author: LUMBARD, Circuit Judge:

text:
    Frank SAVARESE, Plaintiff-Appellee, v. EDRICK TRANSFER & STORAGE, INC., a Wisconsin Corporation, Defendant-Appellant.
    No. 73-2160.
    United States Court of Appeals, Ninth Circuit.
    March 10, 1975.

      Duane W. Bolze (argued), Phoenix, Ariz., for defendant-appellant.
    John G. Thomas (argued), Scottsdale, Ariz., for plaintiff-appellee.
   OPINION

Before LUMBARD, KOELSCH and WRIGHT, Circuit Judges.

LUMBARD, Circuit Judge:

Defendant Edrick Transfer & Storage, Inc. [Edrick], appeals from the entry of a default judgment against it in the District Court of Arizona.

Plaintiff Frank Savarese filed his complaint in this action on April 6, 1972, in the Superior Court of Maricopa County, Arizona. He alleged that Edrick owed him $6,501.83 in unpaid wages and commissions and $5,400.00 that it had received from him for payment of a truck which it had later repossessed. Savarese also alleged that he had in his possession some $2,578.41 which belonged to defendant and which he asked the court to permit him to apply to his claim of $11,-901.83. Edrick removed the case to the district court on May 31, 1972. It thereafter took no action and a default was entered on January 22, 1973. The district court denied Edrick’s motion under Fed.R.Civ.P. 55(c) to set aside the entry of default and entered a default judgment on March 29, 1973, which awarded Savarese the relief sought in his complaint. The district court later denied a motion under Fed.R.Civ.P. 60(b) to vacate its judgment and Edrick appealed.

On appeal Edrick argues that the default judgment should be set aside for five reasons: first, it claims that the district court lacked subject-matter jurisdiction because .less than $10,000 was in controversy; second, that its time to answer had not expired before entry of default; third, that no personal jurisdiction existed because the summons and complaint were not properly served; fourth, that it was not subject to the long-arm jurisdiction of Arizona courts because it was not “doing business” in the state of Arizona; and fifth, that the district court erred in not granting its motion to set aside the entry of default and its motion to vacate the default judgment.

I.

Edrick claims that the complaint does not satisfy the $10,000 jurisdictional amount requirement of 28 U.S.C. §§ 1332, 1441. We disagree. As found by the district court, the amount in controversy here is $11,901.83. That is the amount requested by Savarese and that is the amount that the district court awarded to him. The $2,578.41 which the complaint stated Savarese possessed and owed to Edrick should not be subtracted from the $11,901.83 in order to calculate the jurisdictional amount. If the court had awarded Savarese $9,323.42, he would not have received what he was claiming because he then would have no legal right to continue to retain Edrick’s $2,578.41. Edrick could pay Savarese $9,323.42 and then sue him for its $2,578.41 and it would undoubtedly win. Thus the amount in controversy was $11,901.83.

II.

Edrick’s second argument is that the default judgment was improperly entered because its time to file an answer had not expired. Since Edrick is located out of Arizona, Savarese obtained service of the summons and complaint by mailing it to Edrick in May 1972. However, Savarese’s attorney failed to file an affidavit of service in the district court until December 19, 1972. Under Arizona rules of procedure service is not complete until 30 days after such an affidavit is filed. Ariz.R.Civ.P. 4(e)(2)(a), 16 A.R.S. Thus, under Arizona rules service was not complete until January 18, 1973. Arizona rules would then give Edrick 30 days in which to file an answer. Ariz.R.Civ.P. 4(e)(4). Default was entered on January 22, 1973, only four days after service was complete under the Arizona rules. Edrick argues that default was improperly entered since its time to answer had not expired.

In advancing this argument on appeal Edrick ignored rule 81(c) of the Federal Rules of Civil Procedure even though it had been cited by the district court. That rule provides in part:

In a removed action in which the defendant has not answered, he shall answer or present the other defenses or objections available to him under these rules within 20 days after the receipt through service or otherwise of a copy of the initial pleading setting forth the claim for relief upon which the action or proceeding is based, or within 20 days after the service of summons upon such initial pleading, then filed, or within 5 days after the filing of the petition for removal, whichever is longest.

There is no question that Edrick failed to file an answer within 5 days of filing its removal petition or within 20 days after receipt of the initial pleading by “service or otherwise.”

However, in its reply brief filed in this court Edrick focuses on the second clause of rule 81(c) and claims that service of the summons was not complete until January 18, 1973, because of the Arizona rule cited previously. We disagree. The second clause of rule 81(c) was intended to cover cases arising in states which require only service of a summons and not a complaint:

The phrase, “or within 20 days after the service of summons upon such initial pleading, then filed,” was inserted . because in several states suit is commenced by service of summons upon the defendant, notifying him that the plaintiff’s pleading has been filed with the clerk of the court. Thus, he may never receive a copy of the initial pleading.

Supreme Court’s Explanatory Note in 7 Moore’s ■ Federal Practice II 81.01[19] at 81 — 33 n*. Thus, the second clause of the rule was viewed as more restrictive than the first because a defendant would have to file an answer within 20 days of service of a summons even though the complaint to which the answer would have to be directed was not served.

We think it is clear that the intent of the rule makers was to ensure the speedy filing of answers in removed actions. See generally 7 Moore’s Federal Practice HU 81.01[12]—[20]; cf. Mahoney v. Witt Ice & Gas Co., 131 F.Supp. 564, 568 (W.D.Mo.1955). The interpretation of rule 81(c) urged by Edrick would defeat the purpose of speedily processing removed cases. Thus, we conclude that the second clause of rule 81(c) applies only to cases arising in states which do not require service of both a summons and complaint. Since Arizona does require service of both, Ariz.R.Civ.P. 4(d), this clause is not available to Edrick. Edrick should have filed its answer by June 5, five days after it petitioned for removal.

Even if we did not adopt the foregoing interpretation of rule 81(c)’s second clause, we would conclude that Edrick was in default. The removal statute provides that if service has not been completed prior to removal, it may be completed under the federal rules. 28 U.S.C. § 1448. See also Fed.R.Civ.P. 81(c). There is no federal rule that specifies the time at which service becomes complete. However, service was unquestionably complete when the affidavit of service was filed in federal court on December 19, 1972. See Fed.R.Civ.P. 4(g). In such a case rule 81(c) would require Edrick to answer by January 11, 1973, or 11 days prior to entry of default. Thus we conclude that Edrick’s time to answer had expired prior to default.

III.

Edrick’s third argument is that the state court lacked personal jurisdiction over it (and therefore no derivative federal jurisdiction exists) because the service of the summons and complaint failed to comply with the Arizona Rules of Civil Procedure which provide:

Service shall be made as follows:
6. Upon a domestic or foreign corporation ,or upon a partnership or other unincorporated association which is subject to suit under a common name, by delivering a copy of the summons and of the complaint to [a partner,] an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process and, if the agent is one authorized by statute to receive service and the statute so requires, by also mailing a copy to the defendant.

Ariz.R.Civ.P. 4(d)(6). Edrick claims that service was inadequate because the registered mail receipt indicates that the summons and complaint was received by James L. Plale, who did not hold any of the positions listed in the rule. We find this argument unpersuasive.

Under Arizona law the requirements of rule 4(d)(6) are met if process is served on a person in a position such that it is “reasonably certain” that the corporation will receive actual notice of the suit. Schering Corp. v. Cotlow, 94 Ariz. 365, 385 P.2d 234, 237 (1963) (en banc). Here the corporation received actual notice; it promptly removed the case to the federal court. In fact, the vice president of Edrick in his petition for removal stated that “a copy of the Summons and Complaint was served on petitioner ... on May 4, 1972.” Record at l.

The only issue is whether Plale held such a position that one could assume with reasonable certainty that he would notify the proper officials of Edrick. Plale was Edrick’s dispatcher. Since this job largely entails receiving and sending communications, we think that it was reasonably certain that Plale would forward any legal papers to the proper official of Edrick. The fact that he did so promptly lends support to our conclusion.

This result is supported by decisions of the Arizona courts. They indicate that a person is an agent of a corporation so long as he is a responsible employee of the corporation. See Schering Corp. v. Cotlow, supra (sales representative); Arizona Mutual Auto Ins. Co. v. Bisbee Auto Co., 22 Ariz. 376, 197 P. 980 (1921) (insurance salesman); Safeway Stores, Inc. v. Ramirez, 1 Ariz.App. 117, 400 P.2d 125 (1965) (store manager). See also Koninklijke Luchtvaart Maatschap-pij N.V. v. Curtiss Wright Corp., 17 F.R.D. 49 (S.D.N.Y.1955) (federal rule-service on corporate officer’s secretary). We find it no less likely that a dispatcher at corporation headquarters would forward legal papers to the proper person than that a salesman in the field would do so. Cotlow seems to stress the need for actual notice and that was present here.

Even if we did not conclude that service was adequate under Arizona law, reversal would not be appropriate. Once this action was removed to the federal courts, the Federal Rules of Civil Procedure applied. Fed.R.Civ.P. 81(c). Under these rules “a defense ... or insufficiency of service of process is waived (A) if omitted from a motion in the circumstances described in subdivision (g), or (B) if it is neither made by motion under this rule nor included in a responsive pleading or an amendment thereof permitted by Rule 15(a) to be made as a matter of course.” Fed.R. Civ.P. 12(h)(1).

