author: FEINBERG, Circuit Judge:

text:
    UNITED STATES of America, Appellant, v. Albert GOLDSTEIN et al., Appellees.
    No. 796, Docket 73-1165.
    United States Court of Appeals, Second Circuit.
    Argued April 19, 1973.
    Decided May 25, 1973.
    See also, D.C., 342 F.Supp. 661.

      Michael B. Pollack, Atty., Dept, of Justice (Dennis E. Dillon, Atty., Dept, of Justice, Robert A. Morse, U. S. Atty., E. D. N. Y., L. Kevin Sheridan, Asst. U. S. Atty., on the brief), for appellant.
    Thomas J. O’Brien, New York City (Kostelanetz & Ritholz, James M. La Rossa, Joseph E. Brill, New York City, on the brief), for appellees Goldstein, Caesar, Jacobson and Geller.
    Jerome Lewis, New York City (H. Elliot Wales, New York City, on the brief), for appellee Wisch.
    Before CLARK, Associate Justice, and WATERMAN and FEINBERG, Circuit Judges.

       Retired Associate Justiee of the Supreme Court of the United States, sitting by designation.

   FEINBERG, Circuit Judge:

The United States seeks to appeal from a pre-trial order of the United States District Court for the Eastern District of New York, Jack B. Weinstein, J., dismissing an indictment against appellees on the ground that a mistrial declared in a prior trial on the same indictment was unwarranted, and that reprosecution would violate the double jeopardy clause of the fifth amendment. Under the recently amended Criminal Appeals Act, 18 U.S.C.A. § 3731 (1972-73 Supp.), the Government may appeal from an

order of a district court dismissing an indictment or information as to any one or more counts, except that no appeal shall lie where the double jeopardy clause of the United States Constitution prohibits further prosecution.

We thus must answer two questions. First, does the language of section 3731 prevent an appeal by the Government? And second, was Judge Weinstein correct in holding that the double jeopardy clause barred a second trial? For reasons which follow, we conclude that an appeal does lie to this court from the order below, and, further, that the indictment was erroneously dismissed. Accordingly, we reverse and remand for further appropriate proceedings.

I

On January 7, 1972, appellees were indicted in the Eastern District of New York, on 20 counts charging various violations of federal internal revenue laws, 26 U.S.C. §§ 7201, 7206, and conspiracy to violate those provisions. Trial commenced on September 5, 1972, before Judge Orrin G. Judd. Jury deliberation began on the morning of October 5. The jury was excused for the evening after failing to reach a verdict with respect to any defendant on any count. That evening, Judge Judd had a brief exchange with Juror No. 2 (Mrs. Rappa-port), which he related to counsel after jury deliberation had recommenced the following morning. As he explained it, she had asked to see him “on a personal matter.” The judge had observed her “sniffling” and “quite ill at ease during the day” and he “started commiserating with her on her illness.” She replied that she was “all'right” but just felt “incapable.”

At 11:30 A.M. on this second — and last — day of deliberation, the jury requested and received a re-reading of the charge. At 3:10, the jury sent a note to the judge stating it was

apparently not able to reach a unanimous verdict on any count except number 20. Please advise.

In discussion with counsel, the judge indicated that he intended to tell the jury to deliberate “another couple of hours,” but doubted that he would ask them to come back on Tuesday. Defense counsel first objected to

your Honor saying that they should be returned for deliberation for a couple of more hours because it may well be that what that amounts to is an incarceration against their will

and then pointed out with respect to requiring the jury’s return on Tuesday:

There would be Friday night, all day Saturday, all day Sunday, all day Monday. So there would be three full days and four nights of separation during which it would be impossible to avoid pollution of the jury ....

Judge Judd then called the jury back into the courtroom and told them that he would ask them “to go back and to consider further and tell me whether further deliberation would be useful,” although he pointed out that he did not intend to have them stay “late tonight” or return on the following Tuesday. He then gave what the Government accurately describes as a modified “Allen charge.” Thereafter, defense counsel moved for a mistrial on the ground that the jury was in “deadlock, which apparently is a hopeless one.” The motion was denied.

At approximately 5 o’clock, the jury foreman sent a second note, which said:

[Ajfter reviewing most of the testimony and raising what arguments and persuasion we could bring to bear, Mrs. Rappaport has insisted that under no circumstances can she vote guilty on any of the Counts.

Judge Judd thereupon stated his view that this meant “a disagreement on seventeen counts” and resolved to “bring the Jury in and see.” The jury was brought in; they announced a verdict of not guilty on count 20, involving only appellee Goldstein, and were polled at the Government’s request. The judge then asked: “And it’s clear that you are in disagreement on the rest of the counts?”, to which the foreman replied “I am afraid so.” The judge then continued :

I appreciate the time you have put in, the effort that’s been made. I might have given a more coercive charge, but I thought it was improper. I think we should respect the conscience of anybody on the Jury.
I would like to keep you for five or ten minutes just to give you a little picture of things behind the scenes. You are entitled to wonder about what happened at all these side bars, and this has been only an income tax case. But it has been an important case for everybody.
You have heard some of the best defense counsel in this City for the last five weeks. The Government attorney is not an ordinary assistant U.S. Attorney. .

The judge then went on to disclose, among other things, that the government attorney was from the Organized Crime section of the Justice Department, that defendant Goldstein’s tax returns disclosed income from gambling, and that certain defendants had threatened a witness prior to the trial. Counsel took vigorous exception to these comments — a concern which we share — and moved to dismiss the indictment. The motion was denied.

The case was set for retrial before Judge Weinstein, but prior to trial, defendants moved to dismiss the indictment principally on the ground of double jeopardy. The judge granted the motion; while his order of January 8, 1973 dismissing the indictment contained no express findings, the bases for the order were carefully stated during the course of the hearing held on the motion. We set these out extensively:

I am particularly impressed with the transcript of October 6, 1972 [the second day of jury deliberation described above] at 5:00 o’clock P.M.
The Court said there is “still disagreement on all but one count.” There is no indication that disagreement was fixed or that there could not be some agreement had' there been further consultation. There were 18 counts undisposed of at that time. Many of them involved a number of defendants and all of them involved at least two defendants.
The Jury was then polled on Count 20 and the defendant in that count was found not guilty. There’s no inquiry made by the Court as to whether the Jury wished to consult further with each other. There is no indication that they disagreed with respect to each defendant on each count. In fact, it is not clear that they had considered in any detail each defendant as to each count. Immediately after the Jury was polled, the Judge began to address the Jury and there would be nothing from which their counsel could determine the nature of the remarks that would be made up until line 15 of page 6 of the transcript. Then reference is made to the organized crime section of the Department of Justice. Thereafter very quickly there is reference to highly prejudicial material which undoubtedly had taken counsel by surprise and it would be only at that point I would think that the normal practice was not going to be followed, that inquiry was not going to be made to the Jury with respect to whether they might possibly reach an agreement given more time or whether they might possibly reach an agreement on any of the counts as to any of the defendants.
•X* -X- -X-
I must reluctantly conclude that the Court acted without proper consultation with the attorneys and without proper consultation with the Jury and that the case was improperly taken from the Jury at this point without the consent of the defendants and before it had been determined that no agreement could be reached.
Under the circumstances, therefore I reluctantly find that defendants should be placed in double jeopardy if they were to be tried ....

From the subsequent order dismissing the indictment, the Government appeals.

II

At the outset, appellees claim that the Government cannot appeal from Judge Weinstein’s order dismissing the indictment on double jeopardy grounds. The 1970 amendments to the Criminal Appeals Act, enacted as Title III, § 14 of the Omnibus Crime Control Act of 1970, P.L. 91-644, 84 Stat. 1880, 1890, 91st Cong., 2d sess., U.S.Code Cong. & Admin.News 1970, p. 5804, were designed to eliminate much of the tortuous statutory construction, e. g., United States v. Sisson, 399 U.S. 267, 90 S.Ct. 2117, 26 L.Ed.2d 608 (1970), and United States v. Apex Distributing Co., 270 F.2d 747 (9th Cir. 1959) (en bane), to which federal courts had been put in interpreting the coverage of the predecessor act. See S.Rep. No. 91-1296, 91st Cong., 2d sess., at 2 (1970). But a principal purpose of the amendments was to broaden considerably those situations in which the Government could appeal. Id. While the predecessor act was to be strictly construed against the Government’s right to appeal, e. g., United States v. Sisson, supra, 399 U.S. at 291, 90 S.Ct. 2117, the present statute expressly directs that its provisions “shall be liberally construed to effectuate its purposes.”

Appellees do not — and cannot — dispute this reading of statutory purpose. They contend, nonetheless, that the plain language of the 1970 amendments forecloses our appellate jurisdiction. Any need to undertake a detailed refutation of this assertion has been obviated by this court’s' recent opinion in United States v. Castellanos, 478 F.2d 749, 750 (2d Cir. 1973). Like this case, Castellanos involved an appeal from an order dismissing an indictment on grounds of double jeopardy prior to the impaneling of a new jury. In holding that order ap-pealable, Judge Smith observed that such an order was plainly appealable under the predecessor statute in light of United States v. Jorn, 400 U.S. 470, 91 S.Ct. 547, 27 L.Ed.2d 543 (1971), and that “[n]othing in either the legislative history or the language of the new statute . . . indicates the slightest intention to cut back the scope of former § 3731. Indeed, quite the opposite seems true . . . .” (Emphasis added.) The same conclusions govern here.

