author: PER CURIAM:

text:
    Walter KNAPP, Petitioner-Appellee, v. T. L. BAKER, Sheriff of Potter County, Texas and W. J. Estelle, Jr., etc., Respondents-Appellants.
    No. 74-2614.
    United States Court of Appeals, Fifth Circuit.
    March 14, 1975.
    John L. Hill, Atty. Gen., Larry F. York, Joe B. Dibrell, Jack Boone, Asst. Attys. Gen., Austin, Tex., for respondents-appellants.
    Robin M. Green, Wayne Bagley, Frank J. Baughman, Amarillo, Tex., for petitioner-appellee.
    Before BELL, AINSWORTH and RONEY, Circuit Judges.
   PER CURIAM:

This case involves an appeal from the federal district court’s order granting a writ of habeas corpus from a Texas state conviction. We heard oral argument on the appeal and the matter was submitted for our decision. However, petitioner Walter Knapp died on December 20, 1974. This case is therefore moot. Accordingly, we vacate the judgment and remand to the district court with direction to dismiss the case as moot so that it will spawn no legal consequences. Gornto v. MacDougall, 5 Cir., 1973, 482 F.2d 361 (appeal from judgment denying habeas corpus relief from a state court sentence); Hann v. Hawk, 8 Cir., 1953, 205 F.2d 839 (appeal from judgment granting the writ of habeas corpus in a matter involving a Nebraska state court conviction). See also Duke Power Co. v. Greenwood County, S.C., 299 U.S. 259, 267, 57 S.Ct. 202, 205, 81 L.Ed. 178 (1936) and authorities cited therein; United States v. Munsingwear, 340 U.S. 36, 71 S.Ct. 104, 95 L.Ed. 36 (1950); Lebus v. Seafarers’ International Union, 5 Cir., 1968, 398 F.2d 281, 283.

Counsel for petitioner urges that we also order dismissal of the judgment of conviction by the Texas state court which was affirmed by the Texas Court of Criminal Appeals, 504 S.W.2d 421 (1974). Dismissal of a conviction is proper in a direct appeal in a federal criminal case, Durham v. United States, 401 U.S. 481, 91 S.Ct. 858, 28 L.Ed.2d 200 (1971). However, appellate courts in habeas corpus actions pertaining to state court convictions have issued their directives only to the lower federal courts. Gornto v. MacDougall, supra; Hann v. Hawk, supra. Further action is not warranted under the circumstances.

Vacated and remanded with direction to dismiss.


source: Caselaw Access Project

author: WILLIAM E. DOYLE, Circuit Judge.

license: Public Domain

text:
    Paul MULLER, Plaintiff-Appellee, v. UNITED STATES STEEL CORPORATION, Defendant-Appellant.
    No. 74-1161.
    United States Court of Appeals, Tenth Circuit.
    Argued Nov. 13, 1974.
    Decided Jan. 14, 1975.
    Rehearing Denied Feb. 5, 1975.

      James B. Lee and Daniel M. Allred, Parsons, Behle & Latimer, Salt Lake City, Utah, for defendant-appellant.
    Stephen G. Morgan, Morgan, Scalley, Lunt & Kesler, Salt Lake City, Utah, for plaintiff-appellee.
    Before SETH, BARRETT, and DOYLE, Circuit Judges.
   WILLIAM E. DOYLE, Circuit Judge.

United States Steel seeks reversal of a judgment rendered by the United States District Court for the District of Utah in favor of the plaintiff Muller. The court adjudged that the Steel Company had discriminated against Muller in its promotion policies in violation of Title VII of the 1964 Civil Rights Act, 42 U.S.C. § 2000e — 2(a).

The main contention of United States Steel is that the evidence at trial was legally insufficient to establish that the plaintiff was a victim of discriminatory employment practices toward plaintiff. So, our primary inquiry is whether appellant company discriminated and whether appellee was shown to have been discriminated against. There are other contentions which will be enumerated and discussed.

The plaintiff is of Spanish-American origin. He commenced working for United States Steel in 1955 and continued until August 6, 1969. At present he lives and works in Albuquerque, New Mexico. He has not sought reinstatement.

Plaintiff was employed at the Geneva Plant of United States Steel near Orem, Utah. His employment was in the large diameter pipe mill. It was the admitted failure of the company to promote plaintiff to a supervisory position which led to the filing of this case.

The lowest supervisory position in the mill is the turn foreman. If such a foreman is replaced by a production employee on a temporary basis, he is given the position of spell foreman but is still paid by the hour. Generally speaking, in order for a production employee to become a turn foreman he must have previously served as a spell foreman. The spell foreman is selected from the shift in which a vacancy occurs in a particular area of the mill. There are three such areas in the large diameter mill — the O.D. or hot line area, the I.D. area and the finishing area. Muller’s main qualifications, according to his testimony, were in the O.D. or hot line area.

The selection of a spell foreman is made by the general foreman, whose decisions are for practical purposes final, although not necessarily so, for there exist no definite recognized criteria which govern the selection of a spell foreman. The general foreman consults the area foremen who review the names on the crew schedule. The general foreman in making the selection considered the recommendation of the area foreman, the ability of the individual to perform his work, his ability to get along with people, leadership ability, promptness, attitude toward the work and, finally, experience. Such jobs are not published and thus the qualifications are not set forth in writing. Complaint is made that the vagueness of the criteria lends itself to discriminatory practices.

The population of the county from which the company draws its labor force was 137,776 in 1970 of which 2,596, or about 1.88%, were, according to the Census Bureau, Spanish language or origin persons. However, the percentage of persons of Spanish origin who are employed in the whole facility is far lower than the county-wide percentage. This is apparent from the columnar analysis which is shown below.

From these figures it is also possible to infer for the purposes of the pipe mill, at least, that the Spanish origin people are not to any marked degree under-employed. It is somewhat different, however, when promotions are considered. Mr. Muller, for example, though employed in the pipe mill for fourteen years, was never chosen as a spell foreman and no other Spanish-American person had been chosen since at least 1963. Muller has testified that he was in some cases assigned to the I.D. area instead of the O.D. area or hot line area and that militated against his being eligible for spell foreman in the hot line area. In any event, during 1968 and 1969 the evidence showed that about 20 — 25 employees were selected as spell foremen, and in every instance these were persons of Anglo origin. Fifteen of this number had more seniority than Muller. There were 20 other employees who had more seniority than Muller who, like Muller, were never selected as spell foremen.

The evidence further showed that Muller had five years of welding experience prior to going to work for the defendant. He completed his high school education and a course in welding during his employ. He also was shown to have undertaken leadership responsibilities in the community.

The instant charges were filed with the Utah Anti-Discrimination Department on December 29, 1968 and January 28, 1969. No action was taken. In July 1969 the large diameter mill shut down and Muller worked as a laborer. Just prior to the shutdown he worked as an arc welder. On August 6, 1969, he terminated his employment and moved to Albuquerque. His testimony was that the cause of this was the unfair and discriminatory treatment he received at the plant.

Trial was had starting February 8, 1974. The district court found that the promotional system violated Title VII in that it lent itself to discrimination and was not shown to have been the product of business necessity. The court went further. It found that Muller in addition had been constructively discharged from his job in that Muller’s resignation was not a matter of free choice; that it resulted from discrimination. An award of $26,624.35 in back pay was made plus $14,000 in attorneys’ fees. Injunctive relief was also granted, notwithstanding that this was not a class action. Defendant was ordered to take affirmative steps to adopt a non-discriminatory promotional system together with meaningful standards.

The Steel Company’s main contentions are, first, that the court erred in granting judgment for the plaintiff because of the absence of a finding that plaintiff himself was discriminated against. Second, the court’s judgment is based on, so it is argued, the theory that opportunity to discriminate constitutes a violation of Title VII. Third, it is contended that the evidence is insufficient to establish discrimination against the plaintiff. Complaint is also made about the holding that there was a constructive discharge, and at last it is argued that the damages are excessive and that the court erred in issuing general injunctive relief since it was not a class action. Most but not all of the points urged will be reviewed.

I.

WHETHER THE EVIDENCE ESTABLISHED THAT PLAINTIFF WAS DISCRIMINATED AGAINST ON THE BASIS OF HIS ETHNIC ORIGIN

Plaintiff-appellee’s complaint is that the failure to appoint him as spell foreman constituted a violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e — 2. The Steel Company maintains that the statistics are inconsequential pointing out that the number of Spanish origin persons in the community is small and that it employs a representative percentage. However, the cases hold that this is not sufficient to disprove discrimination; that deprivation of employment opportunities can also exist as a result of failure to promote.

The use of statistics capable of raising inferences of employment discrimination is now a well recognized aid in proof in cases of this type. One of the early definitive decisions in this field is that of our court in Jones v. Lee Way Motor Freight, Inc., 431 F.2d 245 (10th Cir.), cert. denied, 401 U.S. 954, 91 S.Ct. 972, 28 L.Ed.2d 237 (1970) applied in Spurlock v. United Airlines, 475 F.2d 216 (10th Cir. 1972). There the employer had two categories of truck drivers. These were line or over the road and, secondly, city drivers. The line driver positions were superior in that they paid higher wages and had other benefits as well. The two categories were treated in separate union contracts and there was a non-transfer policy from city driver to line driver. The plaintiffs in Jones were black persons and city drivers who had sought and been denied transfer. The allegation of the complaint was that the application of the rule, although on its face it appeared as a neutral non-transfer policy, in practice discriminated against them. The decision was that the evidence sufficiently established that the effect of the policy was discrimination since no Negro had been appointed as a line driver between 1964 and 1968. All black drivers were city drivers and, although there were some white drivers in the city category, the vast majority of the total white drivers were in the line category.