Under rule 12(h)(1), Edrick could be held to have waived a defense of insufficiency of service of process when it failed to raise it in its answer or by a rule 12 motion. See Clover Leaf Freight Lines, Inc. v. Pacific Coast Wholesalers Assn., 166 F.2d 626, 632 (7th Cir. 1948), cert. denied, 335 U.S. 823, 69 S.Ct. 46, 93 L.Ed. 377 (1948); Geo-physical Maps, Inc. v. Toycraft Corp., 162 F.Supp. 141, 148 (S.D.N.Y.1958); 5 C. Wright & A. Miller, Federal Procedure & Practice § 1391, at 855, 857-58 (1969).

IV.

Edrick also argues that personal jurisdiction did not exist because it was not “doing business” in the state of Arizona and is therefore not subject to service under Arizona’s long-arm rule. See Ariz.R.Civ.P. 4(e)(2). We feel that the district court’s rejection of this argument was appropriate under the circumstances of this case.

The waiver provisions of rule 12(h)(1) of the Federal Rules of Civil Procedure, which were discussed above, apply to a defense based on a lack of personal jurisdiction. Imposing such a waiver is particularly appropriate here because it does not appear that Edrick even raised this argument in its rule 55(c) motion. It clearly is not argued in the memorandum submitted with that motion and it is not mentioned in the district court’s opinion. Likewise, no mention of the argument is made in the subsequent rule 60(b) motion or in Edrick’s accompanying memorandum or in its brief filed in this court.

Even if we did not hold that Edrick waived the personal jurisdiction argument under rule 12(h)(1), we would uphold the district court’s decision not to vacate its judgment on a rule 60(b) motion. If Edrick wished seriously to advance this argument at such a late stage in the proceedings, it should have presented and discussed evidence which would support its claim that it was not doing business in Arizona. As the record stood before the district court it included Edrick’s proposed answer to Savarese’s complaint in which Edrick admitted it was doing business in Arizona and an affidavit by an officer of Edrick that its equipment was used to move goods from Wisconsin to Arizona. Since the standard of “doing business” is not difficult to meet it appears that on the facts before it the district court was justified in finding that it had jurisdiction.

V.

Finally, Edrick argues that the district court erred in refusing to set aside Edrick’s default under rule 55(c) and in refusing to vacate the judgment entered on that default under rule 60(b). At the outset it should be noted that the granting or denial of such motions is left largely to the discretion of the district court. Martella v. Marine Cooks & Stewards Union, 448 F.2d 729 (9th Cir. 1971) (rule 60(b)), cert. denied, 405 U.S. 974, 92 S.Ct. 1191, 31 L.Ed.2d 248 (1974); Madsen v. Bumb, 419 F.2d 4 (9th Cir. 1969) (rule 55(c)); 10, 11 C. Wright & A. Miller, Federal Practice & Procedure §§ 2693, 2857 (1973).

Edrick argues that we should rule that the district court abused its discretion in denying its motions. It urges that it established that the failure to file an answer was due to mistake, inadvertence, or excusable neglect. See Fed.R.Civ.P. 60(b)(1). It claims that confusion between its Arizona counsel (Bolze) and its Wisconsin counsel (Fries-ler) resulted in its failure to file an answer. The record shows that Friesler claimed that he assumed that Bolze would file the answer Friesler had forwarded to him when Bolze “determined the time was proper.” Record at 42. Bolze claimed that he thought that he was to file the answer only on further instructions from Friesler. Record at 40.

If only the above facts were reflected we might be tempted to rule that the district judge acted too harshly in this case, but the record suggests that the real reason that no answer was filed was because of a lack of understanding of the removal process on the part of Edriek’s attorneys. In attorney Bolze’s memorandum in support of the rule 55(c) motion he argued that the removal statute, 28 U.S.C. §§ 1441-1451, is “silent with respect to any specific requirement concerning the necessity for defendant to proceed to answer or otherwise plead after removal.” Record at 31.

As the prior discussion demonstrates, rule 81(c) deals in detail with a defendant’s duty to answer after removal. We feel, as did the district judge, that parties who remove cases to the federal courts should become acquainted with and comply with the Federal Rules of Civil Procedure. We see no reason for the federal courts to excuse such professional neglect in a case which barely met the jurisdictional amount requirements. Defendants in state court actions should not remove them to a federal court if they lack a basic understanding of federal rules and procedure. We conclude that the district court did not abuse its discretion in denying Edrick’s motions.

Affirmed.

       United States Court of Appeals for the Second Circuit, sitting by designation.

      . When Edrick removed the case to the district court, it claimed that more than $10,000 was at stake. Record at 1. However, a challenge to the district court’s subject matter jurisdiction is not waivable; whenever it is made, the district court must consider it. Fed.R.Civ.P. 12(h)(3).

      . The district court granted “Judgment for plaintiff Frank Savarese and against defendant Edrick Transfer and Storage Company for the total sum of $11,901.83, and allowing the sum of $2,578.41, held in trust by plaintiff, as an offset towards said judgment." Record at 55 (emphasis added).

      . Edrick’s reliance on Kansas City Philharmonic Assn. v. Greyhound Lines, Inc., 257 F.Supp. 941 (W.D.Mo.1966), is misplaced. In that case the district court remanded a case removed by defendant on the ground that plaintiff had demanded a judgment of only $9,951.77. In the complaint plaintiff had alleged injury from defendant’s breach of contract in an amount of $12,731.27, but at the same time admitted owing defendant $2,784.50 on the contract. However, instead of asking for judgment of $12,731.27 against which the $2,784.50 would then be offset, plaintiff sought a judgment of $9,951.77. This was probably inadvertent because defendant could have paid plaintiff the $9,951.77 and still have demanded payment of the $2,784.50. But the district court found that plaintiff was the master of his own complaint. Since less than $10,000 had been sought the court concluded that it had no jurisdiction. See generally C. Wright, Federal Courts 116-17 & n. 52, 134 (2d ed. 1970).

      . This interpretation is made even clearer by comparing the language of rule 81(c) with that of 28 U.S.C. 1446(b) which establishes the time period in which a defendant must petition for removal. Section 1446(b) provides in part that' a petition for removal shall be filed within 30 days
      after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading ... or within 30 days of the service of summons upon defendant if such initial pleading has then been filed in court and is not required to be served on defendant

      . Since Edrick received the summons and complaint on May 4, 1972, the other clauses of rule 81(c) would have required an answer by May 27, 1972. (The extra three days are provided by rule 6(e).)

      . Any attempt by Edrick to argue that the Arizona rules are not overridden by the federal rules is precluded by Granny Goose Foods, Inc. v. Teamsters Local 70, 415 U.S. 423, 94 S.Ct. 1113, 39 L.Ed.2d 435 (1974).

      . Rule 4(g) provides that “[fjailure to make proof of service does not affect the validity of the service.” This suggests that under the federal rules “service” occurs when the papers are actually served on a person, not when proof of service is filed.

      . “The jurisdiction of the federal court on removal is .a derivative jurisdiction. If the state court lacks jurisdiction of the subject-matter or of the parties, the federal court acquires none . . . ”
      Lambert Run Coal Co. v. Baltimore & Ohio RR Co., 258 U.S. 377, 382, 42 S.Ct. 349, 351, 66 L.Ed. 671 (1922). See generally 1A Moore’s Federal Practice j] 0.157[3]; C. Wright, Federal Courts 132 (2d ed. 1970).

      . The Arizona rule is identical to federal rule except that the bracketed language is not in the federal rule. See Fed.R.Civ.P. 4(d)(3).

      . The district court relied on the fact of removal and Edrick’s actual notice of the suit as grounds for rejection of this argument in its opinion on the rule 55(c) motion. Record at 52 — 53.

      . We have previously held that Edrick’s time in which to file an answer had expired. See part II.

      . The district court cited rule 12(h) when it rejected Edrick’s insufficiency of service argument in its opinion on the rule 60(b) motion. Record at 77-79.

      . This argument is also based on the derivative nature of removal jurisdiction. If the Arizona court where the suit was initially filed did not have jurisdiction, then the district court would not have jurisdiction on removal. See note 8 supra.

      . The district court’s opinion on the rule 60(b) motion briefly rejected the lack of personal jurisdiction argument and noted that it had not been “significantly argued.” In fact, the argument was not explicitly made in papers filed with a court until Edrick filed its reply brief in this court.

      . Normally the burden of proving that a defendant is doing business in Arizona is on the plaintiff once the defendant has raised it. Ly-coming Div. of Avco Corp. v. Superior Ct., 22 Ariz.App. 150, 524 P.2d 1323 (1974); Deere & Co. v. Superior Ct., 18 Ariz.App. 491, 503 P.2d 967 (1972). Here, however, plaintiff should not have to carry that burden since Edrick failed to assert the argument in explicit terms.

      . Edrick alleged in its proposed answer that it was not licensed to do business in Arizona. It is clear, however, that a corporation need not be licensed to do business in the state in order to be found to be “doing business” in the state for the purposes of rule 4(e)(2). The application of the licensing statutes requires a closer nexus with Arizona than is required by the long-arm rule. Rochester Capital Leasing Co. v. Sprague, 13 Ariz.App. 77, 474 P.2d 201 (1970).

      . The drafters of Arizona rule 4(e)(2) intended it to grant the maximum possible jurisdiction over foreign corporations to Arizona courts. Powder Horn Nursery, Inc. v. Soil & Plant Laboratory, Inc., 20 Ariz.App. 517, 514 P.2d 270 (1973). The “doing business” requirement is satisfied if a foreign corporation engages in a systematic and continuous course of business within the state. Lycom-ing Div. of Avco Corp. v. Superior Ct., 22 Ariz.App. 150, 524 P.2d 1323 (1974). “Absolute continuity, of course, is not required, but the business done must be continuous in the sense that it is distinguishable from a casual isolated transaction, which alone does not constitute doing business in the state.” Wells Fargo & Co. of Mexico, S. A. v. McArthur Bros. Mercantile Co., 42 Ariz. 405, 26 P.2d 1021, 1027 (1933) (emphasis added).

