaps influenced by the considerations that the necessity for encouraging truthful disclosures in court-supervised proceedings was more compelling than in other settings and that the means for preventing abuse of the statute were more readily available.

Basically, the reason for having a witness testify before a grand jury is to discover the truth, not to lay the groundwork for a perjury prosecution. As the Supreme Court said in Bronston v. United States, 409 U.S. 352, 359, 93 S.Ct. 595, 34 L.Ed.2d 568 (1973):

“The seminal modern treatment of the history of the offense concludes that one consideration of policy overshadowed all others during the years when perjury first emerged as a common law offense: ‘That the measures taken against the offense must not be so severe as to discourage witnesses from appearing or testifying. Study of Perjury, reprinted in Report of New York Law Revision Commission, Legis. Doc.No.60, p. 249 (1935).”

While Congress made it easier to secure convictions under § 1623, it balanced its approach to some degree by adding a recantation provision, § 1623(d), which could be helpful to a witness. This subsection reads:

“Where, in the same continuous court or grand jury proceeding in which a declaration is made, the person making the declaration admits such declaration to be false, such admission shall bar prosecution under this section if, at the time the admission is made, the declaration has not substantially affected the proceeding, or it has not become manifest that such falsity has been or will be exposed.”

That this was to encourage disclosure by utilizing a combination of the carrot and stick approach is clear from the legislative history. “It serves as an inducement to the witness to give truthful testimony by permitting him voluntarily to correct a false statement without incurring the risk [of] prosecution by doing so.” 2 U.S.Code Cong. & Adm. News p. 4024 (1970).

If the recantation provision is to serve its purpose, it would seem to follow that in some circumstances there may be a requirement that the witness know of its existence.

Although there is no duty generally on the part of the government to explain a grand jury witness’s right to him, United States v. DiMichele, 375 F.2d 959 (3d Cir. 1967), this would not necessarily cover the situation where a government attorney chooses to enlighten the witness on the punitive provisions of the false swearing statute when the witness has no knowledge of the recantation provision.

The trial record in this case did not focus on the issue, and consequently, we do not have an adequate factual background to properly rule on this point.

Ordinarily this issue should be raised by a pretrial motion under Fed.R.Crim.P. 12(b)(2), and failure to do so is considered a waiver. However, the rule grants authority to grant relief from the waiver for cause shown, and this may be done by an appellate as well as a trial court. United States v. Gougis, 374 F.2d 758 (7th Cir. 1967); 8 Moore’s Federal Practice § 12.03[4].

One of the considerations which must guide our judgment is whether the defendant would be prejudiced by enforcing the waiver. We conclude that he would and are concerned that the waiver might effectively be interposed to prevent consideration on the merits in a proceeding brought pursuant to 28 U.S.C. § 2255. Furthermore, the novelty of the issue presented under a statute recently enacted, the fact that Lardieri was not represented at the time he presented himself to the grand jury, and that the transcript of the grand jury proceedings would not have been available to defense counsel until a late stage in the case, all combine to provide cause for relief.

We therefore remand to the district court for a hearing to determine if the indictment should be dismissed.

      . Sorrentino’s relationship with Lardieri prompted the Internal Revenue Service to interview him in June, 1971. During that interview, Lardieri stated that he had signed some of the restaurant’s checks.

      . In re Schofield, 486 F.2d 85 (3d Cir. 1973), notes that the courts do have supervisory powers over grand juries, and the decision in that case is an indication of our continuing interest in this field. We take this occasion to express our approval of the practice of transcribing the testimony of witnesses before the grand jury which was followed in this case but note that one off-the-record discussion was not recorded. While we do not think it was of any significance in this case, we would recommend that in the future all such colloquies should be transcribed. A number of district courts by local rule require recordation of all grand jury testimony. See United States v. Battisti, 486 F.2d 961 (6th Cir. 1973); United States v. Arradondo, 483 F.2d 980, 984, n. 4 (8th Cir. 1973); and United States v. King, 478 F.2d 494 (9th Cir. 1973), cert. denied, 414 U.S. 846, 94 S.Ct. 111, 38 L.Ed.2d 93. See Wright, Federal Practice and Procedure: Criminal § 103; Knudsen, Pretrial Disclosure of Federal Grand Jury Testimony, 60 F.R.D. 237 (1973).

      . This comment makes it clear that the prosecutor was referring to 18 U.S.C. § 1623— “False declarations before grand jury or Court” — which calls for a maximum fine of $10,000, rather than the general perjury statute, § 1621, which allows a maximum fine of $2,000. Both sections provide imprisonment not to exceed 5 years.

      . Our review is bound by the principle “that the Government is entitled, once a jury returns a verdict of guilty, to have this Court view the evidence in the light most favorable to the prosecution in order to sustain the convictions.” United States v. DeCavalcante, 440 F.2d 1264 (3d Cir. 1971).

      . The Eighth Circuit Court of Appeals also concluded “that the ‘two-witness’ rule in perjury cases is not constitutionally mandated.” Koonce, supra, at 377.

      . For a discussion of whether the government is required to utilize § 1623 rather than § 1621 in indictments charging falsity before courts and grand juries, see United States v. Kahn, 472 F.2d 272, 283 (2d Cir. 1973), cert. denied, 411 U.S. 982, 93 S.Ct. 2270, 36 L.Ed.2d 958 (1973).

      . See Annot. Recantation as defense in perjury prosecution, 64 A.L.R.2d 276 (1959).


author: CRAVEN, Circuit Judge:

text:
    NATIONAL LABOR RELATIONS BOARD, Petitioner, v. BEL-AIR MART, INC., a Subsidiary of Mammoth Mart, Inc., Respondent.
    No. 73-1826.
    United States Court of Appeals, Fourth Circuit.
    Argued Feb. 6, 1974.
    Decided May 16, 1974.
    Robert Dashiell, Atty., N. L. R. B., (Peter G. Nash, Gen. Counsel, John S. Irving, Deputy Gen. Counsel, Patrick Hardin, Associate Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel, and Jay E. Shanklin, Atty., N. L. R. B., on brief), for petitioner.

      Milton M. Konowe, New York City (Katz & Wolchok and Sidney S. Wolehok, New York City, on brief), for respondent.
    Before CRAVEN, RUSSELL, and FIELD, Circuit Judges.
   CRAVEN, Circuit Judge:

The National Labor Relations Board seeks enforcement, pursuant to section 10(e) of the National Labor Relations Act, 29 U.S.C. § 160(e), of its order finding that respondent, Bel-Air Mart, Inc., committed unfair labor practices in violation of sections 8(a)(1) and 8(a)(3), 29 U.S.C. §§ 158(a)(1) and (a) (3). Because we agree that substantial evidence supports the finding as to the 8(a)(1) violation and that the 8(a)(3) violation occurred with respect to activity of an employee which was protected under section 7 of the Act, 29 U.S.C. § 157, we enforce the Board’s order.