In reversing the judgment of the district court the opinion of this court recognized that the existence of a superficially neutral policy did not serve as a sufficient explanation; that it had an inherently discriminatory effect. It was recognized in the court’s opinion authored by Judge Breitenstein that the statistics constituted a prima facie case which required the employer to affirmatively show that business necessity required continuation of the policy. The showing of the company was held to be insufficient.

The standards employed in Jones were fully recognized in our subsequent decision, Spurlock v. United Airlines, supra. In addition, it was there pointed out that specific intent to discriminate was not necessary; that it was sufficient if discriminatory criteria were employed deliberately and not accidentally.

In the case at bar the statistics are less dramatic than were those in Jones particularly as to discrimination in the hiring of Spanish-Americans. However, we view the methods employed in promotions as sufficient to establish a prima facie ease. Also, the statistics were sufficient to shift the burden of going forward with the evidence to the employer.

There is an added factor here and that is the existence of vague and inconclusive criteria in promotion decisions. We refer to the selection of the spell foreman being made by the general foreman in his uncontrolled discretion. True, he must have the approval of his superiors but disapproval from this source is rare. The big element in the general foreman’s decision is the recommendation given by the front line foreman.

Plaintiff-appellee relies on statistical facts and emphasizes especially that no Spanish-American has ever been promoted to the position of spell foreman or temporary foreman, the essential step to becoming a supervisory employee.

The Company asserts that one person of Spanish-American ancestry is a foreman. But this does not prove a lack of discrimination because this individual was not promoted to the position. He was transferred as foreman from the West Coast plant of United States Steel.

Opposed to the lack of evidence of promotion of Spanish origin persons, the record shows that appellant promoted 20 — 25 persons of Anglo origin to the position of spell foreman during the year 1968 — 69 alone. It is surprising that not a single Spanish person was assigned to this position during this same period. While these statistics are not overwhelming, they are not to be ignored.

The law is clear that a plaintiff in a job discrimination case need not prove that the employer had a specific intent to discriminate. It is sufficient that the employer’s conduct produced discriminatory results. See Jones v. Lee Way Motor Freight, supra. See also Spurlock v. United Airlines, supra. Where, as here, there are circumstances showing discrimination, a prima facie case exists. At bar there is the added factor — the lack of meaningful standards to guide the promotion decision, whereby there is some assurance of objectivity. Such personal and subjective criteria encourage and foster discrimination.

And where, as here, the results give a strong indication that discrimination is being practiced, the cases condemn subjective standards which United States Steel had in this case. See United States v. N. L. Industries, Inc., 479 F.2d 354 (8th Cir. 1973); Brito v. Zia Co., 478 F.2d 1200 (10th Cir. 1973); Brown v. Gaston County Dyeing Machine Co., 457 F.2d 1377 (4th Cir. 1972); Rowe v. General Motors Corp., 457 F.2d 348 (5th Cir. 1972); Parham v. Southwestern Bell Tel. Co., 433 F.2d 421 (8th Cir. 1970); United States v. Sheet Metal Workers, Local 36, 416 F.2d 123 (8th Cir. 1969).

Rowe v. General Motors Corp., supra, is a case which like ours involved vague standards. The standards there applied to the transfer of employees from jobs paying hourly wages to salaried jobs. The Fifth Circuit delineated five aspects of the defendant’s transfer methods. These were:

(i) The Foreman’s recommendation is the indispensable single most important factor in the promotion process.
(ii) Foremen are given no written instructions pertaining to the qualifications necessary for promotion. (They are given nothing in writing telling them what to look for in making their recommendations).
(iii) Those standards which were determined to be controlling are vague and subjective.
(iv) Hourly employees are not notified of promotion opportunities nor are they notified of the qualifications necessary to get jobs.
(v) There are no safeguards in the procedure designed to avert discriminatory practices.

Id. 457 F.2d at 358-359.

More important, the court held that these factors in addition to the statistical indicia of the presence of discrimination made out a prima facie case. In our case the standards were equally vague and subjective. This plus the fact that no person of Spanish-American origin was, as far as we know, ever promoted are enough in our case also to establish a prima facie case that defendant-appellant unlawfully discriminated against Spanish-Americans and against the plaintiff-appellee.

II.

WHETHER BUSINESS NECESSITY EXISTED

The remaining liability issue is whether these actions were justified. In the leading case on this defense, Griggs v. Duke Power Co., 401 U.S. 424, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971), the Supreme Court said that unless an exclusion rule is related to job performance it is prohibited. From this the doctrine of business necessity has developed. Under it the employer may rebut a prima facie case of the employee by showing that the maintenance of safety and efficiency requires the practice which obtains. Thus, in Spurlock v. United Airlines, supra, the plaintiff had alleged that he had been discriminated against when he was not given a job as a flight officer. The defendant was able to counter with specific criteria which had been required of all flight officers such as a college degree, a commercial pilot’s license, 500 hours of flight time and age between 21 and 29 years old. The court held that the failure of the applicant to meet these justified his rejection in the interest of safety and efficiency.

Other cases enunciate this business necessity doctrine in a more limited manner. The Second Circuit has held that the doctrine must mean more than transfer and seniority policies serve legitimate management functions. The court went on to say that if the ends of safety and efficiency are served by a reasonably available alternative method having less discriminatory effects, “then the present' policies may not be continued.” United States v. Bethlehem Steel Corp., 446 F.2d 652 (2d Cir. 1971). See also United States v. St. Louis-San Francisco Ry. Co., 464 F.2d 301 (8th Cir.), cert. denied 409 U.S. 1107, 1116, 93 S.Ct. 900, 34 L.Ed.2d 687 (1972); United States v. Jacksonville Terminal Co., 451 F.2d 418 (5th Cir. 1971); Robinson v. Lorrilard Corp., 444 F.2d 791 (4th Cir.), cert. denied, 404 U.S. 1006, 92 S.Ct. 573, 30 L.Ed.2d 655 (1971).

United States Steel has not shown business necessity or any other justification for its failure to promote plaintiff and other Chicano people to the position of spell foreman. It has not been shown that efficiency or safety or any other of the company’s interests are served by this system which depends on hunch judgments rather than specific criteria. Judged by any of the mentioned standards, then, the prima facie case of Muller has not been rebutted.

The Company also argues that, even assuming the existence of discrimination, Muller failed to prove that he was personally discriminated against. It is said that the people who were appointed were all more competent than Muller. Here again there is no basis for so concluding where there is a palpable lack of objective standards. The trial court found that Muller was not considered for the position, notwithstanding his long seniority and despite the fact that he had clearly held the highest ranking position below the spell foreman and had requested consideration. It cannot be said in view of the results and the lack of criteria that the trial judge’s ultimate holding that Muller had been discriminated against was clearly erroneous.

III.

WAS THERE A CONSTRUCTIVE DISCHARGE OF PLAINTIFF?

In our opinion the ruling that constructive discharge took place was error. This doctrine exists when an employer deliberately renders the employee’s working conditions intolerable and thus forces him to quit his job. See J. P. Stevens & Co., Inc. v. NLRB, 461 F.2d 490 (4th Cir. 1972). Plaintiff would have us rule that the Steel Company’s refusal to consider him as spell foreman and its assignment of him to an area which made it impossible for him to become spell foreman created intolerable conditions which satisfied the requirement of constructive discharge. We are persuaded, however, that his reassignment and the other actions complained of were not designed to coerce his resignation. True, just prior to his resignation he was downgraded to laborer, but this was a result of the large diameter mill closing temporarily.

We are not saying that this constructive discharge doctrine which developed in labor cases is inapplicable to civil rights cases. Cf. Colorado Civil Rights Com’n v. State, 30 Colo.App. 10, 488 P.2d 83 (1971). In the Stevens case, supra, there was evidence that an employee who had favored the union during an organizing effort was harassed by management and the court had no difficulty finding a constructive discharge. This has been found in other cases. See for example NLRB v. Century Broadcasting Corp., 419 F.2d 771 (8th Cir. 1969) and NLRB v. Tennessee Packers, Inc., Frosty Morn Div., 339 F.2d 203 (6th Cir. 1964). In each of these cases there was extrinsic evidence to establish that an effort had been made to render the job so unattractive and unpleasant as to justify the finding that the resignation was a constructive firing.

An example of a case in which the evidence was inadequate was Steel Industries, Inc. v. NLRB, 325 F.2d 173 (7th Cir. 1963), wherein it was said that the evidence did not even establish a strong suspicion as to the existence of a scheme to get rid of the employee in question.

Similarly, in the present case, there is a dearth of evidence to show a deliberate effort to make things difficult for the employee so as to bring about his separation. Hence, the proof of constructive discharge fails.

IV.

EFFECT OF THE FAILURE OF THE CONTENTION OF CONSTRUCTIVE DISCHARGE ON THE DAMAGE AWARD

Unless appellant was constructively discharged, he would not be entitled to damages in the form of back pay, interest and retirement from the date of leaving the Steel Company’s employ. His damage would be measured by the difference between actual pay and the amount he would have made if he had been chosen as spell foreman during the period from September 17, 1967 until he quit, August 6, 1969. There is no evidence in the record which could be used for this purpose. Hence, this will necessitate remand. The Steel Company says that the damages were excessive even if there was a constructive discharge. The court applied the formula testified to by an expert witness, Mr. Caldwell. Defendant’s evidence consisted of the pay record of an employee who was only slightly senior to Muller. It claimed that since Muller had less seniority he could not have earned more than this other employee. This is one point which we need not consider.

The Steel Company makes the added contention that Muller’s award cannot be based on the 1968 — 69 base period because if he had not quit he would have worked in lower paying jobs and would have been laid off more often. We do not believe, however, that these figures for the period in question were erroneously adopted by the court in the face of the inconsequential evidence offered by the company.