      . Edrick has never suggested that the due process notions of fair play or substantial justice would be violated by subjecting it to the jurisdiction of Arizona courts. Moreover, since it is a corporation and Savarese an individual, such considerations would probably support a finding that jurisdiction exists. See Phillips v. Anchor Hocking Glass Corp., 100 Ariz. 251, 413 P.2d 732 (1966) (en banc).

      . The existence of inexcusable neglect in this case makes it unlike Schwab v. Bullock’s, Inc., 508 F.2d 353 (9th Cir. 1974), where this court reversed a district court’s denial of a rule 60(b) motion. In that case, we held that the negligence there was not excusable. 508 F.2d at 356. Here we think that the negligence was not excusable under rule 60(b)(1).


source: Caselaw Access Project

author: HEANEY, Circuit Judge.

license: Public Domain

text:
    Patricia REILLY, Appellant, v. UNITED STATES of America, Appellee.
    No. 74-1804.
    United States Court of Appeals, Eighth Circuit.
    Submitted Feb. 14, 1975.
    Decided March 31, 1975.

      Bennett G. Hornstein and Bruce G. Mason, Omaha, Neb., for appellant.
    William K. Schaphorst, U. S. Atty., and Michael L. Schleich, Asst. U. S. Atty., Omaha, Neb., for appellee.
    Before HEANEY and WEBSTER, Circuit Judges, and NANGLE, District Judge.

       JOHN F. NANGLE, District Judge, Eastern District of Missouri, sitting by designation.

   HEANEY, Circuit Judge.

Patricia Reilly brought this medical malpractice action in the United States District Court for the District of Nebraska under the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b) and 2674, alleging negligent treatment by the physicians, nurses, and other agents of the Ehrling Bergquist United States Air Force Hospital. The trial was to the court. On motion of the appellant, the sole issue litigated was whether the applicable statute of limitations, 28 U.S.C. § 2401(b), barred the appellant’s cause of action. The court ruled that the statute of limitations had run and dismissed the cause of action with prejudice. We affirm.

28 U.S.C. § 2401(b) states, in relevant part:

A tort claim against the United States shall be forever barred unless it is presented in writing to the appropriate Federal agency within two years after such claim accrues * * *.

When the claim “accrues” is a matter of federal law. Portis v. United States, 483 F.2d 670, 672 n.4 (4th Cir. 1973); Tyminski v. United States, 481 F.2d 257, 262 (3rd Cir. 1973); Kington v. United States, 396 F.2d 9, 11 (6th Cir.), cert. denied, 393 U.S. 960, 89 S.Ct. 396, 21 L.Ed.2d 373 (1968); Kossick v. United States, 330 F.2d 933, 935 (2nd Cir.), cert. denied, 379 U.S. 837, 85 S.Ct. 73, 13 L.Ed.2d 44 (1964); Hungerford v. United States, 307 F.2d 99, 101 (9th Cir. 1962); Quinton v. United States, 304 F.2d 234, 235 (5th Cir. 1962); Davis v. Foreman, 239 F.2d 579 (7th Cir. 1956), cert. denied, 353 U.S. 930, 77 S.Ct. 719, 1 L.Ed.2d 724 (1957). But see Tessier v. United States, 269 F.2d 305 (1st Cir. 1959). In medical malpractice actions, the claim “accrues” when the claimant discovers, or in the exercise of reasonable diligence should have discovered, the acts constituting the alleged malpractice upon which the cause of action is based. Portis v. United States, supra, 483 F.2d at 672 n.5; Tyminski v. United States, supra, 481 F.2d at 263; Toal v. United States, 438 F.2d 222, 225 (2nd Cir. 1971); Hungerford v. United States, supra, 307 F.2d at 102; Quinton v. United States, supra, 304 F.2d at 235. Here, the alleged malpractice occurred on or about November 18, 1968, and the appellant’s claim was presented to the appropriate federal agency on December 29, 1971. In applying the federal law to the facts, the court found that the appellant should have discovered her cause of action in August, 1969, more than two years prior to the filing of the administrative claim.

Appellant Reilly is a dependent of an Air Force Lieutenant Colonel who, at the time of the alleged malpractice, was living in Offutt, Nebraska. She was a twenty-one year old college student and had suffered from asthma for approximately five years. On November 18, 1968, she experienced a severe asthma attack and was admitted, in the early hours of the evening, to the intensive care unit of Ehrling Bergquist United States Air Force Hospital. Captain Peter Soteres, M.D., was the treating physician. Dr. Soteres characterized the appellant’s condition as “near death” and prescribed that she be placed on a mechanical respirator. The respirator treatment required nasal endotracheal intubation and several attempts were necessary before the appellant was successfully intubated. Reilly breathed by means of the mechanical respirator for eighty continuous hours.

• The appellant had previously experienced severe asthma attacks and protested to Dr. Soteres against the use of the mechanical respirator. She characterized her attack as no more severe than previous attacks and was certain that the normal, less drastic, treatment would be successful. Nevertheless, the appellant acquiesced to the doctor’s prescription despite her reservations. Dr. Soteres did not inform her of the risks involved in the use of the mechanical respirator.

Reilly was discharged from the hospital on November 29, 1968. She complained to Dr. Soteres that her throat was sore and hoarse, and he assured her that the condition was a normal aftereffect of the endotracheal intubation that would quickly heal. The condition did not, however, heal, and it is this use or operation of the mechanical respirator that the appellant alleges constitutes medical malpractice.

The operation of the endotracheal tube or cuff of the mechanical respirator caused an unusual amount of scar tissue to form about the appellant’s trachea: a condition known as tracheal stenosis. This tracheal stenosis put Reilly in acute respiratory distress, for the trachea was extensively constricted. She was readmitted to the hospital on January 14, 1969, and a low tracheotomy was performed to allow unrestricted breathing. The appellant was then transferred by air evacuation to Wilford Hall United States Air Force Hospital at Lackland Air Force Base, Texas. There, she underwent tracheal dilation treatment until April, 1969, when she returned to her home in Nebraska. The tracheal dilation treatment did not cure the tracheal sten-osis. Reilly was unable to speak from April to August, 1969.

The trial court found that the appellant knew of the causal relationship between the tracheal stenosis and the November 18, 1968, treatment in January, 1969. She was then informed by Dr. Soteres and Dr. Yonkers, an ear, nose and throat specialist, that the tracheal stenosis was a rare aftereffect of the previous endotracheal intubation of the mechanical respirator.

Once the appellant knew of the allegedly negligent acts that caused her injury, she was under a duty to exercise reasonable diligence in bringing suit. See Portis v. United States, supra, 483 F.2d at 672; Toal v. United States, supra, 438 F.2d at 225; Quinton v. United States, supra, 304 F.2d at 241. The concept of reasonable diligence does not, however, ignore the appellant’s reliance on the statements of her doctors that the tracheal stenosis was, a normal occurrence of the treatment she had received or her faith in their efforts to cure it. See Kossick v. United States, supra, 330 F.2d at 936. But when the facts became so grave as to alert a reasonable person that there may have been negligence related to the treatment received, the statute of limitations began to run against the appellant’s cause of action. Ashley v. United States, 413 F.2d 490, 492 (9th Cir. 1969); Brown v. United States, 353 F.2d 578, 580 (9th Cir. 1965). See Jones v. Rogers Memorial Hospital, 143 U.S.App.D.C. 51, 442 F.2d 773, 775 (1971).

Paramount significance was placed by the trial court on the fact that after three months of treatment, the tracheal stenosis was not cured and, as a result, the appellant was unable to speak from April to August, 1969. The court viewed this extreme and unexpected consequence as sufficient to put the appellant on notice that she may have been legally wronged. The court so concluded despite the fact that Reilly was assured by her doctors that the tracheal stenosis was a normal, albeit rare, consequence of endotracheal intubation. It found that the appellant was not only aware of the causal relationship between her affliction and the previous treatment, but that she questioned the success of the treatment from an early date. The court was not clearly erroneous in finding that the appellant should have been aware of her cause of action by August, 1969, despite the representations of her doctors.

Reilly finally places reliance on the continuous treatment rule and argues that the statute of limitations had not run as a matter of law. The fact that the appellant continued to receive treatment for her condition well into the two-year period prior to the filing of her administrative claim does not change the result here. The reliance on the continuous treatment rule is misplaced, for the rule does not apply'when the claimant is aware of the acts constituting negligence. The rule

* * * [I]s premised on the notion that a person should not be required to investigate the cause of his injuries or to bring suit while receiving necessary treatment for the injuries. The interest in preventing stale claims convinces us that this rationale for the rule has no merit when a person knows of the acts constituting negligence. In this situation little, if any, investigation is necessary to determine whether a meritorious cause of action exists. * $ $

Tyminski v. United States, supra, 481 F.2d at 265 n.5.

There being no error of fact or law, the decision of the District Court is affirmed.

      . This finding of the trial court is aptly supported by the record. The following was brought out during the cross-examination of the appellant:
      Q. So you knew in January of 1969 that your throat was blocked off because the tube was placed down there?
      A. I would have to say yes to that.

      . It is axiomatic that our review of the trial court’s factual findings is circumscribed by the clearly erroneous rule, and that the burden is upon the appellant to demonstrate error. United States v. United States Gypsum Company, 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948); Snodgrass v. Nelson, 503 F.2d 94, 95-96 (8th Cir. 1974) (per curiam); Federal Rules of Civil Procedure 52(a).

