author: PER CURIAM. McCREE, Circuit Judge

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Betty Jean ANDERSON, Defendant-Appellant.
    No. 74-1021.
    United States Court of Appeals, Sixth Circuit.
    Argued June 10, 1974.
    Decided Sept. 24, 1974.

      McCree, Circuit Judge, dissented and filed an opinion.
    Don L. Hanni, Youngstown, Ohio, for defendant-appellant.
    Frederick M. Coleman, U. S. Atty., Cleveland, Ohio, for plaintiff-appellee.
    Before EDWARDS, McCREE and ENGEL, Circuit Judges.
   PER CURIAM.

Appellant in this case waived a jury and was tried before a District Judge in the United States District Court for the Northern District of Ohio, Eastern Division for attempted manslaughter, in violation of 49 U.S.C. § 1472(k) (1) (1970), and 18 U.S.C. § 1113 (1970). She was found guilty and sentenced to two years under 18 U.S.C. § 4208(a)(2) (1970).

The events which produced this sad and macabre story may be recited briefly, since the only appellate issue of significance pertains to federal jurisdiction.

Appellant boarded a United Airlines plane scheduled between Pittsburgh, Pennsylvania and Youngstown, Ohio. Some time during the flight (she testified 15 minutes after it left Pittsburgh) she went to the lavatory of the aircraft where she remained until approximately 15 minutes after the plane had landed in Youngstown. After appellant and the flight crew had left the airplane, a ground crew in charge of cleaning the plane noticed a baby in the bottom of the toilet and called for help to cut a hole in the side of the toilet refuse box. The baby was full term and lived.

Federal jurisdiction is defined by 49 U.S.C. § 1301(32) (1970), which defines the special aircraft jurisdiction of the United States to include:

“(a) civil aircraft of the United States; * * * For the purpose of this definition, an aircraft is considered to be in flight from the moment when power is applied for the purpose of takeoff until the moment when the landing run ends.”

Defendant’s testimony at trial indicated that the baby was dropped in the toilet receptacle, which had at least two inches of liquid in it, contemporaneously with its birth.

At trial the parties had stipulated:
“No. 3. It is stipulated by and between the Government of the United States and the defendant, Betty Jean Anderson, that Betty Jean Anderson gave birth to a child during the flight of Aircraft No. 699 between Pittsburgh, Pennsylvania and Youngstown, Ohio, on February 19th, 1973.”

Appellant contends on this appeal that this is a stipulation to federal jurisdiction and that since such jurisdiction did not in fact exist, it could be contested on appeal.

The government argues that the stipulation is a stipulation of fact which has bearing on jurisdiction and is binding on appellant.

Appellant was represented by counsel at her trial. Her counsel in her presence entered into the stipulation which we have quoted above. The stipulation is not a stipulation to federal jurisdiction which is a purely legal question. On the contrary, it is a stipulation to a fact which serves to establish federal jurisdiction.

We find no ambiguity in the language of the stipulation. The normal meaning of the words “during the flight” would be the period while the aircraft was in the air. This period is clearly encompassed by the statutory period from power application to the end of the landing run.

Voluntary stipulations of undisputed facts are appropriate methods of shortening trials and are to be encouraged. United States v. 133.79 Acres, More or Less, in Sebastian County, Arkansas, 313 F.Supp. 697, 702 (W.D.Ark. 1970); Minneapolis Brewing Co. v. Merritt, 143 F.Supp. 146, 149 (D.N.Dak. 1956). There is not a line in this transcript to show that this stipulation was other than voluntary or that appellant’s counsel was ignorant of the federal jurisdictional standard when he entered into it. It may well be that appellant and her counsel, before trial and sentence, preferred that the trial take place in a federal rather than a state forum.

As the United States Supreme Court held in an early case:

“Consent of parties cannot give the courts of the United States jurisdiction, but the parties may admit the existence of facts which show jurisdiction, and the courts may act judicially upon such an admission.” Railway Co. v. Ramsey, 89 U.S. (22 Wall.) 322, 327, 22 L.Ed. 823 (1874).

See also United States v. Campbell, 453 F.2d 447, 451 (10th Cir. 1971).

The District Court had jurisdiction in this case. Appellant was indicted for willfully attempting murder or manslaughter. At trial the government sought to prove only involuntary manslaughter — an included offense under 18 U.S.C. § 1113 (1970). (See 18 U.S.C. § 1112 (1970)). The facts established at trial were such as to support the trial judge’s verdict of guilty of attempted manslaughter.

The judgment of the District Court is affirmed.

McCREE, Circuit Judge

(dissenting):

I respectfully dissent. I agree with the opinion of the court that parties may stipulate to the existence of facts that may confer federal jurisdiction. But the principle that commands strict construction of jurisdictional statutes also requires careful scrutiny of stipulations of jurisdictional facts. See, e. g., McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 56 S.Ct. 780, 80 L.Ed. 1135 (1936). I would hold that the stipulation does not establish jurisdiction under 49 U.S.C. § 1301(32).

The stipulation was entered as one of several stipulations of fact, and the circumstances surrounding its adoption do not indicate that it was entered into for the purpose of conferring special aircraft jurisdiction on the district court. Instead, the parties stipulated only that appellant “gave birth” to a child “during the flight” from Pittsburgh to Youngstown. This stipulation is insufficient to confer the special jurisdiction for two reasons. First, although the court states that the phrase “during the flight” is unambiguous and that “its normal meaning would be the period while the aircraft was in the air,” I observe that the word flight is also defined as “a trip made by or in an airplane” or “an airplane making a scheduled flight.” Webster’s New Collegiate Dictionary. Either of these definitions comprehends a longer span of time than that specified in the special aircraft jurisdictional statute. Second, the stipulation does not state that appellant committed the offense of which she was convicted within the special aircraft jurisdiction. She stipulated only that she “gave birth” to a child “during the flight,” an act that is not criminal. She did not agree that delivery took place before the end of the landing run or, even if the child was born aloft, that, with the requisite criminal intent, she abandoned it within the special aircraft jurisdiction.

The deficiency of the stipulation was not remedied by the evidence adduced at trial. Appellant was not asked if birth occurred while the aircraft was in the air, and she testified, without contradiction, that she was not even aware that she had delivered a baby. Other evidence shows only that the aircraft departed from Pittsburgh at 8:35 p. m.; that approximately fifteen minutes later at 8:50 p. m. she walked into the lavatory; that the aircraft arrived at Youngstown at 9:02 p. m.; and that she left the lavatory and deplaned approximately fifteen minutes later at 9:17 p. m. These facts do not establish that the offense of unlawfully and wil-fully attempting to commit involuntary manslaughter occurred within the special aircraft jurisdiction of the United States. Accordingly, I would hold that the district* court’s jurisdiction was not established, and that appellant’s conviction should be reversed.


source: Caselaw Access Project

author: HAYS, Circuit Judge:

license: Public Domain

text:
    AVIS RENT A CAR SYSTEM, INC., Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant.
    No. 1012, Docket 74-1119.
    United States Court of Appeals, Second Circuit.
    Argued May 17, 1974.
    Decided Sept. 24, 1974.
    On Rehearing Nov. 6, 1974.

      Robert Layton, New York City (Lay-ton & Sherman, New York City, on the brief, Frederick E. Sherman, New York City, and Stuart B. Stillman, Garden City, N. Y., of counsel), for plaintiff-ap-pellee.
    Gary R. Allen, Washington, D. C. (Scott P. Crampton, Asst. Atty. Gen., Washington, D. C., Meyer Rothwacks, George G. Wolf, Tax Div., Dept, of Justice, on the brief, Robert A. Morse, U. S. Atty., for the E. D. N. Y., of counsel), for defendant-appellant.
    Before MEDINA, HAYS and OAKES, Circuit Judges.
   HAYS, Circuit Judge:

This is an appeal from a district court judgment for the taxpayer in a tax refund action. The issue is whether certain drivers, so-called car shuttlers, engaged by the taxpayer, Avis Rent A Car System, Inc. [“Avis”], were Avis employees for the purpose of determining Avis’s liability for federal employment taxes. The District Court for the Eastern District of New York held that the car shuttlers were independent contractors rather than employees, and accordingly gave judgment for the taxpayer. The Commissioner appeals.

The facts in this case are substantially undisputed. Avis is in the business of renting cars to the general public from a series of rental stations located at numerous points dispersed widely throughout the country. Its customers frequently rent Avis cars for one-way trips in which the customer returns the car to a station other than the rental station. Because of these one-way rentals, and because of seasonal and holiday fluctuations in the volume of business at various locations, shortages or oversupplies of cars develop at particular sites. There is thus an irregular need to relocate automobiles. Avis employs “car shuttlers”, drivers who transport automobiles from one station to another, to adjust local station inventories to demand.

At the times relevant to this appeal, car shuttlers were for the most part not regularly or permanently employed by Avis. They were commonly servicemen, airport personnel, civil servants or housewives, although from time to time the taxpayer’s regular employees shuttled automobiles, either in the course of their employment or after hours. Unlike Avis’s permanent employees, the occasional ear shuttlers did not fill out employment applications, take employment examinations, or submit to employment interviews. They did not participate in Avis's regular employment benefit programs, and unlike some Avis employees, they did not wear distinctive uniforms. The Avis car shuttlers frequently offered their driving services to other car rental companies.

Car shuttlers were recruited by a variety of means. At some stations, key individuals, “head shuttlers”, contracted to shuttle automobiles. They, in turn, subcontracted the actual driving to others. In San Francisco, shuttlers were hired through a union hiring hall. Some stations maintained listings of persons known to be interested in shuttling, and Avis would call on people so listed when the need for shuttlers arose. Avis’s full time employees knew of the availability of shuttling work through their regular employment and sometimes acted as shuttlers. At airport locations, airline personnel, who could get flight passes for return transportation, frequently shuttled. Shuttlers were recruited from off the street and from state employment agencies. People often simply walked up to the taxpayer’s rental counter and inquired into the possibility of shuttling.