I. The 8(a)(1) Violation

Bel-Air Mart (the company) operates a discount department store in Belair, Maryland, and employs approximately 90 persons in various capacities —managers, supervisors, clerks, and guards. Mrs. Dorothy Himmelman, a clerk, became actively involved during March and April 1972 in encouraging her fellow employees to join Local 692 of the Retail Store Employees Union. The Administrative Law Judge determined, and the Board agreed, that the company committed an unfair labor practice by (1) incessant surveillance of her activities together with other related forms of harassment, (2) promising her benefits if she would cease supporting the union, and (3) coercively interrogating her concerning union activities. Mrs. Himmelman’s testimony in this regard is uncontradicted and provides substantial evidence of an unfair labor practice. The company does not seriously contend otherwise, limiting argument in its brief to pointing out that a conversation which the Board alleged to have occurred between Himmelman and Leavitt, the store manager, was actually between Himmelman and the personnel manager, Lerner. Since both are management representatives, the Board’s mistake is of no great consequence. The Board’s order as to the 8(a)(1) violation is clearly supported by substantial evidence.

II. The 8(a)(3) Violation

Beginning October 31, 1969, James Pilachowski was employed by the company as a uniformed guard. According to Pilaehowski’s testimony his duties entailed “ [gjreeting customers when they [came] in, being on the lookout for shoplifting, mak[ing] sure that all doors were closed and locked at nighttime when we closed up, and also taking deposits to the bank.” Pilachowski further agreed that his duties involved not only surveillance of customers to prevent shoplifting but also observation of employees to prevent theft by them as well.

On the evening of April 5, 1972, Pilachowski attended a union meeting. A few days later he, along with other guards and supervisory personnel, were warned by personnel manager Lerner that they were “considered management” and that they “were to offer no opinion to the girls as to whether or not they [the clerks] should join.” On April 12 Pilachowski attended a second meeting. His presence was disclosed to Leavitt (store manager) on April 17; Leavitt called Pilachowski to his office and questioned him about his attendance. Pilachowski readily admitted that he had gone to the meeting, whereupon, on Lerner’s orders, Leavitt discharged him “for violating company policy.” Whether there was one warning, as Pilachowski testified, or two, as Lerner claimed, prior to Pilachowski’s discharge, and whether that warning specifically informed Pilachowski that he was not to attend union meetings is of little moment. The company admits that Pilachowski was discharged solely for the reason that he attended the two meetings.

Section 8(a) (3) of the National Labor Relations Act, 29 U.S.C. § 158(a)(3), declares it to be an unfair labor practice for an employer “by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization . . . .” In discharging Pilachowski, the company was found by the Board to have committed an 8(a)(3) violation as well as an infringement of section 8(a)(1) proscribing interference by employers with the exercise of employees’ section 7 rights.

The company counters with the assertion that attendance at union meetings by a guard is not protected activity because the guard is an agent of the employer who must maintain a “strictly neutral attitude” in a union organizational campaign. The company must be able to prevent such attendance, it is argued, in order to insulate itself from liability against charges of surveillance, coercion or other unfair labor practices attributable to it through the acts of its agents. Relying on section 2(13) of the LMRA, the company pictures itself in the doleful dilemma of violating section 8(a)(1) if the security guard attends the union meeting and transgressing section 8(a)(3) if he is forbidden to attend. But Bel-Air’s plight is more theoretical than real for section 2(13) purports only to state a general principle of the law of agency — that the authority of an agent may be implied from the conditions and circumstances of his employment and that specific acts, to be within the scope of that authorized, need not be either expressly authorized by the principal or ratified by him. It does not purport to create a per se rule that guards are agents of their employers for all purposes and at all times. Cf. National Paper Co., 102 N.L.R.B. 1569, 31 L.R.R.M. (1953), enforcement denied, 216 F.2d 859 (5th Cir. 1954); Harrison Sheet Steel Co., 94 N.L.R.B. 81, 28 L.R.R.M. 1012 (1951). Bel-Air’s position is not as dilemmatic as we are asked to believe.

Respondent’s argument goes further, however, and seeks to escape the purported quandary by defining guards as “management.” In terms of the LMRA, Bel-Air contends that Pilachowski must be considered a “supervisor” within the meaning of section 2(11), 29 U.S.C. § 152(11), rather ‘ than an “employee” within section 2(3), 29 U.S.C. § 152(3). Such a classification would strip Pilachowski of the rights guaranteed “employees” under section 7 and validate his discharge by Bel-Air. This denomination by the company is bottomed upon its interpretation of the legislative history of the Taft-Hartley Act and of section 9(b)(3) of the Act, 29 U.S.C. § 159(b)(3).

Respondent’s legislative history is awry. While it is certainly true that “ [p] lant policemen and guards” were referred to as an extension of management in the House Report on the Act, it is also clear that the sweeping definition of “supervisors” envisioned in the House bill was considerably circumscribed by the Senate’s version. The conference committee specifically adopted the Senate modification:

[B]oth the House bill and the Senate amendment excluded supervisors from the individuals who are to be considered employees for the purposes of the act. The House bill defined as “supervisors”, however, certain categories of employees who were not treated as supervisors under the Senate amendment. These were generally (B) labor relations personnel, police, and claims personnel The Senate amendment confined the definition of “supervisor” to individuals generally regarded as foremen and persons of like or higher rank.
The conference agreement, in the definition of “supervisor,” limits such term to those individuals treated as supervisors under the Senate amendment.

H.R.Rep.No.510, 80th Cong., 1st Sess. 35 (1947) (Conference Report), U.S.Code Cong.Serv. p. 1141.

The adoption of the Senate variant is not entirely conclusive of the matter. In NLRB v. Wheeling Electric Co., 444 F.2d 783 (4th Cir. 1971), we faced an analogous question pertaining to the status of confidential secretaries. Like guards, confidential employees had been included within the House definition of “supervisor.” While specific mention of this category of employee, like the guard category, was dropped from the Senate’s more general definition of “supervisor,” the legislative history plainly indicated that the bill was not intended to alter the Board’s prior practice of treating confidential secretaries as personnel outside the scope of the Wagner Act. See H.R.Rep.No.510 at 35; Wheeling Electric, supra, 444 F.2d at 785; NLRB v. Bell Aerospace Co.,U.S. -, 94 S.Ct. 1757, 40 L.Ed.2d 134, 42 U.S.L.W. 4564, 4569 (1974). As to guards, however, the legislative history reveals a different tack. Prior practice in the guard context- — segregating plant guards in separate bargaining units but allowing the same union to represent guard and non-guard employees — is quite dissimilar from the Board’s approach to confidential secretaries. See e. g., NLRB v. E. C. Atkins & Co., 331 U.S. 398, 67 S.Ct. 1265, 91 L.Ed. 1563 (1946); NLRB v. Jones & Laughlin Steel Corp., 331 U.S. 416, 67 S.Ct. 1274, 91 L.Ed. 1575 (1946). Recognizing the Board’s distinction between the two categories, the Senate amendment adopted a statutory approach aimed at eliminating what was perceived to be the danger of earlier Board practice while at the same time preserving the rights of guards under the NLRA. The conference committee concurred with the Senate and the result was section 9(b)(3), 29 U.S.C. § 159(b)(3):