      . The appellant’s physician-patient relationship with Dr. Soteres terminated in January, 1969. Accordingly, we express no opinion on the issue whether continuous treatment by the original treating physician tolls the running of 28 U.S.C. § 2401(b). See Ciccarone v. United States, 486 F.2d 253, 257 (3rd Cir. 1973); Brown v. United States, 353 F.2d 578, 580 (9th Cir. 1965).


text:
    NUCOR CORPORATION, Appellant, v. TENNESSEE FORGING STEEL SERVICE, INC., et al., Appellees.
    No. 74-1718.
    United States Court of Appeals, Eighth Circuit.
    Submitted Jan. 9, 1975.
    Decided April 2, 1975.
    Ernest S. DeLaney, Jr., Charlotte, N. C., for appellant.
    William Sutton, Little Rock, Ark., for appellees.
    Before GIBSON, Chief Judge, and HEANEY and ROSS, Circuit Judges.
   HEANEY, Circuit Judge.

This matter is before us for a second time. When it was first here, Nucor challenged the refusal of the District Court to enjoin the defendants from using architectural plans owned by Nucor. On the basis of the record, as then developed, we held that Nucor’s architectural plans for its Grapeland plant were protected by common law copyright, and that the plans drawn for the defendant Tennessee Forging, by a Gene Klettner King, infringed upon that copyright. We also held that William R. White, a former employee of Nucor, had breached an implied duty not to disclose confidential information to a competitor. In addition, we found that the defendant Charles N. Munn, the President of Tennessee Forging, may have been a knowing and active participant in the scheme to obtain the Grapeland plans; accordingly, we refused to sustain the District Court’s dismissal of the action with respect to him.

In remanding the cause as to each defendant to the District Court, we said:

* * * [I]t is clear that Nucor has been wronged and that the defendants, White and Tennessee Forging, have benefited from this wrong, it is appropriate that Nucor be afforded the following relief:
(1) That the defndants be permanently enjoined from making further use of Nucor’s Grapeland plans, and that they be required to return the Grapeland plans to Nucor.
(2) That Nucor be permitted to amend its complaint to claim damages from the defendants for the fair value of the Grapeland plans, and that it be permitted to prove its damage in an appropriate proceeding.

Nucor Corp. v. Tennessee Forging Services, Inc., 476 F.2d 386, 393 (8th Cir. 1973).

On remand, Nucor amended its complaint to seek relief of $9,284,770 in actual damages and $1,000,000 in punitive damages. It did so on the theory that it was entitled to, not only the fair value of the Grapeland plans, but also the investment value of those plans. Nucor argued that the use of the plans by Tennessee Forging enabled the latter to realize capitalized savings in manufacturing costs of $1,065,000. In response to this new theory of recovery, the defendants introduced evidence that neither the Grapeland plans nor the infringing King plans had been used to complete the construction of the . Hope plant. Their evidence was that a third set of architectural plans, prepared by a Roy Weaver, had been used for this purpose. On the basis of this testimony, the defendants argued that they were not benefited by their infringement of the Grapeland plans, and, therefore, Nucor was entitled to no damages. The defendants requested and received an instruction to the jury requiring it to award only those damages proximately resulting from their use of the Grapeland plans. On the basis of this instruction, the jury returned a verdict of no damages. Nucor assigns the admission of this testimony of nonuse of the Grapeland plans and the proximate cause instruction as error. It argues that the issue of use of the Grapeland plans was finally determined by our mandate in the first appeal and could not be relitigated on remand.

Our decision on the first appeal finally determined that each of the defendants had used the Grapeland plans, and that the defendants White and Tennessee Forging, and potentially the defendant Munn, were liable to Nucor for the fair value of those plans. As to these issues, the District Court was bound by the doctrine of the law of the case.

When a case has been decided by this court on appeal and remanded to the District Court, every question which was before this court and disposed of by its decree is finally settled and determined. The District Court is bound by the decree and must carry it into execution according to the mandate. It cannot alter it, examine it except for purposes of execution, or give any further or other relief or review it for apparent error with respect to any question decided on appeal * * *

Thornton v. Carter, 109 F.2d 316, 319—320 (8th Cir. 1940).

See Richardson v. Communications Workers of Amer., AFL-CIO, 486 F.2d 801, 804 (8th Cir. 1973); Cherokee Nation v. State of Oklahoma, 461 F.2d 674, 677-678 (10th Cir.), cert. denied, 409 U.S. 1039, 93 S.Ct. 521, 34 L.Ed.2d 489 (1972); Banco Nacional de Cuba v. Farr, 383 F.2d 166, 177 (2nd Cir. 1967), cert. denied, 390 U.S. 956, 88 S.Ct. 1038, 20 L.Ed.2d 1151 (1968); Pauli v. Archer-Daniels-Midland Company, 313 F.2d 612, 618 (8th Cir. 1963); 6A Moore’s Federal Practice, 159.16 (1974). It, therefore, was the duty of the District Court, with respect to these issues, to instruct the jury that: (1) the defendants White and Tennessee Forging were liable to Nucor for the fair value of the Grapeland plans, and (2) the defendant Munn was liable to Nucor for the fair value of the Grapeland plans if he was a knowing and active participant in the scheme to obtain those plans. The failure to so instruct the jury was error.

The issue of whether Nucor was entitled to recover damages in addition to the fair value of the Grapeland plans was not submitted to us on the first appeal, and, as to it, the doctrine of the law of the case is inapplicable. See Strimling v. Stone, 194 F.2d 920, 921 (8th Cir. 1952); Hansen & Rowland v. C. F. Lytle Co., 167 F.2d 998, 999 (9th Cir. 1948); Western Fire Ins. Co. v. University City, 124 F.2d 698, 700 (8th Cir. 1942); Jones v. St. Paul Fire and Marine Ins. Co., 108 F.2d 123, 125 (5th Cir. 1939); 3 Moore’s Federal Practice 1115.11 (1974). Nucor was, therefore, free to amend its complaint to seek additional relief for damages occurring subsequent to our prior decision, see Texarkana v. Arkansas Louisiana Gas Co., 306 U.S. 188, 203, 59 S.Ct. 448, 83 L.Ed. 598 (1939), and the defendants could respond thereto. The issue of whether the use of the Grape-land plans proximately resulted in lower manufacturing costs to the defendants was properly put to the jury on the second trial. Its determination that the defendants were not so benefited by their use of the Grapeland plans is binding on the parties.

Because the proceedings on remand were not in conformity with our prior decision, we must again remand the cause to the District Court. On remand, Nucor shall be allowed to prove the fair value of the Grapeland plans and the liability of the defendant Munn.

The judgment of the District Court is affirmed in part, reversed in part, and remanded to the District Court for further proceedings consistent with this opinion.

Costs will be taxed to the appellees.

      . Because the construction of the Hope plant was completed before our decision, we were unable to give injunctive relief. Believing that Nucor was entitled to damages, we remanded for that purpose.

      . The first trial was completed on March 2, 1972. At that time, Tennessee Forging had started the construction of the Hope plant, using the infringing King plans. The footings for the plant had been laid, the bids to contractors had been let, and Roy Weaver had been employed to draw the steel detailing for the plant. Weaver had completed 95% of this steel detailing when, he testified, he was contacted by William White, approximately two weeks after the first trial, and told to redesign and redetail the Hope plant without the aid of the King plans. Weaver stated that he complied with White’s request, completing the “new” plans within two to three weeks. This third set of architectural plans was drawn while the first trial was on appeal, and when the defendants were vigorously arguing their right to copy the Grapeland plans. The Hope plant was completed and in production by June, 1972.

      . “Fair value” is the market value of the architectural plans. See Ashworth v. Glover, 20 Utah 2d 85, 433 P.2d 315, 320 (1967); Taft v. Smith, Gray & Co., 76 Misc. 283, 134 N.Y.S. 1011 (1912). Nucor is not entitled to that portion of the market value normally allocable to architectural supervision during construction. See Edgar H. Wood Associates, Inc. v. Skene, 347 Mass. 351, 197 N.E.2d 886, 896 (1964).

      . The Arkansas Supreme Court has said:
      * * * [0]ne who knowingly aids, encourages or cooperates with a fiduciary in the breach of his duty becomes equally liable with such fiduciary. * * *
      Raines v. Toney, 228 Ark. 1170, 313 S.W.2d 802, 810 (1958) (Citations omitted).

      . We find no merit to the defendants’ argument that Nucor failed to request damages for the fair value of the Grapeland plans. The testimony at trial revealed that the plans had a fair value of between $4,000 and $500,000.

      . In the light of our disposition of this appeal, it is unnecessary to consider Nucor’s remaining assignments of error: (1) whether the District Court erred in denying Nucor’s motion for a new trial, and (2) whether the District Court erred in dismissing Nucor’s complaint while a motion for a contempt citation and remedial order was pending.


author: PER CURIAM.

text:
    UNITED STATES of America, Appellee, v. Louis BERRETT, Defendant-Appellant.
    No. 74-1436.
    United States Court of Appeals, First Circuit.
    Argued March 5, 1975.
    Decided March 28, 1975.

      Owen Gallagher, Roslindale, Mass., for defendant-appellant.
    Lawrence P. Cohen, Asst. U. S. Atty., Deputy Chief, Crim. Div., with whom James N. Gabriel, U. ■ S. Atty., Boston, Mass., was on brief, for appellee.
    Before COFFIN, Chief Judge, McEN-TEE and CAMPBELL, Circuit Judges.
   PER CURIAM.

