author: JAMES HUNTER, III, Circuit Judge:

text:
    Dora HULTZMAN, Appellant, v. Caspar WEINBERGER, Secretary of Health, Education and Welfare, Appellee.
    No. 73-1917.
    United States Court of Appeals, Third Circuit.
    Argued Feb. 25, 1974.
    Decided April 18, 1974.

      Roland J. Artigues, Galfand, Berger, Senesky, Lurie & March, Philadelphia, Pa., for appellant.
    Robert E. J. Curran, Michael B. L. Hepps, Asst. U. S. Atty., Philadelphia, Pa., for appellee.
    Before HUNTER and WEIS, Circuit Judges, and MILLER, District Judge.
   OPINION OF THE COURT

JAMES HUNTER, III, Circuit Judge:

This appeal involves the denial of Medicare coverage by the Secretary of Health, Education and Welfare (“HEW”) for inpatient hospital services which the Secretary believed could have been rendered in a lesser care facility. Jurisdiction resides in this Court by virtue of 42 U.S.C. § 1395ff (c), 42 U.S.C. § 405(g) and 28 U.S.C. § 1291.

From July 13 through September 3, 1970, appellant, Mrs. Dora Hultzman, was hospitalized at the Albert Einstein Medical Center, Philadelphia, Pennsylvania, on the order of her family physician, Dr. Kravitz. Mrs. Hultzman, who was 73 years old at the time she was admitted to the hospital, had suffered from severe rheumatoid arthritis for many years. She had previously received therapy for her arthritis by Dr. Kravitz at the Moss Rehabilitation Center, a rehabilitation hospital. Mrs. Hultzman had felt increasing pain in the months preceding her hospitalization, and she had great difficulty in moving about, even with the aid of two canes. Dr. Kravitz noted in the discharge summary that she was completely helpless at the time of admission.

Although the primary purpose for the hospital admission was to receive physical and occupational therapy, Dr. Krav-itz was equally concerned with several other ailments of Mrs. Hultzman: persistent iron-loss anemia, urinary tract infection, eye problems and previous gastrointestinal bleeding. Dr. Kravitz ordered hospitalization because Mrs. Hultzman “could not have gotten her treatment as an outpatient because she was non-ambulatory and she could not be transferred to a less acute facility such as Moss Rehabilitation Hospital because of the urinary problem and the anemia.” Dr. Kravitz, who had previously treated Mrs. Hultzman at the Moss Rehabilitation Center, this time chose to treat her at the Albert Einstein Medical Center so that her many other ailments could be taken care of at the same time that she was receiving physical therapy.

Throughout Mrs. Hultzman’s hospitalization, both Dr. Kravitz, her family and attending physician, and the utilization review committee of the hospital certified that care in the hospital was medically necessary and that it was medically necessary for Mrs. Hultzman to remain in the hospital for as long as she did.

The patient progress notes show the following entry by Dr. Kravitz on September 1: “Pain unabated — patient seems to be trying very hard but we have reached an impasse.” On September 3, Mrs. Hultzman was discharged from the hospital.

Subsequently, the hospital submitted a request for payment for services rendered to Mrs. Hultzman to appellee’s fiscal intermediary, Blue Cross of Greater Philadelphia, which initially handles such a claim. Acting on behalf of the intermediary, Dr. H. Hopkins examined the medical records and concluded that there had been an “overutilization,” i. e., that only during the first seven days of Mrs. Hultzman’s hospitalization did she require inpatient hospital services and the remainder, which he concluded was mostly for physical therapy, could have been rendered in some lesser facility.

Concurring with Dr. Hopkins, the Hearing Examiner held that the hospital services provided to Mrs. Hultzman from July 13 to September 3, 1970, “were not reasonable and necessary inpatient hospital services and are specifically excluded from coverage [by 42 U.S.C. § 3195y [1395y] (a) (1) ].” The Hearing Examiner’s decision subsequently became the final decision of the Seere-tary. On July 19, 1973, the district court upheld the Secretary, finding the decision to be supported by substantial evidence. This appeal followed. We reverse.

In drafting the Medicare legislation, Congress provided for benefits for “inpatient hospital services.” 42 U.S.C. § 1395d(a) (1). This section contains only one condition: benefits are not payable beyond a maximum number of days in the hospital. This limitation on the reimbursable length of stay is reinforced by a requirement that a “spell of illness” would continue until sixty days after discharge, thereby precluding coverage of a rehospitalization during that period. 42 U.S.C. § 1395x(a)(2).

The Medicare statute defines “inpatient hospital services” as follows:

“(b) The term ‘inpatient hospital services’ means the following items and services furnished to an inpatient of a hospital and (except as provided in paragraph (3) ) by the hospital—
“(1) bed and board;
“(2) such nursing services and other related services, such use of hospital facilities, and such medical social services as are ordinarily furnished by the hospital for the care and treatment of inpatients, and such drugs, biologicals, supplies, appliances, and equipment, for use in the hospital, as are ordinarily furnished by such hospital for the care and treatment of inpatients; and
“(3) such other diagnostic or therapeutic items or services, furnished by the hospital or by others under arrangements with them made by the hospital, as are ordinarily furnished to inpatients either by such hospital or by others under such arrangements . . . . ” 42 U.S.C. § 1395x(b).

Certain “ [c] onditions of and limitations on payment for services” are provided in 42 U.S.C. § 1395f. First, payment is conditional upon a physician certifying “that such services are required to be given on an inpatient basis for such individual’s medical treatment, or that inpatient diagnostic study is medically required and such services are necessary for such purpose. . . .” 42 U.S.C. § 1395f (a) (3). The first such certification is to be made no later than the 20th day of the hospitalization and periodic recertifications are necessary thereafter. The legislative history reveals the importance Congress attached to the physician’s certification:

“[T]he physician is to be the key figure in determining utilization of health services — and . . . it is a physician who is to decide upon admission to a hospital, order tests, drugs and treatments, and determine the length of stay. For this reason the bill would require that payment could be made only if a physician certifies to the medical necessity of the services furnished.” 1965 U.S.Code Cong. & Admin.News, p. 1986.

Second, when inpatient hospital services extend beyond twenty days, payment is conditional upon periodic review by the utilization review committee as to the medical necessity of further inpatient hospital services. 42 U.S.C. § 1395f(a)(6) & (a)(7). Before the utilization review committee can find that further stay in the institution is not medically necessary, it must afford the attending physician an opportunity for consultation with the committee. 42 U. S.C. § 1395x(k)(4). The regulations of the Secretary outline the standard by. which the committee reviews the decision of the attending physician:

“Because there are significant divergences in opinion among individual physicians in respect to evaluation of medical necessity for inpatient hospital services, the judgment of the attending physician in an extended stay case is given great weight, and is not rejected except under unusual circumstances.” 20 C.F.R. § 405.1035(g).

If after consultation with the attending physician, the utilization committee determines that further stay in the institution is medically unnecessary, it must promptly notify the hospital, the individual and the attending physician. 42 U.S.C. § 1395x(k)(4). Payment for inpatient hospital services continues, however, for three days following receipt by the hospital of the committee’s determination. 42 U.S.C. § 1395f(a)(7). If the utilization review committee fails to function effectively, the statute provides that the Secretary may decer-tify the hospital, 42 U.S.C. § 1395cc (b)(2)(A), or upon notice the Secretary may deny reimbursement for inpatient hospital services rendered by that hospital after the 20th day of hospitalization. 42 U.S.C. § 1395cc(d). Wilbur Cohen, then Under-Secretary of HEW, testified prior to the passage of the Medicare legislation that, “[i]f the [utilization] review board makes a mistake, there is nothing we can do about it, because that is the professional decision of the doctors.” In response to questioning, he agreed that the utilization review committee’s decision would be equivalent to a “supreme court decision.”

We fully agree with the Secretary that Congress, in enacting the Medicare legislation, sought to encourage the efficient and economical use of medical facilities. This does not explain, though, what method Congress chose to accomplish this objective. That Congress intended the utilization review committee to have the primary role in securing these objectives is evidenced by the legislative history as well as by the Secretary’s regulations:

“The committee is particularly concerned that the utilization and review function is carried out in a manner which protects the patients while at the same time making certain that they remain in the hospital only so long as is necessary, and that every effort be made to move them from the hospital to other facilities which can provide less expensive, but equal, care to meet their current medical needs.” 1965 U.S.Code Cong. & Admin.News, p. 1987.

20 C.F.R. § 405.1035(a) & (b)(2) provides :

“An acceptable utilization review plan provides for: (1) The review, on a sample or other basis, of admissions, duration of stays, and professional services furnished; and (2) review of each case of continuous extended duration.”
•X- -X- * * -X* *
“(2) The review plan of a hospital should have as its over-all objective the maintenance of high quality patient care, and an increase in effective utilization of hospital services to be achieved through an educational approach involving study of patterns of care, and the encouragement of appropriate utilization. It is contemplated that a review of the medical necessity of admissions and durations of stay, for example, would take into account alternative use and availablity of out-of-hospital facilities and services. The review of professional services furnished might include study of such conditions as overuse or under use of services, logical substantiation of diagnoses, proper use of consultation, and whether required diagnostic workup and treatment are initiated and carried out promptly. Review of lengths of stay might consider not only medical necessity, but the effect that hospital staffing may have on duration of stay, whether assistance is available to the physician in arranging for discharge planning, and the availability of out-of-hospital facilities and services which will assure continuity of care.”