(b) The Board shall decide in each case whether, in order to assure to employees the fullest freedom in exercising the rights guaranteed by this subchapter, the unit appropriate for the purposes of collective bargaining shall be the employer unit, craft unit, plant unit, or subdivision thereof: Provided, That the Board shall not (3) decide that any unit is appropriate for such purposes if it includes, together with other employees, any individual employed as a guard to enforce against employees and other persons rules to protect property of the employer or to protect the safety of persons on the employer’s premises; but no labor organization shall be certified as the representative of employees in a bargaining unit of guards if such organization admits to membership, or is affiliated directly or indirectly with an organization which admits to membership, employees other than guards.

Respondent argues that Congress could not have intended that the word “employee” mean one thing for purposes of determining a proper bargaining unit and something else in determining which employees are protected from being fired for union activity. We think otherwise. Compromise has its own logic. Under this compromise, guards are “employees” within the meaning of section 2(3) and possess the same rights as non-guard employees under section 7. Guards’ employee rights are not limited by the terms of the Act; the only limitation is the elimination of the Board’s power to certify two types of bargaining units — (1) those containing both guard and non-guard employees, and (2) those containing only guards but which are represented by or affiliated with the same union which represents other bargaining units containing non-guard employees of the same employer.

Once again, an ear to the legislative history is dispositive of a contrary interpretation. In a summary of the principal differences between the Senate bill and the later conference agreement, Senator Taft, the Act’s chief spokesman in the Senate, declared:

Under the language of clause (3), guards still retain their rights as employees under the National Labor Relations Act, but the Board is instructed not to place them in the same bargaining unit with other employees, or to certify as bargaining representatives for the guards a union which admits other employees to membership or is affiliated directly or indirectly with labor organizations admitting employees other than guards to membership.

93 Cong.Rec. 6444 (1947). The intent of section 9(b)(3) is further clarified by an exchange between Senator Taft and Senator Murray. After Senator Murray described section 9(b)(3) as “a petulant gesture at the Supreme Court” which had “no justification other than a wish to belittle a tribunal which is a coordinate branch of this Government and, as such, is entitled to the respect of the Congress,” Senator Taft responded:

By the provision of the House bill plant guards were completely excluded from the Wagner Act. We compromised with the House by providing that they should have the protection of the Wagner Act, but in a separate unit from the workers in the plants. That is certainly a change — although a minor one, nevertheless a reasonable one — and certainly it is a compromise with the extreme position taken by the House.

93 Cong.Rec. 6499 (1947). See also, H.R.Rep.No.510, 80th Cong., 1st Sess. 47-48 (1947) (Conference Report), U.S.Code Cong.Serv. p. 1135; 93 Cong.Rec. 6442 (1947) (remarks of Senator Taft); 93 Cong.Rec. 6534 (1947) (statement of the House managers); 93 Cong.Rec. 6504 (1947) (analysis of Title I of the Act by Senator Murray). We conclude that the legislative history of sections 2(11) and 9(b)(3) leaves no doubt that guards are “employees” within the meaning of section 2(3) and that they retain the full panoply of rights granted to non-guard employees by section 7. Section 9(b)(3) is a limitation not upon employee rights but upon Board powers.

This conclusion is undergirded by several analogous lower court holdings. In Rock-Hill-Uris, Inc. v. McLeod, 236 F.Supp. 395 (S.D.N.Y.1964), aff’d 344 F.2d 697 (2d Cir. 1965), plaintiff-employer sought to exclude two unions from the ballot in an election to determine the bargaining representative for its security officers and watchmen. Its opposition was grounded upon section 9(b)(3) which would have prohibited the Board from certifying either union. The district court rejected the plaintiff’s contention and refused to enjoin the election, declaring:

[Njowhere does the Act proscribe such a union from representing the guards. They retain the right to select a mixed union to represent them; the employer may voluntarily recognize such a union — as, in fact, the plaintiffs have in the instant case— and may even be forced to do so by the exertion of the union’s economic power. Thus, while the statute forecloses certification by the Board of a disqualified union, it does not deprive the guards of the right granted under Section 7 “to bargain collectively through representatives of their own choosing.”

236 F.Supp. at 398 (emphasis added).

Closer to the situation before us is that faced by the Sixth Circuit in NLRB v. White Superior Division, 404 F.2d 1100 (1968). Respondent White had maintained its own guard force for 26 years prior to 1966. In that year a majority of its ten-guard force authorized the International Association of Machinists to represent them — the same union which represented White’s production and maintenance workers. Five days after I.A.M. requested recognition as the guards’ bargaining agent, the company subcontracted out its guard work, allowing the former guards to accept transfers to production or maintenance with the same fringe benefits and, as to six of the eight who accepted transfer, the same wage. In agreeing that White’s conduct constituted an unfair labor practice under section 8(a)(3), the court placed emphasis upon the legislative history of section 9(b) (3) together with the language of section 8(a)(3) which proscribed encouragement or discouragement of membership “in any labor organization.” 404 F.2d at 1103 and n, 4. Judge Coffin concluded:

[W]e think it is clear that § 9(b)(3) does not operate to prevent guard employees from joining a labor organization, and this principle extends to labor organizations which also represent non-guard employees. Indeed, the real significance of § 9(b)(3) is the restriction which it imposes on the Board.

404 F.2d at 1103. If section 9(b)(3) does not prevent guards from joining the same union which represents the employer’s non-guard employees, how can it be said that the same section prevents a guard from merely attending that union’s meetings? We conclude that store guard Pilachowski was exercising rights reserved to him as a section 2(3) employee by section 7 of the NLRA and that the company’s discharge of him solely for the reason of his attendance was an unfair labor practice within the meaning of sections 8(a)(1) and (a)(3).

Despite this holding, we cannot fail to recognize the incongruous result which, in part, led us to an opposite conclusion with respect to the confidential secretary in Wheeling Electric. We said:

It strikes us as nonsense for the Board to exclude Mrs. McConnell from membership in the bargaining unit and then extend to her the same protection for the same concerted activity that she would have enjoyed if a union member.

444 F.2d at 788. While the Board’s action here is not “nonsense,” it serves a very limited purpose. The right of the guard which we here protect has little practical value aside from the rare instance when an employer voluntarily chooses to bargain with a union which could not be certified, see Rock-Hill-Uris, supra, 236 F.Supp. at 398; White Superior, supra, 404 F.2d at 1103-1104; Radio Corp. of America, 173 N.L.R.B. No. 72, 69 L.R.R.M. 1368, 1373 (October 29, 1968), or where attendance at the meeting “educates” the guard to the benefits of unionism, though such benefits are later obtained only by membership in a separate, certifiable union. But even though section 7 rights in this context may be of little value, the legislative history is that such rights were the intended product of compromise.