Defendant appeals from his conviction for receiving goods stolen from interstate shipment in violation of 18 U.S.C. § 659 (1970), alleging that the court erred in refusing to suppress the goods as unlawfully seized.

In October 1973 the FBI was investigating the theft of 25 cartons of Texas Instrument hand calculators from the Roadway Express Terminal in North Reading, Mass. A special agent acting under cover contacted one DeVasteo, a Roadway driver, who admitted stealing the calculators and offered to sell them to the agent. The two drove to the defendant’s garage and were told that he had left for the day. The closet in which the calculators were kept was locked and the two made arrangements to return the following day to inspect the goods. The next morning the agent, DeVasteo and defendant entered the garage and the latter brought out three cartons of calculators. The agent opened one of the cartons and removed the contents.

Five or six other agents involved in the investigation had been detailed to proceed to the garage that day and look for a Roadway truck in the vicinity. When the truck was spotted the agents entered the open garage to locate and interrogate the driver, and observed the undercover agent, DeVasteo and the defendant standing around several cartons bearing Texas Instrument markings. One agent identified himself and interviewed DeVasteo, who admitted having stolen the calculators and concealing them in defendant’s garage.' Another agent then obtained a search warrant and seized the calculators.

Defendant did not learn of the FBI’s undercover activities until after the hearing on the motion to suppress, which was denied. When the activities were revealed the court decided to reconsider its ruling. Counsel filed a stipulation of facts and supplemental briefs, and the court without a hearing again denied the motion.

On appeal defendant argues, apparently for the first time, that the calculators were actually seized when the FBI agents “moved in” and “secured the premises” without a warrant, and that the subsequent procurement of a warrant could not serve to legitimate this warrantless seizure. However, he has not made out any showing that the agents exercised dominion over the garage or the calculators before the warrant was executed. United States v. Berkowitz, 429 F.2d 921 (1st Cir. 1970). Although several agents moved to the back of the garage to secure it, Agent Ervin testified that this was merely to protect his safety while he interviewed DeVasteo. There was no evidence that the agents purported to seize the calculators or placed a guard on them, id.; they did not close or lock the garage doors, cf. State v. LaDuca, 89 N.J.Super. 159, 214 A.2d 423 (1965), or display guns or handcuffs at any time. We conclude that the court did not commit plain error in treating the seizure as occurring only upon execution of the warrant. Fed.R.Crim.P. 52(b).

Even if the seizure was pursuant to warrant, defendant contends, it was tainted because the personal knowledge of the calculators’ presence alleged in the supporting affidavit was obtained by an unlawful search. Defendant concedes that as an ordinary matter law enforcement officials may accept a general public invitation to enter commercial premises for purposes not related to the trade conducted thereupon, United States v. Berkowitz, supra, 429 F.2d at 925; once they are there they are of course entitled to take note of objects in plain view. “What a person knowingly exposes to the public, even in his own home or office, is not a subject of Fourth Amendment protection. . . ” Katz v. United States, 389 U.S. 347, 351, 88 S.Ct. 507, 511, 19 L.Ed.2d 576 (1967). Citing Niro v. United States, 388 F.2d 535 (1st Cir. 1968), defendant seeks to distinguish Berkowitz on the ground that in this case because of its undercover activities the government already had probable cause to search and seize at the time of entry and in fact intended to do so, hence should have gone before a magistrate to secure a warrant. But Niro was a case of seizure without warrant; in the instant case a warrant was obtained. While the possession of probable cause may necessitate procuring a warrant to search if practicable, it obviously cannot preclude mere further investigation not otherwise violating the Fourth Amendment. Defendant has no more right to be investigated when he pleases than to be arrested when he pleases. Cf. United States v. Berkowitz, supra, 429 F.2d at 926. Although the agents may have had probable cause when they accepted defendant’s public invitation to enter and may even have intended to arrest defendant and seize the goods shortly, they had a perfect right to confirm their suspicions and protect the government’s case by further investigation before seeking a warrant.

On this view of the law defendant was not prejudiced by the limitation on the scope of evidence at the hearing or the discretionary refusal to hold a full hearing on reconsideration.

Affirmed.

       Defendant speculates that the agents would not have permitted him to dispose of the calculators, had he attempted to do so. Even if true this would not prove that the seizure had necessarily occurred at any time before the attempted disposition, since such a disposition might itself appear to the agents an exigent circumstance justifying seizure. Whether such a seizure would be appropriate on the facts of this case is a matter we need not decide. Cf. Niro v. United States, 388 F.2d 535, 540 (1st Cir. 1968).


author: ELY, Circuit Judge:

text:
    UNITED STATES of America, Appellee, v. Thomas Venest HENSON, aka Tom Vinnie Henson, and George Victor Abisalih, aka George Abbey, dba "Associated Theaters of Texas”, Appellants.
    No. 73-2063.
    United States Court of Appeals, Ninth Circuit.
    March 3, 1975.

      David M. Brown (argued), Fleishman, McDaniel, Brown & Weston, Hollywood, Cal., for appellants.
    Robert C. Bonner, Asst. U. S. Atty. (argued), Los Angeles, Cal., for appellee.
   OPINION

On Petition for Rehearing

Before ELY and GOODWIN, Circuit Judges, and MURRAY, District Judge.

ELY, Circuit Judge:

In an indictment filed on January 10, 1973, the appellants were charged with having transported allegedly obscene films in interstate commerce, a violation of 18 U.S.C. § 1462. The appellants were tried before a jury and convicted shortly before the Supreme Court announced its opinions in Miller v. California, 413 U.S. 15, 93 S.Ct. 2607, 37 L.Ed.2d 419 (1973), and United States v. 12 200-ft. Reels of Film, 413 U.S. 123, 93 S.Ct. 2665, 37 L.Ed.2d 500 (1973).

In our original opinion in this case, filed on October 5, 1973, and reported in slip opinion form only, we vacated the appellants’ convictions and remanded the case to the District Court for reconsideration in the light of Miller v. California and its companion cases. We now vacate .and withdraw our opinion of October 5, 1973. The Government’s Petition for Rehearing, addressed to our original opinion, is granted so as to enable us to consider the impact on this appeal of Hamling v. United States, 418 U.S. 87, 94 S.Ct. 2887, 41 L.Ed.2d 590 (1974), United States v. Dachsteiner, 518 F.2d 20 (9th Cir. 1974), and United States v. Miller, 505 F.2d 1247 (9th Cir. 1974).

The single question now presented is whether the trial judge committed prejudicial error in instructing the jury to decide the question of obscenity, vel non, by applying a “national standard” of sexual candor, rather than the “contemporary community standard” required by Miller v. California. The court’s instruction was as follows:

“The second test to be applied, in determining whether a given picture is obscene, is whether the appeal to the prurient interest violates, or goes substantially beyond, what is permissible according to the current standards of the community as a whole. By community I mean the 50 states constituting the United States at the present time. When we talk about the community as a whole we are talking about the United States, the 50 states.”

Under Hamling and Dachsteiner, supra, the court’s instruction constituted error. Nevertheless, Hamling and Dachsteiner make clear that the appellants’ convictions are not to be reversed unless, when viewed in the context of all the evidence in the trial and the court’s instructions as a whole, the erroneous instruction appears to have been prejudicial. Having carefully reviewed the testimony and the court’s instructions in their entirety, we conclude that the erroneous instruction quite likely affected the jury’s deliberations and that, therefore, prejudice to the appellants has been shown.

At trial, the Government introduced the expert testimony of Homer E. Young, formerly an FBI agent and then Director of the Administration of Justice Department at California Lutheran College. Young relied on his experiences while investigating obscenity cases in Phoenix; Pecos and Houston, Texas; Norwood, Louisiana; Jacksonville, Florida; Atlanta; Baltimore; Philadelphia; New York City; Grand Rapids; Seattle; Reno; Las Vegas; and Oklahoma City in testifying about the degree of sexual candor condoned by the “national standard.” Over defense objection, the witness gave his opinion that the films in question “. . . substantially exceeded] the acceptable limits of candor for dealing with sexual matters, using the standards established by the national community.” [Emphasis added.] Young testified further that in his opinion, the contemporary standards in California were very different from those of the national community. In the remainder of his testimony, he sought to discredit, as inapplicable to any attempt to ascertain national mores, a survey of sexual attitudes taken primarily in Southern California and relied on in earlier testimony for the defense.

We think it obvious that through Young’s testimony, the Government was seeking to focus the jury’s attention on a hypothetical “national standard” which, in the Government’s view, likely would tolerate less sexual candor than the attitudes prevailing in Southern California, or in the State of California as a whole. This prosecutorial attempt to separate and differentiate a “national standard” from the defense testimony concerning the attitudes of Californians and the jurors’ experiences in the Los Angeles community distinguishes the instant case from Hamling, Dachsteiner, and United States v. Miller, 505 F.2d 1247 (9th Cir. 1974). The opinions in those cases specifically note that the prosecution presented no testimony tending to show that the “national standard” was different from the standard in the area from which the jurors were drawn. The sole use in those cases of any geographically-oriented “standard” of sexual explicitness was “. . . to assure that the material [was] judged neither on the basis of each juror’s personal opinion, or by its effect on a particularly sensitive or insensitive person or group.” Hamling v. United States, supra at page 107, 94 S.Ct. at 2902, 41 L.Ed.2d at 614-15. As we have shown, the Government sought to give the “national standard” a different role here.

Of course we express no opinion as to whether the “contemporary community standard” of California, or any portion of the State (whatever is the relevant “community”), would tolerate more sexual explicitness than would a “national standard,” if such could be ascertained. We hold only that since in the appellants’ trial, the Government may have succeeded in its attempt to convince the jury that Californians would permit more sexual candor than would Americans as a whole, the appellants are entitled to a new trial.