Appellees further contend, however, that Judge Weinstein’s dismissal was, “as a matter of substantive law, tantamount to an acquittal.” There is no merit to the argument. United States v. Hill, 473 F.2d 759 (9th Cir. 1972), on which appellees rely, is not in point. Hill involved indictments charging the sending of obscene advertisements through the mail. Defendants’ motion to dismiss the indictments was granted on the ground that the advertisements were not obscene as a matter of law. In finding reprosecution prohibited by the double jeopardy guarantee, the court noted that the judge had received evidence limited to a necessary element of the offense; the dismissal thus decided the general issue of guilt and was the equivalent of a directed acquittal. See United States v. Sisson, supra, 399 U.S. at 290 n. 19, 90 S.Ct. 2117; United States v. Ponto, 454 F.2d 657, 663-664 (7th Cir. 1971) (en banc). Judge Weinstein’s dismissal, by contrast, in no sense turned on the general issue of guilt or required the taking of evidence remotely related to any element of the crime.

Thus,, the Government’s appeal is properly before us, and appellees’ motion to dismiss the appeal is denied.

Ill

We turn now to the merits of Judge Weinstein’s dismissal order. Plainly, technical jeopardy had attached in the trial before Judge Judd because the jury had been impanelled, but equally plainly, as a century and a half of cases illustrate, that did not end the matter. See United States v. Perez, 22 U.S. (9 Wheat.) 579, 6 L.Ed. 165 (1824); Illinois v. Somerville, 410 U.S. 458, 461, 93 S.Ct. 1066, 1069, 35 L.Ed.2d 425 (1973). What would have ended the matter, however, was defendants’ consent to Judge Judd’s order declaring a mistrial. See United States v. Gori, 282 F.2d 43, 47 & n.5 (2d Cir. 1960), aff’d, 367 U.S. 364, 81 S.Ct. 1523, 6 L.Ed.2d 901 (1961); cf. United States v. Jorn, supra, 400 U.S. at 485, 91 S.Ct. 547. We conclude that defendants did so consent.

On the afternoon of the second day of deliberation, the jury notified Judge Judd that it was “apparently not able to reach a unanimous verdict on any count except number 20”; the judge then gave a modified “Allen charge.” Defense counsel immediately moved for a mistrial because the jury was hopelessly deadlocked. Had the judge granted this request, of course, no meritorious double jeopardy claim could later have been made. See United States v. Tateo, 377 U.S. 463, 467, 84 S.Ct. 1587, 12 L.Ed.2d 448 (1964). We are at a loss to understand what transpired thereafter to breathe life into such a claim. Defendants argue that the situation was completely changed less than two hours later by the jury’s second note. At that point, according to defendants, counsel realized that they had a favorable jury, that “at worst there would be a hung jury,” and that they “decided they did not want a mistrial.” The initial problem with this position is that defense counsel did not communicate this change in attitude to Judge Judd. Defendants now argue, as they successfully did before Judge Weinstein, that they never had an effective chance to make their new position known to Judge Judd. We do not understand why that is so, as a recounting of the events of that afternoon indicates.

After the judge read the second note to defense counsel, he stated that this “means a disagreement on seventeen counts. We will bring the Jury in and see.” The jury then came back to the courtroom and reported its verdict of not guilty on count 20; each juror was then polled on that verdict. On completion of the polling, the foreman confirmed to the judge that the jury was “in disagreement on the rest of the counts.” As anyone familiar with trial court procedure knows, all of this took considerable time. It was certainly sufficient for defense counsel, whose performance up to that time had not been marked by excessive timidity, to make their changed views known to the court. Nor was that all. Judge Judd did not immediately launch into his behind-the-scenes discussion which, defendants correctly maintain, made it impossible for the same jury to continue. Instead, the judge took another moment or two in introductory remarks — at which point his intention to order a mistrial became plain — before characterizing the government attorney as “not an ordinary assistant,” but from “the section on Organized Crime.” This interlude gave defense counsel yet another chance to say that they did not want a mistrial. It is thus apparent to us that defense counsel had adequate opportunity to disabuse the judge of the idea that they still wanted the jury discharged because it was deadlocked; Judge Weinstein’s contrary view is not supportable.

Judge Judd obviously assumed that defendants continued to favor mistrial. Certainly, he would not have proceeded as he did had he thought the trial was to continue before the same jury. There was ample warrant for the judge’s assumption. Less than two hours before, defense counsel had characterized a proposed instruction to the jury to deliberate “for a couple of more hours” as “incarceration against their will,” and had opposed requiring the 'jury to continue after the weekend recess because “it would be impossible to avoid pollution of the jury.” In addition, the judge’s assumption as to defendants’ position was buttressed by common sense. When defendants had earlier moved for a mistrial, they had no way of knowing the jury’s vote: It might have been anything from 11-1 for acquittal to 11-1 for conviction. Any one of these possibilities except the last would indicate a jury sentiment more— rather than less — favorable than the 11-1 vote for conviction on all remaining counts revealed by the jury’s second note. To all appearance, defendants’ position had worsened in the time between the first and second notes. Defendants argued before Judge Weinstein, however, that they were then in a better position because they knew that they could not be hurt, and that

They could only get a hung jury and it is possible, as it happens in the movies at any rate, that one person can change the minds of eleven other people.

Anything is possible, of course, but the self-serving nature of this hindsight assertion is patent. Moreover, the silence of defense counsel on this issue was even more deafening after Judge Judd had discharged the jury. At that point, defense counsel argued at length that the judge’s disclosure of material not in evidence had hopelessly prejudiced defendants, and required dismissal of the indictment. But this claim itself assumed that another trial would be held, a position inconsistent with their present contention that the double jeopardy clause would bar such a trial, because the discharge of the jury had been premature.

We disagree, therefore, with Judge Weinstein’s belief that a mistrial was declared without defendants’ consent. Consent need not be express, but may be implied from the totality of circumstances attendant on a declaration of mistrial. United States v. Gori, supra, 282 F.2d at 46; see Scott v. United States, 91 U.S.App.D.C. 232, 202 F.2d 354, cert. denied, 344 U.S. 879, 73 S.Ct. 176, 97 L.Ed. 681 (1952); cf. Raslich v. Bannan, 273 F.2d 420 (6th Cir. 1959) (per curiam). Defendants had moved for a mistrial a scant two hours before one was declared, at the first suggestion of jury deadlock; little, if anything, had occurred thereafter to warrant a belief that their position had changed; and even if it had, they failed to make this change in position known to the trial judge notwithstanding adequate opportunity to do so. See United States v. Pappas, 445 F.2d 1194, 1199-1200 (3d Cir.), cert. denied, 404 U.S. 984, 92 S.Ct. 449, 30 L.Ed.2d 368 (1971).

Under these circumstances, their consent to mistrial can be properly implied, Judge Judd did not really act sua sponte, and defendants cannot successfully argue double jeopardy.

IV

In what may be an excess of caution, we turn finally to the argument made by the Government that, even if defendants did not consent to the mistrial, reprose-cution was consistent with the policies served by the double jeopardy clause.

In deciding to abort a criminal trial short of a verdict and without a defendant’s consent, after jeopardy has attached, the trial judge is typically afforded “broad discretion,” Illinois v. Somerville, supra, 410 U.S. at 462, 93 S.Ct. at 1069, since he is “best situated intelligently to make such a decision,” Gori v. United States, 367 U.S. 364, 368, 81 S. Ct. 1523, 1526, 6 L.Ed.2d 901 (1961). On the other hand, it is recognized that the double jeopardy clause of the fifth amendment safeguards the defendant’s “valued right to have his trial completed by a particular tribunal,” Wade v. Hunter, 336 U.S. 684, 689, 69 S.Ct. 834, 837, 93 L.Ed. 974 (1949), which “he might believe to be favorably disposed to his fate,” United States v. Jorn, supra, 400 U.S. at 486, 91 S.Ct. at 558, 27 L.Ed.2d 543. With due regard for this right, as well as for other defendant interests served by the double jeopardy clause, see Note, Double Jeopardy: The Reprosecution Problem, 77 Harv.L.Rev. 1272, 1274 (1964), the Supreme Court has limited that discretion and has occasionally held a second prosecution barred where a trial judge sua sponte and mistakenly had declared a mistrial. See United States v. Jorn, supra; Downum v. United States, 372 U.S. 734, 83 S.Ct. 1033, 10 L.Ed.2d 100 (1963). In defining standards for the exercise of discretion in this sort of case, the Court has continually adhered to the formulation of Justice Story in United States v. Perez, 22 U.S. (9 Wheat.) 579, 580, 6 L.Ed. 165 (1824):

[T]he law has invested Courts of justice with the authority to discharge a jury from giving a verdict, whenever, in their opinion, taking all the circumstances into consideration, there is manifest necessity for the act, or the ends of public justice would otherwise be defeated.

Beyond these general guidelines, the Court has emphasized, each case must turn on its own facts. E. g., Illinois v. Somerville, supra, 410 U.S. at 462, 93 S. Ct. at 1069.

Turning to the facts in this case, Perez itself and Logan v. United States, 144 U.S. 263, 297-298, 12 S.Ct. 617, 36 L.Ed. 429 (1892), among others, establish that a jury’s genuine inability to agree on a verdict constitutes “manifest necessity” warranting the declaration of a mistrial. See United States v. Lansdown, 460 F.2d 164, 168 (4th Cir. 1972). Requiring a jury to continue deliberations despite genuine and irreconcilable disagreement more often than not defeats the ends of public justice; not only will such compulsion needlessly waste valuable judicial resources, it may coerce erroneous verdicts. On this view of the case, the only question presented to us, therefore, is whether Judge Judd abused his discretion in concluding when he did that the jury was in fact genuinely hung.