The Board’s order that Pilachowski be reinstated with compensation for loss of earnings together with the usual cease and desist and notice requirements is enforced.

Order enforced.

      . Section 8(a), 29 U.S.C. § 158(a), provides: It shall be an unfair labor practice for an employer—
      (1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title;

      . This error was subsequently corrected by the Board.

      . Lerner’s testimony as to the content of this initial warning varies somewhat from Pilachowski’s recollection. Lerner testified that he specifically warned the “management team,” including the guards, that they were not to attend any union meetings. This warning took place on April 5 and was followed by another warning on April 12, after Lerner was apprised that a security guard had attended the April 5 meeting. Lerner testified to the substance of the April 12 warning as follows:
      I had made all management, as well as Mr. Pilachowski, aware that if they violated company policy and attended any meetings, or made any opinions, that would be cause for immediate dismissal.

      . Section 7, 29 U.S.C. § 157, provides in pertinent part:
      Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection
      It cannot be gainsaid that the right to attend a union meeting is encompassed by the broad terms of section 7.

      . Section 2(13), 29 U.S.C. § 152(13), recites: In determining whether any person is acting as an “agent” of another person so as to make such other person responsible for his acts, the question of whether the specific acts performed were actually authorized or subseqiiently ratified shall not be controlling.

      . H.R.Rep.No.245, 80th Cong., 1st Sess. 16 (1947). The House definition of “supervisor” was, in relevant part, as follows :
      The term “supervisor” means any individual—
      (B) who is employed in labor relations, personnel, employment, police, or time-study matters ....
      H.R.Rep.No.245 at 49-50.

      . Now codified as 29 U.S.C. § 152(11), the Senate definition read:
      The term “supervisor” means any individual having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.

      . The Supreme Court in Jones & Laughlin recognized the Board’s interpretation.

        Where the private employer retains the right to fix the wages, hours or other working conditions of such guards, the Board’s uniform conclusion lias been that they are employees of the private employer and that they retain their rights under the National Labor Relations Act.

      331 U.S. at 428 (emphasis added).

      . Respondent’s reliance upon NLRB v. North Arkansas Electrical Cooperative, Inc., 446 F.2d 602 (8th Cir. 1971), is misplaced. That case dealt with the “managerial employee,” a category treated precisely as was the “confidential secretary” in the Act’s legislative history. North Arkansas is thus distinguishable from the present ease in the same manner as Wheeling Electric, supra. Accord, NLRB v. Bell Aerospace Co., - U.S. -, 94 S.Ct. 1757, 40 L.Ed.2d 134, 42 U.S.L.W. 4564, 4568-71 (1974).

      . Senator Taft’s remarks revealed the conferees’ agreement with the Sixth Circuit’s decision in NLRB v. Jones & Laughlin Steel Corp., 154 F.2d 932, rev’d 331 U.S. 416, 67 S.Ct. 1274, 91 L.Ed. 1575 (1946), which refused to enforce a Board order which would have permitted the same union representing production employees to represent a separate bargaining unit consisting of plant guards. 93 Cong.Rec. 6444.

      . Senator Taft added, in response to Senator Murray’s charge that the change was “put in arbitrarily,” that:
      [T]he Supreme Court’s opinion to which the Senator has referred was only a 5-4 opinion, and the dissenting opinion was about as good as the majority opinion.
      93 Cong.Rec. 6499 (1947).

      . The court’s dieta that the unqualified union might exert economic power to force the employer to “voluntarily” recognize it has been eroded by McLeod v. Security Guards and Watchmen, 333 F.Supp. 768 (S.D.N.Y.1971), at least so far as recognitional picketing is concerned. In enjoining such picketing by a union disqualified from certification as the representative of a guard unit because it also represented a non-guard unit, the district court recognized that failure to grant relief would “grant to a disqualified union greater freedom of action to picket than Congress has permitted to those unions clearly qualified to have a certification election.” 333 F.Supp. at 771. This does not detract, however, from the Roch-Hill-Uris conclusion that section 9(b)(3) does not take away section 7 rights, only that section 9(b)(3) cannot be Utilized to grant additional rights.

      . The situations are not precisely the same. Since the confidential secretary, due to prior Board practice, could under no circumstances be a member of the same bargaining unit as the employees whose picket line she refused to cross, no benefits could flow to her from such activity and her section 7 rights, if they existed, were valueless to her. In this case assertion of the right by Pilachowski could lead to some benefit to him, i. e., the employer might choose to voluntarily recognize a mixed bargaining unit of guards and non-guards.
      The underlying distinction goes to the differing functions of the two job categories and Congress’ assessment of those functions. The reason for eliminating section 7 rights as to one group while preserving them as to another, whether arrived at by deference to the Board’s prior practice or through an independent judgment of the Congress, can properly be characterized, we think, as stemming from a conviction that confidential employees — as their label suggests' — occupy a position so closely intertwined with management’s interests that divided loyalties could not be suffered. Guards, on the other hand, are ordinarily not so privy to management secrets.


author: COFFIN, Chief Judge.

text:
    Louis W. MARTIN and Mary L. Martin, Plaintiffs, Appellants, v. TRAVELERS INSURANCE COMPANY, Defendant, Appellee.
    No. 74-1033.
    United States Court of Appeals, First Circuit.
    Argued April 4, 1974.
    Decided May 23, 1974.
    Patrick N. McTeague, Brunswick, Me., with whom Ranger McTeague & Higbee, P. A., Brunswick, Me., was on brief, for plaintiffs, appellants.
    Lawrence P. Mahoney, Portland, Me., with whom Mahoney, Robinson, Mahoney & Norman, Portland, Me., was on brief, for defendant, appellee.
    Before COFFIN, Chief Judge, Mc-ENTEE and CAMPBELL, Circuit Judges.
   COFFIN, Chief Judge.

This is an action by a claimant under the Longshoremen’s and Harbor Workers’ Compensation Act, 33 U.S.C. §§ 901-950, and his wife, against the insurer of his former employer for alleged misdeeds committed in connection with payment of compensation under the Act. According to the allegations of the complaint, plaintiff had received an award of compensation from the Bureau of Employees Compensation on June 19, 1973, and had received soon thereafter three drafts from defendant totaling $5,709.62, satisfying the award. But, about two weeks after the drafts had been deposited and substantially drawn upon by plaintiff, defendant stopped payment on the drafts, presumably because a decision had been made in the interim to appeal the adverse decision of the Bureau. This action by defendant is alleged by plaintiffs to have delayed payment in violation of the terms of the Act and to have subjected claimant to financial embarrassment due to the fact that he had written checks which had become worthless. Defendant allegedly was aware, or in the exercise of due care should have been aware, that plaintiff had a “grievous and life-threatening disease” which could be aggravated into “another . . . disabling attack” by the emotional upset flowing from a stopping of payment of the drafts. Resulting emotional distress is said to have caused claimant to suffer a “grievous attack” and severe physical impairment.