In furtherance of these goals Congress provided that the fiscal intermediary was to “assist the [hospital] in the application of safeguards against unnecessary utilization of services furnished” to individuals entitled to Medicare benefits. 42 U.S.C. § 1395h(b) (1) (B).

Nowhere, however, in the Medicare statute or in the legislative history is there any suggestion that Congress intended that the Secretary deny coverage retroactively to patients whenever he believes the utilization review committee has ceased to function properly. Indeed, the two express statutory remedies which are provided — decertification of hospital or denial of benefits beyond the 20th day of hospitalization — both foreclose retroactive effect because of the requirements that notice be given. 42 U.S.C. § 1395cc(b) & (d).

This construction of the Medicare legislation is not only the most sensible in our view, but is also one which will give effect to the broad remedial purpose of the statute, i. e., to insure that adequate medical care is available to the aged throughout this country.

Lastly, we recognize that in certain limited situations Congress has authorized the Secretary to deny coverage for services which otherwise meet the requirements of the statute. These situations are enumerated in 42 U.S.C. § 1395y(a), the statutory section relied upon by the Secretary to support his decision. This section provides, inter alia:

“Notwithstanding any other provision of this subchapter, no payment may be made under part A or part B for any expenses incurred for items or services—
“(1) which are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member; **•»**■»
“(9) where such expenses are for custodial care.”

Subparagraph (9), pertaining to custodial care, was not a basis for the Secretary’s exclusion of coverage, since the Hearing Examiner, whose decision became that of the Secretary’s, agreed with the contention of Mrs. Hultzman’s attorney that “the care [she] received was not custodial in nature.” (Emphasis added.) Rather, the Secretary’s decision was based on the Hearing Examiner’s finding that the services rendered Mrs. Hultzman after July 12, 1970, “were not reasonable and necessary inpatient hospital services and are specifically excluded from coverage by [section 1395y(a) (1)].”

Were this finding based on a correct view of the law, we would agree with the parties to this appeal that the standard of review would be whether such a finding is supported by substantial evidence. 42 U.S.C. § 1395ff(c) & 42 U.S.C. § 405(g). We do not, however, think the Secretary has correctly interpreted section 1395y(a)(l), and therefore we are not bound by the Secretary’s determination. See, e. g., Social Security Board v. Nierotko, 327 U.S. 358, 369, 66 S.Ct. 637, 90 L.Ed. 718 (1946).

There is absolutely nothing in the record which would support a conclusion that the services rendered Mrs. Hultz-man were not reasonable and necessary to the improvement of her arthritis or for the diagnosis or treatment of her other illnesses. All the evidence suggests to the contrary. Indeed, the Hearing Examiner concluded that “it is apparent that [Mrs. Hultzman] was in need of these services.”

Notwithstanding this conclusion, the Hearing Examiner held that “such services did not require hospitalization” but “could have been provided at the Moss Rehabilitation Center or another extended care facility;” thus they were not “reasonable and necessary inpatient hospital services" and are “excluded from coverage by [section 1395y(a) (1)].” (Emphasis added.)

The Secretary apparently construes section 1395y(a) (1) to mean that services which are admittedly reasonable and necessary for the treatment and diagnosis of a patient’s ailments are nonetheless excluded from coverage if the Secretary determines that it was not reasonable and necessary to render those services in a hospital (as opposed to a lesser care facility). This construction of section 1395y(a)(l), however, cannot be sustained in the face of the clear and plain language of that section. Section 1395y(a)(l) excludes from coverage only those services which are not reasonable and necessary to the treatment or diagnosis of a patient’s ailments. It does not speak at all to the question of whether it is medically necessary to provide such services on an inpatient or outpatient basis or in a hospital rather than extended care facility. The only other court which to our knowledge has considered this question explicitly rejected the Secretary’s construction of section 1395y(a)(l). Blacker v. Richardson, Civ.No. 2055, (D.Mont., Nov. 21, 1972), CCH Medicare & Medicaid Guide § 25, 613. The cases chiefly relied upon by the Secretary are inapposite because they all involve the question of whether services rendered were essentially supportive or custodial in nature and hence excludable under section 1395y(a)(9).

We therefore conclude that the Secretary erred in holding that Mrs. Hultzman was not entitled to have payment made on her behalf for the inpatient hospital services provided her from July 13 to September 3, 1970. The fifty-nine days Mrs. Hultzman spent in the hospital did not exceed the maximum permitted under the statute; the services provided clearly come within the definition of “inpatient hospital services; ” the conditions of payment- — certification by her attending physician and by the hospital utilization review committee — were fulfilled; and the Secretary’s reliance on section 1395y(a) was misplaced.

Consequently, the order of the district court of July 19, 1973 will be reversed with directions to the district court to enter judgment for the appellant.

      . The legislative history of the Medicare statute provides a cogent summary of the structure and purpose of the utilization review committee:
      “Hospitals and extended care facilities participating in the program would be required to have in effect a utilization review plan providing for a review of admissions to the institution, length of stays, and the medical necessity for services provided with the objective of promoting the efficient use of services and facilities. The review would ordinarily be carried out by a staff committee of the institution, which would have to include two or more physicians [except the attending physician] but which could also include other professional personnel such as registered nurses and medical social workers. Alternatively, the review could be conducted by a similar group outside the institution- — • preferably one established by the local medical society and some or all of the hospitals and extended care facilities in the locality. In some circumstances the review committee would have to be one outside the institution — for example, where the small size of the institution or, in the case of an extended care facility, the lack of an organized medical staff makes it impracticable for the institution to have a properly functioning staff committee.” 1965 U.S.Code Cong. & Admin. News, p. 1988.

      . 42 U.S.C. § 1395d(a) (1) provides that benefits are payable for up to 90 days plus an additional 60 days if the patient so desires. The additional 60 days, however, are a lifetime reserve and are payable only to the extent they have not been used previously.

      . Subparagraph (3) quite clearly provides that physical therapy is included in the term “inpatient hospital services.” The legislative history of the Medicare statute states that “[u]nder present law, health insurance payments may generally be: made for physical therapy services when provided to an inpatient in a hospital. . . . ” ■ 1967 U.S. Code Cong. & Admin.News, p. 2909.

      . Executive Hearings on H.R. 1 Before the House Comm, on Ways & Means, 89th Cong., 1st Sess., at 68 (1965).

      . Id.

      . U.S.Code Cong. & Admin.News 1964; see, e. g., Sowell v. Richardson, 319 F.Supp. 689, 691-692 (N.D.Ill.1970).

      . The legislative history does not support the Secretary’s construction of section 1395y(a) (1). See 1965 U.S.Code Cong. & Admin. News, p. 1989.

      . 42 U.S.C. § 1395d.

      . 42 U.S.C. § 1395x(b). We note that the Hearing Examiner stated that the services rendered to Mrs. Hultzman after July 12, 1970,
      “were not ‘inpatient hospital services’ which are covered under [section 1395x(b) — definitional section] of the Social Security Act. Those services were not reasonable and necessary inpatient hospital services and are specifically excluded from coverage by [section 1395y(a) (1)].”
      The statement referring to section 1395x(b) which defines “inpatient hospital services” is at best ambiguous, and we do not think it represents a finding that the services provided were not within the definition of inpatient hospital services. Not only is the record devoid of any evidence (much less substantial evidence) to support such a finding, but also a fair reading of the Hearing Examiner’s report reveals that the Hearing Examiner justified denial of coverage solely on the basis that the services could have been provided in a lesser facility.
      Moreover, this was the sole basis for which the fiscal intermediary refused to allow payment ; the district court apparently viewed this as the sole basis for the Secretary’s decision ; and this has been the sole basis for the Secretary’s argument on appeal.
      See also the legislative history of section 1395x(b). 1965 U.S.Code Cong. & Admin. News, p. 1967-1968.

      . 42 U.S.C. § 13951


source: Caselaw Access Project

author: CUMMINGS, Circuit Judge.

license: Public Domain

text:
    In the Matter of CHICAGOLAND IDEEL CLEANERS, INC., Bankrupt. UNITED STATES of America, Appellant, v. Craig PHELPS, Receiver in Bankruptcy, Appellee.
    No. 72-1620.
    United States Court of Appeals, Seventh Circuit.
    Heard Feb. 13, 1974.
    Decided May 7, 1974.
    Rehearing Denied May 24, 1974.
    Scott P. Crampton, Asst. Atty. Gen.', Karl Schmeidler, Atty., Tax Div., U. S. Dept, of Justice, Washington, D. C., James R. Thompson, U. S. Atty., Chicago, 111., for appellant.
    Kevin J. Gillogly, Daniel C. Ahern, Chicago, 111., for appellee.

      Before HASTINGS, Senior Circuit Judge, and CUMMINGS and STEVENS, Circuit Judges.
   CUMMINGS, Circuit Judge.