Once Avis chose someone to shuttle a car, it checked his driver’s license and filled out an Avis “Vehicle Transfer Contract”, a standard form used at all stations. The contract had spaces for identifying the car to be moved, the sending and receiving rental stations, the date, the time, mileage, the agreed upon compensation, and the signature of the shuttler and Avis agent. The form contained the following language:

“Contractor acknowledges that he received the vehicle below from Owner or Owner’s Authorized Representative in good appearance and safe mechanical condition, and agrees to deliver it at the time and place and for the fee designated below, in the same condition as received, ordinary wear and tear excepted. Contractor agrees not to use said vehicle for any purpose other than for delivery as described herein, nor to transport any persons or property therein.
“It is agreed that this contract in no way constitutes the contractor as an agent or employee of the owner of said vehicle or of Avis-Rent-A-Car System, its members or licensor or li-censor’s subsidiaries.”

The compensation was set by Avis on a take-it-or-leave-it basis, generally at a flat rate per trip for local moves, and at a flat rate based on estimated mileage for distant moves.

Upon completing the forms, the shut-tier drove the car to its destination, or if the car was to be returned from a distant point, he traveled to the car and returned it. Avis did not specify a route or a delivery time, although it was usually understood that shuttlers were to proceed as expeditiously as possible. Avis did not train or instruct shuttlers except for an occasional specific instruction as to the procedure in the event of accident or breakdown. Upon arriving at the receiving station, the shuttler would report to the Avis rental desk with his copy of the Vehicle Transfer Contract. He was paid the agreed upon fee and was reimbursed for expenses. Payment was usually made in cash. Avis generally paid for or provided transportation on the half of the round-trip not involving shuttling.

The resolution of the issues in this appeal depends on the interpretation of provisions assessing taxes under the Federal Insurance Contribution Act (“FICA” or “Social Security”), the Federal Unemployment Tax Act (“FUTA”), and the provisions for collection of income tax at source of the Internal Revenue Code of 1954 (“withholding tax”). The FICA provisions of the Internal Revenue Code of 1954, see sections 3101 et seq., assess on individuals a tax on income which is required to be collected by the individual employers:

"§ 3101. Rate of tax
“(a) Old-age, survivors, and disability insurance. — In addition to other taxes, there is hereby imposed on the im-come of every individual a tax equal to the following percentages of the wages (as defined in section 3121(a)) as received by him with respect to employment (as defined in section 3121(b))—
* * -X- -X- -X- *
“§ 3102. Deduction of tax from wages
“(a) Requirement, — The tax imposed by section 3101 shall be collected by the employer of the taxpayer, by deducting the amount of the tax from the wages as and when paid.”

The terms used in the sections assessing the tax are defined as follows:

“§ 3121. Definitions
“(a) Wages. — For purposes of this chapter, the term ‘wages’ means all remuneration for employment, including the cash value of all remuneration paid in any medium other than cash;
* -X- * * * -X-
“(b) Employment. — For purposes of this chapter, the term ‘employment’ means . . . any service, of whatever nature, performed after 1954 . by an employee for the person employing him. . . . ”

The FICA also assesses an excise tax on the employer:

“§ 3111. Rate of tax
“(a) Old-age, survivors, and disability insurance. — In addition to other taxes, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal to the following percentages of the wages (as defined in section 3121(a)) paid by him with respect to employment (as defined in section 3121(b)) . . . .”

The FICA issue on this appeal is whether the car shuttlers were in the “employment” of Avis, as that term is used in sections 3101 and 3111, and as it is defined in section 3121(b). Since “employment” is defined as “service . by an employee,” this issue depends on the meaning of “employee”, which is defined by section 3121(d)(2):

“(d) Employee. — For purposes of this chapter, the term ‘employee’ means—
* -X- * -X- -X- *

(2) any individual who, under the usual common law rules applicable in determining the employer-employee relationship, has the status of an employee. . . . ” The FTJTA, sections 3301 et seq., of the Internal Revenue Code of 1954, as amended, assess a tax in the following terms:

“§ 3301. Rate of tax.
“There is hereby imposed on every employer (as defined in section 3306(a)) for the calendar year 1961, and for each calendar year thereafter an excise tax, with respect to having individuals in his employ, equal to 3.1 percent of the total wages (as defined in section 3306(b)) paid by him during the calendar year with respect to employment (as defined in section 3306(c)) after December 31, 1938.”

For the purposes of the FUTA, “employment” is defined as the service of an “employee”. Id. at § 3306(c). “Employee” includes all persons except:

“(1) any individual who, under the usual common law rules applicable in determining the employer-employee relationship, has the status of an independent contractor, or
“(2) any individual (except an officer of a corporation) who is not an employee under such common law rules.” Id. at Sec. 3306(i) (1) and (2).

The Treasury Regulation clarifying this definition, 26 C.F.R. § 31.3306 (i) — 1, is substantially the same as the regulation relating to “employee” under the FICA. See note 1, supra.

Sections 3401 et seq., of the Internal Revenue Code require employers to withhold an income tax from all wages paid:

“§ 3402. Income Tax collected at source.
“(a) Requirement of withholding.— Every employer making payment of wages shall deduct and withhold upon such wages (except as otherwise provided in this section) a tax determined in accordance with the following tables.”

“Wages”, as it is used in section 3402 is defined by section 3401(a) as remuneration paid an “employee”, and “employee”, as it is used in section 3401(a) is defined tautologically by section 3401(c). Treasury Regulation 31.-3401(c) — 1 defines “employee” in terms substantially the same as Treasury Regulation 31.3121(d) — 1 relating to FICA. See note 1, supra.

It thus appears that these three taxes, known collectively as federal employment taxes, must be collected and paid as to payments made to an “employee” of the person making the payments “under the usual common law rules applicable in determining the employer-employee relationship.” § 3121(d)(2), Internal Revenue Code of 1954.

Avis did not withhold or pay with respect to the compensation paid car shut-tiers any employment taxes for the years 1962 through and including 1966. In 1968 the Commissioner determined that car shuttlers were Avis “employees”, and accordingly assessed tax deficiencies against Avis as to those years to-talling $105,733.20 for FICA, $6,124.51 for FUTA, and $199,226.46 for withholding tax. Avis paid $31,178.42 of the assessments and filed a timely claim for refund. In April, 1969, the Commissioner disallowed the claim. On June 20, 1970, Avis commenced this action in the Eastern District of New York to recover the amount paid. The ease was tried before Judge Travia, sitting without a jury. The evidence consisted of the testimony of one witness, Mr. Edwin Hale, a City Manager for Avis, some 37 depositions, and a number of exhibits. After reviewing the evidence and the parties' memoranda, the district court held that the ear shuttlers were not Avis employees, and that they were independent contractors. 364 F.Supp. 605 (E.D.N.Y. 1973). The district court recognized that one key issue under the applicable regulations and Supreme Court decisions was whether Avis had the right to control the actions of car shuttlers:

“The key issue ... is whether the person, or corporation, for whom services are performed has the right to control the actions of the individual. A perusal of the Vehicle Transfer Contract reveals that the ‘shuttler’ was obligated to deliver the vehicle at the time and the place designated in the contract; that the ‘shuttler’ had to agree not to use the vehicle for any purpose other than delivery, and not to transport any persons or property therein. These factors appear to represent a limited right of AVIS to control the performance of the ‘shuttlers’ and, standing alone, plaintiff’s contention falls short of convincing this court that ‘shuttlers’ are independent contractors.” 364 F.Supp. at 611 (footnote omitted, emphasis in original).

In spite of this finding, the court held that the car shuttlers were independent contractors, a finding based on facts showing the transient nature of the Avis-shuttler relationship.

We reverse and remand to determine the amount of Avis’s liability for federal employment taxes.

While the district court’s statements of fact are generally supported by the record (defining “employee” for employment tax purposes), it misapplied the law to those facts. The leading case defining “employee” for employment tax purposes is United States v. Silk, 331 U.S. 704, 67 S.Ct. 1463, 91 L.Ed. 1757 (1947). In Silk, the Supreme Court considered whether two employers were required to withhold FICA assessments as to payments made to three groups of individuals. The first employer, the Albert Silk Coal Co., operated a coal yard. It engaged men to unload coal cars at a fixed rate per ton of coal unloaded. The coal unloaders provided their own shovels. They worked for Silk when and if they pleased, and they were permitted to work for other coal companies. See 331 U.S. at 706, 67 S.Ct. 1463. The coal yard also engaged truckers to deliver the coal, paying them at a fixed rate per ton. The truckers supplied their own trucks, their own laborers to aid in loading and unloading the coal, and they paid all expenses arising out of their trucking activity. They were not selected on the basis of seniority; rather they decided among themselves who was to make a given run.

The second employer in the Silk case was Greyvan Lines, Inc., which operated a trucking business in which it contracted with truckers in various locations to haul goods. These truckmen worked solely for Greyvan Lines. Like the Silk truckers, the Greyvan truckmen furnished their own trucks and paid their own costs. They supplied such labor and insurance as was necessary to carry on their trucking businesses. The truckers collected all payments, and forwarded them to Greyvan Lines, which paid them a commission.

The Supreme Court held that the coal loaders were “employees” of Silk Coal, as that term was and is used in the Social Security Act. It held that the Silk and Greyvan truckers were independent contractors, and thus not employees. The Court found that the employer's right to control “how ‘the work shall be done’ ” was one factor to be considered in distinguishing employees from independent contractors, though not the foremost factor as the applicable Treasury Regulations suggested and suggest. See 331 U.S. at 714-715, 67 S.Ct. 1463; note 1, supra. Other factors of equal importance were the employee’s investment in the equipment of his trade, his level of skill, his opportunity to profit from his own management skill, and the permanence of his relation to the “employer”. 331 U.S. at 716, 67 S.Ct. 1463. Contract recitations that a worker is either an employee or contractor were found to have no effect on tax liability. Applying these standards, the Court noted that the coal unloaders provided only simple tools, and that they had no opportunity for profit, except by working at a faster or slower rate. It noted that they worked in the course of their employers’ business. See id. at 717-718, 67 S.Ct. 1463. It found that the Silk and Grey-van truckers were small businessmen. They supplied their own trucks and hired their own labor. They undertook substantial costs and significant risks, and stood to profit by their own management ability. See id. at 718-719, 67 S.Ct. 1463.

Bartels v. Birmingham, 332 U.S. 126, 67 S.Ct. 1547, 91 L.2d 1947 (1947), involved the same issue of statutory interpretation as the Silk ease. In Bartels, the Court held that musicians employed by bandleaders were employees of the bandleaders, rather than of ballroom operators which booked the bands for limited engagements, despite the use of a booking contract that referred to the operators as “employers” of the musicians. The ballroom operators had no right to control the manner of playing while the bandleaders did. The ballroom-musician relationship was transient, while the bandleader-musician relationship was permanent. The bandleader had an opportunity for profit or loss from his management of the band. He understood the risk of paying musicians’ salaries, and the various costs of doing business as a band. The bandleader organized and trained the musicians.