The question is a close one. Judge Weinstein believed that Judge Judd had erred because the trial had been lengthy; the evidence and factual issues were complex, as demonstrated by the jury’s request to have the charge reread; the jury had only deliberated eight hours even though there were almost 50 possible verdicts to render and no indication that agreement was impossible as to all. Finally Judge Weinstein felt that no sufficiently in-depth attempts had been made, in accord with “the normal practice,” to ascertain the scope of disagreement among jurors, or to determine whether further deliberation might produce some agreement. These are appropriate factors to consider. See ABA, Project on Minimum Standards for Criminal Justice, Trial by Jury § 5.4(e) (approved draft 1968); id. at 156-57.

Nonetheless, “taking all the circumstances into consideration,” as Perez requires, we are left with the firm conviction that Judge Judd committed no error. The complexity of a case and the amount of time requested by 12 reasonable jurors to reach unanimity on some or all of many possible verdicts are determinations best left to a trial judge and are difficult to gauge by another district judge or by appellate judges on a cold record. .The jury twice reported itself unable to agree — in the second instance, less than two hours after the first and after a modified Allen charge in which the judge had instructed the jury to tell him “whether further deliberation would be useful.” The second note itself appears to answer the question in the negative and suggests growing frustration on the part of the jurors. Indeed, the second note and final oral response of the jury foreman were unequivocal in tone: Mrs. Rappaport could vote guilty “under no circumstances” and it was “clear” that they were in disagreement on all counts. With the dissenting juror so identified, Judge Judd was entitled to recall his conversation with her on the previous evening, and to conclude that her previously vague reference to feeling “incapable” meant that she was in fact unable or unwilling to vote guilty.

Appellees call our attention to but one case in which the trial court’s erroneous decision to order mistrial due to an apparently hung jury has been held to bar reprosecution. United States v. Lansdown, supra. Our research has disclosed no other federal case. But cf. Commonwealth v. Baker, 413 Pa. 105, 196 A.2d 382 (1964) (premature discharge of jury bars retrial on state constitution double jeopardy ground). This itself suggests how rarely the informed judgment of a trial court is disturbed in these or similar circumstances. Moreover, factual differences between this case and Lansdown are striking. In Lansdown, the trial judge ordered a mistrial solely because he felt that the many hours of jury deliberation after a one-day trial had been long enough. The court of appeals noted that no rule of thumb in terms of hours deliberated could be extrapolated from precedent. 460 F.2d at 169 & n.2. Of far more significance, however, the jury foreman had told the Lansdown trial judge, immediately before mistrial was declared, that they were “on the verge” of a verdict; another juror took it upon himself to request an additional ten minutes of deliberations. In light of this, the trial judge’s action was arbitrary and manifestly an abuse of discretion. In this case, on the other hand, no member of the jury evey suggested that any verdict was remotely possible. We believe that Judge Judd could have reasonably concluded that the jury was hopelessly deadlocked. If so, it follows that there was manifest necessity for declaring a mistrial and that doing so was not an abuse of discretion.

Reversed and remanded for further proceedings consistent with this opinion.

      . Count 5 of the indictment was later dismissed and was replaced by a superseding information.

      . At the outset, the jury’s deliberation involved 18 counts, defendants having successfully moved for acquittal on counts 16 and 19.

      . The second day of deliberations was a Friday. Monday, October 9, 1972 was Columbus Day.

      . The statute, 18 U.S.C.A. § 3731, provides that:
      The appeal . . . shall be taken within thirty days after the order has been rendered and shall be diligently prosecuted.
      The Government’s notice of appeal was filed on February 1, 1973, within 30 days of Judge AVeinstein’s order dated January 8. The Government’s brief, however, was not filed until March 12, nearly six weeks. after the notice of appeal. In view of the statutory command of diligent prosecution, we believe that the Government’s brief in appeals of this sort should ordinarily be filed within 30 days after the notice of appeal. Cf. Local Appellate Rule § 34(f).

      . The amendments also eliminated direct appeals to the Supreme Court, lightening the caseload of the Court. S.Rep., supra, at 13-18.

      . In addition to Judge Smith’s persuasive analysis, see S.Rep., supra, at 7-9, 12, which details the reasons for the change in language.

      . Appellees also rely on United States v. Oppenheimer, 242 U.S. 85, 87-88, 37 S.Ct. 68, 61 L.Ed. 161 (1916), but the case is patently inapposite on its facts and rationale.

      . Brief for Appellees Goldstein, et al., at 14.

      . Toward the end of the morning session of the hearing, Judge Weinstein stated:
      [A] mistrial was granted here at a time when the defendants . . . would have opposed it had they been given an adequate opportunity to be heard.
      In the course of his remarks set forth earlier in this opinion, he again commented that Judge Judd had acted “without proper consultation with the attorneys . . . . ” Even if this be a finding of fact, we believe that it must be set aside, regardless of whether the “clearly erroneous” standard applies. We doubt that it does, however. While the “clearly erroneous” standard is applicable to analogous findings in criminal cases, see 8A Moore’s Federal Practice ¶ 41.09, at 97, Judge Weinstein’s view as to the “opportunity to be heard” turned on his reading of the trial transcripts, and these are as available to us as they were to him. Cf. In Matter of Beck Industries, Inc., 479 F.2d 410, 412 n. 3 (2d Cir. 1973), and authorities there cited.

      . Indeed, the record before us is somewhat contradictory as to whether such a finding was in fact made. Judge Wein-stein made such a comment at the hearing. On the other hand, in his subsequent order after stating that “the case was improperly taken from the jury,” the judge deleted additional language proposed by defendants, i. e., that this was “without the consent of the defendants and before it had been determined that no agreement could be reached

      . We need not go so far as to hold that in the absence of an express objection to discharging the jury, consent is, in effect, to be presumed, see United States v. Phillips, 431 F.2d 949 (3d Cir. 1970); we believe instead that the failure to object is one of the several probative factors here from which consent may be implied.

      . The trial judge referred to “20 hours” of deliberation. The court of appeals pointed out, “In fact, the jury had deliberated slightly in excess of 11 hours.” 460 F.2d at 168 n. 1.

      . Cf. the standard proposed by § 5.4(c) of the ABA Minimum Standards, supra, defining the scope of a trial judge’s discretion to declare a mistrial sua sponte:
      The jury may be discharged without having agreed upon a verdict if it appears that there is no reasonable probability of agreement.

      (Emphasis added.)


source: Caselaw Access Project

author: MULLIGAN, Circuit Judge:

license: Public Domain

text:
    Samuel M. KAYNARD, Regional Director of the Twenty-ninth Region of the National Labor Relations Board, for and on behalf of the National Labor Relations Board, Petitioner-Appellant, v. INDEPENDENT ROUTEMEN’S ASSOCIATION, Respondent-Appellee.
    No. 968, Docket 73-1480.
    United States Court of Appeals, Second Circuit.
    Argued May 11, 1973.
    Decided June 1, 1973.

      Marvin Roth, Supervisory Atty., N.L. R.B. (Peter G. Nash, Gen. Counsel; John S. Irving, Deputy Gen. Counsel; Julius G. Serot, Sp. Counsel to the Gen. Counsel; Charles I. Cohen and Peter B. Mirsky, Attys., N.L.R.B., of counsel), for petitioner-appellant.
    Marc A. Rosenberg, Mineóla, N.Y. (Rosenberg, Rosenberg & Rockman, Mineóla, N.Y., of counsel), for respondent-appellee.
    Before SMITH, MULLIGAN and TIMBERS, Circuit Judges.
   MULLIGAN, Circuit Judge:

This is an appeal from an order of the United States District Court for the Eastern District of New York, Hon. Anthony J. Travia, presiding. The order appealed from denied a petition for a preliminary injunction filed on behalf of the National Labor Relations Board (the Board) pursuant to Section 10(1) of the National Labor Relations Act (the Act), 29 U.S.C. § 160(Z). The order was entered on March 12, 1973 based upon findings of fact and conclusions of law in the Court’s opinion entered on the same day. Reversed and remanded.

The petition and amended petition for the Section 10(l) injunction were predicated upon a charge filed with the Board on January 30, 1973 by Urban Distributors, Inc. (Urban) alleging that the respondent, Independent Routemen’s Association (Union), a labor organization, had and was continuing to engage in unfair labor practices within Section 8(b) (4) (ii)(B) of the Act, 29 U.S.C. § 158(b) (4)(ii)(B), prohibiting certain types of secondary boycotts. In essence the charge was that the Union, to further a labor dispute with Lorenz Schneider, Inc. (Lorenz), a franchise distributor of snack products in the New York metropolitan area, was engaged in an unlawful secondary boycott by picketing various retail stores which carry, stock and sell food products sold to them by Urban and other independent distributors who do business with Lorenz. The Regional Director of the Board determined after investigation that there was reasonable cause to believe that the Union was engaged in an unfair labor practice and filed the Section 10(Z) petition. The Court below issued a temporary restraining order on March 2, 1973, conducted a hearing on March 7, 1973 and on March 12, 1973 issued its order dismissing the petition. A panel of this Court granted a temporary injunction and expedited the appeal.