Taxpayer, Chieagoland Ideel Cleaners, Inc., is an Illinois corporation with its principal place of business in Chicago. On March 12, May 21, May 28, and June 4, 1971, assessments were made against the taxpayer totaling $140,831.5,9 for withholding and federal unemployment taxes for periods from September 30, 1970, to March 31, 1971. On June 28, 1971, pursuant to the written consents of its directors, taxpayer assigned and transferred all of its assets to Nathan Yorke as assignee for the benefit of its creditors. Thereafter Yorke proceeded to liquidate its assets. On August 25, 1971, the Internal Revenue Service filed in the office of the Recorder of Deeds of Cook County, Illinois, a notice of tax lien with respect to the taxes previously assessed, and on the same date served a notice of levy on assignee Yorke. The notice of tax lien indicated that the $140,831.59 in taxes had been assessed against taxpayer and that after demand for payment, the taxes remained unpaid. The notice of levy stated that the taxpayer’s properties “are hereby levied upon and seized for satisfaction” of the taxes.

On September 14, 1971, an involuntary petition for bankruptcy was filed in the court below, and a receiver was appointed ten days thereafter. The taxpayer was adjudged bankrupt on September 28, 1971.

Three weeks thereafter, the receiver filed an application for an order requiring assignee Yorke to turn over all of taxpayer’s assets to the receiver. The Government urged that the bankruptcy court lacked summary jurisdiction to grant the application on the ground that possession of the property held by the assignee had been in the United States since August 25, 1971, when it filed its notice of tax lien and served its notice of levy upon assignee Yorke. However, on December 9, 1971, the referee in bankruptcy ruled that assignee Yorke held “inalienable title” to the taxpayer’s assets and that the Internal Revenue Service’s notice of levy was a “nullity.” Therefore, he ordered the assignee to turn over to the receiver all of taxpayer’s assets in the assignee’s possession. After considering the Government’s petition for review of the referee’s order, the district court approved the order on January 11, 1972, and reaffirmed its approval on March 2, 1972. We reverse.

Here the four tax assessments against the taxpayer occurred in March, May and June 1971. The notice of tax lien and the notice of levy both recite that the taxes remained unpaid after demand. These notices are regular on their face. Where, as here, the receiver has not come forward with any evidence suggesting that demands were not made, we will accept the recitations in the notices. Therefore, by virtue of Sections 6321 and 6322 of the Internal Revenue Code, 3 the Government’s liens arose and attached to taxpayer’s property on the dates of assessment and demand. The liens were thereafter valid and perfected against all persons except purchasers, holders of security interests, mechanic’s lienors or judgment lien creditors, and the liens became effective against those four classes when the notice of tax lien was filed on August 25, 1971. 26 U.S.C. § 6323(a). The receiver does not assert that assignee Yorke is in one of the four protected classes.

Under Treasury Regulation § 301.6331-1 (a), “Levy may be made by serving a notice of levy * * This regulation does not go beyond the authority of the statute, which provides: “The term ‘levy’ as used in this title includes the power of distraint and seizure by any means.” 26 U.S.C. § 6331(b) (emphasis supplied). The regulation was implemented by the notice of levy served on assignee Yorke August 25, 1971, which advised him that taxpayer’s properties “are hereby levied upon and seized * * Thus about three weeks prior to the filing of the bankruptcy petition, the property levied upon was reduced to possession of the United States superior to that of the receiver. See United States v. Pittman, 449 F.2d 623, 627 (7th Cir. 1971); Rosenblum v United States, 300 F.2d 843 (1st Cir. 1962); United States v. Eiland, 223 F.2d 118 (4th Cir. 1955); see also Youngstown S. & T. Co. v. Patterson-E.-C. of Ind., 227 F.Supp. 208, 217 (N.D.Ind. 1963); Consumers Power Co. v. Rubiner, 225 F.Supp. 926, 929 (E.D.Mich. 1963); United States v. Manufacturers National Bank, 198 F.Supp. 157 (N.D.N.Y.1961); In re Venda Manufacturing, Inc., 60-2 U.S. Tax Cas., |f 9480 (S.D. Cal.1960).

The receiver insists that actual possession is necessary to remove the Government’s tax liens from the subordinate priority accorded them under Section 67c(3) of the Bankruptcy Act. However, Eiland and Rosenblum are squarely to the contrary with respect to intangibles (such as involved here) and we consider them persuasive. As Judges Parker and Woodbury there pointed out, contrary cases relied upon by the present taxpayer dealt either with tangible property or with different language contained in the Internal Revenue Code of 1939 or state tax laws. See Givan v. Cripe, 187 F.2d 225 (7th Cir. 1951); United States v. O’Dell, 160 F.2d 304 (6th Cir. 1947); City of New York v. Hall, 139 F.2d 935 (2d Cir. 1944); see also Division of Labor Law Enforcement v. Goggin, 165 F.2d 155 (9th Cir. 1947), reversed on other grounds, 336 U.S. 118, 69 S.Ct. 469, 93 L.Ed. 543. It is also significant that even Givan and O’Dell recognized that possession could be either actual or constructive. Those cases contemplated that the levy would be complete when the Government had served a warrant of distraint in addition to its notice of levy. We see no reason why the language necessary to create constructive possession may not be printed in full on one piece of paper. Historically, service of notice has been sufficient to seize a debt. Miller v. United States, 11 Wall. 268, 297, 78 U.S. 268, 297, 20 L.Ed. 135. Finally, Judge Pell’s careful discussion in Pittman demonstrates that under the Internal Revenue Code, levy is equivalent to seizure and gives the Government full legal rights in the property levied upon. 449 F.2d at 627.

Since possession of the property resided in the United States as against the receiver, the bankruptcy court lacked jurisdiction summarily to adjudicate the controversy without the Government’s consent. Cline v. Kaplan, 323 U.S. 97, 99, 65 S.Ct. 67, 89 L.Ed. 558; In re American National Trust, 426 F.2d 1059, 1065 (7th Cir. 1970). The United States is now entitled to have its claim adjudicated in a plenary suit. We respectfully decline to follow the contrary holding in In re United General Wood Products Corp., 483 F.2d 975 (9th Cir. 1973).

The district court’s order approving the turnover order is reversed.

      . The demands had to be made within 60 days of the assessments. 26 U.S.C. § 6303(a).

      . Section 6321 provides :
      “If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.”
      Section 6322 provides:
      “Unless another date is specifically fixed by law, the lien imposed by section 6321 shall arise at the time the assessment is made and shall continue until the liability for the amount so assessed (or a judgment against the taxpayer arising out of such liability) is satisfied or becomes unenforceable by reason of lapse of time.”

      . Section 67c(3) provides :
      “Every tax lien on personal property not accompanied by possession shall be postponed in payment to the debts specified in clauses (1) and (2) of subdivision (a) of section 64 of this title. Where such a tax lien is prior in right to liens indefeasible in bankruptcy, the court shall order payment from the proceeds derived from the sale of the personal property to which the tax lien attaches, less the actual cost of that sale, of an amount not in excess of the tax lien, to the debts specified in clauses (1) and (2) of subdivision (a) of section 64 of this title. If the amount realized from the sale exceeds the total of such debts, after allowing for prior indefeasible liens and the cost of the sale, the excess up to the amount of the difference between the total paid to the debts specified in clauses (1) and (2) of subdivision (a) of section 64 of this title and the amount of the tax lien, is to be paid to the holder of the tax lien.” 11 TJ.S.C.A. § 107(c)(3) (1974 Supp.).


author: IRVING R. KAUFMAN, Chief Judge:

text:
    Angelo F. CONIGLIO, Plaintiff-Appellant, v. HIGHWOOD SERVICES, INC., et al., Defendants-Appellees.
    No. 738, Docket 73-2448.
    United States Court of Appeals, Second Circuit.
    Argued March 27, 1974.
    Decided April 17, 1974.

      David Berger, Philadelphia, Pa. (H. Laddie Montague, Jr., Joel C. Meredith, Steven J. Greenfogel, Philadelphia, Pa., Irving M. Shuman and Gross, Shuman, Wiltse & Laub, Buffalo, New York City, on the brief), for plaintiff-appellant.
    Frank G. Raichle, Buffalo, New York City (Raichle, Banning, Weiss & Hal-pern, Buffalo, New York City, on the brief; Ralph L. Halpern, David C. Dief-endorf, New York City, of counsel), for defendant-appellee Highwood Service Inc.
    Paul J. Tagliabue, Washington, D. C. (Hamilton Carothers, Washington, D. C., on the brief; Covington & Burling, Washington, D. C., of counsel), for defendants-appellees National Football League and Pete Rozelle.
    Before KAUFMAN, Chief Judge, and SMITH and ANDERSON, Circuit Judges.
   IRVING R. KAUFMAN, Chief Judge:

Whatever else might be said about professional football in the United States, it does seem to breed a hardy group of fans who do not fear litigation combat. No fewer than five lawsuits have been instituted by football aficionados from Dallas to New England, each claiming that the respective defendant National Football League (NFL) team had violated the Sherman Act by requiring an individual who wishes to purchase a season ticket for all regular season games to buy, in addition, tickets for one or more exhibition or preseason games. In each case, including the instant one, the response of the district court has been the same: To dismiss the complaint upon the defendant’s motion for summary judgment. Without passing upon the wisdom or desirability of this ticket sale modus operandi, we find the practice to be outside the ambit of even the broad reach of the Sherman Act. Accordingly, we affirm.

I.

Angelo F. Coniglio is a resident of Amherst, New York, a suburb of Buffalo. An employee of the New York State Power Authority, Coniglio’s vocation is hydraulic engineering; his avocation — avid football fan and ardent rooter for the Buffalo Bills football team (Bills).