Reversed and remanded.

       Honorable William D. Murray, Senior United States District Judge for thé District of Montana, sitting by designation.

      . The pre-Miller v. California “national standard" was derived from, inter alia, Manual Enterprises, Inc. v. Day, 370 U.S. 478, 488, 82 S.Ct. 1432, 8 L.Ed.2d 639 (1962) (Opinion of Harlan, J.).

      . Although initially there was some doubt, Hamling v. United States, 418 U.S. 87, 94 S.Ct. 2887, 41 L.Ed.2d 590 (1974), establishes that the “contemporary community standards” test of Miller v. California applies in federal, as well as state, obscenity prosecutions. United States v. Miller, 505 F.2d 1247 (9th Cir. 1974).

      . If the Government elects to retry the appellants, the appellants will be entitled to whatever benefits they may derive from the definition of obscenity established by Miller v. California; otherwise, the jury instructions must conform to the definition of obscenity as it existed, when the appellants committed the acts with which they are charged. United States v. Jacobs, - F.2d -(9th Cir. 1974).


author: PER CURIAM:

text:
    UNITED STATES of America for the Use of RAY WEIST CONSTRUCTION COMPANY, Plaintiff-Appellant, v. ST. PAUL FIRE & MARINE INSURANCE COMPANY et al., Defendants-Appellees.
    No. 73-3160.
    United States Court of Appeals, Ninth Circuit.
    March 17, 1975.
    Douglas A. Wilson (argued), of Wilson, Flower & Sullivan, Yakima, Wash., for plaintiff-appellant.
    Jerry R. McNaul (argued), of Culp, Dwyer, Guterson & Grader, Seattle, Wash., for defendants-appellees.
    Before TRASK and CHOY, Circuit Judges, and MURRAY, District Judge.

       The Honorable William D. Murray, United states District Judge for the District of Montana, sitting by designation.

   OPINION

PER CURIAM:

This appeal is from a summary judgment adverse to Ray Weist Construction Company (Weist), a subcontractor, which brought an action against a surety under the Miller Act, 40 U.S.C. §§ 270a, 270b. The district court held that it lacked jurisdiction because Weist had failed to satisfy the notice of claim requirement of § 270b. We affirm.

O’Leary Construction, Inc. (O’Leary), subcontracted with Weist for Weist to crush rock for a United States Forest Service road and thereafter to haul and place the crushed material on the roadbed.

The material facts are undisputed. Weist fully performed the rock-crushing on December 1, 1971. Road building operations were closed down for the winter. On July 1, 1972, O’Leary asked Weist to haul and place the crushed material. Weist defaulted on this portion of its subcontract. O'Leary did the hauling and placing. On March 21, 1972, O'Leary not having paid for the rock-crushing, Weist gave the surety and O’Leary notice of claim therefor.

The district court held that the notice of claim was served more than 90 days after the last work Weist had performed and so the court had no jurisdiction under the Miller Act. Weist contends that the statutory time did not commence to run until it defaulted on its subcontract and when. O’Leary elected to haul and place the crushed material. We agree with the district court.

The language of § 270b is too clear to permit adoption of Weist’s contention that the ninety days should be construed as beginning when it defaulted in July, 1972, and not when it last crushed rock in December, 1971. United States ex rel. Austin v. Western Electric Co., 337 F.2d 568 (9th Cir. 1964), on which Weist strongly relies provides no aid to it. Austin rejected use of the date of substantial completion as commencing the ninety-day period; it held that the last date on which work was performed under the contract, as opposed to when repairs were made following inspection of the project, was the test to be applied.

Affirmed.

      . In pertinent part the statute reads: “ . . . any person having direct contractual relationship with a subcontractor but no contractual relationship express or implied with the contractor furnishing said payment bond shall have a right of action upon the said payment bond upon giving written notice to said contractor within ninety days from the date on which such person did or performed the last of the labor or furnished or supplied the last of the material for which such claim is made, stating with substantial accuracy the amount claimed and the name of the party to whom the material was furnished or supplied or for whom the labor was done or performed.”


text:
    Peter J. BRENNAN, Secretary of Labor, United States Department of Labor, Appellant, v. Ricardo CORREA, Jr., d/b/a Ricardo’s Mexican Enterprises of Omaha and Ricardo’s Casa De Tacos No. 4, Inc., a corporation, Appellees.
    No. 74-1620
    United States Court of Appeals, Eighth Circuit.
    Submitted Feb. 13, 1975.
    Decided April 7, 1975.
    Bobbye D. Spears, Deputy Associate Sol., Kansas City, Mo., for appellant.
    Martin A. Cannon, Omaha, Neb., for appellees.
    Before HEANEY and WEBSTER, Circuit Judges, and NANGLE, District Judge.

       JOHN F. NANGLE, District Judge, Eastern District of Missouri, sitting by designation.

   PER CURIAM.

The Secretary of Labor appeals from the decision of the District Court refusing to enjoin Ricardo Correa, Jr., from further violating the child labor provisions of the Fair Labor Standards Act of 1938, as amended (the “Act”), 29 U.S.C. § 201 et seq. The secretary brought the action under Section 17 of the Act, 29 U.S.C. § 217.

Although the District Court found that appellee Correa committed violations of the Act, it denied permanent injunctive relief. The issue before us is whether the District Court abused its discretion in denying relief. Concluding that it did and that a permanent injunction should have been issued, we reverse and remand.

Appellee Correa does business as Ricardo’s Mexican Enterprises of Omaha, producing corn and flour tortillas and taco shells for retail and wholesale distribution. Appellee’s production facility is located in Omaha, Nebraska. Retail distribution of the products is made through four self-service Mexican food restaurants owned by Correa and located in the Omaha area. The products are distributed wholesale to grocery stores and other customers in Iowa and South Dakota. In 1971 appellee’s total sales exceeded $250,000.00. It is readily apparent, and appellee does not argue to the contrary, that appellee’s business is covered by the Act’s provisions. See 29 U.S.C.' § 203(s).

On June 8, 1970, a Department of Labor wage and hour investigator inspected appellee’s production facility. He observed twelve instances of persons being employed in violation of the age provisions of the Act. One employee, James Koll, then fifteen years of age, was observed cleaning a dough-mixing machine in violation of Hazardous Order No. 11, promulgated by the Secretary. The investigator discussed the violations with Correa and his attorney. Correa explained that he had been unaware that his business was covered by the Act. Later in June the investigator returned to wind up his inspection and observed that Brian Maher, previously observed as employed in violation of the Act, remained so employed by appellee.

In July, 1970, the investigator again discussed these violations with Correa and his attorney. They gave assurances that Correa would comply with the Act’s requirements in the future. The Department of Labor Area Director carefully explained to Correa the Act’s requirements in a letter dated August 10, 1970.

In December, 1970, Correa instituted an unwritten policy of not employing anyone under sixteen years of age in the retail operation or under eighteen years of age in the wholesale operation which included production.

The Department of Labor investigated Correa’s production facility again in April, 1971. The investigating Compliance Officer found one child labor violation, and explained that the flour dough mixer was covered by Hazardous Order No. 11. After conferring with Correa, the Compliance Officer was persuaded that he was making a good faith effort to comply with the Act.

On November 6, 1972, Tom Carl, then seventeen years of age, became entangled in the masa feeder, a power-driven production machine, and was killed. A subsequent investigation indicated that he had been employed in violation of Hazardous Order No. 11, and that two other persons were employed in violation of the Child Labor Regulation No. 3, 29 C.F.R. § 570.31 et seq. Again appellee promised future compliance with the Act. However, the trial court found that from November, 1972, to February, 1973, appellee employed a person under eighteen years of age in violation of the Hazardous Order No. 11. On March 28, 1973, the Secretary commenced this action.

An important tool available to the Secretary for compelling compliance with the Act is an action for injunctive relief under § 17. Such relief is remedial in nature, i.e., intended to prevent future violations; it is not imposed as punishment for past violations. Goldberg v. Kickapoo Prairie Broadcasting Co., 288 F.2d 778, 783 (8th Cir. 1961); Mitchell v. Southwest Engineering Company, 271 F.2d 427, 432 (8th Cir. 1959); Wirtz v. Lone Star Steel Company, 405 F.2d 668, 670 (5th Cir. 1968). The trial court, in determining whether or not to enjoin an employer from further violations must exercise its discretion to accomplish the Act’s objective of abolishing oppressive child labor. Lenroot v. Interstate Bakeries Corporation, 146 F.2d 325, 327 (8th Cir. 1945); Mitchell, supra. Guiding factors include the employer’s previous noncompliance and the dependability of its promise of future compliance. Shultz v. Salinas, 416 F.2d 412, 414 (5th Cir. 1969); Hodgson v. Griffin and Brand of McAllen, Inc., 471 F.2d 235, 238 (5th Cir. 1973), cert. denied, 414 U.S. 819, 94 S.Ct. 43, 38 L.Ed.2d 51 (1973). The trial court’s belief that the employer desires to comply with the Act in the future might not be sufficient reason to deny the injunction. Lenroot v. Kemp, 153 F.2d 153, 156 (5th Cir. 1946).

The trial court denied relief finding that Correa “took prompt action in an attempt to comply with the provisions of the Act.” The trial court further found as follows:

The Court does not consider this case to be one in which the employer is making pious declarations of attempted compliance, while taking no action to constructively institute policies which would insure compliance. Here, the employer hired additional help to prepare and maintain records required by the Act and instituted policies designed to assure compliance with the Act. (App. 358.)