In our view, the granting of general injunctive relief applicable to the entire class was not appropriate because the plaintiff had not sought prospective injunctive relief for himself. Therefore, no basis existed for such relief as to the other persons who had not asserted claims of this nature. In any event, a consent decree has been entered in a suit brought by the United States and, therefore, virtually the same relief was given. We see no occasion for an injunction or ancillary remedy in this case.

It is our conclusion, then, that the judgment of the district court should be affirmed in part and reversed in part and that the action should be remanded for further proceedings consistent with the views expressed herein. It is our further conclusion that the attorney’s fee is excessive in view of the action which we have taken, and it is ordered that this part of the judgment be also vacated and reconsidered in the light of the results achieved. It is so ordered.

      . Date Geneva Works Total Geneva Works Spanish-American Pipe Mill Pipe Mill Total S/A
      1964 5,087 9 (.18%) 340 3 ( .88%)
      1964 4,856 11 (-23%) 282 3 (1.06%)
      1965 3,774 9 (.24%) 331 3 ( .91%)
      1966 4,617 10 (.22%) 113 4 (3.54%)
      1967 5,061 10 (.20%) 420 4 ( .95%)
      1968 4,751 23 (.49%) 446 9 (2.02%)
      1969 4,274 17 (.40%) 91 6 (6.6%)
      1970 4,472 (Not reported) 210 4 (1.9%)
      1971 4,488 24 (.54%) 115 2 (1.74%)
      1972 4,395 26 (.60%) 142 5 (3.5%)
      1973 4,333 31 (-72%) 276 2 ( .72%)

      . That section provides:
      It shall be an unlawful employment practice for an employer—
      (1) to fail or refuse to hire or to discharge any individual or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin; or
      (2) to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s race, color, religion, sex, or national origin.

      . Baxter v. Savannah Sugar Refining Corp., 495 F.2d 437 (5th Cir. 1974); United States v. N. L. Industries, Inc., 479 F.2d 354 (8th Cir. 1973); United States v. St. Louis-San Francisco Ry. Co., 464 F.2d 301 (8th Cir.), cert. denied, 409 U.S. 1107, 1116, 93 S.Ct. 900, 34 L.Ed.2d 687 (1972); Brown v. Gaston County Dyeing Machine Co., 457 F.2d 1377 (4th Cir.), cert. denied, 409 U.S. 982, 93 S.Ct. 319, 34 L.Ed.2d 246 (1972); Rowe v. General Motors Corp., 457 F.2d 348 (5th Cir. 1972); Marquez v. Omaha Dist. Sales Office, Ford Div. of Ford Motor Co., 440 F.2d 1157 (8th Cir. 1971); Jones v. Lee Way Motor Freight, Inc., 431 F.2d 245 (10th Cir.), cert. denied, 401 U.S. 954, 91 S.Ct. 972, 28 L.Ed.2d 237 (1970).

      . On this the court said:
      The company argues that because the no-transfer policy locks in white as well as Negro city drivers, it is not discriminatory. Roughly 80% of the white drivers were employed as line drivers. The 20% hired as city drivers presumably had the opportunity to apply as line drivers but either were not qualified or preferred city work. In any event, race was not a determinative factor in their employment as city drivers, as it was with the Negroes. Although the no-transfer provisions may have the same ultimate effect on both white and Negro city drivers, the difference in the factors underlying their initial employment as city drivers is sufficient to make the policy discriminatory as to the latter but not the former.
      431 F.2d at 249.

      . The court’s further statement was:
      The remedial nature of Title VII requires the adoption of the business necessity test. If employers or unions could pursue, upon a showing of mere rationality, neutral policies which have the effect of perpetuating past discrimination, the value of the principles developed in Quarles and subsequent cases would be eroded. When a policy is demonstrated to have discriminatory effects, it can be justified only by a showing that it is necessary to the safe and efficient operation of the business. See Local 189, United Papermakers and Paperworkers v. United States, supra, 416 F.2d [980] at 989. Id.


author: HAYS, Circuit Judge:

text:
    METRO-GOLDWYN-MAYER, INC., Plaintiff-Appellant, v. Jerry ROSS and Arthur B. Ross, Defendants-Appellees. HERITAGE RECORDS, INC., et al., Plaintiffs-Appellants, v. METRO-GOLDWYN-MAYER, INC., et al., Defendants-Appellees.
    Nos. 80, 81, 82, Dockets 73-2271, 73-2306, 73-2686.
    United States Court of Appeals, Second Circuit.
    Argued Nov. 18, 1974.
    Decided Jan. 13, 1975.

      S. Hazard Gillespie, New York City (Davis Polk & Ward well, New York City, on the brief, Daniel F. Kolb, Sue Ann Dillport, Mark L. Austrian, New York City, of counsel), for plaintiff-appellant Metro-Goldwyn-Mayer, Inc.
    Arnold I. Rich, New York City (Hofer, Rich & Grubman, New York City, on the brief), for defendants-appellees Jerry Ross and Arthur B. Ross and plaintiffs-appellants Heritage Records, Inc., and others.
    Before SMITH, HAYS and MANSFIELD, Circuit Judges.
   HAYS, Circuit Judge:

Metro-Goldwyn-Mayer, Inc. filed a complaint in the United States District Court for the Southern District of New York alleging that the defendants, Jerry and Arthur Ross, had violated § 17(a) of the Securities Act of 1933, 15 U.S.C. § 77q(a) (1970), § 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b) (1970), and SEC Rule 10b-5, 17 C.F.R. § 240.10b — 5 (1974) by making misleading statements of material facts in connection with a stock exchange agreement with MGM and by omitting material facts necessary to make their statements to MGM not misleading. MGM also alleged that the Ross brothers had breached several of the warranties they had given in the agreement. On these grounds, MGM demanded rescission of the agreement. The Ross brothers counterclaimed for damages for breach of a related loan agreement primarily on the ground that MGM had failed to provide the financing called for by that agreement. The district court dismissed MGM’s claims for rescission and awarded the Ross brothers $200,000 in damages. Metro-Goldwyn-Mayer, Inc. v. Ross, 363 F.Supp. 23 (S.D.N.Y.1973). We reverse.

I.

Jerry Ross is a producer of records who prior to April 21, 1970, was the primary owner of Colossus Records, Inc. and a number of related record companies. When Michael Curb became president of MGM Records, a division of MGM, he set out to acquire the Ross companies for MGM in order to acquire the services of Jerry Ross, who had been responsible for a number of hit records.

On April 21, Í970, MGM and the Ross brothers signed a series of contracts, including an exchange agreement under which MGM was to receive an 80% interest in the Ross companies in exchange for 8,333 shares of MGM stock, valued for purposes of the agreement at $300,-000. The Ross brothers were to receive additional annual payments of MGM stock over the next five years, depending on the earnings of the Ross companies. The exchange agreement was to be closed at a later date, and section 8(a) provided that all representations and warranties by the sellers would have the same force as though made on the closing date. In section 4(g) of the agreement, the Ross brothers warranted that all accounts receivable were valid, were subject to no offsets, and would be paid “within six months from the date hereof.” In section 4(p) the sellers warranted that no statement of theirs to MGM contained or would contain any untrue statement o'f a material fact or an omission of a material fact necessary to make their statements as a whole not misleading.

Another contract signed on April 21 was a loan agreement, under which MGM was to provide financing of up to $500,000 for the Ross companies. The duty to provide financing was to become effective only if the board of directors of the Ross companies decided that such financing was necessary. The board was to consist of six members designated by MGM and three designated by the Ross brothers.

MGM engaged the certified public accounting firm of Arthur Andersen & Co. to conduct a “purchase investigation” of the Ross companies before the closing. The Andersen report, submitted in September, 1970, reflected representations made by Ross employees that the Ross companies followed the common practice of providing to distributors three so-called free records for every 10 single records purchased and two free records for every 10 albums. In the case of the Ross companies that meant that they charged 45 cents each for the first 10 single records sold and 17 cents each for the next three, for an average price of 38.5 cents and $2.42 for the first 10 albums and nothing for the next two, for an average price of $2.01. In general, the report was a good deal more pessimistic about the companies’ financial situation than the Ross companies’ accountant, Ellis Elgart, had been in his audit of the May 31, 1970 Ross financial statements. In that audit Elgart certified the worth of the Ross companies to be $358,000, while Arthur Andersen concluded that it should have been $39,750.

On October 8, 1970, the April 21 agreements were closed, with some modifications not relevant here.

II.

In its claim for rescission, MGM relies primarily on the failure of the Ross brothers to inform it of some' 70,000 records which the Ross companies had given to distributors free of charge, over and above the usual three on 10 and two on 10 arrangement, which MGM had beep told was in force. Rejecting MGM’s rescission claim, the district court held that although the distribution by the Ross companies of the additional 70,-000 records was a material fact, “MGM should have known and Jerry and Arthur Ross might reasonably have assumed MGM to know” the approximate number of such records. 363 F.Supp. at 29. We disagree.

The district court’s conclusion that there had been no violation of a duty to disclose was based in large part on the fact that during the purchase investigation the Ross companies provided Arthur Andersen with inventory cards which, if explained and interpreted properly, could have revealed all but 12,500 of the 70,000 additional records. However, Rule 10b-5, as well as the terms of the exchange agreement, required the Ross brothers to state all material facts necessary to make other statements not misleading. See, e. g., SEC v. Texas Gulf Sulphur Co., 401 F.2d 833 (2d Cir. 1968), cert. denied, 394 U.S. 976, 89 S.Ct. 1454, 22 L.Ed.2d 756 (1969). Such a duty is not discharged merely by giving the purchaser access to company records and letting him piece together the material facts if he can. Stier v. Smith, 473 F.2d 1205, 1208 (5th Cir. 1973); Weaver Organization, Inc. v. Manette, 41 App. Div.2d 138, 142, 341 N.Y.S.2d 631, 634-635 (1st Dep’t 1973) (per curiam). Cf. Dale v. Rosenfeld, 229 F.2d 855, 858 (2d Cir. 1956). Here as in Weaver Organization, Inc. v. Manette, supra, the agreement specifically provided that all representations were to survive any investigation made by or on behalf of the parties. Under such circumstances, it is clear that the Ross brothers should have affirmatively disclosed the complete free record situation.