The Bills, owned and operated by High-wood Service, Inc. (Highwood), was a charter member of the American Football League (AFL), playing its inaugural season in 1960. From its inception, the Bills has been the only professional football team in Buffalo, indeed, filling a void of more than one decade’s duration since the demise of the All American Conference in 1949.

Although Coniglio regularly attended the Bills home games from 1960 onward, he did not become a season ticket holder until 1964. With this new status, he gained a number of advantages over those who purchased tickets on an individual game basis, such as, preferential seat selection, preferential call on postseason playoff tickets, and preferential seat selection for the following season. Coniglio repeated his season ticket purchase in 1965.

The year 1966 produced two events of some significance to Bills fans. First, the American Football League and its arch rival, the older National Football League, tentatively agreed to merge into one league, provided congressional approval, obviating a possible antitrust violation, could be obtained. Second, the Bills altered its season ticket sale policy by requiring the purchaser of a season ticket to also buy a ticket for one exhibition game.

In 1968, the Bills increased the number of exhibition games included in the season ticket package to two. And, two years later, in 1970, the season ticket holders were required to purchase tickets for three exhibition games. Whether because of this or perhaps because of the eongressionally sanctioned merger between the AFL and the NFL, ****which was also consummated in 1970, the Bills that year saw the end of Coniglio as a season ticket purchaser. The record does reflect, however, that in 1971 Coniglio attended five of the seven regular season home games played by the Bills at Buffalo’s War Memorial Stadium, by purchasing individual tickets for each game, and that Coniglio, in fact, had chosen not to attend the two remaining home games that year.

Disenchanted with the Bills’s season ticket sale practice, Coniglio commenced an antitrust action against Highwood, the NFL, and its Commissioner, Pete Rozelle, by filing a complaint in the Western District of New York on September 9, 1970. He claimed that for the period, 1966-1970, Highwood’s policy of conditioning the purchase of season tickets, to a requirement to buy exhibition game tickets, constituted an unlawful tying arrangement in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. Moreover, he charged, it also constituted an abuse of the Bills’s monopoly power over professional football in the Buffalo area, in breach of Section 2 of the Sherman Act, 15 U.S.C. § 2. In addition, Coniglio alleged that the unlawful tie between season tickets and exhibition game tickets was the product of a conspiracy between Highwood, the NFL, and Rozelle, and that such conspiracy was a further violation of Section 1 of the Sherman Act.

Coniglio initially sought to maintain this suit as a class action, on behalf of approximately 750,000 season ticket holders of the Bills as well as a number of other NFL clubs, against a defendant class represented by Highwood. In this latter class Coniglio included all NFL clubs with season ticket policies mandating the purchase of exhibition game tickets. Following more than two years of pretrial discovery during which a substantial number of documents were produced by Commissioner Rozelle, the late Judge Henderson, on September 18,1972, entered an order upon motion of the defendants limiting the plaintiff class to some 23,000 Bills season ticket holders, and denying Coniglio’s motion to establish a defendant class.

On March 21, 1973, after additional discovery of documentary evidence and the completion of Coniglio’s deposition— the only oral deposition taken by either side — the defendants moved Lor summary judgment. On August 1, 1973, Judge Henderson, in a brief opinion réported only in 1973-2 CCH Trade Cas. fí 74,795 (W.D.N.Y.1973), granted the motions and dismissed the complaint.

II.

We proceed directly to a consideration of the law applicable to the alleged Sherman Act violations. In Northern Pacific Railway Co. v. United States, 356 U.S. 1, 78 S.Ct. 514, 2 L.Ed. 2d 545 (1958), the Court concisely defined a tying arrangement as:

an agreement by a party to sell one product but only on the condition that the buyer also purchase a different [or tied] product. .

Northern Pacific Railway Co. v. United States, supra, 356 U.S. at 5, 78 S.Ct. at 518. The Court further elucidated the subject by describing the basis upon which a tying arrangement would be found to be a violation of Section 1 of the Sherman Act.

[Tying arrangements] are unreasonable [restraints of trade and commerce] in and of themselves whenever a party has sufficient economic power with respect to the tying product to appreciably restrain free competition in the market for the tied product and a “not insubstantial” amount of interstate commerce is affected.

Id. at 6, 78 S.Ct. at 518. Thus, using Northern Pacific as a springboard for our analysis, we can identify four factors essential in determining whether a particular sales practice constitutes an illicit tying arrangement:

(1) two separate and distinct products, a tying product and a tied product;
(2) sufficient economic power in the tying market to coerce purchase of the tied product;
(3) anti-competitive effects in the tied market;
(4) involvement of a “not insubstantial” amount of interstate commerce in the tied market.

It seems clear, at the outset, that the fourth factor is easily satisfied in this instance since, in 1970 alone, the total value of tied exhibition game tickets was approximately $483,000. In International Salt Co. v. United States, 332 U.S. 392, 68 S.Ct. 12, 92 L.Ed. 20 (1947), roughly $500,000 of interstate commerce was deemed sufficient. And see Fortner Enterprises, Inc. v. United States Steel Corp., 394 U.S. 495, 89 S.Ct. 1252, 22 L.Ed.2d 495 (1969).

We turn next to the second Northern Pacific prerequisite — the power to coerce purchase of the tied product — for the district judge rested his decision on the ground that the Bills lacked sufficient economic power in the season ticket (or tying) market to coerce purchase of exhibition game tickets. Judge Henderson concluded that since more than half of the 46,206 seats at War Memorial Stadium could be purchased on an individual game basis (as Coniglio himself did in 1971), “there is no tying problem even though the seller may offer a package of both season and preseason [exhibition] game tickets. See Northern Pacific Ry. v. United States, 356 U.S. 1, 6 [78 S.Ct. 514, 2 L.Ed.2d 545] (1958).” And see Laing v. Minnesota Vikings Football Club, Inc., supra; Driskill v. Dallas Cowboys Football Club, Inc., supra; Pfeiffer v. New England Patriots Football Club, Inc., supra. But see Laing v. Minnesota Vikings Football Club, Inc., supra, (Lay, J. concurring) (declining to find no coercive power as a matter of law where only 2,500 to 4,000 tickets available on individual game basis). Although the question is indeed a close one, we believe that, despite the relatively large quantity of individual game tickets available here, the district court’s conclusion, that as a matter of law the requisite coercive power was absent, is erroneous.

The district judge’s reliance on Northern Pacific in the factual context of this case seems to have been misplaced. In Northern Pacific, the Court noted that “where the buyer is free to take either product by itself there is no tying problem even though the seller may also offer the two items as a unit at a single price.” Northern Pacific Railway Co. v. United States, supra, 356 U.S. at 6 n. 4, 78 S.Ct. at 518. Here, however, the buyer is not “free to take either product [season ticket or exhibition game ticket] by itself.” Indeed, it is undisputed that a season ticket could not be purchased unless a certain number of exhibition game tickets, three in 1970, were purchased as well.

Appellee Highwood responds that a season ticket is no more than the sum of its parts — the individual regular season football games played by the Bills in Buffalo — and, therefore, the availability of tickets on an individual game basis eliminates the coercive tie under Northern Pacific. We have already referred to the advantages obtained through the purchase of a season ticket, principally the preferential seat selection accorded the season ticket holder. Although High-wood would thus have us characterize this suit as one to “guarantee every spectator a seat on the 50-yard line for the home games of the Bills,” we are not inclined to take so disparaging a view. Rather, we are mindful of the test for coercive power announced by a unanimous Court in United States v. Loew’s Inc., 371 U.S. 38, 45, 83 S.Ct. 97, 102, 9 L.Ed.2d 11 (1962):

[T]he crucial economic power may be inferred from the tying product’s desirability to consumers or from uniqueness in its attributes.

That approximately 23,000 people were “willing” to purchase season tickets in a stadium that can seat only 46,000, is certainly some evidence of the “desirability” of these tickets, sufficient at least to persuade us that the existence of the requisite economic power is a triable issue of fact.

Highwood contends that in any event there is no tying arrangement, lawful or otherwise, because the first prerequisite — the separability of the tying and tied products — has not been satisfied in this case. See e. g. Times-Picayune Publishing Co. v. United States, 345 U.S. 594, 73 S.Ct. 872, 97 L.Ed. 1277 (1953). It argues that exhibition football games and regular season contents are substantially equivalent, each involving a struggle between two professional football teams fielding eleven-man units with the object of the battle being to get that pigskin across the goal line whether by brain or brawn or both. See Pfeiffer v. New England Patriots Football Club, Inc., supra, 1973-1 CCH Trade Cas. If 74,267 at 93,265. Coniglio answers that exhibition games are clearly inferior to regular season games. He argues cogently that the exhibition season is virtually conceded to be the time for experimentation with line-ups, plays, etc., during which the won-loss record is of distinctly secondary importance.

Product separability based on quality differentiation has been an essential ingredient in a 'long line of tying cases. See e. g. United States v. Loew’s, Inc., supra (block sale of desirable and undesirable movies); American Manufacturers Mutual Insurance Co. v. American Broadcasting-Paramount Theatres, Inc., 388 F.2d 272 (2d Cir. 1067) (block sale of television advertising for both desirable and undesirable television stations); Associated Press v. Taft-Ingalls Corp., 340 F.2d 753 (6th Cir.), cert denied, 382 U.S. 820, 86 S.Ct. 47, 15 L.Ed. 2d 66 (1965) (block sale of desirable and undesirable wire services). To be sure, Highwood urges in response that quality is a continuum on which distinctions could be drawn between each regular season game as well. Although there is a measure of validity in Highwood’s position, see Shayne v. Madison Square Garden Corp., 1974 CCH Trade Cas. jf 74,-920 at 96,123 (E.D.N.Y.1973), appeal dismissed, 491 F.2d 397 (2d Cir. 1974), we believe that the distinction between exhibition and regular season contests is sufficiently sharp, at the very least, to render the factual determination of product separability more appropriate for a trial rather than for summary judgment. Grossman Development Co. v. Detroit Lions, Inc., supra, 1973-2 CCH Trade Cas. ¶ 74,790 at 95,539.