The record indicates that Correa discharged employees shown by the investigators to be employed in violation of the Act and advised his supervisors orally not to hire persons younger than the Act’s age requirements. After the April, 1971, inspection, Correa advised his supervisors not to allow anyone under eighteen years of age to operate the flour dough mixer. Nevertheless, violations continued to occur.

Correa testified that after the first inspection he made no effort to learn the provisions of Hazardous Order No. 11. Although he could observe the entire production line through a window in his office, and although he was aware that James Koll had been rehired, he was unaware that Koll was employed cleaning and filling the dough mixer in violation of Hazardous Order No. 11.

This Court has long held that an employer’s duty to enforce the provisions of the Act does not end with directives communicated to subordinates. Lenroot v. Interstate Bakeries Corporation, supra, 146 F.2d at 328. Where such directives are followed by further violations, sterner measures controlling the actions of subordinates may be appropriate. Id. at 327. The record indicates that Correa instituted no measures sterner than oral directives against his two primary supervisors. This Court concludes that the record provides an insufficient factual basis for a reasonable belief that violations of the Act will cease. The trial court’s dismissal of the Secretary’s complaint was an abuse of discretion.

The judgment of the District Court is reversed with directions to enjoin appel-lee Correa permanently from further violating Section 15(a)(4) of the Act, at the appellee’s production facility, as prayed for by the Secretary in his complaint.

      . The United States District Court for the District of Nebraska, Denney, J., filed an unreported memorandum opinion on June 20, 1974.

      . 29 U.S.C. § 212(c) provides:
      No employer shall employ any oppressive child labor in commerce or in the production of goods for commerce or in any enterprise engaged in commerce or in the production of goods for commerce.
      29 U.S.C. § 215(a)(4) provides:
      (a) After the expiration of one hundred and twenty days from June 25, 1938, it shall be unlawful for any person * * * (4) to violate any of the provisions of section 212 of this title.
      29 U.S.C. § 203(l) provides in pertinent part:
      “Oppressive child labor” means a condition of employment under which (1) any employee under the age of sixteen years is employed by an employer * * * in any occupation, or (2) any employee between the ages of sixteen and eighteen years is employed by an employer in any occupation which the Secretary of Labor shall find and by order declare to be particularly hazardous for the employment of children between such ages or detrimental to their health or wellbeing * * *.

      . Hazardous Order No. 11 is found at 29 C.F.R. § 570.62 and provides in pertinent part:
      (a) Finding and declaration of fact. The following occupations involved in the operation of power-driven bakery machines are particularly hazardous for the employment of minors between sixteen and eighteen years of age:
      (1) The occupations of operating, assisting to operate, or setting up, adjusting, repairing, oiling, or cleaning any horizontal or vertical dough mixer * * *

      . Other available tools are administrative persuasion and an action under § 16 of the Act, 29 U.S.C. § 216(c), to recover unpaid minimum wages or overtime compensation owing to an employee.


author: WILLIAM E. DOYLE, Circuit Judge.

text:
    BANK OF COMMERCE and First National Bank of Sheridan, Petitioners, v. BOARD OF GOVERNORS OF the FEDERAL RESERVE SYSTEM and Wyoming Bancorporation, Respondents.
    No. 74-1264.
    United States Court of Appeals, Tenth Circuit.
    Argued Jan. 21, 1975.
    Decided March 21, 1975.
    Rehearing Denied May 1, 1975.
    Richard L. Eason, Simon, Eason, Hoyt & Malone, P. C., Englewood, Colo. (Henry A. Burgess, Sheridan, Wyo., and D. Monte Pascoe, Ireland, Stapleton, Pryor & Holmes, P. C., Denver, Colo, on the brief), for First Nat. Bank of Sheridan.
    Donald Etra, Atty., Dept, of Justice (Carla A. Hills, Asst. Atty. Gen., and Leonard Schaitman, Atty., Dept, of Justice, on the brief), for Bd. of Governors of the Federal Reserve System.
    William P. Johnson, Rothgerber, Appel & Powers, Denver, Colo. (Hanes, Carmichael, Johnson, Gage & Speight, P. C., Cheyenne, Wyo., on the brief), for Wyoming Bancorporation.
    Before SETH, BARRETT and DOYLE, Circuit Judges.
   WILLIAM E. DOYLE, Circuit Judge.

The matter presented is a petition on behalf of Bank of Commerce and First National Bank of Sheridan, Wyoming seeking review of the order of the Board of Governors of the Federal Reserve System granting its approval of the application of Wyoming Bancorporation to acquire 95% of the voting shares of the Bank of Wyoming, Sheridan, Wyoming, a proposed new bank. The Bank of Commerce is a state chartered bank. The Bank of Wyoming would compete with it and with the First National Bank of Sheridan. The facts are uncomplicated:

On April 28, 1972 the Bank of Commerce applied for a new state bank in Sheridan, Wyoming. Some months after that, on July 18, 1972, the organizers of the Bank of Wyoming applied to the Comptroller of Currency for a charter. The latter application disclosed that the Bank of Wyoming would be a subsidiary of Wyoming Bancorporation, a holding company, and would be located at 1963 North Main Street in Sheridan, some 20 blocks away from the Bank of Commerce and the First National Bank of Sheridan. The Bank of Commerce and the First National Bank objected to the issuance of the charter and requested a hearing.

On September 26, 1972 the hearing was held and subsequently the State of Wyoming held a hearing on the application of the Bank of Commerce for a state charter. On July 5, 1973 the Comptroller gave preliminary approval on the condition that Wyoming Bancor-poration hold all of the stock except directors’ qualifying shares, and on July 31, 1973, approval was given to the application for the Bank of Commerce state charter.

On August 1 Wyoming Bancorporation sought approval from- the Federal Reserve Board for its acquisition of the Bank of Wyoming, and on August 13, 1973 Bancorporation sought to stay the order of the state examiner granting the Bank of Commerce a state charter.

Inquiries were made on August 31 by the Federal Reserve Bank of Kansas City to Bancorporation asking (1) the definite location of the new bank; (2) whether the new bank would compete with the Ranchester State Bank (which is 15 miles from Sheridan); and (3) information as to the effect, if any, the state application would have on the financial status of the Bank of Wyoming.

In response to the inquiry of the Federal Reserve Bank as to definite location, Bancorporation said it intended to transfer its location to downtown Sheridan instead of 1963 North Main. The Federal Reserve Bank then formally accepted the application and a notice of the application was published in the Federal Register on September 28, 1973. It called for comments on or before October 16.

The Bank of Commerce was fully aware of the proceedings. For example, it appeared in opposition to the application of the Bank of Wyoming to the Comptroller. The Comptroller gave preliminary approval to the application on July 5, 1973. Following that, an action was filed in the United States District Court for the District of Wyoming to review that approval. The district court dismissed the Bank of Commerce complaint and that matter is now before this court on appeal, Bank of Commerce v. Smith, etc., et al., No. 74—1185.

On February 11, 1974, the Comptroller recommended to the Board that it approve the holding company application. The Board gave its- approval to the application on May 3, 1974.

The instant review is pursuant to 12 U.S.C. § 1848 which allows any party aggrieved to seek review in the United States Court of Appeals. Petitioners say that they are aggrieved in accordance with 12 U.S.C. § 1850 which gives a party who will become a competitor of the applicant the right to become an adversary before the Board and to appeal an adverse order.

The doctrine of Whitney National Bank v. Bank of New Orleans and Trust Co., 379 U.S. 411, 85 S.Ct. 551, 13 L.Ed.2d 386 (1965) requires that an opponent of acquisition of a new bank by a bank holding company must first attack the proposed arrangement before the Federal Reserve Board. In a more recent case, First National Bank of St. Charles v. Board of Governors of the Fed. Res. System, 509 F.2d 1004 (8th Cir. 1975), the petitioners, as in this case, took no action until after Board approval. The appeal was dismissed by the Eighth Circuit because of failure to exhaust administrative remedies. As a result, they were held not to have been aggrieved parties under § 1848.

Petitioners here contend that the notice given in the Federal Register was legally inadequate and thus they were not required to participate in the administrative proceeding, and can suffer no legal disability on that account.

There were two notices given in the Federal Register, one on September 28, 1973 and one on March 5, 1974. Admittedly, no notice was mailed to or served on the petitioners. On the other hand, petitioners had actual knowledge that an application was to be filed. Whether they had actual notice of the filing is another matter which is not now before us. This could become an issue of fact if the publication in the Federal Register were to be held insufficient. Undoubtedly petitioners are entitled to participate by filing objections and the Board may, in its discretion, grant a hearing. In this instance the action of the Board was taken on the basis of documentary information. Petitioners say that inasmuch as they have a right to participate under the statute, § 1850, it follows that they are entitled to actual notice of the pendency of the proceedings under the due process clause of the Constitution and that notice through the Federal Register violates procedural due process. They rely on Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950) and the cases which follow it. Mullane holds that due process requires notice which is calculated to apprise interested parties of the pendency of the action and to afford them an opportunity to present their objections. This was publication in a local newspaper of a notice to settle accounts in an estate matter. Other cases are cited by appellants, but none of these are in point either since they do not involve publication in the Federal Register and are not concerned with administrative proceedings.

By Act of Congress notice by publication in the Federal Register is declared to be notice to all persons residing within the States of the Union and the District of Columbia except in cases where notice by publication is insufficient in law. 44 U.S.C. § 1508. In our case neither the statute nor any regulation compels the Board to furnish individual notice.

An important difference to be noted between the case at bar and the cases relied on by appellants is that the cases cited have to do with direct deprivations of property. Ours does not.