Lorenz distributes Wise Potato Chips, Quinlan Pretzels, Old London Cheese Doodles and other snack products (Wise Products) throughout the New York metropolitan area. Lorenz’ method of operation is to sell routes to independent dealers. Urban is one of several purchasers of such routes from Lorenz. Since December, 1972, the Union has been engaged in a labor dispute with Lorenz concerning its recognition as the bargaining representatives of Lorenz’ employees. To further its strike against Lorenz, the Union has engaged as found below in a campaign to force a number of supermarkets and grocery stores to remove Wise Products from their shelves. Stores which carry Wise Products were visited by Union members and were threatened with a picket line unless they discontinued these sales. When some retailers refused, picketing was promptly commenced with chanting and signs proclaiming:

ON STRIKE

WISE POTATO QUINLAN PRETZEL OLD LONDON DRIVERS AGAINST LORENZ SCHNEIDER CO. INC. DISTRIBUTORS

I

It is beyond any question that the role of a district court in a Section 10 (i) proceeding is not to adjudicate the merits of the alleged violation, but rather to decide whether the Regional Director had reasonable cause to believe that the respondent has violated the Act. Reasonable cause has been interpreted to mean that there must be a “reasonable possibility” that the Board will sustain the unfair labor practice charge. McLeod v. Local 25, IBEW, 344 F.2d 634, 638 (2d Cir. 1965). That the Court’s function is so circumscribed has been held in numerous cases and in fact is not disputed here on appeal. (See NMU v. Commerce Tankers Corp., 457 F.2d 1127, 1133 (2d Cir. 1972); Sachs v. Local 48, Plumbers, 454 F.2d 879 (4th Cir. 1972); Kennedy v. Los Angeles Typographical Union No. 174, 418 F.2d 6 (9th Cir. 1969); Schauffler v. Local 1291, Int’l Longshoremen’s Ass’n, 292 F.2d 182, 187 (3d Cir. 1961)). Neither can there be any question that the Court below committed reversible error in not limiting itself to the question as to whether or not there was reasonable cause for the Regional Director to find a violation of Section 8(b)(4) (ii)(B) of the Act, but rather finding on the merits that there was no violation of that Section. McLeod v. Local 282, Teamsters, 345 F.2d 142, 145 (2d Cir. 1965). Without any discussion of the pertinent facts, the Court below made twelve identical Findings of Fact (Findings 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45) which repeat with respect to individual supermarkets or grocery stores that: “the acts engaged in, from the evidence in this case, all reveal a compliance with the guidelines set forth in the aforementioned cases [NLRB v. Fruit & Vegetable Packers, Local 760, 377 U.S. 58 [84 S.Ct. 1063, 12 L.Ed.2d 129] (1964) (picketing and handbilling); NLRB v. Servette, Inc., 377 U.S. 46 [84 S.Ct. 1098, 12 L.Ed. 2d 121] (1964) handbilling alone)], i. e., the ‘union’s appeal to the public is confined to its dispute with the primary employer, since the public is not asked to withhold its patronage from the secondary employer, but only to boycott the primary employer’s goods.’ NLRB v. Fruit and Vegetable Packers, etc., 377 U.S. at 63 [84 S.Ct. 1063].” These conclusory findings relate to acts of picketing and make no reference to the threats to the retailers of picketing, including the distribution of handbills which contained unqualified threats of picketing if the stores continued to carry Wise Products. In the conclusions of law made below, again without explication, the Court simply found that the

[petitioner does not have reasonable cause to believe that:

a) The charges filed by Urban Distributors, Inc., is [sic] true and constitutes a violation of subsection (B) of Section 8(b) (4) (i) (ii) of the Act, “affecting commerce” within the meaning of Sections 2(6) and (7) of the Act.

At no place do we find any discussion of the facts or law pertinent except the conclusory findings of fact set forth above. The only questions properly before the Court as we have indicated were whether the Regional Director, not the Court, had reasonable cause to believe that the unfair labor act charged was occurring and if so whether it was “just and proper” under Section 10(l) to issue the preliminary injunction.

II

There is no question that the picketing here would be violative of Section 8(b) (4) (ii) (B) of the Act as a secondary boycott unless the activity of the Union is within the Tree Fruits decision, NLRB v. Fruit & Vegetable Packers, Local 760, 377 U.S. 58, 84 S.Ct. 1063, 12 L.Ed.2d 129 (1964). In Tree Fruits the Court held that if the picketing at a secondary site is employed only to persuade consumers not to buy the struck product there is no violation of the Act. Unlawful secondary pressure exists where the picketing goes beyond and urges the public not to deal at all with the secondary employer. The retailer then “stops buying the struck product, not because of falling demand, but in response to pressure designed to inflict injury on his business generally. In such case, the union does more than merely follow the struck product; it creates a separate dispute with the secondary employer.” Tree Fruits, supra, 377 U.S. at 72, 84 S.Ct. at 1071 (footnote omitted).

The picketing in the instant case was in front of the retail stores and the Regional Director of the Board contends that it was, in fact, directed at those stores. When the union elects to picket at a secondary site, it assumes the obligation of clearly identifying the struck product. NLRB v. San Francisco Typographical Union No. 21, 465 F.2d 53, 56 (9th Cir. 1972); Bedding, Curtain & Drapery Workers v. NLRB, 390 F.2d 495 (2d Cir.) cert. denied, 392 U.S. 905, 88 S.Ct. 2056, 20 L.Ed.2d 1363 (1968); see ABA, The Developing Labor Law 602-03 & n. 47 (C. Morris ed. 1971). The Regional Director claims that the picket signs here do not clearly show that the union’s dispute is limited to the primary employer, i. e., the signs do not specifically request the public not to buy the struck foods. We have studied the photographs of the pickets contained in the record on appeal. “On Strike” appears in the boldest lettering at the top; “Lorenz Schneider Co. Inc., Distributors” appears in smaller typeface at the bottom. The leaflets passed out to consumers do not further clarify the nature of the labor dispute. On the record before us, we think the Regional Director had reasonable cause to believe that the picketing did not clearly identify the retailers as neutrals, unconnected with the primary employer. The dispositive factor is the probable effect of the picketing upon the consumer. Hoffman v. Cement Masons Union, Local 337, 468 F.2d 1187, 1192 (9th Cir. 1972).

Some retailers elected not to deal in the struck products rather than have a picket line outside their stores. At the hearing before Judge Travia, retailers testified that striking union members visited their stores and threatened to picket unless Wise Products were removed from the shelves. The retailers were given a handbill which, after reciting the Union’s dispute with Lorenz, státed: “All stores disregarding this request [not to buy Wise Products] will be subject to picketing without notice.” We think that the Regional Director had reasonable cause to believe that these general threats of picketing were unlawful secondary pressure within the meaning of § 8(b) (4) (ii) (B). See NLRB v. Local 3, IBEW, 467 F.2d 1158, 1160-1161 (2d Cir. 1972).

In view of the loss of custom created by the picketing, we find that a preliminary injunction pursuant to Section 10(Z) would be “just and proper.” (See Danielson v. Local 275, Laborers, 479 F.2d.l033(2d Cir. 1973) ). There is evidence in the record, for example, indicating that Urban suffered severely because of this labor dispute and is in danger of financial collapse.

We reverse and remand to the District Court for entry of an appropriate in-junctive decree.

       It is an elementary proposition that lawful picketing is not rendered unlawful merely because it has a serious economic impact on neutrals. See, e. g., Brotherhood of R. R. Trainmen v. Jacksonville Terminal Co., 394 U.S. 369, 390, 89 S.Ct. 1109, 22 L.Ed.2d 344 (1969). In his affidavit in support of the Regional Director’s petition for the injunction, the President of Urban stated that Urban’s precarious financial condition was the result of the “unlawful secondary pressures exerted by the [Union] upon Urban’s retail independent and chain store customers forcing them to discontinue purchasing Urban products


author: LUMBARD, Circuit Judge: WYZANSKI, Senior District Judge

text:
    UNITED FEDERATION OF COLLEGE TEACHERS, LOCAL 1460, and American Federation of Teachers, AFL-CIO, Plaintiff-Appellant, v. Edward B. MILLER et al., Defendants-Appellees.
    No. 709, Docket 73-1091.
    United States Court of Appeals, Second Circuit.
    Argued March 8, 1973.
    Decided May 15, 1973.
    Wyzanski, Senior District Judge, dissented with opinion.

      Judith P. Vladeck, New York City (Vladeck, Elias, Vladeck & Lewis, Stephen C. Vladeck and Deborah Watarz, New York City, on the brief), for plaintiff-appellant.
    R. Bruce McLean, Washington, D. C. (Peter G. Nash, Gen. Counsel, Patrick Hardin, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Glen M. Bendixsen, Chief of Special Litigation, and Abigail Cooley Baskir, Atty., N. L.R.B., on the brief), for defendants-appellees.
    Before LUMBARD and TIMBERS, Circuit Judges, and WYZANSKI, District Judge.

       Senior District Judge of the District of Massachusetts sitting by designation.

   LUMBARD, Circuit Judge:

United Federation of College Teachers, Local 1460 (“Union”) appeals from an order of the Eastern District dismissing for lack of jurisdiction its action against defendants Miller, Fanning, Pennello, and Kennedy, in their capacities as members of the National Labor Relations Board. The Union had sought an injunction preventing the N. L.R.B. from effectuating its order of July 27, 1972, which directed the N.L.R.B. Regional Director for the 29th Region to count certain disputed ballots that had been cast in a representation election among professional employees at the C. W. Post Center of Long Island University (“C. W. Post”). In dismissing the action, the district court, 359 F. Supp. 76, relied on the general rule that an action to review a representation proceeding is not ordinarily within the competence of a district court. Herald Co. v. Vincent, 392 F.2d 354, 357 (2d Cir. 1968). It has long been held that N.L.R.B. certification proceedings do not result in reviewable final orders. A.F.L. v. N.L.R.B., 308 U.S. 401, 60 S. Ct. 300, 84 L.Ed. 347 (1940). Review is ordinarily permitted only after the N.L. R.B. enters a final order in an unfair labor practice proceeding in reliance on its resolution of the certification proceeding ; and then review lies in the court of appeals, not in the district court. 29 U. S. C.A. § 160(e).