From Silk and Bartels it appears that at least seven factors are relevant in the present case to determine whether an employer-employee relationship exists:

1) If the person receiving the benefit of a service has the right to control the manner in which the service is performed, the person rendering the service may be an employee.
2) If a person rendering a service has a substantial investment in his own tools or equipment, he may be an independent contractor.
3) If a person performing a service undertakes a substantial cost, say by employing and paying his own laborers, he may be an independent contractor.
4) If a person performing a service has an opportunity to profit depending on his management skill, he may be- an independent contractor.
5) If a service rendered requires a special skill, the person rendering it may be an independent contractor.
6) If the relationship between a person rendering a service and the person receiving it is permanent, it may be an employment relationship.
7) If a person rendering a service works in the course of the recipient’s business, rather than in some ancillary capacity, he may be an employee.

Applying these criteria to the present case, it is evident that the car shuttlers were Avis employees. The district court erred in relying solely on facts tending to show the transient nature of the Avis-car shuttler relationship, overlooking facts which under the other criteria tend to establish that the shuttlers were Avis employees. Thus, as to the degree of control, the district court correctly found that the Avis Vehicle Transfer Contract evidences employer control of the manner of doing shuttling work. See 364 F.Supp. at 611. The car shuttlers had no investment in “car shuttling equipment”. In that regard they were like the coal shov-elers in Silk, and unlike the truckers in Silk. The car shuttlers undertook none of the costs of shuttling cars; all of those costs were fully reimbursed by Avis. In that respect they were like the Silk coal unloaders and unlike the Silk truckers, who undertook their own fuel and labor expenses. The car shuttlers had no opportunity to profit by their management skills. Their only control over their return lay in their ability to move cars more or less quickly, just as the Silk coal unloaders could control their compensation only to the extent that they shoveled more or less quickly. The shuttlers brought no particular skill to their jobs. Evidence of the hit-or-miss recruitment techniques employed by Avis suggests that it expected the shuttlers to have no special skill.

Under the facts of this ease, only one of the Silk factors suggests that shut-tiers were independent contractors. The district court examined the relationship between Avis and the shuttlers at some length and found that the relationship was transient. Its conclusion, based as it is on the shuttlers’ non-participation in employment benefits, and on the haphazard recruiting and assignment policies employed by Avis, is surely correct. But transients may be employees. The Silk coal unloaders were employed from day to day and were no more “transient” than the shuttlers. Determination of whether individuals are “employees” for the purpose of federal employment taxes depends upon the totality of their circumstances. No single consideration governs. The district court found that one such consideration, the impermanence of the relationship, weighed toward “independent contractor”. But it failed to consider the various other factors, factors due at least equivalent weight, which tend to indicate that shuttlers are. employees.

The judgment of the District Court is reversed. The cause is remanded for a determination of the amount of Avis’s tax liability.

ON PETITION FOR REHEARING

In its petition for rehearing, appellee raises the question of the status of those car shuttlers who, instead of being hired directly by Avis, were retained by “head shuttlers.” These head shuttlers operate their own independent businesses serving several rental agencies. Under the criteria set forth in the court’s opinion, those car shuttlers who were hired by and were under the exclusive control of such independent businessmen cannot be considered the employees of Avis. Cf. Bartels v. Birmingham, 332 U.S. 126, 132 (1947). The petition for rehearing is therefore granted for the limited purpose of adding to our opinion the following paragraph:

“The district court, in determining Avis’ liability, shall exclude from the category of employees those car shut-tiers who were hired by and were under the exclusive control of independent head shuttlers.”

In all other respects we reaffirm our original decision.

      . Treasury Regulations promulgated under Section 3121 interpret “employee” as follows :
      “(c) Common law employees. (1) Every individual is an employee if under the usual common law rules the relationship between him and the person for whom he performs services is the legal relationship of employer and employee.
      “(2) Generally such relationship exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to the details and means by which that result is accomplished. That is, an employee is subject to the will and control of the employer not only as to what shall be done but how it shall be done. In this connection, it is not necessary that the employer actually direct or control the manner in which the services are performed; it is sufficient if he has the right to do so. The right to discharge is also an important factor indicating that the person possessing that right is an employer. Other factors characteristic of an employer, but not necessarily present in every case, are the furnishing of tools and the furnishing of a place to work, to the individual who performs the services. In general, if an individual is subject to the control or direction of another merely as to the result to be accomplished by the work and not as to the means and methods for accomplishing the result, he is an independent contractor. An individual performing services as an independent contractor is not as to such services an employee under the usual common law rules. Individuals such as physicians, lawyers, dentists, veterinarians, construction contractors, public stenographers, and auctioneers, engaged in the pursuit of an independent trade, business or profession, in which they offer their services to the public, are independent contractors and not employees.
      “(3) Whether the relationship of employer and employee exists under the usual common law rules will in doubtful cases be determined upon an examination of the particular facts of each case.” 26 O.P.R. § 31.3121(d) — !.

      . Silk and Bartels v. Birmingham, 332 U.S. 126, 67 S.Ct. 1547, 91 L.Ed. 1947 (1947), cbneern the meaning of “emjdoyee” as it was then used in the Social Security Act. But it is clear, and the parties agree, that the same standard controls the scoj>e of “employee” as it appears in the PUTA and withholding tax jjrovisions.
      The present statutory definitions of “employee” in sections 3121(d)(2) and 3306 (i) were not in effect when Silk and Bartels were decided. The predecessors of these statutory definitions were added to the 3939 Code after Bartels and Silk, see sections 1 and 2 of H.J.Res. 296, 62 Stat. 438 (1948), to codify their result, at least so far as they related a common law test of emjiloyment, in the face of a proposed Treasury Regulation which would have given “employer” much broader scoj)e. Ringling Bros.-Barnum & Bailey Combined Shows, Inc. v. Higgins, 189 F.2d 865, 867 (2d Cir. 1951).

      . This list is not exhaustive, see Lifetime Siding, Inc. v. United States, 359 F.2d 657 (2d Cir.), cert. denied, 385 U.S. 921, 87 S.Ct. 233, 17 L.Ed.2d 144 (1966), but it is sufficient to illustrate the error of the district court’s one-dimensional approach. It accords with the sort of factors that we have applied to determine the common law of the employer-employee relationship. Id., Ringling Bros.-Barnum & Bailey Combined Shows, Inc. v. Higgins, supra; Restatement (Second) of Agency § 220 (1958); cf. Illinois Tri-Seal Products, Inc. v. United States, 353 F.2d 216, 228, 173 Ct.Cl. 499 (1965).


author: TIMBERS, Circuit Judge:

text:
    UNITED STATES of America, Appellee, v. Milton PARNESS and Barbara Parness, Appellants.
    No. 984, Docket 74-1027.
    United States Court of Appeals, Second Circuit.
    Argued April 8, 1974.
    Decided June 27, 1974.
    Certiorari Denied Jan. 13, 1975.
    See 95 S.Ct. 775.

      Roy M. Cohn, New York City (Eugene Gressman, Washington, D. C., and Michael . Rosen, New York City, on the brief), for appellants.
    Bart M. Schwartz, Asst. U. S. Atty., New York City (Paul J. Curran, U. S. Atty., and S. Andrew Schaffer, Asst. U. S. Atty., New York City, on the brief), for appellee.
    Before FRIENDLY and TIMBERS, Circuit Judges.

       The parties agreed in open court that these appeals would be heard and decided by a panel of two judges.

      . The interstate transportation of the two cashier’s checks on February 4, Goberman’s interstate travel on the same clay, and the February 9 interstate transportation of the additional $5,000 cashier’s check constitute the violations of § 2314 charged in Counts Four, Five and Six, respectively. They also constitute the pattern of racketeering activity, in violation of § 1962(b), charged in Count One.

   TIMBERS, Circuit Judge:

Appellants Milton and Barbara Parness appeal from judgments of conviction entered upon jury verdicts returned on October 3, 1973 after a thirteen day trial in the Southern District of New York before Dudley B. Bonsai, District Judge, finding them guilty on two counts of causing interstate transportation of stolen property (Counts Four and Six) and on one count of causing a person to travel in interstate commerce in furtherance of a scheme to defraud (Count Five), in violation of 18 U.S.C. § 2314 (1970); and, in-addition, finding Milton Parness guilty of acquiring an enterprise affecting interstate or foreign commerce through a pattern of racketeering activity (Count One), in violation of a provision of Title IX of the Organized Crime Control Act of 1970, 18 U.S.C. § 1962(b) (197Ó).

Of the numerous claims of error raised on appeal, we find the following to be the principal ones: (1) both appellants challenge the sufficiency of the evidence; (2) Parness claims that there was a material variance between the theory of the crime charged in Count One and the theory upon which that count was submitted to the jury; (3) Parness claims that the acquisition of a foreign corporation by means of criminal acts committed in the United States does not state an offense within the meaning of § 1962(b); and (4) Parness claims that the statute is unconstitutionally vague on its face and as applied. Questions (3) and (4) appear to be ones of first impression. Other subordinate claims of error are also raised.

We affirm.

I.

In view of the issues raised on appeal, including the challenge to the sufficiency of the evidence, the following summary of the events from the end of 1967 to the middle of 1971 which culminated in the indictment is believed necessary to an understanding of our rulings on those issues.

In 1967, Allan Goberman, a successful Pennsylvania businessman, learned of an opportunity to invest in the St. Maarten Isle Hotel Corporation, N.V. (Hotel Corp.) which owned an insolvent and partially completed hotel-casino complex on the island of St. Maarten in the Netherlands Antilles. He organized the Goberman Construction Company, N.V. and arranged for the necessary financing through American sources and later from the Antillean government with which to complete the construction of the hotel-casino in January 1970. When the complex was opened in early 1970, Goberman owned 90.5% of Hotel Corp.’s stock. He also held a $3.5 million demand note from Hotel Corp. which represented money he had loaned Hotel Corp. for construction of the complex.