The complaint was dismissed by the district court pursuant to Fed.R.Civ.Proc. 12(b)(6) for failure to state a claim for which relief can be granted. An amended complaint, submitted to the court on the day set for hearing of the 12(b)(6) motion, was denied as not timely filed, but the court added that even if timely it too failed to state a claim. Defendant primarily relies for support of the ruling below upon the argument that the Longshoremen’s and Harbor Workers’ Compensation Act provides the exclusive mechanism for relief in this situation.

The exclusivity of the remedies provided in the Act is codified in section 905, which states in relevant part that “The liability of an employer prescribed in section 4 [33 U.S.C. § 904] shall be exclusive and in place of all other liability of such employer to the employee . and anyone otherwise entitled to recover damages from such employer at law or in admiralty on account of such injury or death . . . .” However, the instant claim for damages is not encompassed within the terms of this provision. Section 905 refers to the liability prescribed in section 904 which in turn states that an employer “shall be liable for and shall secure the payment to his employees of the compensation payable under sections 7, 8 and 9 [§§ 907-909 of title 33].” Sections 907 through 909 detail the amount of compensation payable. But the gist of the complaint in this case has to do instead with the manner and timing of payment, and the timing of payment is governed by an entirely separate section, section 914, which is not mentioned in any of sections 904 or 907-909 so as to bring it within the terms of the exclusivity provisions of section 905. And the matter of harm caused by withdrawal of payment is not mentioned anywhere in the Act.

Moreover, the exclusivity language of section 905 speaks in terms of liability “on account of such injury or death”, and “injury” is defined in section 902 as “accidental injury or death arising out of and in the course of employment, and such occupational disease or infection as arises naturally out of such employment or as naturally or unavoidably results from such accidental injury, and includes an injury caused by the willful act of a third person directed against an employee because of his employment.” The damage which is the basis of this suit did not arise out of or in the course of employment nor was the damage caused by a third person because of plaintiff’s employment. Instead the damage was allegedly incurred in the course of and arising out of plaintiff’s status as a claimant seeking compensation, after his status as an employee had terminated. Finally, the protection of section 905 extends to an employer. Defendant is not his former employer but the insurer of the employer. The default complained of was the act of, and the responsibility of, the insurer-defendant, who is thus a real party in interest. Nothing in the Act extends the protection of section 905 to such a defendant. All of the above reasons indicate that section 905 does not extend to the instant case.

There remains the question whether the penalty for late payment provided in section 914(f) should be the exclusive remedy for resulting harm. This penalty amounts to twenty per cent of the payment due and is thus a not insubstantial compensation. But seemingly the crux of the complaint here is the insurer’s callous stopping of payment without warning when it should have realized that acute harm might follow. A stop payment on a sizable compensation check which may have been deposited and drawn upon carries the obvious possibility of embarrassment and distress. Under the alleged circumstances the plaintiff who had received the check from what he considered to be a reputable corporation had little reason to suspect that a stop order would be lodged. Whether the insurer’s actions, if proven, give rise to a separate cause of action in tort under state law, or upon some other theory, against the insurer is not a question we presently can answer. But we are satisfied that plaintiffs are not precluded by the terms of the Longshoremen’s and Harbor Workers’ Compensation Act from pursuing whatever independent remedy may be recognized for such conduct.

Having decided the preclusion issue adversely to the defendant, we believe it appropriate to remand. It is not clear whether the trial court ever considered the remaining questions of law. Initial scrutiny of questions is normally the function of that court. Also the remaining issues are not presented in the kind of sharp focus which we would prefer. For example, while we have suggested that plaintiff’s complaint centers around the issuance of a stop order, we may be misstating matters. It remains less than clear whether and to what extent plaintiff claims that his damages were caused by delay in effective compensation payment as distinguished from the stop payments themselves. Moreover, the question of intentional infliction of emotional distress appears to be entangled with the question of the untimeliness of the motion to amend the complaint. Although entirely proper, the prior decision to deny permission to amend may no longer be thought by the district court to bar amendment upon remand particularly if duplicitousness in litigation would thereby be avoided.

Remand will provide an opportunity for the district court and the parties to focus their attention upon the remaining issues without the distraction of the question of preclusion. Once it has achieved sufficient narrowing and sharpening of the questions, the district court will be free to proceed with the case or to dismiss if it concludes that there is no cause of action. If state law is unclear it may certify the question of a state claim to the state Supreme Court under 4 M.R.S.A. § 57 and Maine Rule of Civil Procedure 76B.

Remanded for further proceedings consistent herewith. No costs at this time.

       Plaintiff relies upon the tort theory creating liability for infliction of mental and emotional suffering recognized by the Maine Supreme Judicial Court in Wallace v. Coca-Cola Bottling Plants, Inc., 269 A.2d 117 (Me.1970). Alternatively, see generally, W. Prosser, Handbook of the Law of Torts §§ 129, 130 (4th ed. 1971); cf. Uniform Commercial Code § 4-402.


text:
    Archie PELTZMAN, Plaintiff-Appellant, v. CENTRAL GULF LINES, INC., Defendant-Appellee.
    No. 942, Docket 74-1162.
    United States Court of Appeals, Second Circuit.
    Argued May 1, 1974.
    Decided May 21, 1974.
    Archie Peltzman, plaintiff-appellant, pro se.
    Richard P. Lerner, New York City (James A. Flynn, and Lorenz, Finn, Giardino & Lambos, New York City, of counsel), for defendant-appellee.

      Before WATERMAN, FRIENDLY and MULLIGAN, Circuit Judges.
   PER CURIAM:

Archie Peltzman, a marine radio officer, brought this action in the District Court for the Southern District of New York, seeking damages and injunctive relief against his former employer, Central Gulf Lines, Inc. Appearing pro se, Peltzman raised a myriad of claims before the district court based on maritime law, the New York and federal constitutions, the antitrust laws, and the collective bargaining agreement between the employer and Peltzman’s union, the American Radio Association. In essence, his claim was that the employer unlawfully acceded to a union request that he be discharged for failing to pay a $2,000 union initiation fee.

I.