There are several recognized exeep-tionc to this general principle, two of which the Union believes support district court jurisdiction in this case: 1) a district court may intervene when the N.L.R.B. has acted contrary to a specific mandate of the National Labor Relations Act (Leedom v. Kyne, 358 U.S. 184, 79 S.Ct. 180, 3 L.Ed.2d 210 (1958)); and 2) the district court has jurisdiction of a cause of action that asserts a violation of constitutional rights that is not transparently frivolous (Fay v. Douds, 172 F.2d 720 (2d Cir. 1949)). The district court considered both of these exceptions and found them inapplicable here. For the reasons stated in this opinion we agree with the district court and we affirm its order dismissing for lack of jurisdiction.

In June 1970, the Union sought to be certified by the N.L.R.B. as the collective bargaining agent for all the full- and part-time instructional staff at C. W. Post. Since the Board had only recently decided to assert jurisdiction over private non-profit colleges and universities, the Union’s petition was the first in which the Board had to consider what constituted an appropriate bargaining unit for a professional instructional staff. One question that arose in this connection was the propriety of including in the same bargaining unit both full-time faculty members and part-time faculty members, who are known as “adjuncts.” The Board concluded that both should be included in the same bargaining unit and directed that a representation election be held among the employees in this unit at C. W. Post. In its order, the Board stated that the bargaining unit included “[a] 11 professional employees employed at the Employer’s C. W. Post Center.” In its accompanying Direction of Election, the Board stated:

Eligible to vote are those in the unit who were employed during the payroll period immediately preceding the date below (April 20, 1971), including employees who did not work during that period because they were ill, on vacation, or temporarily laid off, (emphasis added)

In accordance with the Board’s order, the Regional Director issued an official Notice of Election. The Notice described the voting unit as follows:

, All professional employees employed at the Employers C. U. Post (sic) Center . . . including professors, associate professors, assistant professors, instructors, adjunct professors, adjunct associate professors, adjunct assistant professors . . ., who appear on the Employer’s payroll as of March 31, 1971.

In addition, the Notice stated the following eligibility rules:

Employees eligible to vote are those described under VOTING UNIT in this Notice of Election, including employees who did not work during the designated payroll period because they were ill or on vacation, or temporarily laid off.

In the election, which was conducted May 10 and 11, 1971, 214 ballots were cast for the Union, 208 against the Union, 47 were challenged, and one was voided. Nineteen of the challenged ballots were cast by adjunct faculty members who had taught in prior semesters but were not teaching during the semester in which the election was held. Because the number of disputed ballots was sufficient to determine the outcome of the election, hearings were held after the election to determine the eligibility of the challenged voters. For purposes of this appeal, the focus will be on the challenged ballots cast by adjunct faculty members not teaching during the semester in which the election was held. The Hearing Officer recommended that these challenges be sustained. On July 27, 1972, the Board rejected the Hearing Officer’s recommendation and ordered the Regional Director to count these ballots. After unsuccessfully attempting to persuade the Board to reconsider its decision or, in the alternative, to order a new election, the Union brought this action in the district court.

The Union attempts to characterize the Board’s decision holding the challenged voters eligible as a retroactive change in the eligibility rules after the election. The Union contends that, in so acting, the Board ignored its statutory responsibility under § 9(a), (b), and (c) of the N.L.R.A., 29 U.S.C.A. § 159(a)(b), and (c), to select an appropriate bargaining unit, direct an election in that unit, and determine that representatives are chosen by a majority of employees in that unit, thus giving rise to jurisdiction in the district court under the rule of Leedom v. Kyne, supra. In addition, the Union argues that the Board’s action threatens to deprive the Union of its right to be designated as the exclusive bargaining agent for the professional employees at C. W. Post without due process of law, and will deny equal protection of law to those adjuncts who did not vote in reliance on the Board’s stated eligibility rules, in violation of the fifth amendment, thus giving the district court jurisdiction of this action under the rule of Pay v. Douds, supra Since we cannot agree with the Union’s characterization of the Board’s action, we do not find the statutory and constitutional violations that the Union asserts.

The Union focuses on certain language used by the Board in its order fixing the appropriate bargaining unit and in its Direction of Election. First, the Union notes that the Board limited the bargaining unit to “[a] 11 professional employees employed at the C. W. Post Center.” [emphasis added] In the Notice of Election subsequently issued by the Regional Director, this description of the voting unit was refined somewhat to include “[a] 11 professional employees employed at the . C. W. Post Center . . . who appear on the Employer’s payroll as of March 31, 1971.” [emphasis added] From this language, the Union concludes that the Board’s eligibility rule before the election was quite simple: only those who were currently employed as members of the instructional staff at C. W. Post and were on the payroll as of March 31, 1971 could vote. Since the adjuncts who cast the disputed ballots did not fit within this category, the Union concludes that the Board’s later decision permitting these votes to be counted constituted a retroactive change in the eligibility requirements.

Insofar as the Union’s conclusion is drawn from its analysis of the Board’s pronouncements before the election, it is accurate only as far as it goes. In its Direction of Election, the Board specified that eligible voters were those in the bargaining unit who were employed during the payroll period immediately preceding April 20, 1971 (apparently corresponding to March 31, 1971), “including employees who did not work during that period because they were ill, on vacation, or temporarily laid off.” In the Notice of Election, which described the voting unit in terms of those employed and on the payroll as of March 31, 1971, the eligibility rules stated that “[e]mployees eligible to vote are those described under VOTING UNIT in this Notice of Election, including employees who did not work during the designated payroll period because they were ill or on vacation or temporarily laid off.” Thus, it appears that the eligibility rules established by the Board before the election were not so simple as the Union contends. Indeed, when the pre-election pronouncements of the Board with regard to the appropriate bargaining unit and the eligibility requirements for the election are read together, as one would expect a prospective voter to do, they would appear to bring within the class of eligible voters in the bargaining unit some individuals who were not actually working at C. W. Post on March 31, 1971 if they fit within certain established categories.

It is evident from a reading of the Board’s decision that, in considering the challenges at issue, the Board was concerned with whether “the Hearing Officer failed to give proper weight to language in the Direction of Election relating to ‘temporarily laid-off employees’ and Board precedent which deems laid-off employees eligible if they have a reasonable expectation of employment in the future.” The Board concluded “that the Hearing Officer failed to give appropriate weight to the history of employment in past academic years of adjuncts in determining whether they had a continuing employment interest warranting their inclusion in the unit.” It was then necessary for the Board to determine how much past history of employment was necessary to constitute a sufficient “continuing employment interest.” In this regard, the Board said:

From the record it appears that adjuncts are often reemployed annually contingent upon the availability of work. They sign contracts in advance which, while giving no assurance of employment, do accord the adjuncts individual faculty status and as such some expectation of employment during the contract term. Accordingly, receipt of an adjunct contract coupled with evidence of employment during the contract term would appear to be relevant factors in assessing eligibility. In our opinion, those who signed such a contract in at least 2 of the 3 consecutive academic years, inclusive of that in which the election is directed, and actually teach 3 or more credit hours in at least one semester in each of 2 such years have a sufficient employment history to establish a reasonable expectancy of reemployment to support eligibility in a Board-conducted election.

We are not persuaded by the Union’s characterization of the Board’s decision as a retroactive change in eligibility requirements. Because of the challenges, the Board was called upon to determine whether the particular challenged voters were within the class of “temporarily laid-off” employees that it determined before the election to be eligible to vote despite their not being on the C. W. Post payroll on March 31, 1971. It proceeded to find that 16 of the 19 challenged voters were within the eligible class and 3 were not. What the Board did here was not a retroactive expansion of the eligible voters- as the Union contends. Indeed, by restricting the number of adjuncts who could fit within the class of “temporarily laid-off” employees, the Board could more persuasively be said to have reduced the number of eligible voters.

Admittedly, there may have been some degree of ambiguity in the Board’s pre-election determinations, in that the bargaining unit was defined in terms of employment on a stated date while the eligibility rules were more flexible as we have indicated. Although it may have been desirable for the Board to have been more precise in this regard, we do not believe that either the Union or any prospective voter could have been prejudiced by the potential ambiguity. We hold that the Union has raised neither a claim that the Board has violated a specific statutory mandate, which would give the district court jurisdiction under Leedom v. Kyne, swpra, nor a substantial constitutional claim, which would supply jurisdiction under Fay v. Douds, supra. Rather, the Union’s claim is that the Board’s actions were arbitrary, unreasonable, and an abuse of discretion, for which review lies not in the district court, but in the court of appeals after the entry of a reviewable final order. Herald Co. v. Vincent, 392 F.2d 354 (2d Cir. 1968); Consolidated Edison v. McLeod, 302 F.2d 354 (2d Cir. 1962).

The Union has argued that this ease is somewhat unusual in that, unless review is available in the district court, there will be no practical way in which it can secure judicial review of the Board’s determination. However, the Board has noted that the Union may picket C. W. Post if it is determined to have lost the election. This would presumptively violate § 8(b)(7)(B) of the N.L.R.A., 29 U.S.C.A. § 158(b)(7)(B), and cause the Board to invoke its in-junctive power under § 10(a), 29 U.S.C. A. § 160(a), which will result in a reviewable “final order by the Board upon which the record of the certification proceeding becomes part of the record for review. . . .” Herald Co. v. Vincent, supra, 392 F.2d at 356. The Union has replied that it does not consider such suggestion as offering a practical route for reviewing the Board’s order. However, the Union has offered no reason, and we see none, why this approach would not provide an adequate vehicle for eventual review of the Board’s determination.