In concluding that the Ross brothers had satisfied their duty to disclose, the district court also relied on evidence that Michael Curb, president of MGM Records, knew that some additional records were being distributed free of charge by the Ross brothers and that MGM and industry practice was to distribute some no-eharge records beyond the three on 10, two on 10 standard. However, in light of the statements by Ross employees that free records were distributed on a three on 10, two on 10 basis, MGM was entitled to a full disclosure that large numbers of additional records were distributed free of charge. Because of the Ross brothers’ failure to disclose the full extent of their record distribution practices, in violation of both Rule 10b-5 and their contractual obligations, we hold that MGM was entitled to rescission.

III.

MGM also argues that it was entitled to rescission on the ground of breach of warranty because 86% of the companies’ receivables were not collected within six months of the closing date, 67% of the receivables having been extinguished by returns of records for credit. The district court held that the warranty assuring the collection of Ross receivables “within six months from the date hereof” ran from April 21, the date of the agreement, and not from October 8, the date of the closing. It also held that returns were not offsets within the meaning of the Ross warranty that the accounts were “subject to no offset” and were “fully collectible.”

In view of section 8(a) of the agreement, which makes all warranties effective as if made on and as of the closing date, it is clear that contrary to the district court’s opinion, the warranty as to the collection of receivables should also run from the closing date. The terms of the warranty do not indicate that it is to be an exception from the general rule enunciated in section 8(a). On the contrary, the business realities of the exchange required that MGM be assured that when it parted with its stock at the closing, the receivables it would be acquiring would be paid within a reasonably short time.

Since 67% of the receivables were not collected because they were extinguished by returns, which are expected, to a degree, in the record industry, we would not grant rescission on this ground without remanding to the district court for a determination of whether that figure was unreasonably high. However, in view of our holding that MGM is entitled to rescission on the ground that the Ross brothers failed to disclose the 70,000 no-charge records, such a remand is unnecessary.

IV.

The district court granted the Ross brothers $200,000 in damages on the ground that MGM had breached its obligation under the loan agreement to supply the Ross companies with financing of up to $500,000. However, since the district court should have granted MGM’s claim for rescission of the agreement, it should also have dismissed the Ross brothers’ breach of contract claim.

The decision of the district court is reversed.

      . The district court had jurisdiction over MGM’s breach of warranty claims under the doctrine of pendent jurisdiction and also under 28 U.S.C. § 1332 (1970), since the parties were of diverse citizenship and the amount in controversy exceeded $10,000.

      . In view of our disposition of MGM’s appeal, we need not deal with the Ross brothers’ cross-appeal for additional damages nor with the appeal of the Ross record companies seeking reversal of the district court’s dismissal of their breach of contract claims. See Part IV, infra.

      . The Ross brothers argue without much force that MGM waived its right to rescind by paying dividends on the 12,500 shares it had distributed pursuant to the exchange agreement. We find nothing in such conduct to indicate that MGM intentionally abandoned or relinquished its right to rescind. Cf., Alsens American Portland Cement Works v. Degnon Contracting Co., 222 N.Y. 34, 37, 118 N.E. 210 (1917).


author: MOORE, Circuit Judge: WALLACE, Circuit Judge

text:
    Adelfo V. MACEREN, Appellee, v. DISTRICT DIRECTOR, IMMIGRATION AND NATURALIZATION SERVICE, LOS ANGELES, CALIFORNIA, et al., Appellants.
    No. 72-2818.
    United States Court of Appeals, Ninth Circuit.
    Oct. 25, 1974.
    Rehearing Denied Feb. 20, 1975.

      James R. Dooley, Asst. U. S. Atty. (argued), Los Angeles, Cal., for appellants.
    Sidney Broffman (argued), Los Angeles, Cal., for appellee.
    Before MOORE, BROWNING and WALLACE, Circuit Judges.

       The Honorable Leonard P. Moore, United States Senior Circuit Judge for the Second Circuit, sitting by designation.

   OPINION

MOORE, Circuit Judge:

The Immigration and Nationality Act provides that “[t]he number of aliens who may be issued immigrant visas or who may otherwise acquire the status of an alien lawfully admitted to the United States for permanent residence . shall not in any fiscal year exceed a total of 170,000.” 8 U.S.C. § 1151(a) (1970). In filling this quota, Congress has stipulated that visas must first be granted to those on whom Congress has bestowed a preferred status. This preferred treatment is given to, amongst others,

qualified immigrants who are members of the professions, or who because of their exceptional ability in the sciences or the arts will substantially benefit prospectively the national economy, cultural interests, or welfare of the United States.

8 U.S.C. § 1153(a)(3).

Immigrants who fit this description are given what the Immigration and Naturalization Service refers to as a “third preference,” i. e., third most preferential treatment is given to their applications for immigrant visas after the applications of the spouses and unmarried children of United States citizens and the spouses and children of aliens lawfully admitted to the United States for permanent residence. 8 U.S.C. § 1153(b). Every alien who desires immigrant status is presumed to be a “non-preference immigrant” until he establishes that he is entitled to preferential treatment. 8 U.S.C. § 1153(d). If an alien lays claim to a preference, he must file a petition with the Attorney General requesting this status. The Attorney General will then approve or deny the petition in which case the Department of State will then either grant or deny the immigration visa. 8 U.S.C. § 1154(a).

If an alien petitions the Attorney General for a “third preference,” the Attorney General is required to consult with the Secretary of Labor before making a recommendation to the Department of State. 8 U.S.C. § 1154(b). This consultation is designed to keep the Attorney General abreast of developments in the domestic labor market. A third preference will not be granted to an alien, no matter how qualified a professional he might be, if his employment in this country would likely deprive a U.S. citizen of employment.

Adelfo V. Maceren is a native and citizen of the Philippine Islands, born February 23, 1933. He entered the United States as a visitor on March 30, 1968, and has remained in this country continuously since that date. He holds a Bachelor’s Degree in Music and was a music teacher, on the secondary school level, in his native country. Maceren decided to become a permanent resident of the United States and, in order ultimately to obtain an immigrant visa, petitioned the Attorney General for classification in the third preference as a member of the professions. The petition was supported by an application and documents establishing his professional qualifications as a music teacher. The petition was filed with the Immigration and Naturalization Service on September 27, 1968.

The Service referred the case to the Labor Department which, on November 18, 1969, issued a certification to the Service declaring that Maceren’s .admission to the United States as an immigrant would not “adversely affect the wages and working conditions of workers in the United States similarly employed.” Upon receipt of the labor certification, the Service approved Maeeren’s petition on November 28, 1969, and granted him the status of a member of the professions along with the third preference which such status entails.

Even though Maceren succeeded in obtaining his classification as a preferred immigrant, such classification did not immediately make him a lawful permanent resident of the United States. He had to wait until an immigrant visa number became available. Because of the backlog of Philippine nationals seeking admission to the United States as third-preference immigrants, no visa number could actually be assigned to Maceren until February 1971. On August 5, 1970, the Immigration and Naturalization Service informed Maceren that a visa number could be assigned him if he filed the proper application and appropriate supporting documents. Maceren followed all instructions and, on September 15, 1970, filed the application which the Service sent him.

The Service immediately acknowledged receipt of the application for permanent residence. Nothing more was done until Maceren received a notice to appear for an interview on February 8, 1971, and for a medical examination on February 17, 1971. Customarily, these are the final steps in granting permanent residence. At the interview, however, Maceren was informed that his petition for a preference had “expired” and permanent residence could not be granted.

On May 25, 1971, Maceren filed a complaint in the District Court praying, inter alia, that the court order the State Department to allocate a visa number to him nunc pro tunc; that the District Director, Immigration and Naturalization Service, Los Angeles, California, grant his application for adjustment of status to that of a permanent resident; and that the Secretary of Labor and the District Director consider the visa petition and the underlying labor certification revalidated and extended to a date when Maeeren’s application for adjustment of status is granted.

On September 7, 1971, appellants filed a motion to dismiss and a motion for summary judgment. On May 25, 1972, the District Court filed a Memorandum and Order denying appellants’ motions. On May 26, 1972, judgment was entered against appellants and the matter was remanded to them with instructions promptly to take all steps necessary to process Maceren’s application for adjustment of status.

The dispute in this case revolves around certain regulations promulgated by the Secretary of Labor and by the Attorney General through which they have attempted to fulfill their responsibilities under the Immigration and Nationality Act.

Until March 30, 1971, the Attorney General applied a rule which required aliens seeking third preferences to renew their petitions annually or face denial on the ground that their petitions had lapsed. For aliens requiring individual certificates the one-year period of validity, even though it applied directly to the preference petition, ran not from the date on which the alien received approval of his petition but rather from the date on which he was issued an individual certificate by the Secretary of Labor.

Throughout this period the Secretary of Labor never limited the validity of an alien’s labor certificate to any specific time period. In other words, a labor certificate never automatically “expired” at any time after issue. On February 4, 1971, the Secretary of Labor changed his approach and declared that “[l]abor certifications . . . shall be valid for 1 year after the date that the certification was actually made and revalidation shall be required' after that period. . . . ” 29 C.F.R. § 60.5(b) (1972).