The hotel was moderately successful during its first few months of operation. As the winter holiday season came to an end in early 1970, however, it became apparent that the hotel’s continued financial success depended upon additional income from gambling junkets to the casino. These junkets, originating primarily in the United States, were organized by junket operators (junketeers) who arranged for a group of prospective gamblers to be flown to St. Maarten and to be provided with accommodations at the hotel, all free of charge.

Each junket participant prior to his departure from the United States was required to deposit gambling “front money” with the junketeer. If his losses at the casino exceeded his initial stake, he was permitted to gamble on credit. These credit advances were evidenced by signed IOU’s, commonly known as markers. When a player was unable to recoup his losses and thereby redeem his markers prior to his return to the United States, it was the responsibility of the junketeer to collect such debts and to remit the proceeds, less a commission, to Hotel Corp. The junketeer also was responsible for forwarding the front money to Hotel Corp.

In mid-1970, Goberman first met Parness, a junketeer who had been arranging successful junkets to the casino for some time through his corporation, Olympic Sports Club, Inc. In the fall of 1970, Goberman offered Parness the exclusive right to manage and direct junkets to the hotel-casino. Parness accepted. Thereafter all such junkets were arranged through Parness and Olympic. Beginning in late 1970 and continuing until his eventual acquisition of Gober-man’s interest in Hotel Corp., Parness assumed sole responsibility for collecting all of the hotel’s outstanding marker receivables. During the same period, Olympic’s sole function was arranging gambling junkets to the hotel. Almost its only income was from gamblers’ front money and marker collections.

Despite the income from the gambling junkets, Hotel Corp. began to experience serious financial difficulties within a few months of the opening of the hotel-casino. In order to continue operations until permanent financing could be arranged, Goberman on October 6, 1970 obtained from Leonard Holzer of New York City a short term $150,000 loan (the Holzer loan). Goberman signed a promissory note in this amount, secured by a pledge of his entire 226,500 share interest in Hotel Corp. Goberman advanced virtually the entire $150,000 to Hotel Corp. Parness knew of the Holzer loan and of the hotel’s financial straits.

In late 1970, Holzer began to threaten Goberman with foreclosure on the stock pledge unless the loan was immediately repaid. In order to obtain the necessary funds with which to repay the loan, Gob-erman repeatedly asked Parness for approximately $400,000 in overdue marker receivables which Parness claimed he had not yet been able to collect. Because these funds were not forthcoming from Parness or Hotel Corp., Goberman was unable to repay the loan. Holzer called the loan and on January 25, 1971 began foreclosure proceedings on Gober-man’s stock interest in Hotel Corp.

Shortly before Goberman’s Hotel Corp. stock was to be sold at auction on February 4, 1971, Parness told Gober-man that, although the outstanding markers were still uncollectible, he had arranged to borrow $150,000 and would advance that sum to Goberman to enable him to repay the Holzer loan. Parness told Goberman that the lenders had demanded that Goberman again pledge his entire interest in Hotel Corp. At Parness’ direction, Goberman signed a loan agreement with two Parness nominees, Barbara Landew (Parness) and one Stanley Amsterdam, pursuant to which he was to receive $160,000 (the Gober-man loan). Neither Barbara nor Amsterdam had supplied any of the funds loaned to Goberman. Amsterdam signed the agreement only as a favor to Parness.

On February 4, Barbara went to a bank in West Orange, New Jersey, and, with $99,000 in cash and a $56,000 check drawn on Olympic’s account, purchased two cashier’s checks. These were to be used by Goberman to repay the Holzer loan. Later the same day, Parness arranged for Goberman, his attorney and Holzer’s attorney to meet in Manhattan. From there they went to the New Jersey bank and picked up the cashier’s checks which Barbara had left there. On February 9, again using Olympic funds, Barbara purchased another $5,000 cashier’s cheek at the same bank and forwarded it to Holzer’s counsel in New York as legal fees.

During February and March of 1971, Goberman continued his efforts to obtain from Parness the $400,000 in un-remitted marker receivables. Because this money was still not forthcoming and allegedly because Goberman was denied access to other funds which Parness had remitted to Hotel Corp., he was unable to repay Barbara and Amsterdam. They, at Parness’ direction, prepared to exercise their rights under Goberman’s latest pledge of his Hotel Corp. stock. On April 3, Parness’ counsel drafted, and Goberman, Barbara and Amsterdam executed, a number of documents bearing various dates and purportedly prepared over a period of time in the ordinary course of business, the end result of which was that Goberman was formally divested of his 226,500 shares of Hotel Corp. stock.

Shortly thereafter, Parness acquired Aliter Holdings, N.V., a shell Antillean corporation. He did so through his cousin, Edward Levrey. On June 10, Barbara and Amsterdam transferred “their” interest in Hotel Corp. to Aliter. In a letter purportedly written by Lev-rey, Aliter acknowledged receipt of the stock. The letter also sought to establish that Aliter had provided the funds for the Goberman loan and that Barbara and Amsterdam had acted as its agents throughout. Aliter in fact had supplied no funds to Barbara or Amsterdam and had not even been an active corporation at the time the Goberman loan was made.

During the summer of 1971, Parness, again using Levrey as a front, acquired Terrasol Holdings, N.V., another shell Antillean corporation. Terrasol then exchanged its common stock for Aliter’s holdings in Hotel Corp. In November, Parness attempted to make a public offering of Terrasol common stock in Canada. The prospectus, prepared at Parness’ direction, falsely described Terra-sol as a Levrey family corporation and falsely represented that Levrey had purchased the 226,500 shares of Hotel Corp. stock from Goberman for $150,000 in cash. Levrey in fact had invested no funds' in either Aliter or Terrasol and had had no financial dealings with Gob-erman.

II.

In challenging the sufficiency of the evidence, appellants claim that the government failed to establish that the cashier’s checks, which they caused to be transported in interstate commerce, represented converted marker proceeds. They contend therefore that the evidence was insufficient to support their convictions of the crimes charged under § 2314 (Counts Four and Six) and that it was likewise insufficient to support a finding of two indictable acts on which to predicate Parness’ conviction under § 1962(b) (Count One). Barbara also claims that, even if the funds were unlawfully withheld, there was no evidence that she knew of it and therefore no basis for her conviction as an aider and abettor. Viewing the evidence in the light most favorable to the government, United States v. McCarthy, 473 F.2d 300, 302 (2 Cir. 1972), we hold that each of these claims is without merit.

True, the government did not trace the proceeds of particular marker collections from specific gambler-debtors through Parness and Olympic to Goberman in the form of a loan. Given the nature of the enterprise involved, the absence of such evidence is not surprising,- nor is it fatal to the government’s case. There was evidence that Parness was' in a position to have collected and to have withheld substantial amounts of marker receipts. There also was evidence of numerous and flagrant efforts by Parness and Barbara to conceal both the source of the funds and the interest of Parness in the various transactions. From this and other evidence the jury was warranted in finding the requisite nexus between the money due Hotel Corp. and the Goberman loan. In short, there was ample circumstantial evidence from which the jury reasonably could find the requisite theft or conversion.

The record establishes that Hotel Corp. failed to receive approximately $400,000 in overdue marker accounts payable during a period when Parness was solely responsible for and had exclusive control over marker collections. Parness thus had access to vast sums of money due Hotel Corp. and a clear opportunity to have concealed collections and to have withheld the proceeds.

The record further shows that Olympic derived its income almost exclusively from junket front money and marker collections. From this the jury was entitled to infer that the two Olympic checks totalling $61,000, which Barbara used on February 4 and 9 to purchase the cashier’s checks, represented the proceeds of unremitted marker collections.

The efforts of Parness and Barbara to conceal the use of Olympic funds in connection with the Goberman loan tend to buttress this inference. The two Olympic checks initially were reflected on the corporation’s disbursements ledger as air fare payments to a travel agency with which Barbara was associated. Actually no such payments were ever made. Parness later described these sums as “redeposits” of Olympic funds. Not until the summer of 1972, after the government had begun its investigation into the takeover of Hotel Corp., did Parness acknowledge to his accountant that the money had been loaned to Gob-erman. In a further attempt to conceal Olympic’s role in the acquisition of Hotel Corp., Barbara testified falsely before the grand jury investigating the takeover that it was Levrey who had provided $150,000 in cash to be used for the Goberman loan. Plainly she knew that Olympic checks were used and that Levrey had not supplied the funds. From these and other attempts to cover up Olympic’s participation, the jury was warranted in finding that Parness and Barbara concocted a scheme to avoid the suspicions which would have stemmed from knowledge that the funds for the Goberman loan had come from a corporation which derived its income from casino receipts and which had failed to remit substantial sums due Hotel Corp.

There also was ample evidence to support the inference that the $99,000 in cash used on February 4 to enable Gob-erman to repay the Holzer loan represented money due Hotel Corp. The Hol-zer loan was repaid at a time Parness was making substantial marker collections. Shortly before the Goberman loan, as noted above, agents of the Internal Revenue Service seized $60,000 in cash marker collections intended for Parness. The jury reasonably could have found that this seizure precipitated the cover-up of Olympic’s participation. But for such an unexpected occurrence, Parness would have had sufficient cash with which to have consummated the Goberman transaction undetected. Had such cash been available, Parness need not have resorted to the more easily traceable Olympic checks, and the coverup would have been unnecessary.

But the deception went further. In addition to the efforts to conceal Olympic’s role in Parness’ scheme to acquire Hotel Corp., there was evidence that Parness resorted to similar schemes- to disguise his own personal involvement in the Goberman loan and the subsequent clandestine corporate transactions. . He used nominees in the loan agreement itself. He used a straw man in connection with his acquisition of Aliter and Terrasol. And he had documents prepared which falsely represented that first Aliter and then Levrey had provided the funds used to acquire Hotel Corp.

The government adduced overwhelming evidence which disproved each of these false representations, as well as evidence which exposed the implausibility of explanations offered by Parness for other false representations. The jury surely was justified in concluding that all were part of Parness’ scheme to cover up his conversion of money due Hotel Corp. In short, in the context of this record and in view of the complete absence of any credible explanation as to the source of funds used in connection with the Goberman loan, we fail to see how the jury could have reached any conclusion except that Parness had withheld marker collections and had used the proceeds of such collections and the front money to acquire Goberman’s interest in Hotel Corp. As we recently stated in United States v. Frank, 494 F.2d 145, 153 (2 Cir. 1974):

“[T]he defendants were not required to testify or to present any ease at all, and the jury could not permissibly draw an adverse- inference simply from their failure to take the stand. But the self-incrimination clause does not elevate a defendant’s silence, to the level of a convincing refutation. When a defendant has offered no [credible explanation], it may be reasonable for a jury to draw inferences from the prosecution’s evidence which would be impermissible if the defendant had supplied a credible exculpatory version . . . . ”

Cf. United States v. Sheiner, 410 F.2d 337, 340 (2 Cir.), cert. denied, 396 U.S. 825 (1969).