The Union makes the additional argument that the Board’s supplemental decision on July 27, 1972 was an improper attempt at rule-making in which the Board did not comply with the prerequisites of the Administrative Procedure Act. In support of this contention, the Union cites this court’s recent decision in Bell Aerospace Co. v. N.L.R.B., 475 F.2d 485 (1973), in which the court disapproved a particular instance of the Board’s formulation of policy by adjudication, and required it to proceed by rule-making. On this matter, the court said:

Certainly the decision [N.L.R.B. v. Wyman-Gordon Co., 394 U.S. 759, 89 S.Ct. 1426, 22 L.Ed.2d 709 (1969)] does not proscribe the use of adjudication as a vehicle for the formulation of new agency policies, which “are applied and announced therein” and “generally provide a guide to action that the agency may be expected to take in future cases.” . . . Al though policy-making by adjudication often cannot be avoided in unfair labor practice cases, since the parties have already acted and the Board must decide one way or the other, there is no such problem in a representation case . . . [T]he argument for rule-making is especially strong when the Board is proposing to reverse a long-standing and oft-repeated policy on which industry and labor have relied. 475 F.2d at 496-497.

We do not believe that Bell Aerospace is applicable here. In that case, the Board by means of adjudication had extended its jurisdiction to a class of employees who it had long taken the position were not covered, and this court indicated that such Board action should be effected through rule-making. However, Bell Aerospace should not be taken to mean that any policy determination in representation cases must be resolved by rule-making. For, although this is a representation case, it is also a case where “the parties have already acted and the Board must decide one way or the other.” Furthermore, it is not a case where “the Board is proposing to reverse a long-standing and oft-repeated policy on which industry and labor have relied.” Thus, the underlying rationale of Bell Aerospace would not require the Board here to proceed by rule-making.

In any event, the Union has not shown that a district court has jurisdiction to consider such a contention in a plenary action. We do not see that either Leedom v. Kyne or Fay v. Douds is applicable to such a case. Indeed, Bell Aerospace, on which the Union relies, would appear to work against it on the question of district court jurisdiction. In a footnote to the text quoted above, the court noted that “[w]hile nominally this case comes before us as an unfair labor practice case, in substance the attack is on the Board’s decision, unreviewable at the time, in the representation proceeding.” 475 F.2d at 496 n. 15. Thus, we conclude that the Union’s contention that the Board should have proceeded here by rule-making did not raise a claim over which the district court could assert jurisdiction.

Accordingly, in light of our resolution of the issues involved, we affirm the district court’s order dismissing the Union’s action for lack of jurisdiction.

WYZANSKI, Senior District Judge

(dissenting):

As I read the record, the NLRB’s April 23, 1971 Decision and Direction, as well as the NLRB’s subsequent notice of election, stated that persons not employed and on the payroll on March 31, 1971 could not vote. That statement excluded 206 adjunct professors, most of whom presumably, would have been eligible to vote had the Decision and Direction, as well as the notice of election, embraced, as the NLRB’s July 27, 1972 order did embrace, adjunct professors who on March 31, 1971 were not on the payroll of that date, but who, nonetheless, had a regular pattern of continuing employment on that date. Despite that statement, 19 of the apparently excluded 206 received ballots, and the NLRB, in its July 27, 1972 order, now under review, has directed that 16 of those ballots be counted and that on the basis of such count the NLRB issue its certification.

My view is that that July 27, 1972 order was in error because it permitted the counting of the 16 votes, or, alternatively, because it sanctioned the exclusion from notice and an opportunity to vote of the 187 adjunct professors who did not vote.

The exclusion of the 187 was, first, a violation of the statutory command, implied in Section 9(a), (b) and (e), which implicitly prescribed that the NLRB must not certify the results of an election based upon an eligibility roll larger than the standard of eligibles the Board announced before and at the election. It was, second, a violation of the due process clause of the Fifth Amendment to the United States Constitution because it denied to 187 persons notice and an opportunity to vote. The first violation gave jurisdiction to the District Court under the doctrine of Leedom v. Kyne, 358 U.S. 184, 188, 189, 79 S.Ct. 180, 3 L.Ed.2d 210 (1958). The second violation gave jurisdiction to the District Court under the doctrine of Fay v. Douds, 172 F.2d 720 (2nd Cir. 1949).

      . There appears to be some confusion about whether the challenged adjunct ballots were twenty-one or nineteen in number. In its decision, the Board apparently felt it was considering challenges to nineteen ballots, and we shall assume that is the correct figure, although the number is not crucial.

      . With respect to the Union’s due process claim, we note that it is not certain that the effectuation of the Board’s order to the Regional Director to .count the disputed ballots will necessarily result in the Union’s being deprived of its asserted right to represent the employees. It is only if the ballots when counted cause the Union to lose the election that this will happen. Thus, the Union’s due process contention is contingent at the moment. For purposes of this appeal, we shall assume the due process contention is properly before us and shall not consider whether its proper resolution should await the determination of this contingency.

      . See 5 U.S.C.A. § 553.


author: PER CURIAM:

text:
    TABBY’S INTERNATIONAL, INC., Petitioner, v. SECURITIES AND EXCHANGE COMMISSION, Respondent.
    No. 72-3284.
    United States Court of Appeals, Fifth Circuit.
    June 5, 1973.

      Richard B. Marx, Miami, Fla., for petitioner.
    Mark Q. Connelly, Theodore Sonde, Securities & Exchange Commission, Washington, D. C., for respondent.
    Before BELL, GOLDBERG and SIMPSON, Circuit Judges.
   PER CURIAM:

This is a petition for review of an order entered by the Securities and Exchange Commission pursuant to Rule 261 of Regulation A under the Securities Act of 1933 permanently suspending the exemption from registration with respect to the offering of securities by petitioner, Tabby’s International, Inc. The order is affirmed on the basis of the SEC’s opinion, which we attach hereto as an appendix.

Affirmed.

APPENDIX

Securities Act Release No. 5283 [Caption omitted]

FINDINGS, OPINION AND ORDER PERMANENTLY SUSPENDING REGULATION A EXEMPTION

Before the SECURITIES AND EXCHANGE COMMISSION:

Tabby’s International, Inc. (“issuer”), a Florida corporation organized in 1969 for the purpose of engaging in the restaurant business, filed with us on June 25, 1969 a notification and an offering circular for the purpose of obtaining an exemption from the registration requirements of the Securities Act of 1933 pursuant to Section 3(b) thereof and Regulation A thereunder, with respect to a proposed public offering of 150,000 shares of its common stock at $2 per share. In April 1970 it filed a report on Form 2-A stating that the offering had been completed on November 19, 1969.

On May 12, 1971, we issued an order pursuant to Rule 261 of Regulation A temporarily suspending the exemption. The issuer requested a hearing, and following submission of a stipulation of facts entered into by it with our Division of Corporation Finance, the hearing examiner filed an initial decision. The examiner found, as alleged in the temporary suspension order, that as a result of the activities of the underwriter in the course of the offering, the offering circular became materially false and misleading, the terms and conditions of Regulation A were not complied with, and the offering was made in violation of Section 17 of the Securities Act, and he concluded that the exemption should be permanently suspended. The issuer filed a petition for review and a brief in support thereof which presented objections to the examiner's conclusion.

As found by the examiner on the basis of the stipulation, the offering was carried out by the underwriter in a fraudulent manner. The details of the underwriter’s activities and the respects in which they caused the offering circular to be false and misleading and resulted in noncompliance with the terms and conditions of Regulation A are set forth in the examiner’s findings which we adopt. In brief, prior to completion of the offering, the underwriter repurchased shares from nominees and others at prices substantially above the offering price and resold part of such shares; induced other broker-dealers to make a market in the issuer’s stock at double the offering price; and offered yet other broker-dealers financial inducements to promote the stock. As a result of the failure to disclose these activities and the actual aggregate offering price resulting therefrom, the offering circular became false and misleading. Moreover, the offering exceeded the $300,000 limitation for Regulation A offerings then in effect, and the Form 2-A was inaccurate regarding, among other things, the completion date of the offering, the proceeds received from the public, and the underwriter’s discount.

It is stipulated that the issuer had no knowledge of the underwriter’s fraudulent activities and had no reason to believe that the offering had not been completed on November 19, as reported to it by the underwriter. The issuer contends that since the record contains no evidence of wrongdoing on its part and involved activities over which it assertedly had no control, it is not in the public interest to suspend the exemption permanently, thereby exposing it to civil and criminal sanctions for violation of the registration provisions of Section 5 of the Securities Act. It asserts that in other cases involving more serious wrongdoing we have vacated temporary suspension orders. The issuer further argues that since it could not anticipate the underwriter’s illegal activities, there is no basis for taking action against it based on nondisclosure of such activities in the offering circular which was accurate when it became “effective.” Such action, it is urged, would amount to an ex post facto law prohibited by the United States Constitution and would violate due process. We cannot accept the issuer’s arguments.

Where events occur or actions are taken in the course of an offering which render statements in the offering 'circular materially false or misleading, it is clearly improper to continue the offering without appropriate amendment of the circular. The exemption provided by Regulation A is a conditional one based on strict compliance with express provisions and standards, and its suspension is appropriate where they are not met. The issuer, in challenging the propriety of permanently suspending the exemption in the absence of a finding of culpability on its part, misconceives the nature of the exemption as well as of a suspension. A suspension of the exemption is not a sanction or a penalty, but rather serves the remedial purpose of protecting investors by making the safeguards of a registration statement under the Securities Act a prerequisite for any further public offering of securities either by the issuer or the underwriter where there has been a failure to adhere to the conditions of the exemption. Accordingly, any reference to prohibition of ex post facto laws is entirely inappo-site. Where as here the offering is permeated with fraud, we think a permanent suspension of the exemption as to the security in question is clearly required for the protection of investors, even though only the underwriter is the cause of noncompliance. Contrary to the issuer’s contention, the cases cited by it in which we vacated temporary suspension orders involved far less serious noncompliance.