Finally, on March 30, 1971, 8 C.F.R. § 204.4(b) was revised. The revision omitted any mention of a time limit on the approval of an alien’s petition to be classified as a preference immigrant. However, it provided that approval of third preference status “shall remain valid for as long as the supporting labor certification is valid and unexpired. . . .” 8 C.F.R. § 204.4(b).

The net effect of these changes, at least in the general case, has been no change at all. The approval, by the Attorney General, of an alien’s petition for preferential classification is still valid for a period of one year from the date of certification by the Secretary of Labor just as it was under the old rule. This is not to say, however, that the regulation change has not given rise to many difficulties particularly with respect to those applications that were outstanding when the regulations were revised.

On November 17, 1970, one year after Maceren had been issued a labor certificate, Maceren’s preference petition expired under the terms of the Attorney General’s regulation. The Immigration and Naturalization Service, however, took no notice of this expiration. On January 26, 1971, the Service summoned Maceren to his interview and medical examination.

The expiration of the approval does not decide this case because the March 30, 1971, revision of § 204.4(b) stipulates that:

The approval of a petition to classify an alien under section 203(a)(3) [third perferenee status as a professional] . . . which had heretofore become invalid solely because the date until which the approval was valid had lapsed, is hereby reinstated provided the conditions of this paragraph are met.

There has never been any question that Maceren has complied with all legal requirements and would have received an immigrant visa but for the fact that approval of his preferential status expired. Thus, § 204.4(b)’s retroactivity clause would appear to reactivate the approval of Maceren’s petition provided the conditions of that regulation are met.

The Service argues that for reactivation to be successful, Maceren’s petition must be supported by a valid and unexpired labor certification. Moreover, although there was no time limit on the labor certificate first granted to appellee, labor certificates acquired a one-year term on February 4, 1971, when 29 C.F.R. § 60.5(b) was revised. Thus, according to the Service, Maceren’s petition approval cannot be reactivated because it is not presently supported by a valid and unexpired labor certificate, the prime condition for reactivation.

On the other hand, Maceren argues that the new labor regulation which limits the certificate’s period of validity does not apply to him because his labor certificate was valid and outstanding without time limitation when § 60.5(b) was revised.

For the reasons set forth below we find in favor of the appellee and affirm the decision of the District Court.

Under normal circumstances the regulations promulgated by the Secretary of Labor or his designated officers must be upheld if they are founded on considerations rationally related to the statute he is administering. Cf. Boske v. Comingore, 177 U.S. 459, 470, 20 S.Ct. 701, 44 L.Ed. 846 (1900). The one-year period of validity instituted by the revised version of § 60.5(b) is not unreasonable when applied prospectively to new preference petitions in view of the Secretary’s duty to advise the Attorney General of the condition of a constantly changing labor market. A one-year time limitation on the labor certificate’s validity will often permit the Secretary to re-evaluate the potential contribution of an aspiring immigrant, in the light of ephemeral labor conditions, before permanent resident status is finally granted.

A new and disturbing element is introduced into the calculus, however, when the Secretary attempts to apply such a rule retrospectively to those labor certificates which have been previously granted or reinstated and which continue to support preference petition approvals which are the subject of pending adjudication by the Secretary of State who must grant or deny immigrant status.

In Addison v. Holly Hill Fruit Products, Inc., 322 U.S. 607, 620, 64 S.Ct. 1215, 1222, 88 L.Ed. 1488 (1944), the Supreme Court observed that “law should avoid retroactivity as much as possible.” See also Securities & Exchange Commission v. Chenery Corp., 332 U.S. 194, 203, 67 S.Ct. 1575, 1760, 91 L.Ed. 1995 (1947). In applying this adage the lower courts have sought to balance the possible inequitable results produced by the retroactive application of an administrative rule against the demands of statutory design.

Which side of this balance preponderates is in each case a question of law, resolvable by reviewing courts with no overriding obligation of deference to the agency decision, NLRB v. Guy F. Atkinson Co., 195 F.2d 141 (9th Cir. 1952); and courts have not infrequently declined to enforce administrative orders when in their view the inequity of retroactive application has not been counterbalanced by sufficiently significant statutory interests. [Citations omitted.]

Retail, Wholesale and Department Store Union, AFL-CIO v. N.L.R.B., 151 U.S. App.D.C. 209, 466 F.2d 380, 390 (1972).

It is true that the Secretary of Labor has been granted discretionary power to make rules that protect the American economy from job competition and from adverse working standards as a consequence of immigrant workers entering the labor market, 1965 U.S.Code, Congressional and Administrative News pp. 3333, 3334. Cf. Cobb v. Murrell, 386 F. 2d 947 (5th Cir. 1967); Braude v. Wirtz, 350 F.2d 702 (9th Cir. 1965). But it is equally clear that the Congressional purpose is not substantially enhanced by requiring 29 C.F.R. § 60.5(b) to apply retroactively to labor certificates previously issued.

On the other hand, the unfair prejudice to the holder of the previously issued labor certificate is manifest, particularly with respect to those aliens seeking recognition of their professional status who had been permitted to enter this country as temporary visitors while their visa applications were pending so that this country might profit from their skills without delay. In some cases, if the applicant was a citizen from a country from which many wished to emigrate, the wait for a visa could take several years. During this time aliens would have been practicing their profession, establishing themselves and their families, marrying, becoming absorbed into the economy, or otherwise planting firm roots. Retroactive application of § 60.5(b) would make deportation a certainty for those, like Maceren, who are unable to obtain revalidation of their certificates due to a change in labor conditions.1

Even if we were to hold that the balance between individual hardship and the demands of statutory design tipped in the direction of the appellants, their integrated interpretation of the two relevant regulations, 8 C.F.R. § 204.4(b) and 29 C.F.R. § 60.5(b), demands the invalidation of the retroactive aspects of § 60.5(b).

The Immigration and Naturalization Service argues that the original approval of Maceren’s petition, which expired on November 17, 1970, was not reinstated by the retroactivity clause in § 204.-4(b) because reinstatement demands the existence of a current and unexpired labor certificate — something that Maceren did not have as of the effective date of the revision of § 204.4(b) because of the retroactive intervention, on February 4, 1971, of 29 C.F.R. § 60.5(b).

The Service’s interpretation of the relationship between 8 C.F.R. § 204.4(b) and 29 C.F.R. § 60.5(b) leads to an incongruous situation. According to its view, § 204.4(b) reinstated all preference petition approvals which had expired prior to March 30, 1971, only if, as of that date, such petitions were supported by a current labor certificate. The only way an approval could have expired prior to March 30, 1971 (and thus be a candidate for reinstatement), would be for one year to have elapsed since the issue of its underlying labor certificate by the Secretary of Labor. Under 29 C.F.R. § 60.5(b) all individual labor certificates, including those outstanding on March 30, 1971, lapse automatically one year after the day of issue. This means that no approval reinstated by the retroactivity provision of § 204.4(b) could ever be supported by an unexpired labor certificate because, under the interpretation urged by the Service, § 60.-5(b) would have terminated all individual labor certificates underlying every petition approval which § 204.4(b) could possibly reinstate.

Since the courts should reject interpretations of statutes or regulations which “produce an unjust, unreasonable, or absurd result . . . ”, In re Petition of Vacontios, 155 F.Supp. 427, 430 (S.D.N.Y.1957), we are forced to disagree with the Immigration and Naturalization Service. Its interpretation of § 60.5(b) would make a nullity of § 204.-4(b)’s retroactivity provision, a provision which succeeded § 60.5(b).

Where the retroactivity provisions of sections 204.4(b) and 60.5(b) appear to be irreconcilable, the earlier regulation should give way to the later in time. We therefore hold that 29 C. F.R. § 60.5(b) cannot be retroactively applied to the labor certifications of aliens whose petitions for preferential status were reinstated by 8 C.F.R. § 204.-4(b).

Because we feel that the retroactive application of 29 C.F.R. § 60.5(b) (1972) would cause undue hardship which would not be balanced by a sufficiently significant statutory interest and because retroactive application of 29 C. F.R. § 60.5(b) (1972) would nullify the retroactive aspects of 8 C.F.R. § 204.-4(b) (1974), a subsequent regulation empowered by the same Congressional act, we hold invalid so much of 29 C.F. R. § 60.5(b) (1972) as requires its application to those individual labor certificates granted to petitioners seeking third preferences outstanding prior to its effective date. Consequently, we affirm the District Court in all respects.

WALLACE, Circuit Judge

(dissenting) :

I respectfully dissent.

The majority affirms the district court’s judgment ordering the Immigration and Naturalization Service to grant Maceren permanent resident status primarily because it concludes that the retroactive application of 29 C.F.R. § 60.-5(b) would be incongruous with the retroactive aspects of 8 C.F.R. § 204.4(b). The majority bases its conclusion upon its assumption that the reinstatement provisions of section 204.4(b) would be a nullity if section 60.5(b) were to be applied retroactively. Thus, it holds that we must give retroactive effect only to section 204.4(b), because a court should give effect to the later of two inconsistent regulations.

I disagree that the retroactive application of section 60.5(b) would be inconsistent with the provisions of section 204.4(b) or that the two regulations are irreconcilable. ’ Under the provisions of 8 C.F.R. § 204.4(b), as it read from May 9, 1970, to March 30, 1971, a preference petition under section 203(a)(3) or (6) of the Act that was supported by a labor certification remained valid for one year from the date the labor certification was signed. Until February 4, 1971, the labor certification was valid indefinitely. On February 4, however, the Secretary of Labor revised section 60.5(b), to provide that the labor certification expires after one year unless revalidated. The regulation further provides that “this provision shall be applicable to both new and outstanding certifications . ” (Emphasis added.)