With Coniglio having successfully traversed three quarters of the field, Highwood raises its final but insurmountable barrier. It contends that Coniglio failed, as a matter of law, to demonstrate an anti-competitive effect in the tied (exhibition football game) market. Quite simply, just as the Bills has a monopoly over the presentation of regular season professional football games in the relevant geographic market, which is Buffalo, so too does it have a monopoly over the presentation of exhibition professional football games— the tied product. Thus, Highwood is not using its economic power in the tying (season ticket) market to “restrain free competition in the market for the tied product,” Northern Pacific Railway Co. v. United States, supra, 356 U.S. at 5, 78 S.Ct. at 518, for it is undisputed that, at the time this complaint was filed, there were neither actual nor potential competitors to the Bills in the professional football market. Accordingly, the tying arrangement attacked by Coniglio does not fall within the realm of contracts “in restraint of trade or commerce” proscribed by Section 1 of the Sherman Act, 15 U.S.C. § 1. See Laing v. Minnesota Vikings Football Club, supra; Grossman Development Co. v. Detroit Lions, Inc., supra.

Coniglio tries strenuously but unsuccessfully to skirt this obstacle. He argues that the tying arrangement foreclosed competition in what could only be characterized at oral argument as the “general entertainment market in Buffalo.” Support for this obviously vague assertion, moreover, is limited to a self-serving statement in Coniglio’s affidavit in opposition to summary judgment which reads:

There are alternative activities available on Friday and Saturday evenings [when the Bills’s home exhibition football games were generally played] which are attractive to me, including movies, some live theater, and music programs. As a season ticketholder with seats to exhibition games forced upon me at up to $7 per seat, I was precluded from seriously considering alternative activities on game nights.

Not only does this fall far short of Fed. R.Civ.P. 56(e)’s requirement that an affidavit in opposition to a motion for summary judgment “set forth specific facts showing that there is a genuine issue for trial,” but we consider the purportedly relevant product market so broadly defined as to render that concept all but meaningless as an analytic tool for assessing the anti-competitive effect requisite to a Sherman Act violation.

We agree with the court in American Aloe Corp. v. Aloe Creme Laboratories, Inc., 420 F.2d 1248 (7th Cir.), cert. denied, 398 U.S. 929, 90 S.Ct. 1820, 26 L.Ed.2d 91 (1970) and 400 U.S. 820, 91 S.Ct. 37, 27 L.Ed.2d 47 (1970), reh. denied, 400 U.S. 856, 91 S.Ct. 24, 27 L.Ed.2d 95 (1970), that “[b]efore there can be a conclusion as to whether there has been ... a contract in restraint of trade, a determination must be made as to what are the relevant product markets within which to gauge a firm’s power or the effect of its activities.” In defining the relevant product market, moreover, we are guided by the oft-cited analysis in Brown Shoe Co. v. United States, 370 U.S. 294, 325, 82 S.Ct. 1502, 1524, 8 L.Ed.2d 510 (1962):

The outer boundaries of a product market are determined by the reasonable interchangeability of use or the cross-elasticity of demand between the product itself and substitutes for it. (footnote omitted)

And, the Court in Brown Shoe added that, in determining product line differential, such considerations as the existence of characteristics peculiar to a particular product and product appeal to a distinct class of customers would prove illuminating. Viewed in this light, Con-iglio’s claim that plays, movies, and musicals are all within the boundaries of the same product market as exhibition football amounts to nothing more than the boundless contention that, by extracting extra dollars from season ticket holders, the Bills leave less in their pockets to spend on any other form of diversion, from a trip to the zoo to a night at the opera. Suffice to say that the extraordinary breadth of the market encompassing such 'diverse yet assertedly competitive products is far beyond that ever contemplated for a relevant product market.

Nor can Coniglio bootstrap his hollow claim of an anticompetitive effect into a triable issue by relying on the Supreme Court’s admonition in Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962), that summary judgment may not be appropriate for complex antitrust litigation “where motive and intent play leading roles, the proof is largely in the hands of alleged conspirators, and hostile witnesses thicken the plot.” (footnote omitted). Unlike Poller, in which the key issue was intent to monopolize, the propriety of summary judgment in this ease rests on Coniglio’s total failure to demonstrate any adverse effect on competition, actual or potential, an issue perfectly well suited to objective, statistical analysis. In such instances, summary judgment is properly granted to lower the curtain on costly litigation where it is clear beyond cavil that one side simply has no support for its version of alleged facts. See Community of Roquefort v. William Faehnd-rich, Inc., 303 F.2d 494, 498 (2d Cir. 1962).

Coniglio also seeks to avoid the lack of demonstrable, anti-competitive impact of the Bills’s ticket sale practice by contending that a deleterious effect on competition is not essential to prove a violation of Section 1 of the Sherman Act. He claims it is sufficient that the tying arrangement merely interfere with the consumer’s freedom of choice in deciding whether to purchase the tied product. Although courts have occasionally referred to this as a primary evil of the tying arrangement, see e. g. Associated Press v. Taft-Ingalls, Corp., supra, 340 F.2d at 762, it represents no more than the causal determinant of the proscribed restraint on competition in the tied market which ordinarily results from such interference. Associated Press, heavily relied upon by Coniglio, is not to the contrary, for the court was careful to note the existence of United Press International as a competitive wire service. Associated Press v. Taft-Ingalls, Corp., supra, 340 F.2d at 762, 764. See also American Manufacturers Mutual Insurance Co. v. American Broadcasting-Paramount Theatres, supra (adverse effect on competition among television networks for advertising) . In sum, therefore, neither the cases marshalled by appellant nor the plain language of Section 1, which speaks specifically of contracts “in restraint of trade or commerce,” support his contention that Section 1 can be violated absent a showing of such restraint.

Finally, Coniglio turns to Section 2 of the Sherman Act, 15 U.S.C. § 2, and argues that, in establishing the tying arrangement, Highwood violated that section by unlawfully abusing its monopoly power in the professional football market. Mr. Justice Douglas’s opinion for a majority of the Court in United States v. Griffith, 334 U.S. 100, 68 S.Ct. 941, 92 L.Ed. 1236 (1948), sets forth the governing rule:

[T]he use of monopoly power, however lawfully acquired, to foreclose competition, to gain a competitive advantage, or to destroy a competitor, is unlawful.

334 U.S. at 107, 68 S.Ct. at 945. Accordingly, since we have made plain that Highwood has not used the tying arrangement either to prevent competition or destroy it, its ticket sale practice does not represent an unlawful abuse of its monopoly power. See United States v. Grinnell Corp., 384 U.S. 563, 570-571, 86 S.Ct. 1698, 16 L.Ed.2d 778 (1966); United States v. Aluminum Co. of America, 148 F.2d 416, 429-430 (2d Cir. 1945).

As for the remaining defendants, the NFL and its Commissioner, Pete Rozelle, it is readily apparent that if Highwood’s tying arrangement is not unlawful, an agreement among the defendants to establish that practice, even if it could be proven, would not be unlawful either.

Affirmed.

      . Grossman Development Co. v. Detroit Lions, Inc., 1973-2 CCH Trade Cas. f 74,790 (E.D.Mich.1973), appeal docketed, No. 74-1093 (6th Cir. 1974); Laing v. Minnesota Vikings Football Club, Inc., 1973-2 CCH Trade Cas. U 74, 601 (D.Minn.1973), aff’d, No. 73-1625 (8th Cir. Feb. 11, 1974); Driskill v. Dallas Cowboys Football Club, Inc., 1973-1 CCH Trade Cas. H 74,544 (N.D. Texas 1973), appeal docketed, No. 73-2659 (5th Cir. 1973); Pfeiffer v. New England Patriots Football Club, Inc., 1973-1 CCH Trade Cas. H 74,267 (D. Mass.1972), appeal dismissed, No. 72-1306 (1st Cir. Nov. 1, 1972).

      . See 15 U.S.C. § 1291.

      . According to Coniglio’s deposition, he was an organizer of the AFL Identity Committee in Buffalo. The Committee’s purpose, Coniglio stated, was to urge restoration of the name “American Football League,” and use of the AFL’s emblem, both of which had been dropped when the merger became effective in 1970.

      . Pursuant to Fed.R.Civ.P. 23(b)(1)(B) and 23 (b) (3).

      . There are 46,206 seats in War Memorial Stadium.

      . His decision is reported at 60 F.R.D. 359 (W.D.N.Y.1972).

      . In 1970, there were about 23,000 season ticket holders and each was required to purchase 3 exhibition game tickets at $7 apiece. The total paid by them for these 3 games approximated $483,000.

      . Brief of Appellee Highwood Service, Inc. at 2.

      . Coniglio has included in the record a number of newspaper articles in which professional football coaches rationalize poor performance during the exhibition season on the experimentation theory.