We also reject Barbara’s claim that the evidence was insufficient to support her conviction as an aider and abettor. Her active involvement in virtually every aspect of Parness’ scheme to acquire Hotel Corp. and the subsequent cover-up warranted the jury in finding that she had associated herself with the venture and had sought to make it succeed. Nye & Nissen Corp. v. United States, 336 U.S. 613, 619 (1949), quoting in part from United States v. Peoni, 100 F.2d 401, 402 (2 Cir. 1938) (L. Hand, J.); United States v. Manna, 353 F.2d 191, 192 (2 Cir. 1965), cert. denied, 384 U.S. 975 (1966).

It is not an overstatement to characterize the evidence of Barbara’s participation as overwhelming. She purchased the cashier’s checks used in connection with the Goberman loan. She stated to the person who accompanied her to the bank on February 4 that she was arranging for the takeover of a hotel. She allowed her name to be used in the loan agreement. She participated in executing on April 3 the bogus documents by which Goberman was formally divested of his stock. She acquiesced in the transfer without consideration of “her” interest in Hotel Corp. to Aliter.

Moreover, she testified falsely before the grand jury that Levrey had furnished $150,000 in cash to be used for the Goberman loan. It is axiomatic that exculpatory statements, when shown to be false, are circumstantial evidence of guilty consciousness and have independent probative force. United States v. Lacey, 459 F.2d 86, 89 (2 Cir.), cert. denied, 409 U.S. 860 (1972); United States v. DeAlesandro, 361 F.2d 694, 697-98 (2 Cir.), cert. denied, 385 U.S. 842 (1966). This rule has especially compelling application here, for Barbara’s false testimony tended not only to conceal her own participation in the transfer of the stolen funds but furthered the cover-up initiated by her husband.

III.

Parness claims that his conviction under § 1962(b) must be reversed because there was a material variance between the theory of the crime charged in Count One and the theory upon which that count was submitted to the jury. We hold that, if there was error at all in this respect, it was harmless beyond a reasonable doubt.

Count One charged Parness under § 1962(b), among other offenses, with acquiring Goberman’s interest in Hotel Corp. through a pattern of racketeering activity involving the conversion and interstate transportation of marker proceeds. The evidence established that Parness gained control of Hotel Corp. by (1) withholding funds due Hotel Corp., (2) loaning a portion of these funds to Goberman, and (3) thereafter preventing him from repaying the loan by continuing to conceal marker collections and by denying him access to other funds which Parness had remitted. Parness claims that this latter “remittal-deprivation” scheme was not charged in the indictment. He argues that the district court, in instructing the jury to consider it, in effect sanctioned an amendment of the indictment and permitted the jury to convict him of a crime not charged.

In our view, even if the jury did consider the so-called “remittal-deprivation” evidence and assuming such evidence was not precisely within the literal scope of the allegations of the indictment, that could have had no effect whatever on his conviction under § 1962(b). Parness was charged with and convicted of three separate violations of § 2314. Counts Four and Six charged interstate transportation of cashier’s checks on February 4 and 9. Count Five related to Gob-erman’s interstate travel on February 4. Convictions on any two of these counts were sufficient under § 1961(5) to establish the “pattern of racketeering activity” necessary for a conviction under § 1962(b). In order to find Parness guilty on Counts Four and Six, the jury was required to find only that he converted marker collections and caused the proceeds to be transported in interstate commerce. Whether Goberman at some later date may or may not have been denied access to remitted funds has no bearing on such a finding. Parness’ convictions on Counts Four and Six were unaffected by the jury’s alleged consideration of the "remittal-deprivation” evidence. Such convictions provide sufficient predicates for his conviction under § 1962(b).

IV.

Parness claims that, in enacting Title IX of the Organized Crime Control Act of 1970, 18 U.S.C. § 1961 et seq. (1970), of which § 1962(b) is a part, Congress did not intend to proscribe the acquisition of foreign businesses by means of criminal conduct committed in the United States despite the impact on domestic commerce. Specifically, he argues that his take-over of Hotel Corp., an Antillean corporation, cannot be said to constitute an offense under § 1962(b) because Hotel Corp. is not an “enterprise” within the meaning of the Act. This argument is predicated upon an unreasonably narrow interpretation of the statute and is refuted by the language and legislative history of § 1962 (b).

Section 1962(b) proscribes the acquisition of “any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce.” “Enterprise” is defined in § 1961(4) to include “any . . . corporation”. On its face the proscription is all inclusive. It permits no inference that the Act was intended to have a parochial application. The legislative history, moreover, strongly indicates the intent of Congress that this provision be broadly construed. For example, the House Report on § 1962 states that:

“any acquisition meeting the test of subsection (b) is prohibited without exception.” (emphasis added)

We find Parness’ claim unpersuasive for yet another reason. It presupposes that in enacting § 1962(b) Congress intended to focus exclusively upon the enterprise acquired and sought to protect only American institutions. There is no indication that the statute was meant to have such a limited remedial scope. On the contrary, its legislative history leaves no room for doubt that Congress intended to deal generally with the influences of organized crime on the American economy and not merely with its infiltration into domestic enterprises.

In its Statement of Findings and Purpose, by way of preface to Title IX, Congress made clear its concern for American investors and businessmen, as well as American institutions:

“(1) organized crime in the United States . . . annually drains billions of dollars from America’s economy by unlawful conduct . . . ; (4) organized crime activities . weaken the stability of the Nation’s economic system, harm innocent investors . . . and undermine the general welfare of, the Nation and [American] citizens; ”

Moreover, the provisions of §§ 1963 and 1964 for broad civil remedies to victims of such infiltration further indicate the intent of Congress to protect the individual, as well as the “enterprise”.

In short, we find no indication that Congress intended to limit Title IX to infiltration of domestic enterprises. On the contrary, the salutary purposes of the Act would be frustrated by such construction. It would permit those whose actions ravage the American economy to escape prosecution simply by investing the proceeds of their ill-gotten gains in a foreign enterprise. We reject any such construction.

Parness nevertheless advances an argument based on cases arising under the Labor Management Relations Act, 29 U.S.C. § 141 et seq. (1970). They deal with labor disputes involving alien staffs aboard foreign flag vessels operating in United States territorial water E. g., Windward Shipping (London) Ltd. v. American Radio Assn., 415 U.S. 104 (1974); McColloch v. Sociedad Nacional, 372 U.S. 10 (1963). Parness argues that we cannot apply § 1962(b) to his acquisition of Hotel Corp. unless “the affirmative intention of Congress [is] clearly expressed.” Benz v. Compania Naviera Hidalgo, 353 U.S. 138, 147 (1957). His reliance on this line of cases is misplaced.

First, the rather obvious proposition for which these cases stand is simply that a court should consider the legislative history of a statute to determine its applicability to a given factual situation. International Longshoreman’s Local 1416 v. Amdriadne Shipping Co., 397 U.S. 195, 198-200 (1970). Having done so here, we have concluded that Congress intended to make criminal the acquisition of any “enterprise” having the requisite nexus with interstate or foreign commerce if done in the manner proscribed by the statute.

Secondly, the Benz-McColloch-Windward line of cases involved the exercise of American sovereignty — here, in the context of American labor law — in a regulatory area in which international comity is traditional. Windward Shipping (London) Ltd. v. American Radio Assn.,. supra, 415 U.S. at 112-13; McColloch v. Sociedad Nacional, supra, 372 U.S. at 21. These cases presented difficult issues in the-“delicate field of international relations”. Benz v. Compania Naviera Hidalgo, supra, 353 U.S. at 147. In view of this potential for international discord and retaliation, the Supreme Court was reluctant to apply regulatory provisions of the LMRA to foreign flag vessels and alien seamen in the absence of a clear Congressional directive.

Title IX, by way of contrast, in no way involves regulation of the internal affairs of enterprises subject to the sovereign power of foreign states. The application of § 1962(b) here cannot conceivably endanger American foreign relations. The statute simply provides federal law enforcement agencies with the tools with which to combat organized crime in the United States.

Finally, we are not breaking new ground in applying federal criminal sanctions to activities involving both American and foreign contacts, as Parness suggests. The Sherman Act, 15 U.S.C. § 1 et seq. (1970), has been held to proscribe conspiracies in restraint of trade which are entered into in the United States but carried out both here and abroad, assuming the requisite effect on commerce. E. g., United States v. Sisal Sales Corp., 274 U.S. 268, 276 (1927); cf. Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 704-06 (1962). And, in dealing with one of the antifraud provisions of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b) (1970), we have held that, where there is substantial United States activity and Americans are hurt, it is immaterial that the corporation is foreign. Leasco Data Processing Equipment Corp. v. Maxwell, 468 F.2d 1326 (2 Cir. 1972).

V.

Finally, relying on Papachistou v. City of Jacksonville, 405 U.S. 156, 162 (1972), and United States v. Petrillo, 332 U.S. 1, 8 (1947), Parness claims that § 1962(b) is unconstitutionally vague on its face and as applied. He asserts that the statute .failed to convey to him a sufficiently definite warning as to the proscribed conduct.

Section 1962(b) provides in relevant part as follows:

“It shall be unlawful for any person through a pattern of racketeering activity ... to acquire . any interest in or control of any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce.”

“Racketeering activity” as charged in the instant indictment is defined in § 1961(1) (B) as “any act which is indictable under any of the following provisions of title 18, United States Code: [section] 2314 (relating to interstate transportation of stolen property) . . . .” Under § 1961(5), a “pattern of racketeering activity” requires at least two such acts. Thus, as applied here, § 1962(b) proscribes the acquisition of any interest in any enterprise affecting interstate or foreign commerce resulting from at least two acts which are indictable under § 2314.

Despite what strikes us as the clarity of this statutory proscription, Parness claims that Congress committed a fatal error in defining “racketeering activity” in terms of an “act which is indictable under”, rather than one which violates, the incorporated criminal statutes. He argues that, since he could not have known at the time he made his “investment” whether he would be indicted for the predicate § 2314 offenses, the statutory warning that his acquisition of Hotel Corp. would violate § 1962(b) was constitutionally inadequate.