Subsequent to the issuance of section 60.5(b), on March 30, 1971, the Immigration and Naturalization Service revised section 204.4(b) to provide that a preference petition remains valid as its supporting labor certification is valid, rather than for the one-year period provided previously. The regulation further provides that a preference petition “which had heretofore become invalid solely because the date until which the approval was valid had lapsed, is hereby reinstated provided the conditions of this paragraph are met.” One of these conditions is that the preference petition be supported by a valid and unexpired labor certification.

The majority reasons that this savings clause is inconsistent with section 60.5(b), since the preference petition would have expired prior to March 30 only if its supporting labor certification had been signed more than a year prior to that date. If section 60.5(b) is applied to “outstanding” as well as new certifications, all such supporting certifications would be invalid. Under such a construction, the majority concludes, no preference petition could ever be reinstated under the savings clause.

The majority overlooks the fact, however, that between February 4, the date that the new section 60.5(b) became effective, and March 30, the date the new section 204.4(b) became effective, an immigrant could have revalidated his labor certification. Thus, on March 30 he would have had a valid labor certification but an expired preference petition. The savings clause by its express terms applies to these individuals.

The fact situation in this case demonstrates how the regulation was designed to work. Maceren’s preference petition expired on November 17, 1970, but his labor certification remained invalid until February 4, when it terminated automatically under the new regulation. If Maceren had revalidated his labor certification between February 4 and March 30, his preference petition would have been reinstated under the savings clause.

Although this construction of the regulations limits the scope of the savings clause to a short period of time, it gives effect to all of the terms of both regulations. The majority’s construction requires the court to give no effect to the language in section 60.5(b) that makes that regulation applicable to “outstanding” labor certifications. Under established rules of construction, we are to give effect to all the words of a statute and to harmonize all the statutes dealing with one subject. Weinberger v. Hynson, Westcott & Dunning, Inc., 412 U.S. 609, 633, 93 S.Ct. 2469, 37 L.Ed.2d 207 (1973); Jarecki v. G. D. Searle & Co., 367 U.S. 303, 307, 81 S.Ct. 1579, 6 L. Ed.2d 859 (1961); United States v. Menasche, 348 U.S. 528, 538-539, 75 S. Ct. 513, 99 L.Ed. 615 (1955); Ruiz v. Morton, 462 F.2d 818, 819-820 (9th Cir. 1972), aff’d, 415 U.S. 199, 94 S.Ct. 1055, 39 L.Ed.2d 270 (1974). The majority needlessly fails to apply this rule.

I would conclude that Maceren was not entitled to permanent resident status because his preference petition had expired and because he failed to revalidate his labor certification. I, therefore, would reverse.

      . The different classes of preferred immigrants are set forth in 8 U.S.C. § 1153(a).
      (a) Aliens who are subject to the numerical limitations specified in section 1151(a) of this title shall be allotted visas or their conditional entry authorized, as the case may be, as follows :
      (1) Visas shall be first made available, in a number not to exceed 20 per centum of the number specified in section 1151(a) (ii) of this title, to qualified immigrants who are the unmarried sons or daughters of citizens of the United States.
      (2) Visas shall next be made available, in a number not to exceed 20 per centum of the number specified in section 1151(a) (ii) of this title, plus any visas not required for the classes specified in paragraph (1) of this subsection, to qualified immigrants who are the spouses, unmarried sons or unmarried daughters of an alien lawfully admitted for permanent residence.
      (3) Visas shall next be made available, in a number not to exceed 10 per centum of the number specified in section 1151(a) (ii) of this title, to qualified immigrants who are members of the professions, or who because of their exceptional ability in the sciences or the arts will substantially benefit prospectively the national economy, cultural interests, or welfare of the United States.
      (4) Visas shall next be made available, in a number not to exceed 10 per centum of the number specified in section 1151(a) (ii) of this title, plus any visas not required for the classes specified in paragraphs (1) through (3) of this subsection, to qualified immigrants who are the married sons or the married daughters of citizens of the United States.
      (5) Visas shall next, be made available, in a number not to exceed 24 per centum of the number specified in section 1153(a) (ii) of this title, plus any visas not required for the classes specified in paragraphs (1) through (4) of this subsection, to qualified immigrants who are the brothers or sisters of citizens of the United States.
      (6) Visas shall next he made available, in a number not to exceed 10 per centum of the number specified in section 1151(a) (ii) of this title, to qualified immigrants who are callable of performing specified skilled or unskilled labor, not of a temporary or seasonal nature, for which a shortage of employable and willing persons exists in the United States.

      . Aliens seeking to enter the United States, for the purpose of performing skilled or unskilled labor Tshall be excluded], unless the Secretary of Labor has determined and certified to the Attorney General that (A) there are not sufficient workers in the United States who are able, willing, qualified, and available at the time of application for a visa and admission to the United States and at the place to which the alien is destined to perform such skilled or unskilled labor, and (B) the employment of such aliens will not adversely affect the wages and working conditions of the workers in the United States similarly employed. The exclusion of aliens under this paragraph shall apply to special immigrants defined in section 1101(a) (27) (A) of this title (other than the parents, spouses, or children of United States citizens or of aliens lawfully admitted to the United States for permanent residence), to preference immigrant aliens described in sections 1153 (a)(3) and 1353(a) (G) of this title, and to nonpreference immigrant aliens described in section 1153(a) (8) of this title
      8 U.S.C. § 1182(a) (14) (1970).
      Although it could, under different circumstances, be argued that a labor certification pursuant to 8 U.S.C. § 1382(a) (14) is not required for one who qualifies as a member of the professions because he practices a profession and does not perform either “skilled or unskilled labor” as specified in the opening portion of that subsection, such an interpretation is unwarranted in light of the fact that the subsection specifically applies itself to professionals seeking third preference status.

      . The approval of a petition to classify an alien as a preference immigrant under section 203(a)(3) or (6) of the Act shall remain valid for a period of 1 year. If the petition is supported by an individual labor certification issued under section 212(a) (14) of the Act, the period of validity shall run from the date the certification was signed by the designated Labor Department official. If the petition at time of approval is supported by a blanket labor certification . . . the period of validity shall run from the date of approval of the petition.
      8 C.F.R. § 204.4(b) (1971).
      The approval of a petition to classify an alien as a preference immigrant under section 203(a) (3) or (6) of the Act shall remain valid for a period of 1 year from the date of any individual certification issued by the Secretary of Labor pursuant to section 212(a) (14) of the Act; if a blanket certification has been issued covering the alien’s profession or occupation, the approval shall remain valid for a period of 1 year from the date of approval.
      8 C.F.R. § 204.4 (1968).

      . Certifications issued pursuant to this part are invalid if the repesentations upon which they are based are incorrect. They are applicable only to the positions as described in the Form ES-575-B or as defined in the applicable schedule.
      29 C.F.R. § 60.5 (1971).

      . Labor certifications and revalidations of certifications in the categories of employment described below, including any geographic limitations, shall be valid for 1 year after the date that the certification was actually made and revalidation shall be required after that period; this provision shall be applicable to both new and outstanding certifications ....
      29 C.F.R. § 60.5(b) (1972).

      . Unless revoked pursuant to Part 205 of this chapter, the approval of a petition to classify an alien as a preference immigrant under section 203(a)(3) or (6) of the Act shall remain valid for as long as the supporting labor certification is valid and unexpired, provided in the case of a petition for third preference classification there is no change in the beneficiary’s intention to engage in the indicated profession, art or science, and provided in the case of a petition for sixth preference classification there is no change in the respective intentions of the petitioner and the beneficiary will be employed by the petitioner in the capacity indicated in the petition. The approval of a petition to classify an alien'under section 203(a)(3) or (6) of the Act which had heretofore become invalid solely because the date until which the approval was valid had lapsed, is hereby reinstated provided the conditions of this paragraph are met.
      8 C.F.R. § 204.4(b) (1974).

      . On February 4, 1973, the Department of Labor implemented a restrictive labor certification policy for teachers. See Department of Labor Interpreter Releases, Vol. 47, No. 4 (Feb. 4,' 1970)7 No. Y (Feb. 20, 1970), No. 10 (Mar. 25, 1970). See also Guinto v. Rosenberg, 446 F.2d 11 (9th Cir. 1971).


author: ROBERT P. ANDERSON, Circuit Judge:

text:
    Robert F. WILLIAMS, Appellant, v. TRANS WORLD AIRLINES, Appellee.
    No. 84, Docket 74-1469.
    United States Court of Appeals, Second Circuit.
    Argued Sept. 30, 1974.
    Decided Jan. 10, 1975.

      Harold L. Warner, Jr., New York City (Chadbourne, Parke, Whiteside & Wolff and Bennett H. Last, New York City, on the brief), for appellee.
    Melvin L. Wulf, American Civil Liberties Union Foundation, New York City (Norman Dorsen, New York City, on the brief), for appellant.
    Before HAYS, ANDERSON and MANSFIELD, Circuit Judges.
   ROBERT P. ANDERSON, Circuit Judge:

This is an appeal from the district court’s decision that defendant-appellee Trains World Airlines, Inc. (TWA) was well within its rights in refusing transportation by air to plaintiff-appellant Robert F. Williams (Williams) under 49 U.S.C. § 1511 and that TWA’s refusal to carry Williams on a September 6, 1969 flight from London, England, to Detroit, Michigan for which he held a valid ticket, was not, under the circumstances of this case, arbitrary, or unreasonable, as Williams claims; nor did it subject him “to any unjust discrimination or any undue or unreasonable prejudice or disadvantage in any respect whatsoever,” as proscribed by 49 U.S.C. § 1374(b).