      . Coniglio does not suggest that this monopoly position was in any way secured in contraven-vention of the Sherman Act, 15 U.S.C. §§ 1, 2.

      . As of 1970, the closest major league professional football team to the Buffalo Bills was the Cleveland Browns, some 189 miles away.

      . We are not unaware of the recent commotion over the nascent World Football League (WFL), which is slated to begin its first season of play this summer. Coniglio does not contend, however, that the WFL was even a glimmer in anyone’s eye in 1970.

      . Of course, we do not mean to suggest that the consumer lacks standing to raise a Sherman Act claim where he can prove that a foreclosure of competition in violation of Section 1 caused him injury by, for example, artificially elevating prices. See e. g. Fortner Enterprises, Inc. v. United States Steel Corp., supra, 394 U.S. at 497, 89 S.Ct. 1252.

      . We note that the record before us does not present a convincing case for conspiracy in any event. The Bills instituted the challenged season ticket package policy in early 1966, four years prior to its entry into the NFL, although admittedly only some nine or ten months before Pete Rozelle became, according to his own affidavit in support of the motion for summary judgment, the Commissioner of both the AFL and the NFL in October 1966. Moreover, of the 26 teams in the NFL following the merger, at least 10 did not utilize a season ticket sale policy even remotely similar to that used by the Bills.


author: KILEY, Senior Circuit Judge. PELL, Circuit Judge (dissenting).

text:
    NATIONAL ROOFING CONTRACTORS ASSOCIATION et al., Petitioners, v. Peter J. BRENNAN, Secretary of Labor, Respondent.
    No. 73-1082.
    United States Court of Appeals, Seventh Circuit.
    Argued Oct. 29, 1973.
    Decided April 30, 1974.

      Ira J. Smotherman, Jr., McNeill Stokes, Atlanta, Ga., Michael J. Hamblet, Chicago, Ill., for petitioners.
    Harlington Wood, Jr., Asst. Atty. Gen., Eloise E. Davies, Atty., Dept, of Justice, Washington, D. C., for respondent.
    Before KILEY, Senior Circuit Judge, and PELL and SPRECHER, Circuit Judges.
   KILEY, Senior Circuit Judge.

Petitioners, representatives of employers in the roofing industry, filed their petition in this court, pursuant to 29 U.S.C. § 655(f), to set aside a safety standard promulgated by respondent Secretary, acting by virtue of § 6(a) and (b) of the Occupational Safety and Health Act of 1970 (OSHA), 29 U.S.C. § 651 et seq., to protect workers on sloping roofs of buildings. We deny the petition.

OSHA is the “first comprehensive effort by the federal government to regulate safety and health conditions in the workplace.” In enacting OSHA Congress stated that the purpose is “to assure so far as possible every working man and woman in the Nation safe and ■healthful working conditions and to preserve our human resources.” 29 U.S.C. § 651(b).

The Secretary was authorized in OSHA, § 651(b)(3), to set mandatory standards for safety and health of employees. In promulgating the standard before us he followed the statutory procedures in § 655(b). Briefly stated, those procedures are as follows: When the Secretary receives or develops information upon which he determines a standard is needed, he may request recommendations from an advisory committee appointed by him. He then submits his proposal and the information he has received or developed to the committee. Upon receiving the committee’s recommendations, he publishes the proposed standard and affords interested persons an opportunity to submit written data or comments.

Should objections be made to the proposal, and upon a request for a hearing, the Secretary is to publish in the Federal Register a notice specifying the proposal and set a time and place for a hearing. After the hearing he “shall” promulgate, or determine not to promulgate, the standard.

I.

Petitioners contend that the standard is void because the composition of the advisory committee appointed by the Secretary did not comply with the requirement of § 656(b) that the committee be representative of employers as well as employees and public representatives.

A.

Section 656(b) provides that any advisory committee appointed by the Secretary shall consist of not more than fifteen members and must include one or more designees of the Secretary of Health, Education and Welfare (HEW); “an equal number of persons qualified by experience and affiliation” to present the views of employers and employees; one or more representatives of state safety and health agencies; and “such other persons as the Secretary may appoint who are qualified by knowledge and experience . . . including one or more representatives of professional organizations of technicians or professionals specializing in occupational safety or health . . . ”; but the number of professionals appointed cannot exceed the number appointed as representatives of HEW and state agencies.

Petitioners argue that no roofing industry member was appointed and that general contractors on the committee do not adequately represent them.

The Secretary, before the effective date of OSHA, had exercised his authority under the Contract Work Hours and Safety Standards Act of 1969, 40 U.S.C. § 333 et seq. (CWHSSA) by appointing a nine-man advisory committee to make recommendations for a, safety standard to protect employees working on sloping roofs. After enactment of OSHA he enlarged the committee to the new requirements of fifteen members.

It is not sufficient to charge that because a roofing subcontractor is not appointed to the committee, petitioners are ipso facto prejudiced. There is nothing to show that, although roofing contractors may be the group most affected by the standards, general contractors in conjunction with worker representatives and the other representatives are not competent to determine suitable safety standards for employees working on sloping roofs. The testimony does not show that the general contractors prejudiced petitioners’ position at the hearing. On the contrary, on this record the interests of the petitioners and the general contractors are plainly the same: general contractors must absorb the cost of safety devices required by the standard and they may be liable for subcontractor violations.

Absent a showing of “specific prejudice” suffered by petitioners, we see no substance in the contention urged by petitioners that failure to appoint a representative of the roofing industry violated § 656(b). United States v. Pierce Auto Lines, 327 U.S. 515, 527-529, 66 S.Ct. 687, 90 L.Ed. 821 (1946).

B.

Petitioners argue also that the CWHSSA and OSHA advisory committees were improperly composed. We consider this argument frivolous.

As his affidavit before us states, CWHSSA member MacCollum was not appointed as an employer representative as petitioner erroneously contends, but as a public member. And, contrary to petitioner’s claim, OSHA committee member Anania, an acting chief of the National Institute of Occupational Safety and Health, was a proper HEW desig-nee. Finally, there is no merit in the claim that the CWHSSA committee had an unequal number of employer and employee representatives. Petitioners’ contention that Mr. Burks was a public member is contradicted by a Department of Labor release announcing his appointment as a “management representative.”

We hold that the standard before us is not void for failure of the Secretary to meet the requirements of 29 U.S.C. § 656(b) of OSHA in composing the advisory committee which recommended the standard. None of the cases referred to in petitioners’ brief aids them in their contentions.

II.

The challenged safety standard states:

A catch platform shall be installed below the working area of roofs more than 16 feet from the ground to eaves with a slope greater than 4 inches in 12 inches without a parapet. In width, the platform shall extend 2 feet beyond the protection of the eaves and shall be provided with a guardrail, midrail, and toeboard. This provision shall not apply where employees engaged in work upon such roofs are protected by a safety belt attached to a lifeline.

The “16 feet” height and “4 inches in 12 inches” slope standard departs from the standards previously promulgated by the Secretary of 20 feet for industry in general (the “national consensus”) and 10 feet for construction work, and a 3 inches in 12 inches slope requirement.

Petitioners contend that the departure is not supported by “substantial evidence in the record as a whole,” and is “capricious, arbitrary and unreasonable.”

Testimony, contentions and arguments, for petitioners at the hearing, and before us, are, first, that the 16 feet height is unnecessary — since overprotection makes workers careless, and less expensive devices are available; is without precedent; and compliance with it is too costly.

The testimony that the 20 feet height was the appropriate standard implies that protection at some height was needed. Whether that should be 20 feet or 10 feet or 16 feet was considered by the committee. The 20 feet standard was rejected for the reason that a safer standard was needed in order to protect against falls from lower roofs which resulted in more serious injuries. The Secretary recognized the factor of cost of catch platforms and left room in his promulgation for “temporary parapets,” to be built by contractors, which could qualify under the standard as alternatives to catch platforms. We think this will enable those covered by the standards and sensitive to the costs involved for catch platforms to use ingenuity in providing less costly alternatives which could qualify. Finally, the committee could well have ignored the claim that overprotection makes workers careless.

The fact that the American National Standards Institute (ANSI) adopted the “national consensus” standard of 20 feet, and that several states had adopted the same or greater height standards, is not binding on the Secretary. In fact, OSHA was enacted to supply the protection Congress deemed lacking in state regulations. He is required under § 655(a) to determine whether a standard different from the “national consensus” would result in improved safety or health.

Similarly, while a layman would see little difference, perhaps, between a 4 inches and 5 inches in 12 inches slope, it was within the Secretary’s discretion to choose the more gentle slope. As one committee member stated, “You can work on a 4 inch roof. You get up to 5 inches or 6 inches and this is real tough.”

Petitioners also argue that safety belts, which can be used in place of scaffolds, are dangerous, since ropes purporting to hold the workers safely have caused tripping of employees and more injuries than that protection prevented. The committee properly recognized the self-serving element implicit in this argument and cited the experience of iron workers who originally resisted safety belts but have come gradually to accept them as effective safety equipment.

Finally, petitioners argue that the majority of injuries to employees engaged in roofing were due not to the lack of adequate safety protection but to negligence of workers, and that catch platforms in preventing falls could cause greater injury than the falls, and that the best protection against employee injury was efficiency on the part of employers and due care on the part of employees. Apparently the committee found, as we find, this argument unpersuasive. There is no showing in the statistics to bear out the first argument with respect to the negligence of workers, no convincing testimony that catch platforms would cause greater injuries, and the statistics would seem to indicate that employers have not performed their part in providing effective equipment for their employees.