Parness’ argument presupposes that indictment under § 2314 is a condition precedent to a § 1962(b) prosecution. There is no such statutory requirement. A § 1962(b) offense is predicated in turn upon certain other specified criminal offenses, the constitutionality of which is not challenged. Section 1962(b) creates a separate and wholly independent crime. As with other federal criminal statutes; violation of which is dependent upon proof of another crime, e. g., the Travel Act, 18 U.S.C. § 1952 (1970), and the Gun Control Act, 18 U.S.C. § 921 et seq. (1970), prosecution under § 1962(b) does not require that the predicate offenses paust previously have been charged. Cf. United States v. Nardello, 393 U.S. 286, 293-96 (1969) (Travel Act); United States v. Ramirez, 482 F.2d 807, 813-14 (2 Cir.), cert. denied, 414 U.S. 1070 (1973) (Gun Control Act); United States v. Sudduth, 457 F.2d 1198, 1201 (10 Cir. 1972) (Gun Control Act); United States v. Rizzo, 418 F.2d 71, 74 (7 Cir. 1969), cert. denied, 397 U.S. 967 (1970) (Travel Act).

To convict Parness under § 1962(b), the prosecution was required to establish only that he acquired his interest in Hotel Corp. through two or more § 2314 violations. That he may have been uncertain as to whether he would be indicted for the predicate offenses is irrelevant to the adequacy of the warning of the risk of criminality conveyed by § 1962 (b).

Parness claims that the phrase “pattern of racketeering activity”, although clearly defined as “at least two acts of racketeering activity”, is unconstitutionally vague as applied. He argues that, since he was charged under § 1962(b) with devising a scheme to acquire Goberman’s interest in Hotel Corp. through a “pattern” of § 2314 offenses and since § 2314 proscribes interstate transportation in furtherance of a scheme to defraud, he could not have known whether two indictable § 2314 offenses referred to .two fraudulent schemes or two acts of interstate transportation pursuant to a single scheme. This claim rests upon a misinterpretation of § 2314.

The indictment charged Parness with three acts, each of which constituted a separate § 2314 offense. The interstate transportation of the cashier’s checks on February 4 and 9 constituted two such acts (Counts Four and Six), and Goberman’s interstate travel on February 4 a third (Count Five). Proof that the criminal conduct was in furtherance of a scheme to defraud was an essential element of the offense charged in Count Five only. To establish the offenses charged in Counts Four and Six, the government was required to establish only that Parness knowingly caused converted marker collections to be transported in interstate commerce. It did so. Accordingly, assuming arguendo that the claimed ambiguity under other circumstances might be said to exist, there is no such possibility here. The constitutional validity of a statute does not depend upon whether there are marginal cases in which its clarity may be in doubt. United States v. Petrillo, supra, 332 U.S. at 7; Robinson v. United States, 324 U.S. 282, 285-86 (1945); United States v. Manfredi, 488 F.2d 588, 603 (2 Cir. 1973), cert. denied, 417 U.S. 936 (1974). Rather, the test is whether the statute conveys an adequate warning as applied in a specific situation. E. g., Williams v. United States, 341 U.S. 97, 104 (1951); United States v. Deutsch, 451 F.2d 98, 113-14 (2 Cir. 1971), cert. denied, 404 U.S. 1019 (1972). Here, the interstate transportation of the two cashier’s checks clearly were acts indictable under § 2314. They provided unambiguous predicates for the § 1962(b) “pattern”.

We reject Parness’ claim that § 1962(b) is unconstitutionally vague on its face and as applied.

We have considered appellants’ other claims of error and find them to be without merit.

Affirmed.

      . Unless otherwise stated, appellant Milton Parness will be referred to as Parness and appellant Barbara Parness will be referred to as Barbara or Barbara Landew, her name before her marriage to Milton Parness. Appellants were married after the acts charged in the indictment.

      . The indictment returned August 2, 1973, which superseded an earlier one, contained seven counts. In Counts One, Two and Three, Parness was charged with acquiring three separate enterprises through patterns of racketeering activity, in violation of 18 U.S.C. § 1962(b) (1970). Counts Four through Seven charged both defendants, in violation of 18 U.S.C. § 2314 (1970), with crimes alleged to constitute the individual acts of racketeering which formed tire pattern of racketeering charged in Counts One through Three.
      The trial began on September 12 and concluded on October 3, 1973 when the jury returned a verdict finding both defendants guilty on Counts Four, Five and Six and Parness guilty on Count One. Counts Two, Three and Seven were dismissed at the close of the- government’s case.
      On December 7, Parness was sentenced to concurrent ten year terms of imprisonment on each of the four counts and was fined a total of $55,000. He has been enlarged on bail pending appeal. Barbara was sentenced to concurrent two year terms of imprisonment on each of Counts Four, Five and Six and was fined a total of $6,000; execution of her sentences of imprisonment was suspended and she was placed on probation for three years.

      . The $160,000 represented the $150,000 principal of the Holzer loan, plus $5,000 in accrued interest and $5,000 for Holzer’s attorney’s fees.

      . The cashier's checks were in the amounts of $150,000 and $5,000, representing the principal and accrued interest on the Holzer loan.

      . Proof of conversion of marker collections was not required for conviction on Count Five which charged appellants under paragraph 2 of § 2314 with causing Goberman to travel interstate on February 4 in furtherance of the scheme to defraud him of his interest in Hotel Corp.,

      . Markers often were paid in cash by carriers for tlie gambler-debtors. In late January 1971, agents of the Internal Revenue Service intercepted sucli a carrier and seized $60,000 in cash marker collections intended for Parness.

      . Parness also sought to conceal his interest in Olympic itself. He executed corporate documents in the name of Edward Feld-man without the latter’s knowledge. Later he tried to persuade Feldman to testify falsely at trial that he liad authorized Parness to use his name.

      . Neither appellant testified at trial. The only witnesses called by the defense were John Blandino, the executive assistant manager at the hotel in 1970, and Larry Faigin, Esq., the attorney who represented Holzer in the Goberman transaction.

      . Relying on Griffin v. California, 380 U.S. 609 (1965), appellants argue that the prosecutor’s reference in his summation to the lack of any credible explanation as to the source of the funds constituted an impermissible comment on their failure to produce evidence or to testify on their own behalf. Read in context, we hold that the prosecutor’s remarks constituted fair comment on the weakness inherent in the entire defense case and not improper comment upon appellants’ silence. See United States v. Dioguardi, 492 F.2d 70, 82 (2 Cir. 1974); United States v. Lipton, 467 F.2d 1161, 1168 (2 Cir. 1972), cert. denied, 410 U.S. 927 (1973).

      . We reject out of hand the claim that the activities of Hotel Corp. did not have the requisite effect on interstate or foreign commerce. It was owned by Goberman, an American citizen. It was financed by Pennsylvania banks and Massachusetts businessmen. It had numerous domestic creditors. It served primarily American tourists. And its accounts were payable in U.S. dollars to Olympic, a New Jersey corporation.

      . H.R.No.1549, 91st Cong., 1st Sess. (1970), quoted in 2 U.S.Code Cong. & Admin.News 4033 (1970).
      Indeed, Congress clearly intended that Title IX as a whole “be liberally construed to effectuate its remedial purposes.” Pub.L.No. 91-452 § 904 (1970).

      . Pub.L.No.91-452 § 1 (1970).
      The floor debate on the Act further indicates the concern of Congress in protecting the American economy as a whole. E. g., 115 Cong.Rec. 5874 (1969) (remarks of Senator McClellan); 116 Cong.Rec. 35193 (1970) (remarks of Congressman Poff); 116 Cong.Rec. 35327 (1970) (remarks of Congressman Randall).

      . We note that § 2314, violations of which jn'ovide the predicates for I’arness’ conviction under § 1962(b), has been held to apply to the transportation of foreign securities stolen in a foreign country. United States v. Greco, 298 F.2d 247, 251 (2 Cir.), cert. denied, 369 U.S. 820 (1962).


author: VAN OOSTERHOUT, Senior Circuit Judge.

text:
    UNITED STATES of America, Appellee, v. Glenn J. JUNE, Appellant.
    No. 74-1470.
    United States Court of Appeals, Eighth Circuit.
    Submitted Sept. 10, 1974.
    Decided Sept. 27, 1974.

      McArthur & Lofton, Little Rock, Ark., for appellant.
    W. H. Dillahunty, U. S. Atty., and 0. H. Storey, III, Asst. U. S. Atty., Little Rock, Ark., for appellee.
    Before VAN OOSTERHOUT, Senior Circuit Judge, and HEANEY and STEPHENSON, Circuit Judges.
   VAN OOSTERHOUT, Senior Circuit Judge.

Defendant Glenn J. June, after entering a plea of not guilty to two counts of an indictment charging violation of 42 U.S.C. § 2703(a) and after.having filed written waiver of jury trial, was tried to the court and found guilty on both counts. Final judgment of conviction on such counts and imposing sentence, dated April 3, 1974, was filed on April 11, 1974. The threshold issue presented is whether this court has jurisdiction over the attempted appeal. More specifically, the issue is whether a timely notice of appeal has been filed which confers jurisdiction upon this court.

The only notice of appeal disclosed by the record is one filed on June 10, 1974, stating the appeal is “from the final judgment and sentence entered in this action on the 4th day of June, 1974.” An examination of the briefs and record created a serious doubt whether this court acquired jurisdiction. An order was entered on August 21, 1974, requiring defendant June to show cause why the appeal should not be dismissed by reason of failure to file timely notice of appeal in conformity with Rule 4(b), FRAP. Such notice was served on defendant and response thereto was filed. We hold that the notice of appeal from conviction was not timely filed and that the appeal should be dismissed for want of jurisdiction.

“The courts have uniformly held that the taking of an appeal within the prescribed time is mandatory and jurisdictional.” United States v. Robinson, 361 U.S. 220, 229, 80 S.Ct. 282, 288, 4 L.Ed. 2d 259 (1960); see Temple v. United States, 386 U.S. 961, 87 S.Ct. 1024, 18 L.Ed.2d 110 (1967); Berman v. United States, 378 U.S. 530, 84 S.Ct. 1895, 12 L.Ed.2d 1012 (1964); United States v. Wade, 467 F.2d 1226, 1228 (8th Cir. 1972).