The trial court found the facts to be substantially as follows: Williams, a black, native-born American citizen, had lived in Monroe, North Carolina, until he left his home August 27, 1961 for New York where he learned by radio on the afternoon of the following day that he had been indicted for alleged kidnapping in North Carolina and that a warrant had issued to the FBI for his arrest. To avoid prosecution he fled to Canada early in September, 1961 and after approximately six weeks, he left for Cuba and arrived there in November, 1961. He remained in Cuba until 1966, when he moved to Communist China, where he and his family lived for approximately two years. In 1969 he decided to return to the United States and surrender to the authorities, so he made a trip to Dar es Salaam, Tanzania where he obtained from the United States Embassy a travel document or limited passport good only for a return to the United States. He and his family left China in August, 1969, for Tanzania and his family flew from there to Detroit, Michigan later that month. Their arrival in Detroit was accompanied by a large demonstration at the airport.

On or about September 4, 1969, Williams purchased a ticket for air passage from Dar es Salaam to London, England via United Arab Airlines, and thereafter from London by direct flight to Detroit, Michigan on TWA. The ticket was issued in the name of “R. Franklin”.

Meanwhile, on August 28, 1969, Joseph E. Flaherty, Security Representative for TWA, received a telephone call from Special Agent John Sullivan of the FBI in New York who told Flaherty that Williams would be arriving at the Detroit airport on a TWA flight from London. He stated that there was a warrant outstanding for Williams’ arrest, that he was a fugitive, and that there was a possibility of a demonstration when Williams arrived. The FBI therefore asked to have the aircraft parked somewhere other than at the passenger terminal or rerouted to another airport.

After receiving the call, Flaherty contacted Mr. Richard E. Newman, TWA Staff Vice-President, Audit and Security, and advised him of the FBI’s request. He also told Newman that there had been a demonstration, consisting of some 300 people who went through the barrier and onto the field, four weeks earlier when Williams’ wife arrived from Africa. In response to Newman’s request for additional information, Flaherty sent him a copy of the FBI Wanted Bulletin describing Williams.

Newman in turn gave to the President of TWA, Forward C. Wiser, Jr., all of the information about Williams which had been received from Flaherty. TWA Vice-President and General Counsel, Raymond Fletcher, later advised Newman and another TWA Vice-President that under the Federal Aviation Act the airline could refuse passage to Williams if he “would or might be inimical to safety of flight.”

The ultimate decision to refuse Williams passage was made by Wiser, as president, on September 4, 1969. His decision was based on the FBI Wanted Bulletin including the information that Williams was a fugitive from an indictment on a kidnapping charge, and the warning it contained about Williams being armed and dangerous; the possibility of a demonstration upon Williams’ arrival at Detroit; and the danger of hijacking in light of those recently experienced by TWA and other airlines. Prior to this occasion Wiser had never heard of Williams but on September 6, 1969, he was aware that Williams might be taken into custody by the British authorities.

When Williams arrived in London on September 5, 1969, between 4 and 5 p. m., he first went through Immigration and then to the United Arab Airlines booth to arrange travel to Detroit. Upon finding no one there, he went to the TWA office and spoke to someone there about a flight to Detroit. When he returned to the Immigration gate to get his baggage he was approached by British Security Police who took him to a nearby room to question and search him. He was informed that it had been reported by the FBI that he was carrying arms and ammunition, but the search revealed nothing. Subsequent searches by other British officials also revealed no arms, ammunition or explosives.

At this point Williams was told that TWA had refused him passage to Detroit, although it offered to have him flown back to Cairo on United Arab Airlines, which Williams refused; and, because he had neither a United States passport which allowed him general foreign travel nor a British visa, he was taken to Pentonville prison as an illegal immigrant, where he remained until September 12, 1969. TWA tried to make Williams an offer to transport him to Detroit if he would consent to be accompanied by a legal attache of the United States Embassy in London but the proposal failed to reach Williams in time. Williams never gave consent to an alternative offer by TWA to fly him from London to New York on the 5th.

On September 11, 1969 TWA completed arrangements with Williams’ attorney in Detroit, pursuant to which the attorney was flown to London; and on September 12, 1969, he and Williams were taken by TWA on a special unscheduled non-stop flight to Detroit. Upon arrival at the airport there, two FBI agents took Williams into custody.

Williams instituted suit on January 26, 1970 against TWA alleging, inter alia, that he was unjustly and unreasonably discriminated against in violation of § 404(b) of the Federal Aviation Act, 49 U.S.C. § 1374(b), false imprisonment and breach of contract. The other allegations of his complaint were withdrawn either prior to or during the trial. The three remaining counts can only succeed in the event that TWA was not authorized under 49 U.S.C. § 1511 to refuse to carry Williams on September 6, 1969, in accordance with the terms of his ticket. This is fully discussed in the trial court’s excellent opinion.

The central issue in this case, therefore, is whether, as a matter of law, it was reasonable under the circumstances for TWA to refuse to transport Williams, who was the holder of a valid and confirmed ticket, on the flight in question. We hold that it was.

One of the greatest hazards besetting the commercial transportation of passengers by air in the past fifteen years has been the hijacking of passenger planes. Many lives have been lost and much suffering has been caused by this piratical practice, not to mention the disruption of plans and the frustrations, inconveniences and losses visited upon hundreds of people. This is well described in the first part of the discussion portion of the trial court’s opinion. It is also discussed in Part I of this court’s opinion in United States v. Bell, 464 F.2d 667 (2 Cir. 1972), which the trial court cited.

In order to meet this serious problem Congress enacted appropriate legislation. As an air carrier under the Federal Aviation Act of 1958, 49 U.S.C. § 1301 et seq., (the Act), TWA was and is required to perform its services with the highest possible degree of safety in the public interest and 49 U.S.C. § 1511 authorizes an air carrier to refuse transportation to a passenger “when, in the opinion of the air carrier, such transportation would or might be inimical to safety of flight.” In implementation of this statute TWA filed with the Civil Aeronautics Board its Local and Joint Passenger Rules Tariff No. R — 3, entitled “Limitations of Carrier”, which was in effect at the time of TWA’s refusal to carry Williams.

The plaintiff has brought this action on the theory that TWA’s authority under these statutes and implementing rules is severely limited by 49 U.S.C. § 1374(b), supra, which forbids an airline to subject a person to “unjust discrimination or any undue or unreasonable prejudice or disadvantage in any respect whatever.” He asserts that before TWA could refuse to honor his ticket it must institute a thorough and complete investigation of the plaintiff’s record, background and personal history. He argues that the FBI’s statements about him that he was known to carry firearms, was schizophrenic and a dangerous person and that his arrival at the Detroit airport was likely to produce a mass demonstration could not be taken at face value by the TWA officials but should first have been subjected to a searching inquiry and thoroughly scrutinized to determine whether the conclusions of the FBI were founded in fact and were correct.

The main thrust of the appellant’s case is that TWA had no right to rely upon the written and oral statements by the FBI and that, in order to give effect to the provisions of § 1374(b), it was required intensively to investigate the matters of which he was accused by the FBI and to make a thorough inquiry into his personal history as well. The appellant asserted that had TWA done so, it would have discovered that any charges of socially disruptive or hostile attitudes or conduct on his part and the representations made by the FBI stemmed entirely from false accusations made against him by white persons motivated by race prejudice in response to his lawful protests against race discrimination. To prove this, Williams’ counsel at the trial persuaded the trial judge to receive into evidence testimony by Williams relating to the abuse of black persons and the denial of their rights in racially segregated communities. The trial judge expressed the opinion that it was irrelevant to the issues of the case, particularly because there was nothing whatever to show that TWA knew anything about any persecutions or groundless arrests or unfounded accusations directed against Williams when TWA decided that it would be inimical to security and to the safety, of the flight to permit him to take passage on September 6th under the terms of his ticket. The trial court allowed Williams to give testimony, “just generally”, concerning the adverse and hostile treatment which Williams said he had received or had observed because of race discrimination.

In its decision the trial court found, in effect, that there was no evidence to show that TWA, in refusing Williams passage on September 6th, took such action or was motivated in the slightest degree to do so, because of race prejudice or discrimination. The court concluded that, under the same circumstances, TWA would have taken the same action even if Williams had belonged to the yellow, white or brown races. It further held that TWA’s action was not arbitrary or unreasonable.

Accepting as true all of the appellant’s testimony concerning the harsh and corrosive circumstances of his early life and his later efforts to protest and correct them, his conflict with state authority and his experiences and activities as a fugitive, there is no evidence that TWA was at any time influenced by race prejudice or discrimination in the slightest. Nor was there anything on the face of the information which TWA received from the FBI or any other sources, that was so absurd, bizarre, inaccurate, contradictory or so dubiously authentic as to put TWA on further inquiry as to the truth of the reports which it acted upon,

We are of the opinion that the findings and conclusions of the trial court were fully supported by the evidence before it and that TWA action in refusing! to carry Williams on the flight for which he had a ticket, was not arbitrary or in any way motivated by racial or political prejudice, but was, under the circumstances, reasonable and fully authorized by 49 U.S.C. § 1511. In considering the interaction of this, statute with 49 U.S.C. § 1374, on which the appellant so heavily relies, we are of the opinion that Congress did not intend that the provisions of § 1374 would limit or render inoperative the provisions of § 1511 in the face of evidence which would cause a reasonably careful and prudent air carrier of passengers to form the opinion that the presence aboard a plane of the passenger-applicant “would or might be inimical to safety of flight.” Nor did Congress intend that, before refusing passage to such an applicant, an air carrier, faced with such a problem, be required, as the appellant asserts, to make a thorough inquiry into the intelligence received, its sources and an investigation of the personal history of the applicant.