The committee knew of the 273 fatal or near-fatal falls from roofs in .one year from sloping, and even flat, roofs caused by holes therein, tripping on loose shingles, or the weather, as well as the high injury rate among roofing and sheet metal workers.

An abundant record of oral and written statements, statistics, and testimony underlies the Secretary’s standard. As previously noted, the advisory committee is made up of representatives of employers, employees, technical and professional organizations, and state agencies, and the HEW designate. Reading the transcript of the committee’s final meeting has satisfied us that the committee members understood and considered the oral and written testimony at the hearing and were well informed about the petitioners’ viewpoints and about what safety standards were reasonable. The fundamental issue for the committee was whether the 16 feet height, 4 inches in 12 inches slope, or the 20 feet height, 5 inches in 12 inches slope, was appropriate to protect employees. We conclude that there is “substantial evidence in the record as a whole” to support the standard promulgated by the Secretary, Chicago v. FPC, 147 U.S.App.D.C. 312, 458 F.2d 731, 744-745 (1971), and that the standard is not “capricious” or “arbitrary.”

III.

Finally, petitioners contend that the challenged standard is unconstitutionally void in violation of their equal protection and due process rights and because of the standard’s vagueness. There is no merit in the contention.

Petitioners argue that the 16 feet height standard before us — with potential civil and criminal liabilities attached for its violations — applied to the construction industry is more restrictive than the 20 feet standard applied to employers outside the construction industry ; that the standard bears no rational relationship to the purpose of OSHA; and that the discrimination is so unjustifiable as to violate due process under Bolling v. Sharpe, 347 U.S. 497, 499, 74 S.Ct. 693, 98 L.Ed. 884 (1954).

Under the applicable regulations, the 16 feet standard covers all “substantial” roofing work, including “work for construction, alteration and/or repairs including painting and decorating.” While we are not persuaded by the Secretary’s argument that because 1926.-451 (u) (3) covers construction work, and 1910.28(s)(3) covers maintenance work, the former is more dangerous, we agree with his argument that all persons doing the same kind of work on roofs are subjected to the 16 feet standard; that he addresses safety problems “by one step at a time”; and that his failure to apply that standard to the varying situations at this time is not a basis for a claim of invidious discrimination.

We therefore hold that the Secretary did not deny due process to the roofing industry by not applying the 16 feet standard at this time to the roofing maintenance industry. A rational “one step at a time” approach defeats a constitutional claim. Jefferson v. Hackney, 406 U.S. 535, 546, 92 S.Ct. 1724, 32 L.Ed.2d 285 (1972). What the Secretary has done here is to select one phase of the construction industry for a remedial standard. He may have passed over, temporarily, another phase of the industry, but that neglect is not a denial of constitutional rights.

We need not discuss petitioners’ claim that the standard is so “vague and unintelligible” to those in the industry as to deny them due process. A reading of the testimony and oral statements in the record is sufficient to convince us that the standard is neither.

For the reasons given, the petition is denied.

PELL, Circuit Judge (dissenting).

The Occupational Safety and Health Act of 1970 (OSHA), brought into being for the laudable purpose of assuring “so far as possible every working man and woman in the Nation safe and healthful working conditions,” nevertheless, in its application as manifested and its potential enforcement as implicit in the present case, presents a frightening prospect to employers who are not necessarily any less interested in the safety of their employees than the employees themselves. Accordingly, I respectfully dissent.

As an initial matter, it appears to me that the majority opinion errs in upholding a standard which followed consideration of the subject matter by an advisory committee on which there was no person “qualified by experience and affiliation” to represent the involved employers, roofing subcontractors, as the statute clearly required. (Emphasis added.)

I find it no answer to say that there were general contractors on the advisory committee and that their interests are the same as the roofing subcontractors because the general contractors must absorb the cost of safety devices. The simple fact is that, insofar as it is humanly possible to do so, both the general contractor and the subcontractor will pass along any increased costs to the ultimate consumer. Since the standard adopted will affect very few commercial or industrial buildings the prime recipient of the increased costs will be the home builders. It will be they who will be “sensitive to the costs.”

I do not conceive that it was contemplated that OSHA would eliminate all accidents arising from the construction of roofs. The “so far as possible” proviso makes that clear. The only solution for an in toto eradication of such accidents would be a complete prohibition against anyone working on roofs, but I do not envisage that the veneration paid in the American dream to a roof over one’s head is to be so lightly cast aside.

At oral argument, Government counsel stated that while there are no directions anywhere in the Act for taking economic considerations in view, there are suggestions that the standards must be feasible and as a matter of fact in promulgating the standards there had been an effort to take economic considerations in view. The petitioners fail to perceive that this was accomplished in the case of the present standard and contend, correctly in my opinion, that .they were prejudiced by not having representatives of their employer group on the advisory committee.

The cost factor enters the picture in another aspect in that the Secretary argues that “section 7(b) cannot reasonably be read to require a representative from each sub-group affected by a particular standard because such an interpretation would require a new advisory committee for each separate construction safety standard.” This argument ignores the fact that on this particular standard the roofers were not a subgroup but instead were the only affected employers.

Further, the roofers can scarcely be said to be some minuscular segment of the construction syndrome. They are not the craftsmen who come to the residence under construction to deliver and install the thermostat or telephone; they play a major part in the construction. Also, they occupy a significant part in the safety picture. As the Government concedes, the Secretary established priorities for setting standards which include “a target industry program aimed at industries with injury frequency rates significantly above the all industry average.” The Secretary designated the roofing and sheet metal' industry as one of the first five such target industries, yet he put not a single representative with affiliation with the employer group on the advisory committee.

The majority opinion accepts the Government position that the petitioners cannot raise the present issue absent a showing of specific prejudice, citing United States v. Pierce Auto Freight Lines, Inc., 327 U.S. 515, 527-529, 66 S.Ct. 687, 90 L.Ed. 821 (1946).

In Pierce, two Interstate Commerce Commission proceedings were held on separate applications by the appellants and appellees for certificates of public convenience and necessity and necessity for the same route of operation. Two hearings were held, to which each of the litigants were parties. The hearings were held at substantially the same time and place, and each party was represented at each and given full opportunity to present evidence and cross-examine all witnesses. Much of the evidence was applicable to both applications. The error urged and found to be nonprejudicial and thus not a basis for reversal was the Commission’s apparent consideration of both records together in deciding each application.

It appears clear in the words of the Court that no prejudice or harm whatsoever could have resulted to either party from this “highly technical objection that the Commission in the final state of forming its judgment, could not in either case take account of what had been done in the other, notwithstanding the closely related character and objects of the applications and the prior proceedings. The contention in its farthest reach amounts to a legal version of the scriptural injunction against letting one’s right hand know what one’s left hand may be doing.” 327 U.S. at 529.

The basis of judicial review of most administrative rulings has been well stated by Judge Will in Elgin, Joliet & Eastern Ry. v. Benj. Harris & Co., 245 F.Supp. 467, 472 (N.D.Ill.1965):

“The authority of an administrative agency is delineated by the terms of the statutory grant. The responsibility for construing the statutory authority rests with the judiciary. Hence, an inquiry to determine if the agency has exceeded its statutory power is a constitutional obligation of the courts. The refusal to apply the agency ruling upon finding that the bounds laid down by Congress have been traversed is not based on eviden-tiary insufficiency or disagreement with expert judgment, but is an exercise of judicial authority to preserve the legislative scheme.” Quoted with approval in Board of Public Instruction v. Finch, 414 F.2d 1068, 1074-1075 (5th Cir. 1969).

In the present case, of course, by virtue of explicit congressional language there is a sufficiency of evidence problem as “the determinations of the Secretary shall be conclusive if supported by substantial evidence in the record considered as a whole.” 29 U.S.C. § 655(f).

In my opinion, the prejudice is implicit when that which the legislation required, i. e., employer-affiliated representatives, was given no recognition. In sum, it appears to me that the petitioners have put the matter correctly in arguing that “the promulgation of OSHA standards by the Secretary with an Advisory Committee on which the affected employers are not represented is ‘clearly disruptive of the legislative scheme’ [citing Board of Public Instruc tion, supra] to encourage and perfect occupational safety and health programs and practices and provide their employees with a safe and healthful working environment.”

Inasmuch as I consider the most serious vice in the present proceedings to be the nebulosity of the standard actually adopted in view of the drastic enforcement potential of OSHA, I will not tarry long on the matter of sufficiency of the evidence although it appears that what happened was that the advisory committee recommended a compromise figure which was utilized by the Secretary. I find a paucity of relevant evidence which a reasonable mind might accept as adequate to support a conclusion. Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938).

I do note the following specific matters on the sufficiency question. Of the falls from roofs which had been reported, a substantial number had nothing to do with the pitch of the roof, e. g., falls resulting when a workman backs off a roof while using power equipment or those resulting from falling through holes in the roof. At first blush, I would have little sympathy with the petitioners’ arguments about the dangers created by safety belts since they apparently were not too concerned about this provision if the roof height of 20 feet had been adopted. However, this lack, if the 20 foot level were adopted, does not mean that the safety belt alternative could be safely utilized, or even that it would ever be utilized since another standard, 29 C.F.R. § 1926.104 (1972), requires the line to be anchored or secured to a structural member so ás to be capable of supporting a dead weight of 5400 pounds. The significant factor on the safety belts is that I find no evidence that other than cursory attention was given to these as a practical alternative to the catch platform.