We also note and consider the fact that there is no assurance that petitioners would have been entitled to a hearing even if specific notice had been given. The Board had the authority to grant one in its discretion.

One final consideration is that the petitioners were not parties directly involved in the proceedings before the Board. Because of this the Board was not obligated to summon them to appear, and they had some duty to ascertain the state of the proceedings, particularly since they knew that Bancorporation was compelled to obtain approval from the Federal Reserve Board and that the Federal Register was the medium for giving notice. Furthermore, they were represented by competent, knowledgeable lawyers who were also aware of the general conditions. Also, these proceedings were pending either before the Reserve Bank or the Federal Reserve Board from August 1, 1973 until May 3, 1974.

Finally, we regard as significant the fact that the petitioners do not claim lack of actual notice. The principle they strive for is that due process requires notice by mail, at least. But they advance it on an abstract basis.

There is little law dealing with the adequacy of notice in the Federal Register in administrative law eases and we have found no direct authority. The two administrative law proceedings cases which we have found both hold notice in the Federal Register to be sufficient. See North American Pharmacal, Inc. v. Department of Health, Education and Welfare, 491 F.2d 546 (8th Cir. 1973), and see Buckner Trucking, Inc. v. United States, 354 F.Supp. 1210 (S.D.Tex.1973).

We do not say that notice by publication in the Federal Register would be sufficient in all cases. We do hold that it is sufficient here.

* * *

We have examined the substantive contentions offered by petitioners and find them to be wholly lacking in merit.

Accordingly, we affirm the Federal Reserve Board’s determination approving the issuance of authority to the respondents.

      . In one of its findings the district court stated that a condition of the final approval of the granting of the charter was that the approval of the Federal Reserve Board had to be obtained and that notice of the application would be published in the Federal Register.

      . Robinson v. Hanrahan, 409 U.S. 38, 93 S.Ct. 30, 34 L.Ed.2d 47 (1972) (state forfeiture proceedings invalid where notice was sent to appellant’s home though state knew appellant was in jail); Schroeder v. City of New York, 371 U.S. 208, 83 S.Ct. 279, 9 L.Ed.2d 255 (1962) (notice by publication insufficient for land condemnation where property owner’s address easily ascertainable); Walker v. City of Hutchison, 352 U.S. 112, 77 S.Ct. 200, 1 L.Ed.2d 178 (1956) (property condemnation, notice by publication); City of New York v. New York, N. H. & H. R. Co., 344 U.S. 293, 73 S.Ct. 299, 97 L.Ed. 333 (1953) (city’s liens on railroad property not barred by reorganization in bankruptcy where only notice was by newspaper publication); Greenfield v. Villager Industries, Inc., 483 F.2d 824 (3d Cir. 1973) (notice by publication insufficient to inform class members of need to file claim in order to participate in settlement fund); Menkarell v. Bureau of Narcotics, 463 F.2d 88 (2d Cir. 1972) (forfeiture of car invalid where only notice was by publication and agency practice seemed designed to conceal rather than disclose); Graff v. Nicholl, 370 F.Supp. 974 (N.D.Ill.1974) (seizure of abandoned cars); Miles v. District of Columbia, 354 F.Supp. 577 (D.D.C.1973) (condemnation of building).

      . The notice problem is somewhat different in an administrative proceeding like the one at bar in which the person objecting is not before the Board and need not be summoned.

      . The statute is silent on the question of notice to competitors. The Board’s regulations, which were followed here, require publication in the Federal Register. 12 C.F.R. § 262.3(g).


text:
    BANK OF COMMERCE, a State Chartered Commercial Bank, Appellant, v. James E. SMITH, Comptroller of the Currency of the United States, et al., Appellees.
    No. 74-1185.
    United States Court of Appeals Tenth Circuit.
    Argued Nov. 14, 1974.
    Decided March 21, 1975.
    Rehearing Denied April 23, 1975.

      Richard L. Eason, Simon, Eason, Hoyt & Malone, P.C., Englewood, Colo. (Henry A. Burgess, Sheridan, Wyo., with him on the brief), for appellant.
    Donald Etra, Atty., Dept, of Justice (Carla A. Hills, Asst. Atty. Gen., Richard V. Thomas, U. S. Atty., and Leonard Schaitman, Atty., Dept, of Justice, with him on the brief), for appellee James E. Smith, Comptroller of the Currency of the United States.
    William P. Johnson, Rothgerber, Appel & Powers, Denver, Colo. (Hanes, Carmichael, Johnson, Gage & Speight, P.C., Cheyenne, Wyo., with him on the brief), for appellees, F. A. Rummel, Jr., Sol W. Bernstein, K. L. McShane, Lee Van Deren and Paul L. Howes, Organizers of the Proposed “Bank of Wyoming, N.A.,” and Wyoming Bancorporation.
    Before SETH, BARRETT and DOYLE, Circuit Judges.
   PER CURIAM.

The plaintiff bank challenges and seeks to review the preliminary approval given by the Comptroller of the Currency to the organization of the “Bank of Wyoming, N.A.” as a national bank at Sheridan, Wyoming, and as a subsidiary of Wyoming Bancorporation, a bank holding company.

The trial court granted judgment on the pleadings for the Comptroller and granted the defendant bank’s motion to dismiss. The court held that it did not have jurisdiction over the subject matter and that the complaint failed to state a claim.

The appellant throughout the proceedings has taken the position that it has open to it two concurrent courses of action or remedies during the preliminary stages of the consideration of the application for a charter by the two agencies concerned. This is indicated by the separate action it also commenced against the Board of Governors of the Federal Reserve System, which was appealed to this court as Bank of Commerce v. Board of Governors, 513 F.2d 164 (Tenth Circuit). The opinion in this companion case.is filed concurrently herewith.

It is apparent that this two-track approach by appellant is derived from the fact that separate agencies and statutes are involved, but the arguments are foreclosed by the Supreme Court’s opinion in the Whitney Bank case hereinafter referred to.

The record shows that notice of the filing of the individual organizers’ application with the Comptroller was given in accordance with 12 U.S.C. §§ 27, 30, and 36, and with 12 C.F.R. 5.1. The investigation followed, and the Regional Administrator held a hearing on the application. The plaintiff bank appeared at this hearing to protest the application, as did other banks.

The plaintiff, however, made no appearance in the proceedings before the Board of Governors, and filed no objections there as permitted by law. The filing of the application by the new bank’s holding company was an obvious and necessary step as indicated in Bank of Commerce v. Board of Governors, 513 F.2d 164 (Tenth Circuit). Preliminary approval was subsequently given by the Comptroller to the application of the organizers on the condition that the holding company own all shares of stock in the new bank except the qualifying shares. Approval was also conditioned upon consent being given by the Board of Governors of the Federal Reserve System to the ownership of the new bank shares by the holding company. Such approval was, of course, required under 12 U.S.C. §§ 26 and 27.

The plaintiff asserted that the preliminary approval given by the Comptroller to organize the new bank should be set aside because it was based on ex parte material and political considerations; that findings and conclusions were not made by the Comptroller, and that the action was arbitrary, capricious, and an abuse of discretion.

The standard of review of the Comptroller’s action upon an application of an independent bank is set forth in Camp, Comptroller v. Pitts, 411 U.S. 138, 93 S.Ct. 1241, 36 L.Ed.2d 106. The test is whether the action was arbitrary, capricious, an abuse of discretion, or was “otherwise not in accordance with law,” as asserted by plaintiff as its final point. However, it is obvious that this issue is not reached because of the dual approval required here of the new bank as a subsidiary of a holding company, and by reason of the Supreme Court’s decision as to the proper sequence in the much cited case of Whitney National Bank v. Bank of New Orleans, 379 U.S. 411, 85 S.Ct. 551, 13 L.Ed.2d 386.

Since approval of the organization of the new bank was required by the Board of Governors, the Board was to conduct an investigation under the Bank Holding Company Act (12 U.S.C. § 1846), which included the same factors as required to be considered by the Comptroller under the National Bank Act. The two evaluations of the applications were by separate agencies exercising independent judgment. After enactment of the Holding Company Act, it soon became apparent that there was a problem as to where a protestant should direct his court challenge, and when administrative remedies were exhausted.

These problems were raised and answered in the Whitney Bank case. There the Court held that the proper place to challenge the organization of a new holding company owned bank was in the proceedings before the Board of Governors. It pointed out that a statutory procedure was created for a review of the Board’s action; that this must be followed first by a protestant; and that judicial review of the Board’s action was only in the Court of Appeals. The Court considered the problems which would be caused by a challenge of the Comptroller’s action as an independent matter, and the duplication which would result. The Supreme Court thus decided that the opposition must “ . . . first attack the arrangement before the Board.” It is apparent therefrom that the administrative remedies are not exhausted until the complaining party has utilized the procedure provided by and before the Board. This the plaintiff has not done, and consequently the remedies have not been exhausted.

Appellant urges that First National Bank of Homestead v. Watson, 363 F.Supp. 466 (D.C.), states the rule applicable here but we cannot agree as the considerations there were entirely different as the only issue was the claim under the NEPA.

The Eighth Circuit in The First National Bank of St. Charles v. Board of Governors, 509 F.2d 1004 (Eighth Circuit), considered a very similar set of facts but in a suit against the Board of Governors, and there concluded that the administrative remedies had not been exhausted because the complaining party had not entered an objection in the proceedings before the Board, reliance again being placed on the Whitney Bank decision.

It would not seem necessary to decide whether this is the ordinary failure to exhaust administrative remedies, or whether it is a challenge of the action of the wrong administrative agency, because in either event, the action of the trial court was proper. The trial court was thus correct in holding that it had no jurisdiction.

Affirmed.