Section 1511 expressly leaves the ascertainment of the necessity for denying passage to one seeking it, to the “opinion of the air carrier” within the terms of the statute. Congress was certainly aware that decisions under § 1511 would in many instances probably have to be made within minutes of the plane’s scheduled take-off time, and that the carrier’s formulation of opinion would have to rest on something less than absolute certainty. The statute did not contemplate that the flight would have to be held up or cancelled until certainty was achieved. The test of whether or not the airline properly exercised its power under § 1511 to refuse passage to an applicant or ticket-holder rests upon the facts and circumstances of the case as known to the airline at the time it formed its opinion and made its decision and whether or not the opinion and decision were rational and reasonable and not capricious or arbitrary in the light of those facts and circumstances. They are not to be tested by other facts later disclosed by hindsight. This standard is consistent with the rules and regulations which § 1511 requires in implementation of its own provisions and are set forth in Rule 8, Tariff No. R — 3, ante.

TWA, when it decided to refuse passage to appellant, was entitled to accept at face value the oral and written representations made by the FBI regarding Williams. They were made officially in the course of its duties by a recognized and authorized police force of the United States government, and there was nothing on the face of them or connected with them to put TWA on further investigation or inquiry. The fact that Williams was not actually armed and appeared amenable when he presented himself to board the TWA plane in London did not call for a change of opinion. Meyer v. St. Louis I.M. & S. Ry., 54 F. 116, 120 (8 Cir. 1893). Reports of hijackings indicate that the perpetrator need not necessarily be armed since he may feign possession of a weapon or join with a confederate to overpower members of the crew. Moreover, if some days or weeks later it were discovered that some of the oral or written statements made by the FBI were exaggerated or inaccurate or wrong, this would not furnish a basis for assertion of a claim against TWA which acted properly pursuant to § 1511.

Section 1374(b) cannot serve as a ground for recovery of damages by the appellant from TWA because an air passenger carrier which properly acts pursuant to § 1511 and solely within the framework of that statute to refuse passage to an applicant, cannot, for those acts alone, be held to be within the terms of § 1374(b) as a “carrier . [which] subject[s] any . . . person to unjust discrimination or . undue or unreasonable prejudice or disadvantage in any respect whatsoever.”

The holding that TWA acted properly and reasonably, pursuant to the authority granted it in § 1511, in refusing passage to Williams precludes a recovery by him under either § 1374(b) (§ 404(b) of the Federal Aviation Act) or for breach of contract or for false imprisonment arising out of appellant’s imprisonment by the London police.5 ****** Under the circumstances TWA more than amply fulfilled its obligation to transport Williams by air from London, England to Detroit, Michigan, within a reasonable time. Any damage suffered by him because of his enforced stay in London and his delay in reaching Detroit was not attributable to any negligent or unlawful act or omission or any malfeasance on the part of TWA.

The judgment of the district court is affirmed.

      . Williams v. Transworld Airlines, Inc., 369 F.Supp. 797 (S.D.N.Y.1974).

      . 49 U.S.C. § 1511, § 1111 of the Federal Aviation Act, entitled “Authority to Refuse Transportation”, states that:
      “Subject to reasonable rules and regulations prescribed by the Administrator, any air carrier is authorized to refuse transportation to a passenger or to refuse to transport property when, in the opinion of the air carrier, such transportation would or might be inimical to safety of flight.”

      . 49 U.S.C. § 1374(b), § 404(b) of the Federal Aviation Act, states that:
      “No air carrier or foreign air carrier shall make, give, or cause any undue or unreasonable preference or advantage to any particular person, port, locality, or description of traffic in air transportation in any respect whatsoever or subject any particular person, port, locality, or description of traffic in air transportation to any unjust discrimination or any undue or unreasonable prejudice or disadvantage in any respect whatsoever.”

      . Williams said that the name on the ticket, “Mr. R. Franklin,” was the result of a mistake made by the clerk at the United Arab Airlines office in Dar es Salaam, who incorrectly copied Williams’ name from his “passport” which is in the name of “Robert Franklin Williams.”

      . The FBI Bulletin, though dated August 31, 1961, was currently outstanding in September of 1969. It bore a photograph of Williams and stated: “CAUTION. WILLIAMS ALLEGEDLY HAS POSSESSED A LARGE QUANTITY OF FIREARMS, INCLUDING A .45 CALIBER PISTOL WHICH HE CARRIES IN HIS CAR. HE HAS PREVIOUSLY BEEN DIAGNOSED AS SCHIZOPHRENIC AND HAS ADVOCATED AND THREATENED VIOLENCE. WILLIAMS SHOULD BE CONSIDERED ARMED AND EXTREMELY DANGEROUS.”

      . TWA had, in 1969, experienced four hijackings prior to August, 1969, and a fifth hijacking at the end of August in which a TWA airplane was blown up while on the airport runway in Damascus, Syria, and some of the plane’s passengers were held as hostages. Judge Levet took judicial notice in his opinion of the fact that approximately 41 hijackings of American planes occurred in the United States between September 6, 1968 and September 6, 1969. See 369 F.Supp. at 802, n. 3.-

      . § 1111 of the Federal Aviation Act (Public Law 87-197, 87th Cong., 1st Sess., approved September 5, 1961, 75 Stat. 466) was enacted by Congress as part of a comprehensive program aimed at combatting hijackings and other criminal acts committed on board aircraft. See 1 U.S.Code Cong. & Ad.News, 87th Cong., 1st Sess., pp. 520-522 (1961); 2 U.S. Code Cong. & Ad.News, 87th Cong., 1st Sess., pp. 2563-2582 (1961).

      . This duty has both a statutory and common law basis. § 601(b) of the Federal Aviation Act, 49 U.S.C. § 1421(b), states in relevant part:
      “In prescribing standards, rules, .and regulations, and in issuing certificates under this subchapter, the Administrator shall give full consideration to the duty resting upon air carriers to perform their services with the highest possible degree of safety in the public interest . . . .”
      It has generally been held following state law that commercial air lines such as TWA are common carriers, and as such owe their passengers the duty of utmost care for their safety. See, e. g., Gatenby v. Altoona Aviation Corporation, 407 F.2d 443, 446 (3 Cir. 1968); United Air Lines, Inc. v. Wiener, 335 F.2d 379, 389 (9 Cir. 1964), cert. dismissed 379 U.S. 951, 85 S.Ct. 452, 13 L.Ed.2d 549 (1964); Cattaro v. Northwest Airlines, Inc., 236 F.Supp. 889, 894 (E.D.Va.1964); United States v. United Air Lines, Inc., 216 F.Supp. 709, 716 (D.Nev. 1962). But see Krasnow v. National Airlines, 228 F.2d 326 (2 Cir. 1955), holding that under New York law a common carrier of passengers for hire must only meet a standard of reasonable care under the circumstances. See 228 F.2d at 328.

      . Rule 8 of TWA’s Tariff No. R-3, provides in pertinent part:
      “(A) Refusal, Cancellations or Removal

      (1) Carrier will refuse to carry, cancel the reserved space of, or remove enroute any passenger when, in the exercise of its reasonable discretion carrier decides:
      (a) such action is necessary for reasons of safety;
      (b) such action is necessary to prevent violation of any applicable laws, regulations, or orders of any state or country to be flown from, into or over;

        (c) the conduct, status, age or mental or physical condition of the passenger is such as to
      (1) require special assistance of carrier; or
      (ii) cause him discomfort or make himself objectionable to other passengers; or
      (iii) involve any hazard or risk to himself or to other persons or to property; or
      (d) the passenger fails to observe the instructions of carrier.
      (2) If question arises of any aircraft’s being overloaded, Carrier shall decide in its reasonable discretion which passengers or articles shall be carried.
      (3) Carrier will refuse to carry, or will remove at any point, any passenger who refuses to permit search of his person or property for a concealed deadly or dangerous weapon or article or explosives.
      (4) Carrier will refuse to transport or will remove at any point, any passenger whenever such action is necessary to comply with any governmental regulation, or to comply with any governmental request for emergency transportation in connection with the national defense.”

      . 49 U.S.C. § 1511 is consonant with the common law rule that “where a carrier has reasonable cause to believe, and does believe, that the safety or convenience of its passengers will be endangered by a person who presents himself for transportation, it may refuse to accept such person for transportation and is not bound to wait until events have justified its belief.” 14 Am.Jur.2d, Carriers § 865 at 309.

      . Generally speaking a “presumption of regularity supports the official acts of public officers, and, in the absence of clear evidence to the contrary, courts presume that they have properly discharged their official duties.” United States v. Chemical Foundation, 272 U.S. 1, 14-15, 47 S.Ct. 1, 6, 71 L.Ed. 131 (1926). Under some circumstances, a similar presumption may be entertained by a common carrier. Thus it was held in Picking v. Pennsylvania R. Co., 151 F.2d 240 (3 Cir. 1945), reh. den. 152 F.2d 753 (3 Cir. 1945), that in light of the duty of a common carrier by railroad “to accept for transportation as passengers persons in the custody of peace officers under a warrant valid on its face . ”, the “employees of a railroad company are not required ... to constitute themselves a court of law in order to determine whether extradition proceedings were validly conducted” before complying with this duty. 151 F.2d at 253.
      By analogy a common carrier has a right to presume that official representations made by the FBI in the course of its duties are substantially true and accurate.

      . During the trial of this case the district judge charged the appellant, Williams, in a summary contempt proceeding and found him guilty. Williams in a separate appeal has challenged the contempt judgment, which this court has heard, considered, and ruled upon in favor of Williams, 509 F.2d 949 (2 Cir. 1974). We conclude, however, that neither the contempt proceedings and judgment, nor the circumstances out of which they arose, had any adverse effect upon the fairness, completeness and validity of the findings, conclusions, and the judgment in this case of Williams v. TWA.