The time for taking a criminal appeal is governed by Rule 4(b) of the Federal Rules of Appellate Procedure which provides in pertinent part:

In a criminal case the notice of appeal by a defendant shall be filed in the district court within 10 days after the entry of the judgment or order appealed from.
*X- -X- * *X> -X- -X-
If a timely motion in arrest of judgment or for a new trial * * * has been made, an appeal from a judgment of conviction may be taken within 10 days after the entry of an order denying the motion.
* * * * -x- *
A judgment or order is entered within the meaning of this subdivision when it is entered in the criminal docket. Upon a showing of excusable neglect the district court may, before or after the time has expired, with or without motion and notice, extend the time for filing a notice of appeal for a period not to exceed 30 days from the expiration of the time otherwise prescribed by this subdivision.

It readily appears from the reading of the rule that after the expiration of forty days from the entry of a final judgment there is nothing either the trial court or the court of appeals can do to extend the time for filing notice of appeal.

In our present case, it is clear that the final judgment was entered no later than April 11, 1974. The notice of appeal was filed on June 10, 1974, more than forty days after the entry of the judgment.

Defendant’s presently employed counsel was retained subsequent to the trial resulting in the conviction, apparently for the purpose of advising defendant with respect to an appeal. It seems quite clear from the record that the defendant was advised both by the court and counsel with respect to his right of appeal. Defendant in response to the show cause order stated that he was reluctant to incur the cost of an appeal. He had moved from Arkansas to Michigan and desired to work out an arrangement whereby he could serve his sentence in a Michigan jail with provision for work release during working hours. A motion was filed on May 2, 1974, for modification of sentence. Such motion was discussed with the court and the prosecuting attorney. No agreement was reached, a hearing was held on the motion on June 4, 1974, and an order was entered denying the motion.

An appeal lies from the order refusing to modify the sentence (the June 4, order). However, defendant in his brief makes no attack upon the order refusing to modify the sentence, and as heretofore stated, the appeal is directed to the judgment of conviction. The date of the judgment of conviction is erroneously stated to be June 4, 1974, in the notice of appeal.

Defendant’s position appears to be that the filing of the motion to modify sentence extends the time for appeal. Such contention is not supported by authority. Rule 4(b), supra, provides that a timely motion in arrest of judgment or for a new trial extends the time of appeal from conviction to ten days after the ruling on the motion. No motion in arrest of judgment or for a new trial was made. No provision is made by the rule or otherwise for the extension of time of appeal by reason of the filing of a motion to modify the sentence. Cf. United States v. Quon, 241 F.2d 161, 163 (2d Cir. 1957); 9 Moore’s Federal Practice 1Í 204.18.

It is apparent from the trial court’s letter attached to defendant’s response that the trial court was of the view that defendant should be entitled to ten days from the June 4 order denying his motion to modify sentence to appeal from the conviction. However, for the reasons heretofore pointed out, the trial court had no jurisdiction to extend the right of appeal beyond the forty days fi'om the date of the final judgment. The June 4, 1974, order denying modification of sentence in connection with which the trial court expressed the view that June should have ten days from June 4 to appeal from his conviction was made more than forty days after the judgment of conviction. Defendant could not have been misled to his prejudice by any statement made by the court with respect to his right of appeal after the right of appeal had theretofore been terminated by lapse of time.

Defendant’s contention that we cannot consider our jurisdiction to entertain this appeal because the Government has failed to comply with the provision of local Rule 9, that motions to dismiss on jurisdictional grounds must be filed within fifteen days after the appeal has been docketed, lacks merit. The rule further provides that this court can waive timely filing of the motion for good cause or on its own motion. Additionally, subdivision (a) of Rule 9 expressly provides for the dismissal of appeals for want of jurisdiction by the court on its own motion. Moreover, it is well-settled law that a court of appeals has only such jurisdiction as conferred upon it by law and that it is the duty of the court of appeals to examine and determine its jurisdiction, whether or not the jurisdictional issue is raised by the parties. Stewart v. Bishop, 403 F.2d 674, 677 (8th Cir. 1968).

The appeal is dismissed for want of jurisdiction by reason of June’s failure to file a timely notice of appeal.

      . The sole issue raised upon defendant’s belated appeal is that the evidence is insufficient to support the conviction. We have carefully examined the entire record and state that if the appeal were properly before us on the merits, we would determine that the judgment of conviction is supported by substantial evidence and affirm the conviction. This statement is made in the hope that it will discourage any further non-meritorious attempts to attack the conviction.


text:
    Harry LEWIS, Plaintiff-Appellant, v. Robert S. ODELL et al., Defendants, and Howard Butcher III et al., Defendants-Appellees.
    No. 1048, Docket 73-2531.
    United States Court of Appeals, Second Circuit.
    Argued June 12, 1974.
    Decided Sept. 24, 1974.

      Bennett Frankel, New York City, for plaintiff-appellant.
    Edward W. Keane, New York City (Lawrence W. Nelson and Sullivan & Cromwell, New York City, on the brief), for defendants-appellees.
    Before LUMBARD, HAYS and TIMBERS, Circuit Judges.
   HAYS, Circuit Judge:

Appellant commenced this action alleging that appellee Butcher, while a director of Penn Central Company, used material inside information for the benefit of himself, the brokerage firm of Butcher & Sherrerd, of which he is a partner, and its customers, and International Utilities- Corporation, of which he was also a director. Appellant seeks recovery on behalf of Penn Central and its railroad subsidiary, Penn Central Transportation Company.

Appellant originally brought the action under section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b) (1970), and the Securities and Exchange Commission’s Rule 10b-5, 17 C.F.R. § 240.10b-5 (1973). He later sought to amend his complaint to allege diversity of citizenship as an additional basis for jurisdiction. The district court held that appellant had not stated a claim under section 10(b) or Rule 10b-5. The district court held that, as of the time when appellant sought leave to amend, the Penn Central Transportation Company would have to be realigned as a plaintiff and that since its citizenship was not diverse from appel-lees Butcher and Butcher & Sherrerd the necessary complete diversity was lacking.

Appellant appeals only from the court’s ruling regarding diversity jurisdiction. We affirm.

At the commencement of this action there was no diversity. The partnership, Butcher & Sherrerd, had one general partner who was a citizen of New York, as was plaintiff, and for purposes of diversity a partnership is a citizen of each state of which a general partner is a citizen. Great Southern Fire Proof Hotel Co. v. Jones, 177 U.S. 449, 456, 20 S.Ct. 690, 44 L.Ed. 842 (1900); Woodward v. D. H. Overmyer Co., 428 F.2d 880, 883 (2d Cir. 1970), cert. denied, 400 U.S. 993, 91 S.Ct. 460, 27 L.Ed.2d 441 (1971).

Because of this, appellant declared his intention to drop the partnership ás a defendant. However, when he made the declaration, the Penn Central Transportation Company had fallen into bankruptcy and was being managed by trustees appointed by a federal district court under § 77 of the Bankruptcy Act, 11 U.S.C. § 205. Since appellant was seeking to change the nature of the action, the district court’s jurisdiction had to be determined at this later time rather than at the commencement of the action, as is usually the case. C. Wright, Law of Federal Courts § 28 (2d ed. 1970). A realignment of the parties that would make the Transportation Company, a Pennsylvania corporation whose principal offices are in Pennsylvania, a plaintiff would destroy diversity jurisdiction since appellee Butcher is a Pennsylvania citizen. See Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806).

As a general rule the federal courts are required to realign parties according to their real interests so as to produce an actual collision of interests. Indianapolis v. Chase National Bank, 314 U.S. 63, 69, 62 S.Ct. 15, 86 L.Ed. 47 (1941). The Supreme Court clarified the application of this rule to shareholder’s derivative suits in the companion cases of Smith v. Sperling, 354 U.S. 91, 77 S.Ct. 1112, 1 L.Ed.2d 1205 (1957), and Swanson v. Traer, 354 U.S. 114, 77 S.Ct. 1116, 1 L.Ed.2d 1221 (1957). In Smith the Court held that the corporation should not be realigned as a plaintiff when it is hostile to the action.

“Whenever the management refuses to take action to undo a business transaction or whenever, as in this case, it so solidly approves it that any demand to rescind would be futile, antagonism is evident. . . . This is a practical not a mechanical determination and is resolved by the pleadings and the nature of the dispute.” 354 U.S. at 97, 77 S.Ct. at 1116.

Applying this standard to the instant case, we find that the Penn Central Transportation Company is not antagonistic to appellant’s suit. The nature of the dispute is such that none of the trustees will be harmed by a judgment for plaintiff or has any reason to oppose the suit. The pleadings do not disclose any antagonism. The Transportation Company has not only retained neutrality in its responses to appellant’s complaints but has even reserved the right to take control of the action. Indeed, the Transportation Company has not even “refuse [d] to take action,” for appellant has never made any demand on it. We could reverse the district court only by making the “mechanical determination” that as a matter of law a eor-poration is antagonistic to a shareholder’s derivative suit whenever it does not actively join the action as a plaintiff, Smith and Swanson forbid such a holding.

Affirmed. ’

      . After the filing of the complaint in this case, the Penn Central Company in 1969 went through a reorganization from -which a new Penn Central Company, a holding company, and the Penn Central Transportation Company, an operating subsidiary, emerged. As mentioned below, the Penn Central Transportation Company filed a petition for reorganization in bankruptcy in the Eastern District of Pennsylvania on June 21, 1970. Eor a more detailed account of these events, see In re Penn Central Securities Litigation, 335 F.Supp. 1026, 1030-1031 (E.D.Pa.1971).


author: GRANT, Senior District Judge.

text:
    Narcisse BATISTE et al., Plaintiffs-Appellants, Cross Appellees, v. FURNCO CONSTRUCTION CORPORATION, Defendant-Appellee, Cross Appellant.
    Nos. 73-1255 and 73-1256.
    United States Court of Appeals, Seventh Circuit.
    Argued Nov. 29, 1973.
    Decided Sept. 19, 1974.

      Judson H. Miner, Chicago, 111., for Nareisse Batiste.
    Joel H. Kaplan, Chicago, III., for Furnco Const.
    Before CLARK, Associate Justice, CASTLE, Senior Circuit Judge, and GRANT, Senior District Judge.