In summary, Rule 261 provides for the suspension of a Regulation A exemption if, among other things, the exemption was not, in fact, available, or the conditions of the exemption were not satisfied, or if the offering circular was false or misleading, or if fraudulent or manipulative practices were utilized in the offering. All of the above grounds for suspension are clearly present in this case. Consequently, suspension is proper since the exemption is not, and should not be, available under the circumstances, nor does the basis for suspension depend upon whether the issuer or the underwriter was the person at fault.

We recognize that suspension of a Regulation A exemption may have collateral consequences for, in this case, the issuer. If the issuer seeks to be relieved, in whole or in part, from these consequences, its remedy is to seek relief under Rule 252(f). In connection with such an application, the Commission could explore the degree of care exercised by the issuer in the selection of the underwriter and the extent, if any, to which the issuer kept itself informed about the activities of the underwriter in connection with the offering. On the issue of suspension, it appears that the hearing examiner believed, we think correctly, that these issues were not relevant, and he did not examine them in his initial decision.

Accordingly, it is ordered, pursuant to Rule 261 of Regulation A under the Securities Act of 1933, that the exemption from registration with respect to the offering of securities by Tabby’s International, Inc. be, and it hereby is, permanently suspended.

By the Commission (Chairman Casey, and Commissioners Owens, Herlong, and Loomis).

/s/ Ronald F. Hunt Secretary

      . The issuer’s request for oral argument before us is hereby denied. In our opinion, the written submissions were adequate for dealing with the limited issue presented for our consideration.

      . In separate proceedings, the underwriter’s broker-dealer registration was revoked and its president and vice-president were barred from association with any broker-dealer, investment advisor or investment company, on the basis of findings of violations of registration, antifraud and anti-manipulative provisions of the securities acts in connection with the offering of the issuer’s stock. Those respondents consented to the sanctions and findings of violations, without admitting or denying the allegations in the order for proceedings. J. M. Kelsey & Co., Inc., Securities Exchange Act Release No. 9196 (June 4, 1971).

      . See Rule 256(e) under the Securities Act. Cf. S.E.C. v. Manor Nursing Centers, Inc., C.A. 2, 1972, 458 F.2d 1082 (“The effect of the antifraud provisions [of the securities acts] is to require the prospectus to reflect post-effective [developments] which make the prospectus misleading in any material respect.”)

      . See Selevision Western, Inc., 37 S.E.C. 411, 415 (1956); Antilles Electronics Corporation, 41 S.E.C. 886 (1964); R. A. Holman & Co., Inc., Securities Exchange Act Release No. 7770, p. 15 (December 15, 1965), aff’d, 366 F.2d 446 (C.A. 2, 1966), opinion amended, 377 F.2d 665 (C.A. 2), cert. denied, 389 U.S. 991, 88 S.Ct. 473, 19 L.Ed.2d 482 (1967).

      . See Selevision Western, Inc., supra.

      . See Utah-Wyoming Atomic Corporation, 36 S.E.C. 454 (1955); R. A. Holman & Co., Inc., supra.

      . Mid-Hudson Natural Gas Corp., 38 S.E.C. 639 (1958); Automatic International, Inc., Securities Act Release No. 4719 (September 4, 1964); Baxter and Friedman as The Mandingo Company, Securities Act Release No. 4783 (June 4, 1965).

      . We do not, at present, express any view as to the responsibility of the issuer to exercise care in these matters, but this would be relevant to an application under Rule 252(f). Thus, the accuracy of the disclosure in the offering circular concerning the plan of distribution depends primarily on the manner in which the underwriter makes the offering, and the accuracy of the report on Form 2-A required to be filed by the issuer also depends, in part, upon the manner and progress of the distribution by the underwriter.


author: GIBBONS, Circuit Judge.

text:
    Katie CARTER, on behalf of the household of Thomasena Tindall, Deceased, Barbara C. Ankney, individually and on behalf of her household and on behalf of all others similarly situated, Appellants in No. 72-1239, v. Earl L. BUTZ, Individually and in his capacity as Secretary of the United States Department of Agriculture, et al., Appellants in No. 72-1288, and Helene Wohlgemuth, Secretary of Welfare of the Commonwealth of Pennsylvania, et al.
    Nos. 72-1239, 72-1288.
    United States Court of Appeals, Third Circuit.
    Argued March 6, 1973.
    Decided May 29, 1973.

      Michael A. Nemec, Neighborhood Legal Services Ass’n, Pittsburgh, Pa., for Katie Carter and others.
    Harlington Wood, Jr., Acting Asst. Atty. Gen., Richard L. Thornburgh, U. S. Atty., Alan S. Rosenthal, Michael Kim-mel, Attys., Dept, of Justice, Washington, D. C., for the Federal Government.
    J. Shane Creamer, Atty. Gen., Barry A. Roth, Marx S. Leopold, Asst. Attys. Gen., Harrisburg, Pa., for Secretary of Welfare and Commonwealth of Pennsylvania.
    Before GIBBONS and HUNTER, Circuit Judges, and MUIR, District Judge.
   OPINION OF THE COURT

GIBBONS, Circuit Judge.

In this action heads of households who were beneficiaries of the federal food stamp program sought relief in the district court against the federal Secretary of Agriculture and the Pennsylvania Welfare Department for the deprivation of food stamps which resulted from administrative errors committed by officials of the Welfare Department. The district court judgment provided that(the arrearages in food stamp allotments be cured by a forward adjustment of the amount of purchase discount which would be allowed to each plaintiff in the purchase of future monthly food stamps allotments. The effect of this judgment was to grant full relief to the plaintiffs at the expense of the Federal Government. The plaintiffs sought class action treatment, which the district court declined. Plaintiffs appeal from the adverse class action determination. The federal defendants cross appeal from the judgment imposing the expense of the forward adjustment on the Federal Government rather than on the Commonwealth of Pennsylvania. Neither the federal nor the state defendants contend that it was inappropriate to grant some form of relief, against someone, to the plaintiffs.

Under the Food Stamp Act of 1964 (the Act) and implementing regulations the Food and Nutrition Service of the Department of Agriculture administers a program under which, at the request of the states, low income households within the state are enabled to purchase at a discount from their redeemable value, food stamps which may be used to obtain a nutritionally adequate diet. The amount such householders pay for the food stamps is determined under a sliding scale dependent upon' the household’s income. Eligibility of certain households, such as welfare recipients is determined at the federal level. Eligibility of other households is determined by the states, under uniform national income and resource standards set forth in the Act and federal regulations. Under the Act, state agencies are responsible for certification of qualifying households, and are also responsible for the issuance of food stamps. 7 U.S.C. § 2019(b); 7 C.F.R. § 270.3(b). Instructions of the Food and Nutrition Service permit the state agencies to perform the certification responsibility by mailing to eligible households at a specified time twice each month authorization to purchase cards (ATP cards) which disclose the household’s “purchase requirement.” The “purchase requirement” is the percentage of the face amount of redeemable value which the householder must pay to the issuing state agency for the stamps. The. issuing state agency is usually a commercial bank, which deposits the “purchase requirement” to the credit of the United States Treasury. The food stamps are redeemable for eligible food items at face value at participating retail food stores. The stores collect the face value in money at a bank, which in turn is reimbursed at face value by the Treasury through the Federal Reserve System. Thus, the amount of the discount is borne by the Federal Government. While the Federal Government bears the cost of the discount, with certain limited exceptions the participating states are responsible for financing the costs of carrying out their administrative duties under the Act, including the administrative cost of issuing food stamps to eligible households.

The purpose of the food stamp program is the assurance of a nutritionally adequate diet. This purpose would be defeated by issuing procedures which would tend to place in the hands of eligible householders more food stamps than could be redeemed for food in a relatively short period. To insure that the food stamps will be used by householders for the intended purpose, the ATP cards are issued periodically and are valid only for short intervals; usually no longer than one-half month. If, through an administrative error at the state level, an ATP card does not reach a householder during a given eligibility period, that householder is unable to purchase the stamps available during that interval, and thereby loses his discount for that period. In this case the plaintiffs, eligible householders, did not receive ATP Cards because of a computer breakdown (Tindall) or an incorrect address (Ank-ney). In both of these cases nonissuance was due solely to an administrative error of the Pennsylvania Department of Public Welfare.

The Food and Nutrition Service has issued instructions which deal with inadvertent termination or reduction of food stamp benefits. Food and Nutrition Service Instruction 734-2 authorizes emergency issuance of ATP cards, in cases where through no fault of their own eligible householders may not have received them, before the next regularly scheduled ATP card issuance. Under section VI-C of this instruction state agencies are authorized to prepare manually replacement cards for those not received at the normal time, thereby permitting an eligible household to participate in the program in the current eligibility period. The participating household must promptly notify the state agency that it has not received its regularly scheduled ATP card since, consistent with the nutritional purposes of the statute, the emergency issuance is permitted only prior to the next scheduled issuance. Appellants in this case, the district court found, did make timely application to the appropriate officials of the Pennsylvania Welfare Department, which compounded the administrative foulup in delivery of the ATP cards by failing to make timely emergency issuance.