The facts, as appellant presents them, are as follows: From 1943 through 1949, Peltzman was a member of the American Communications Association, the predecessor of the American Radio Association. In 1949 the Coast Guard refused to issue him a radio officer’s license on the ground that he was either a member of the Communist Party or a communist sympathizer. Without a license, Peltzman was ineligible to serve as a radio officer in the Merchant Marine. In 1967, he brought an action in federal court in the course of which the Coast Guard agreed to reissue him a license, see Peltzman v. Smith, 404 F.2d 335 (2 Cir. 1968). He subsequently sought reinstatement in the union as a full-fledged member. At that time, the union issued him a permit card which entitled him to sail for a year without having to pay the union’s $2,000 initiation fee. At the end of the year, however, the union demanded that Peltzman pay the fee. Peltzman refused, insisting that since he was a former member of the union, he should be liable only for a “withdrawal fee,” equal to one year’s dues. Others who had rejoined the union after a long layoff, Peltzman insisted, had not been required to pay the full initiation fee.

Before the dispute was settled, Peltzman received a permanent assignment on the S/S Green Ridge, one of Central Gulf’s vessels. He made three trips on the Green Ridge and then requested a one-trip vacation leave, as provided for in the collective bargaining agreement. At that time, the union demanded the $2,000 initiation fee and the employer indicated that he would not be rehired without obtaining clearance from the union. Peltzman then began a series of legal actions in an effort to save his job. He first took his claim to the National Labor Relations Board. When the Regional Director declined to file a complaint with the Board and the General Counsel affirmed the Regional Director’s decision, Peltzman appealed to this court. We dismissed the appeal from the bench, and the Supreme Court denied certiorari. Peltzman v. NLRB, No. 72-1091 (2 Cir.), cert. denied, 409 U.S. 887, 93 S.Ct. 112, 34 L.Ed.2d 143 (1972). While his claim was pending before the General Counsel, Peltzman brought suit against the union in the New York courts. The trial court declined jurisdiction over the matter, holding that it was within the exclusive jurisdiction of the Board, and the appellate division affirmed without opinion. Peltzman v. American Radio Association, 69 Misc.2d 17, 327 N.Y.S.2d 505 (S.Ct.N.Y.Co.), aff’d, 40 A.D.2d 631, 335 N.Y.S.2d 998 (1st Dep’t 1971), cert. denied, 411 U.S. 916, 93 S.Ct. 1547, 36 L.Ed.2d 308 (1973).

Failing to obtain relief in those two forums, Peltzman next brought his case to the federal court. In the court below, however, he fared no better than in his previous efforts. On defendant’s motion, the district court granted summary judgment against Peltzman on at least three independent grounds. First, the court held that since his complaint was founded on conduct that would arguably constitute an unfair labor practice, Peltzman’s claims were subject to the exclusive jurisdiction of the National Labor Relations Board. Second, it held that the judgment against him in the New York courts operated as a jurisdictional bar to his maintaining the action in federal court. The court next suggested that since the General Counsel had refused to issue a complaint on Peltzman’s application, he would probably be barred from bringing this action in court. On the merits, the court concluded without discussion that “defendant’s refusal to rehire plaintiff was lawful under the circumstances.” The court did not reach the further defense that Peltzman had failed to exhaust contractual grievance procedures and that such failure should bar his present action. On that point, the court held that the exhaustion defense raised material disputed issues of fact. We reverse the judgment of the district court and remand for a determination whether the collective bargaining agreement provides Peltzman any basis for relief.

II.

Most of Peltzman’s arguments can be dealt with summarily. Nothing in maritime law renders illegal a discharge that is authorized under a legitimate union security clause. There is no colorable basis for an antitrust claim in this case. The security clause here is not subject to attack under the federal or New York constitutions, see NLRB v. General Motors Corp., 373 U.S. 734, 83 S.Ct. 1453, 10 L.Ed.2d 670 (1963); Buckley v. AFTRA, 496 F.2d 305 (2 Cir. 1974); Linscott v. Millers Falls Co., 440 F.2d 14 (1 Cir.), cert. denied, 404 U.S. 872, 92 S.Ct. 77, 30 L.Ed.2d 116 (1971). And any claim that the company has committed an unfair labor practice in discharging him would plainly be subject to the exclusive jurisdiction of the NLRB.

Peltzman’s breach of contract claim, however, is not so easily dismissed. While his pleading is not as concise as could be hoped, his breach of contract claim is founded on his assertion that he was a member of the union when he was discharged, and that the union was thus not entitled to demand an initiation fee from him- — a demand which he alleges was not made of others in his position, see Cunningham v. Erie R. R., 358 F.2d 640, 643-645 (2 Cir. 1966). If his allegations are correct, the union security clause in the collective bargaining agreement would not authorize his discharge, and other provisions, such as the nondiscrimination clause, would arguably provide him a contractual basis for regaining his job.

It is well settled that contract claims brought under § 301(a) of the Labor Management Relations Act are not subject to preemption by the National Labor Relations Board, see Smith v. Evening News Association, 371 U.S. 195, 83 S.Ct. 267, 9 L.Ed.2d 246 (1962); Humphrey v. Moore, 375 U.S. 335, 84 S.Ct. 363, 11 L.Ed.2d 370 (1964) (breach of duty of fair representation cognizable under § 301(a) if it involves a violation of the collective bargaining agreement). Similarly, the decision of the General Counsel not to file a complaint on Peltzman’s behalf has no res judicata effect, as it is not a final judgment on the merits, see Aircraft & Engine Maintenance Employees, Local 290 v. E. I. Schilling Co., 340 F.2d 286, 289 (5 Cir. 1965), cert. denied, 382 U.S. 972, 86 S.Ct. 529, 15 L.Ed.2d 465 (1966); Thomas v. Consolidation Coal Co., 380 F.2d 69, 77-78 (4 Cir.), cert. denied, 389 U.S. 1004, 88 S.Ct. 562, 19 L.Ed.2d 599 (1967); International Union of Electrical Workers v. General Electric Co., 407 F.2d 253, 264 (2 Cir. 1968), cert. denied, 395 U.S. 904, 89 S.Ct. 1742, 23 L.Ed.2d 217 (1969). Finally, the New York court’s jurisdictional dismissal of Peltzman’s action against his unión does not bar him from bringing this suit. The New York court apparently dismissed his action against the union on the ground that Peltzman had alleged only unfair labor practices. Had he raised an independent federal claim, such as a breach of the duty of fair representation, it would clearly have been cognizable in that forum, see Vaca v. Sipes, 386 U.S. 171, 176-184, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967); Amalgamated Association of Street Employees v. Lockridge, 403 U.S. 274, 299-301, 91 S.Ct. 1909, 29 L.Ed.2d 473 (1971).

Peltzman’s claim on the merits may well turn out to be without force. If the initiation fee was uniformly required by the union constitution and by-laws, and was regularly demanded of those in his position, then it is likely that the union security clause was properly invoked and that the contract claim must fail. While the district court may have explored these possibilities below, we are not confident that its brief statement that “the defendant’s refusal to hire plaintiff was lawful under the circumstances” reflects a careful consideration of Peltzman’s contract claim and a determination that he had raised no material questions of fact on that issue. We therefore remand this case for the district court to determine whether Central Gulf breached the collective bargaining agreement, and, if so, whether Peltzman’s apparent failure to exhaust contractual grievance procedures should bar him from maintaining this suit.