       Associate Justice Tom C. Clark of the Supreme Court of the United States (Retired) is sitting by designation.

       Senior District Judge Robert A. Grant of the Northern District of Indiana is sitting by designation.

   GRANT, Senior District Judge.

Both the plaintiffs and the defendant have appealed from an order of the district court which held this cause to be a class action, allowed the addition of a named plaintiff and granted summary judgment for plaintiffs while denying them all relief other than Four Hundred Dollars ($400.00) in attorney’s fees.

Plaintiffs brought this action pursuant to Section 1 of the Civil Rights Act of 1866, 42 U.S.C. § 1981, and Title VII of the 1964 Civil Rights Act, 42 U.S.C. § 2000e et seq., alleging that plaintiffs, who are Negro bricklayers, were denied employment by Defendant Furnco Construction Corporation because of their race. They requested that the cause be treated as a class action and they sought injunctive relief as well as back pay and attorney’s fees.

After they had been denied employment in 1969, plaintiffs had filed timely complaints with the Illinois Fair Employment Practices Commission (F.E.P. C.), and the federal Equal Employment Opportunity Commission (E.E.O.C.). Extensive hearings were held before a hearing examiner of the F.E.P.C. who issued a recommendation on February 3, 1971, that the complaints be dismissed. On February 8, 1971, the E.E.O.C. advised plaintiffs of their right to file suit in the appropriate federal District Court, and plaintiffs then instituted this action. Defendant Furnco Construction Corporation filed a motion for summary judgment alleging that plaintiffs’ action was barred by the doctrine of election of remedies. Plaintiffs filed their motion for summary judgment and an application for leave to add an additional party-plaintiff, Sylvester Williams, who had participated in the action before the F. E.P.C. and the E.E.O.C., but who had not been named in the original complaint.

Meanwhile, on August 26, 1971, the Illinois Fair Employment Practices Commission rejected the hearing éxaminer’s recommendation and entered an order directing the defendant to cease and desist the unfair labor practices complained of, and to offer to employ the plaintiffs as bricklayers on the next job defendant performed in Illinois. Finally, the Commission awarded lost wages to the plaintiffs. Defendant appealed this order to the appropriate State Circuit Court (where the cause is still pending), thus staying the order of the Commission.

On October 30, 1972, the U. S. District Court issued a “Memorandum Opinion and Judgment Order” in the instant cause of action. See Batiste v. Furnco Construction Corporation, 350 F.Supp. 10 (N.D.111.1972). The district court granted plaintiffs leave to proceed as a class, representing all who are or might become victims of defendant’s racially discriminatory employment practices, and granted plaintiffs leave to add Sylvester Williams as a party-plaintiff in this action. Furthermore, relying on the determination of the Illinois Fair Employment Practices Commission, the court granted plaintiff’s motion for summary judgment on their complaint, but limited recovery to the only relief that the F.E.P.C. had not granted plaintiff, namely, attorney’s fees. Thereafter, plaintiffs submitted a verified petition requesting $12,987.00 for 288.6 hours spent on the federal court action. The court awarded plaintiffs $400.00 in attorney’s fees, noting that plaintiffs’ request was clearly excessive. Thereafter, both parties instituted appeals from the district court’s ruling.

This court is presented with many issues in this action. First, both parties have challenged the district court’s award of summary judgment. Defendant asserts that plaintiffs were not entitled to summary judgment, while plaintiffs contend that once the court granted summary judgment it should not have limited recovery to attorney’s fees, but provided the injunctive relief and back pay requested.

In this appeal defendant asserts that the doctrines of election of remedies, res judicata and full faith and credit, bar plaintiffs from bringing their action to federal court after the F.E.P.C. adjudicated plaintiffs’ claims. Although plaintiffs were required by 42 U.S.C. § 2000e-5(c) to first present their claims to the appropriate state authority for 60 days, defendant argues that by continuing to allow the state authority to adjudicate the action instead of removing it at the end of the 60-day period, plaintiffs have elected their remedy and are barred from bringing their action to the federal courts. Noting that the F.E.P. C. is afforded res judicata by the Illinois courts, defendant contends that the federal courts should give the Commission’s decision full faith and credit whether it had been favorable or unfavorable to plaintiffs or whether or not it might later be reversed.

We must agree with the ruling in Cooper v. Philip Morris, Inc., 464 F.2d 9 (6th Cir. 1972) where the court squarely rejected the application of the doctrines of election of remedies and res judicata to Title VII actions where plaintiffs had litigated their charges to final adjudication in state proceedings. There is a strong Congressional policy that plaintiffs not be deprived of their right to resort to the federal courts for adjudication of their federal claims under Title VII. Recently, Congress amended Title VII to explicitly provide that:

In determining whether reasonable cause exists, the Commission shall accord substantial weight to final findings and orders made by State or local authorities in proceedings commenced under State or local law pursuant to the [deferral] provisions of subsections (c) and (d). 42 U.S.C. § 2000e-5(b), as amended by Pub.L. 92-261; 86 Stat. 103 (1972).

While this provision is addressed to the E.E.O.C. rather than the courts, it is strongly indicative of the Congressional policy that final responsibility for the administration of Title VII rests within the federal system. See Cooper, supra, 464 F.2d at 12. It is also apparent that if federal actions are barred by the application of election of remedies and res judicata, then the statutory scheme of deferral to state proceedings will be frustrated by requiring that the plaintiff, who desired to bring an action in federal court, first commence state proceedings but abandon them quickly before an adjudication is made.

Defendant also argues that full faith and credit should be afforded to the state determination, thus barring the subsequent Title VII action in federal court. Defendant asserts that the courts have never considered this question before. However, full faith and credit implemented by federal statute (28 U.S.C. § 1738) ■ is the means by which state adjudications are made res judicata. Lynne Carol Fashions, Inc. v. Cranston Print Works Co., 453 F.2d 1177, 1184 (3rd Cir. 1972). And “other well-defined federal policies, statutory or constitutional, may compete with those policies underlying section 1738.” American Mannex Corporation v. Rozands, 462 F.2d 688, 690 (5th Cir. 1972), cert. den., 409 U.S. 1040, 93 S.Ct. 524, 34 L.Ed.2d 489. It has beeen determined that the Congressional policies embodied in Title VII require that res judicata not be applied to state adjudications. Cooper, supra; Voutsis v. Union Carbide Corporation, 452 F.2d 889 (2nd Cir. 1971) and Young v. South Side Packing Company, 369 F.Supp. 59 (E.D.Wis.1973).

This Circuit has noted that where procedures for dual or parallel remedies are provided, duplicative relief must be avoided to the extent that there be no unjust enrichment. Bowe v. Colgate-Palmolive Company, 416 F.2d 711, 715 (7th Cir. 1969). Clearly, the federal court action need not be barred in order to prevent duplicative monetary awards, should a plaintiff prevail in both federal and state actions, since the district court is capable of fashioning relief which could preclude an unjust enrichment or windfall. Lopez v. State Foundry & Machine, Inc., 336 F.Supp. 34, 37 (E.D. Wis.l972). Accordingly, we find that the fact that final judgment was issued in the state proceedings does not bar this action nor deprive plaintiffs of their right to relief in federal court.

However, the district court erred in entering summary judgment for the plaintiffs. It is evident from the record and the district court’s opinion that it merely accepted the ruling of Illinois Fair Employment Practices Commission and it did not attempt to make its own determination. While a defendant can be required to defend again, it cannot be forced to accept the prior findings, and the federal court must conduct its own inquiry. Young, supra, 369 F.Supp. at 61. If, as the district court noted, the parties did not desire to present the evidence again, the prior state record could have been introduced and stipulated as containing all the pertinent evidence and the court could have based its determination on that evidence without a new trial; however, the court was required to examine that evidence and make its own findings.

Next, defendant challenges the district court’s determination that this cause should be treated as a class action and that Sylvester Williams could be added as a party-plaintiff. Plaintiffs sought to proceed as a class representing all Negro bricklayers who are or might ever become the victims of defendant’s racially discriminatory employment practice, in order to request that the district court enjoin defendant from employing such practices in the future. As the district court noted, plaintiffs’ allegations of the existence of such a class was sufficient to meet all of the requirements of Rule 23(a), F.R.Civ.P. Further, membership in such a class would not have to be limited to those individuals who had filed charges with the E.E. O.C. prior to instituting this suit. Oatis v. Crown Zellerbach Corp., 398 F.2d 496 (5th Cir. 1968). Defendant has contended that the evidence establishes that there has been no pattern of discrimination which would merit the injunctive relief plaintiffs have sought for the class. However, the district court has yet to review the evidence and, at the time that the district court makes its ruling' on the cause, it can also determine to what extent relief for the class would be required. Sprogis v. United Air Lines, Inc., 444 F.2d 1194 (7th Cir. 1971).

The district court determined that inasmuch as this cause was a class action, Sylvester Williams could be added as a party-plaintiff. The court correctly noted the fact that his failure to join in the suit within 30 days after the E.E.O.C. issued its right-to-sue letter, as required by 42 U.S.C. § 2000e-5(e), would not bar him from joining in the class action, and that Sylvester Williams was a proper member of the class. Further, failure to commence the action within the 30-day period as required by 42 U.S.C. § 2000e-5(e) would not bar his action under 42 U.S.C. § 1981 et seq. Battle v. National City Bank of Cleveland, 364 F.Supp. 416 (N.D.Ohio 1973).

Plaintiffs have contended that the district court abused its discretion when it awarded plaintiff only $400.00 in attorney’s fees. However, the court has held that an award of attorney’s fees can only be made to a prevailing party and as a general guideline the amount of the award should be proportionate to the extent that the party has prevailed in the suit. Williams v. General Foods Corp., 492 F.2d 399 (7th Cir. 1974). In view of our reversing and remanding this action, determination of who are the prevailing parties can only be made after completion of the district court’s proceedings upon remand. Accordingly, we make no comment regarding attorneys fees and reserve that judgment for further consideration.

For the foregoing reasons, we reverse the judgment of the district court and remand for further proceedings consistent with this opinion.

      . It would be meaningless for Congress to set up standards for E. E. O. C. examination of cases after determinations were made in state proceedings if Congress intended that those cases be barred from consideration in federal court. The E. E. O. C., which lacks enforcement power, would be attempting to mediate with defendants who were already protected from any further legal action.

      . It should again be noted that plaintiffs have yet to achieve any relief at all.