The federal defendants contend that while they have no objection to giving relief to eligible householders who have been deprived of benefits through no fault of their own, the relief should be at the expense of the Commonwealth of Pennsylvania, not at the expense of the United States. They urge that the applicable administrative regulations and instructions establish a thirty-day statute of limitations on federal liability. But because the states are under a general statutory obligation to follow administrative regulations and the instructions of the Federal Nutrition Service, they urge, and in the instant cases failed to do so, the same regulations and instructions provide the predicate for imposing on the states a liability which does not otherwise appear. The state defendants contend that the Act does not authorize a thirty-day statute of limitations, that the regulations in force at the time of the events in issue do not specify such a period, that there are no state appropriations for the payment of benefits to food stamp eligibles, and that imposition of liability on the Commonwealth is prohibited by its sovereign immunity.

Since both the state and the federal defendants concede that the plaintiffs are entitled to relief from some source we are not concerned with an issue over the statutory right of the recipients. Cf. Graham v. Richardson, 403 U.S. 365, 91 S.Ct. 1848, 29 L.Ed.2d 534 (1971); Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970); King v. Smith, 392 U.S. 309, 88 S.Ct. 2128, 20 L.Ed.2d 1118 (1968). The only issue is, as between the federal and state governments, which party should be financially responsible for the remedy implied from conceded statutory eligibility. Under the Act, generally speaking, the Federal Government pays for benefits, 7 U.S.C. §§ 2013(a), 2016(d), while the states pay for a portion of administrative costs. 7 U.S.C. §§ 2019(b), 2024(a). The Commonwealth may be held liable to the Federal Government for gross negligence or fraud on the part of its agencies in the certification of applicant households by the face amount of food stamps issued as a result of such fraud in excess of the household’s proper eligibility. 7 U.S.C. § 2019(g). The Secretary has a general rulemaking authority under the Act. 7 U.S.C. § 2014(e). He has issued regu-latieras implementing 7 U.S.C. § 2019(g), which provide for state financial liability to the Federal Government when because of errors by the states, the Federal Government has been charged with coupons which should never have been issued. See 7 C.F.R. § 271.7. The aim of 7 U.S.C. § 2019(g) and of 7 C.F.R. § 271.7 is to provide indemnity to the Federal Government for additional expense which it has incurred as a result of such errors. In this case no additional expense is involved. Indeed if we were to accept the position of the federal defendants the Federal Government would incur reduced rather than additional expense.

The argument in favor of imposing liability on the states for the amount of benefits which must be made available later than the normal eligibility period is that such liability would provide an incentive to the states to police strictly the administration of the food stamp program. Such policing by the states would reenforce the federal purpose of having a limited number of food stamps in the hands of recipients in a given period, and thereby of assuring that they would be used for sound nutritional purposes rather than sold or traded. But neither the Act nor the regulations in effect when plaintiffs were deprived of benefits provide specifically for the imposition of such an incentive-penalty upon the states. Thus we are dealing with the area of judicial implication of appropriate remedies to redress federal statutory rights. See, e. g., Sullivan v. Little Hunting Park, Inc., 396 U.S. 229, 90 S.Ct. 400, 24 L.Ed.2d 386 (1969); J. I. Case Co. v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964); cf. Bell v. Hood, 327 U.S. 678, 66 S.Ct. 773, 90 L.Ed. 939 (1946). When considering whether to construe the Act as permitting the implication of a remedy against the state rather than Federal Government we cannot disregard the fact that Congress has appropriated funds for the payment of the benefits in question, while the states have not. This is not to suggest that it would have been beyond the power of Congress to require as a condition of the states’ participation in the program a waiver of sovereign immunity to the extent of retroactive benefits. See King v. Smith, supra; compare Jordan v. Weaver, 472 F.2d 985, 993-994 (7th Cir. 1973) with Rothstein v. Wyman, 467 F.2d 226, 238 (2d Cir. 1972). But nothing in the Act suggests any such congressional intention. See Employees of the Department of Public Health & Welfare, State of Missouri v. Department of Public Health & Welfare, State of Missouri, 411 U.S. 279, 93 S.Ct. 1614, 36 L.Ed.2d 251 (1973).

Moreover, the remedy fashioned by the district court, forward adjustment of the price of food stamps to the deprived recipients, is consistent with the federal nutritional purposes. Presumably the plaintiff householders spent money for food in lieu of stamps in the period during which they did not receive their ATP cards. They are not, under the judgment of the court, being given additional stamps beyond their normal needs, which might find their way into nonnutritional uses. They are merely being given an opportunity to make up the cash discount of which they were deprived. That remedy seems to us entirely consistent with both the purposes and the language of the Act. An instruction of the Federal Nutritional Service, FNS Instruction 732-14 IV-D, prohibits retroactive food stamp adjustments in favor of food stamp recipients who, in fair hearings on reduction or termination of benefits, have prevailed. The Instruction states:

“Past food consumption cannot be increased or otherwise altered. Therefore, following the hearing decision, retroactive adjustments in favor of the household shall not be permitted.”

The Federal Nutritional Services recognizes, however, that some adjustment is appropriate, for the same instruction was amended on August 28, 1972 to provide :

“This prohibition should not be construed to limit State Agencies in any way from issuing retroactive benefits to households from state monies.” Instruction V-D.

Forward adjustment rather than retroactive payment of benefits from any source, state or federal, is more consistent with the federal purpose of assuring current use of the stamps for nutritional purposes. Those courts, in addition to the district court in this case, which have considered the matter have concluded as much. Stewart v. Butz, 356 F.Supp. 1345 (W.D.Ky.1973); Bermudez v. United States Department of Agriculture, 348 F.Supp. 1279 (D.D.C.1972), appeal pending, No. 72-2138 (D.C.Cir.); Russo v. Kirby, 335 F.Supp. 122 (E.D.N.Y.1971).

There remains for consideration the adverse class action determination. In quite similar circumstances other district courts have concluded that the action should be maintained as a class action pursuant to Fed.R.Civ.P. 23(b)(2). See Stewart v. Butz, supra; Bermudez v. United States Department of Agriculture, supra; Russo v. Kirby, supra. In this case the district court concluded that the disparate factual circumstances of class members, especially differences in the amount of discount for which they were eligible, made a class action undesirable. The court also concluded that the precedential value of its decision would render a judgment in favor of the class unnecessary. While we might well have decided otherwise we conclude that the class action determination was within the range of discretion permitted by Rule 23.

The judgment of the district court will be affirmed. Each party to bear its own costs.

      . This court substituted the present Secretary of Agriculture, Earl D. Butz, for the former, Secretary Clifford M. Hardin. Edward J. Hekman, Administrator of the Pood and Nutrition Service of the Department of Agriculture and the United States Department of Agriculture were also joined as defendants. Hereinafter the above will be referred to as the federal defendants.

      . Also joined with the Pennsylvania Welfare Department as defendants were Helene Wohlgemuth, Secretary of Welfare of the Commonwealth of Pennsyl vania, and Edward Kalberer, Executive Director of the Allegheny County Board of Assistance. Hereinafter the above will be referred to as the state defendants.

      . 78 Stat. 703 (1964), as amended, 84 Stat. 2048 (1971), 7 U.S.C. §§ 2011-2025. See also section 411 of the Social Security Amendments of 1972, 86 Stat. 1329, 1491-92, 7 U.S.C. § 2012(e) (Supp.1972), as amended.

      . 7 C.F.R. Pts. 270-274.

      . See 7 C.F.R. § 271.3(b).

      . See 7 U.S.C. §§ 2014, 2019(e) (1); 7 C.F.R. § 271.3(c).

      . 7 U.S.C. § 2024 ; 7 C.F.R. §§ 271.1(h), 271.2.

      . Purposeful termination or reduction, under a 1971 amendment to the Act and implementing regulations, requires a fifteen-day notice of adverse action and a fair hearing. Section 10(e)(6), 7 U.S.C. § 2019(e)(6); 7 C.F.R. §§ 271.1 (m), 271.1 (o); Food and Nutrition Service Instruction 732-14.

      . See 7 U.S.C. § 2013(c).

      . The federal defendants stated :
      “We do not take the position that the food stamp beneficiaries here involved have no remedy at all. Our position is that, assuming that they did not receive their ATPs, that they in fact made a timely request for reissuance to the State agency, and that the latter failed to implement the emergency procedures, the Food Stamp Act and implementing regulations at least implicitly require that the remedy be provided by the State agency, not the federal government.” Brief for the Secretary of Agriculture at 2.3.
      The state defendants admit that those who qualify have a right to receive the food stamps.
      “II. FOOD STAMP BENEFITS ARE STATUTORY ENTITLEMENT TO THOSE WHO MEET THE STANDARDS OF ELIGIBILITY.
      In Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970) it was determined that welfare benefits are a matter of statutory entitlement for persons qualified to receive them. In the lower court opinion, District Judge Dumbauld indicated at page 7 of his opinion, ‘we agree with other courts that have passed upon the issues that the right to receive benefits under the food stamp program is a statutory entitlement.’ In the instant case, the entitlement originates in 7 U.S.C. § 2013(a) [(a)] : ‘The Secretary is authorized to formulate and administer a food stamp program under which, at the request of the State agency, eligible households within the State shall be provided with an opportunity to obtain a nutritionally adequate diet through the issuance to them of a coupon allotment.’ ” Brief for Appellee at G.

      . The argument for imposing liability on the Commonwealth would be that in allowing the thirty-day period for the issuance of ATP cards to elapse, the Commonwealth breached a duty to the recipients and would be liable to them on a negligence theory. We find no indication in the legislation that Congress intended to vest in the administrator the power to create by rule such a cause of action against a sovereign state.