Reversed and remanded.

      . Our summary dismissal of Peltzman’s appeal was doubtless based on the well-settled principle that the General Counsel’s determination not to issue a complaint on an unfair labor practice charge is unreviewable, see Vaca v. Sipes, 386 U.S. 171, 182, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967); United Electrical Contractors Ass’n v. Ordman, 366 F.2d 776 (2 Cir. 1966), cert. denied, 385 U.S. 1026, 87 S.Ct. 753, 17 L.Ed.2d 674 (1967).

      . The district court expressed some doubt that the General Counsel’s refusal to issue a complaint would provide an independent basis for granting summary judgment, but held that since the action was subject to the Board’s exclusive jurisdiction, it did not have to decide the effect of the General Counsel’s decision.

      . The state court apparently placed some weight on the fact that Peltzman’s unfair labor practice claim was still pending before the General Counsel, 69 Misc.2d at 22, 327 N.Y.S.2d at 510. In light of that consideration, we think it particularly inappropriate to accord the state court decision any preclusive effect in this suit.

      . Had the defendant addressed itself more directly in its moving papers to Peltzman’s contract claim, it might have been able to establish that there was no factual dispute over Peltzman’s status as a union member. However, the defendant chose to stress the collateral estoppel and res judicata elements of this case and to present only brief and eonelusory allegations concerning the merits of the contract claim.

      . Peltzman argues that he should be excused from the normal requirement that he exhaust the contractual grievance procedures, see Republic Steel Corp. v. Maddox, 379 U.S. 650, 85 S.Ct. 614, 13 L.Ed.2d 580 (1965), because it was the union that instigated the company’s alleged breach of contract. If the district court should find that Peltzman’s contract claim is a good one, it should then determine whether he should be excused from the exhaustion requirement because of a breach of the duty of fair representation by the union, Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967), or because his pursuit of grievance proceedings, through the union, would plainly have been futile, see Glover v. St. Louis-San Francisco Ry., 393 U.S. 324, 89 S.Ct. 548, 21 L.Ed.2d 519 (1969).


text:
    Herman A. BOLL, Appellant, v. FEDERAL RESERVE BANK OF ST. LOUIS, Appellee.
    No. 73-1860.
    United States Court of Appeals, Eighth Circuit.
    Submitted April 17, 1974.
    Decided May 6, 1974.

      Sanford Goffstein, Clayton, Mo., for appellant.
    Kathryn J. More, St. Louis, Mo., for appellee.
    Before HEANEY and STEPHENSON, Circuit Judges, and SMITH, Senior District Judge.

       TALBOT SMITH, Senior District Judge, Eastern District of Michigan, sitting by designation.

   PER CURIAM.

Herman A. Boll, a former assistant examiner employed by the Federal Reserve Bank of St. Louis, appeals from the District Court’s finding of fact as to the reason for his discharge from the Bank and its holding that his employment contracts with the Bank complied with the “Belo” provision of the Fair Labor Standards Act. 29 U.S.C. § 207(f) (1970).

Boll contends that he was discharged from employment with the Bank because he complained to officials that he had been denied certain overtime pay and threatened to file proceedings against the Bank under the Fair Labor Standards Act. 29 U.S.C. § 201 et seq. The District Court found that Boll was not discharged for the reasons he alleged, but that his discharge

* * * was the result of year-end reports made by bank examiners which indicated that [Boll] was unable to cooperate with his fellow employees and caused irritating incidents with bankers whose banks were being examined.

365 F.Supp. 637, 650 (E.D.Mo.1973).

This finding is supported by substantial evidence, is not clearly erroneous and, thus, may not be set aside by this Court.

We are also satisfied that the District Court did not err in concluding that the contracts between Boll and the Bank complied with Section 7(f) of the Fair Labor Standards Act. 29 U.S.C. § 207(f). It made no error in law in reaching this conclusion, and its findings of fact on this issue are not clearly erroneous.

Affirmed.

      . The case was tried below to the court, and the decision is reported in 365 F.Supp. 637 (E.D.Mo.1973).


author: ROBERT P. ANDERSON, Circuit Judge:

text:
    UNITED STATES ex rel. Dr. Jesse WILLIAMS, II, Petitioner-Appellee, v. Peter PREISER, Commissioner of the Department of Correctional Services of the State of New York, et al., Respondents-Appellants.
    No. 356, Docket 73-1935.
    United States Court of Appeals, Second Circuit.
    Argued March 29, 1974.
    Decided May 9, 1974.
    Arlene R. Silverman, Asst. Atty. Gen., of N. Y. (Louis J. Lefkowitz, Atty. Gen., of N. Y., and Samuel A. Hirshowitz, First Asst. Atty. Gen., on the brief), for respondents-appellants.
    Cyril C. Means, Jr., New York City, for petitioner-appellee.
    Before KAUFMAN, Chief Judge and SMITH and ANDERSON, Circuit Judges.
   ROBERT P. ANDERSON, Circuit Judge:

On October 24, 1966, Dr. Jesse Williams, II, a licensed physician, was convicted by a jury for manslaughter in the first degree under former New York Penal Law § 1050 McKinney’s Consol. Laws, c. 40, for the death of Miss Sara Carr following an abortion he performed upon her at his office. He was sentenced to 5 to 10 years imprisonment, and was released on parole in 1972.

At the time of the abortion, July 23, 1965, Miss Carr was in her second month of pregnancy. Death resulted from a series of seizures, the cause of which remains unknown. The medical examiner testified that the operation was perfectly performed, and although Dr. Williams did not call an ambulance and report Miss Carr’s death until hours after it occurred, the State has not shown that negligence in this respect prevented the patient from being resuscitated. United States ex rel. Williams v. Follette, 313 F.Supp. 269, 272 (S.D.N.Y.1970).

Dr. Williams appealed his conviction, claiming that § 1050 violated the privacy-protections of the Constitution, but the conviction was affirmed without opinion, 33 A.D.2d 534, 304 N.Y.S.2d 214 (Case I) (1st Dept. 1969), and leave to seek review by the Court of Appeals was denied.

He then petitioned for a writ of habeas corpus, but the district court (Pollack, Judge), denied relief and instructed him to give the State an opportunity to reconsider in light of New York’s liberalized abortion procedure, McKinney’s Session Laws of New York, 193rd Session — 1970, ch. 127, and court decisions indicating that abortions were matters of constitutional right. United States ex rel. Williams v. Follette, supra, at 272, 274. On appeal of that ruling this court held exhaustion did not require State reconsideration and remanded for a decision on the merits. United States ex rel. Williams v. Zelker, 445 F.2d 451, 454 (2 Cir. 1971). The petitioner agreed to a stay pending the Supreme Court’s decisions in Roe v. Wade, 410 U.S. 113, 93 S.Ct. 705, 35 L.Ed.2d 147 (1973) and Doe v. Bolton, 410 U.S. 179, 93 S.Ct. 739, 35 L.Ed.2d 201 (1973). Subsequently the district court (Stewart, Judge) held Roe v. Wade should be retroactively applied and granted the writ. United States ex rel. Williams v. Preiser, 360 F.Supp. 667, 668 (S.D.N.Y.1973). The State now appeals.