What appears to me to be the most persuasive basis for remanding and requiring a new standard to be promulgated is not what was included but what was omitted. Evidence indicated that toeboards with safety jacks or cleats were the normal and best safety devices and could be utilized at a reasonable cost. Yet, at the public hearing in July 1972, a member of the Department of Labor Office of Solicitor observed that this was “something which at least I was not aware of, and it doesn’t seem all that unreasonable.”

In promulgating his final standard the Secretary adverted to the toeboard possibility as follows:

“At the hearing a contention was made that in certain circumstances a temporary device constructed on a sloped roof could form an economical and equally safe alternative to a catch platform. To the extent that such devices can be said to constitute secure temporary parapets, they may qualify as an acceptable means of protection. Such a solution requires no amendment to the standards as they already permit parapets as an alternative to catch platforms.”

During oral argument, Government counsel observed that the temporary parapet had been included in the standard, “although they do not make it as tidy as it was before they were included. They have been included for economic considerations to provide builders who are willing to take the risk of satisfying compliance officers by building their own safety devices a chance to do so.” (Emphasis added.)

The majority opinion also adverts to this phase of the case in a frame of reference of employers using “ingenuity in

providing less costly alternatives which could qualify.” (Emphasis added.)

It appears to me that it should be beyond dispute that no standard of conduct should be so vague and uncertain as that which has now resulted where a substantial part of the economy has the Hobson’s choice of alternatives, one being one with which they say they cannot live economically and the other being of the calculated risk or chance type.

This is particularly true when we examine the present statute. Without parsing OSHA, it is fair to say that it empowers a federal government inspector to arrive unannounced, inspect a business, and summarily impose fines which can be as much as $1000 for each violation of a safety standard. The statute in application becomes frightening when it is realized that the employer who chooses to use “a temporary device constructed on a sloped roof” is in compliance or in violation dependent upon the individual inspector’s judgment as to whether the device is a parapet. Webster’s definitional “low wall or similar barrier ... to protect the edge of a roof ... or other structure” may prove challenging to the employer who is a devotee of Russian roulette but scarcely seems to equate with what the Secretary stated at the time he promulgated the standard as hereinbefore quoted.

In view of the fact that both civil and criminal penalties may be imposed under OSHA for violation of the standard, it should, to meet due process requirements, clearly warn what conduct is prohibited or required. “No one may be required at peril of life, liberty or property to speculate as to the meaning of penal statutes. All are entitled to be informed as to what the State commands or forbids.” Lanzetta v. New Jersey, 306 U.S. 451, 453, 59 S.Ct. 618, 619, 83 L.Ed. 888 (1939).

In final analysis, it appears to me that because OSHA thrusts upon the Secretary the responsibility of seeing to it that every working person is provided with safe working conditions in a country with an infinite variety of occupations exposed to possible injury hazards, the Secretary is confronted with a monumental task. Mistakes in determinations during the early period of the responsibility would not only be possible but because of the widespread range of responsibility not unlikely. This would be true despite the fact that the states for some years by legislation and regulation have prescribed rules the purpose of which was to achieve safe working conditions. In addition to direct state action, safety guidelines have been provided by the American National Standards Institute. It is not surprising, and indeed is suggested by the record here, that a natural human impulse, not totally lacking in logic, would come into play by those not possessed of particularized expertise, viz., that Congress has apparently been of the opinion that federal legislation is needed in the present area not only to achieve uniformity in controlling laws but in making working conditions safer generally than they now are, so we will therefore take the present requirements, whatever they may be, and make them more stringent. It, of course, should not have necessarily followed that in any given area the existing requirements were inadequate.

In view of the multiplicity of problems and their broad range in many differing and complex contexts, it should have been particularly necessary that the advisory committees be, by virtue of the composition expressed by Congress, prepared to bring an expertise not here possessed to bear on the differing problems.

The eases are replete with references to the deference if not reverence to be accorded to administrative expertise. However, administrative expertise should partake of something more explicable and supportable than Eleusinian mysteries. The uncertainty interjected into the enforcement process by the parapet reference necessitates in my opinion setting aside and vacating the order of the Secretary and remanding for consideration by a properly constituted advisory committee to be followed by promulgation of a new standard realizing the maximum safety of working conditions consistent with the realities of feasibility and enforceability.

      . Petitioners are an association of roofing contractors and individual roofers. The roofing and sheet metal industry was selected one of five “target industries” of the Occupational Safety and Health Act because in 1969 its record was 43 disabling work accidents per one million man hours as compared to 14.8 injuries for all manufacturing enterprises.

      . (f) any person who may be adversely affected by a standard issued under this section may at any time prior to the sixtieth day after such standard is promulgated file a petition challenging the validity of such standard with the United States court of appeals for the circuit wherein such person resides or has his principal place of business, for a judicial review of such standard. A copy of the petition shall be forthwith transmitted by the clerk of the court to the Secretary. The filing of such petition shall not, unless otherwise ordered by the court, operate as a stay of the standard. The determinations of the Secretary shall be conclusive if supported by substantial evidence in the record considered as a whole.

      . Morey, The General Duty Clause of the Occupational Safety and Health Act, 88 Harv.L.R. 988 (1973).

      . OSHA Compliance Operations Manual, Chapters VII, X (1972).

      . The original advisory committee was formulated under CWHSSA. That the Secretary could temporarily make use of it for Ms OSHA responsiMlities is clear from the Senate Report: “It is the intent of the committee that the Secretary will develop health and safety standards for construction workers covered by Public Law 9-54 [CWHSSA] pursuant to the provisions of that law and that the Secretary will utilize the same mechanisms and resources for the development of health and safety standards for other construction workers newly covered by this act [OSHA].” On August 25, 1972 the nine-member CWHSSA committee was expanded to the fifteen-member OSHA committee.

      . Madden v. International Organization, etc., 259 F.2d 297 (7th Cir. 1958); Madden v. Int. Hod Carriers, 277 F.2d 688 (7th Cir. 1960); NLRB v. United Brotherhood of Carpenters, 261 F.2d 166 (7th Cir. 1958); Pinkett v. United States, 105 F.Supp. 67 (D.Md.1952).

      . 29 C.F.R. 1926.451 (u) (3).

      . Section 655(a) : “[T]he Secretary shall, as soon as practicable during the period beginning with the effective date of this chapter and ending two years after such date, by rule promulgate as an occupational safety or health standard any national consensus standard, . . . unless he determines that the promulgation of such a standard would not result in improved safety or health for specifically designated employees. ft

      . Section 655(f), Judicial Review, provides: “The determinations of the Secretary shall be conclusive if supported by substantial evidence in the record considered as a whole.” See Chicago v. FPC, 147 U.S.App.D.C. 312, 458 F.2d 731, 744-745 (1971) ; Associated Industries v. Dept. of Labor, 487 F.2d 342 (2nd Cir. 1973).

      . Written comments were aimed at the cost of making catch platforms which would range upward of $750.00 and in some instances exceed the cost of the roofing.

      . The purpose of the 16 feet level was to include two-story buildings and exclude single-story buildings. 37 Fed.Register 27599, Dec. 16, 1972.

      . Including New York, Connecticut, Rhode Island and New Jersey.

      . Comment, The Occupational Safety and Health Act, 34 La.L.R. 102 (1973).

      . In early 1970, “[p]rivate industry and state regulation were not doing an adequate job of insuring health and safety in the workplace.” Gross, Occupational Safety and Health Act: Much Ado about Something, 3 Loyola Univ.L.J., 247, 249 (1972).

      . 29 U.S.C. § 666.

      . 29 C.F.R. 1910.28 (s) (3).

      . 29 C.F.R.. 1910.12(b).

      . The petitioners point out that the written comments received by the Secretary of Labor suggested that the cost on a residential roofing job would be increased by anywhere from 25% to 100% or more if catch platforms are required. These letters further suggested that since most “legitimate” roofing companies would bid on this basis, homeowners would probably reject their bids and contract with “jack leg” roofers who could do the job for less because they would ignore the catch platform requirement. To this extent, of course, the roofing subcontractors are subject to a different economic impact than that of the general contractors.

      . In its brief filed in this appeal, the Government argued at length that the plain words of the statute did not mean what they purported to say, in view of the informal rule-making procedures involved and the legislative history. The Secretary’s position in this respect was undercut by post-brief decisions, Associated Industries of New York State, Inc. v. United States Department of Labor, 487 F.2d 342 (2d Cir. 1973); Dry Color Mfrs. Ass’n, Inc. v. Department of Labor, 486 F.2d 98 (3d Cir. 1973); and Florida Peach Growers Ass’n, Inc. v. United States Department of Labor, 489 F.2d 120 (5th Cir. 1974).
      The Secretary also presented the argument, the logic of which escapes me, that even if his “determinations” had to be supported by substantial evidence this did not mean that his “Rule” had to be so supported.

      . The expertise of the advisory committee hopefully was not exemplified by the statement on the slope matter by one of the committee members: “a friend of mine said, who has done a good deal of this, he said, 4 is really not bad but he said 5, particularly if it is a little damp, he said, T would not want to be working up there without some kind of protection.’ ”