The State concedes that if the due process right to privacy or intimacy recognized in Roe is to be given retroactive effect, Dr. Williams’ conviction is void. Texas State Penal Code Article 1194, Vernon’s Ann., found unconstitutional in Roe, was identical in purpose and effect to § 1050. See 410 U.S. 117-118, n. 1. Miss Carr’s abortion occurred during her first trimester, when “the attending physician, in consultation with his patient, is free to determine, without regulation by the State, that, in his medical judgment, the patient’s pregnancy should be terminated.” At 163. And this abortion was performed by “a physician currently licensed by the State.” At 165. See Doe v. Bolton, 410 U.S. 195, 199.

In Vuitch v. Hardy, 473 F.2d 1370 (4 Cir. 1973), the Fourth Circuit affirmed per curiam the grant of habeas corpus because of the retroactive effect of Roe, and the Supreme Court denied certiorari. 414 U.S. 824, 94 S.Ct. 126, 38 L.Ed. 2d 57 (1973). Post-conviction relief was also granted a doctor on the basis of Roe in State v. Ingel, 18 Md.App. 514, 308 A.2d 223 (Court of Special Appeals of Maryland 1973).

New York stresses that Roe was a surprise holding and that retroactive application would disregard the justifiable reliance in 1966 that § 1050 always would be good law. But a presumption of constitutionality is present in all state prosecutions, Robinson v. Neil, 409 U.S. 505, 509, 93 S.Ct. 876, 35 L.Ed.2d 29 (1973), and is never enough by itself to bar habeas corpus for one restrained under the authority of a statute subsequently declared unconstitutional. Ex Parte Siebold, 100 U.S. 371, 25 L.Ed. 717 (1879).

Roe recognized a substantive right to privacy and forbids the State from regulating abortions such as the one Dr. Williams performed. The Supreme Court has stated, “No circumstances call more for the invocation of a rule of complete retroactivity.” United States v. United States Coin and Currency, 401 U.S. 715, 724, 91 S.Ct. 1041, 1046, 28 L.Ed.2d 434 (1971). See Prospective Overruling and Retroactive Application in the Federal Courts, 71 Yale L.J. 907 (1962).

If licensed physicians have a constitutional right to perform non-negligent, consensual abortions without fear of prosecution, Dr. Williams cannot remain deprived of liberty for having done so. Section 1050 is, “in legal contemplation, as inoperative as though it had never been passed.” Norton v. Shelby County, 118 U.S. 425, 442, 6 S.Ct. 1121, 1125, 30 L.Ed. 178 (1886). This declaration of retroactive invalidity assures the supremacy of the newly recognized substantive right over a state’s power to punish. See Wechsler, Toward Neutral Principles of Constitutional Law, 73 Harv.L.Rev. 1 (1959).

The granting of the writ is affirmed.

      . Section 1050, which was superseded in 1967 by § 125.20(3) of the New York Penal Law, derived from the 1881 Penal Code § 192 and stated:
      “A person who provides, supplies, or administers to a woman, whether pregnant or not, or who prescribes for, or advises or procures a woman to take any medicine, drug, or substance, or who uses or employs, or causes to be used or employed, any instrument or other means, with intent thereby to procure the miscarriage of a woman, unless the same is necessary to preserve her life, in case the death of the woman, or of any quick child of which she is pregnant, is thereby produced, is guilty of manslaughter in the first degree.”

      . This amendment, embodied in § 125.-05 (3) (b) of the Penal Law (McKinney’s 1973-74 Supp.), defines the performance of a consensual abortion by a “duly licensed physician . . . within twenty-four weeks from the commencement of pregnancy” as a “justifiable abortional act.”

      . The State contends that, because the doctor delayed in reporting Miss Carr’s death after the abortion, it might have been able to prosecute Williams for criminal negligence, see New York Penal Law § 125.10, but that it chose to rely on the abortion statute instead. The statute of limitation has tolled on any criminal negligence prosecution, and New York claims that it has been, therefore, damaged by justifiable reliance. This reliance interest, however, is not as substantial as it first appears because Williams had raised his constitutional challenge, and other authorities had begun to question the constitutionality of abortion prosecutions before the statute of limitations had tolled. New York had the opportunity to try to prove criminal negligence, but chose not to pursue it.

      . In civil cases, prospective overruling has been invoked when private or public parties have justifiably relied to their potential detriment on prior decisions upholding the validity of an unconstitutional statute. Chicot County Drainage District v. Baxter State Bank, 308 U.S. 371, 60 S.Ct. 317, 84 L.Ed. 329 (1940); Great Northern Railway Co. v. Sunburst Oil & Refinery Co., 287 U.S. 358, 53 S.Ct. 145, 77 L.Ed. 360 (1932); Kuhn v. Fairmont Coal Co., 215 U.S. 349, 370, 30 S.Ct. 140, 54 L.Ed. 228 (1910) (Holmes, J., dissenting); Gelpeke v. City of Dubuque, 1 Wall. 175, 17 L.Ed; 520 (1863). In criminal eases, prospective rulings have protected private parties who justifiably relied on the invalidity of a criminal statute. James v. United States, 366 U.S. 213, 81 S.Ct. 1052, 6 L.Ed.2d 246 (1961). State reliance has also been protected by prospective rulings in criminal cases where new procedural rights have been incorporated, and the reliability of convictions attained prior to incorporation was not in question. Desist v. United States, 394 U.S. 244, 89 S.Ct. 1030, 22 L.Ed.2d 248 (1969); Stovall v. Denno, 388 U.S. 293, 87 S.Ct. 1967, 18 L.Ed.2d 1199 (1967); Linkletter v. Walker, 381 U.S. 618, 85 S.Ct. 1731, 14 L.Ed.2d 601 (1965). See Mishkin, The High Court, The Great Writ, and the Due Process of Time and Law, 79 Harv.L.Rev. 56 (1965). But prospectivity remains “an exception to the general rule of retroactivity,” and, when a new right is recognized that is intended “to prevent a trial from taking place at all,” reliance in criminal cases is irrelevant, and retroactivity is presumed. Robinson v. Neil, 409 U.S. 505, 507-508, 509, 93 S.Ct. 874, 877, 35 L.Ed.2d 29 (1973).

      . A court can easily determine, as was done below, whether the abortion, at the time and in the manner performed, is protected under the Roe and Doe standards, and no new trial is needed after such a determination.