author: JOHN R. BROWN, Chief Judge. RONEY, Circuit Judge

text:
    SECURITY INSURANCE COMPANY OF HARTFORD, Plaintiff-Appellee, v. A. G. WIMPY and A. G. Wimpy Company, Inc. et al., Defendants-Appellants.
    No. 71-1839.
    United States Court of Appeals, Fifth Circuit.
    March 8, 1973.
    W. Woodrow Stewart, Joe K. Telford, Gainesville, Ga., for defendants-appellants.
    B. Carl Buice, Gainesville, Ga., for plaintiff-appellee.
    Before JOHN R. BROWN, Chief Judge, and INGRAHAM and RONEY, Circuit Judges.
   JOHN R. BROWN, Chief Judge.

As a rare animal too often neglected and overlooked as aggrieved parties survey the appellate zoo, this case comes to us on an agreed statement, F.R.A.P. 10(d). It presents for decision the computation of correct premiums under a retrospective rating plan where the Insurer cancels before the expiration of the last year of a three year policy period because of adverse loss experience on the part of the Assured. The trial court held for the Insurer and the Assured appeals. We reverse.

In the quest for the answer the problem comes down to making sense out of non-sense. In more austere language, the problem is interpreting, or more accurately trying to interpret, the specific terms of the cancellation provision of Plan D.

The facts are extremely simple. The Insurer issued its first policy to Assured on April 3, 1965. On April 3, 1966, Insurer issued a similar renewal policy for another year’s coverage. Because of Assured’s poor loss experience during the first two years of coverage, Insurer decided on April 3, 1967, that it would issue a policy effective only until June 15, 1967. By any realistic view of the facts this action must be classed as a cancellation of present and future insurance coverage.

Assured paid the standard premium for this twenty-six months’ coverage. Insurer then determined that the very same loss experience for which it can-celled the insurance warranted it in assessing the 150% maximum additional premium under the Retrospective Premium Endorsement.

The applicability of Retrospective Premium Plan D in the event of such a cancellation presents the legal issue of contract construction. Assured contends that the relevant contract provisions are ambiguous and, therefore, the general canon of construction for standard form contracts obliges us to construe them against Insurer. American Fidelity and Casualty Co. v. St. Paul Mercury Indemnity Co., 5 Cir., 1957, 248 F.2d 509; Retona Chemical Corp. v. Globe Indemnity Co., 5 Cir., 1968, 404 F.2d 181; Southeastern Fidelity Insurance Co. v. McDonald, Ga., 1972, 125 Ga.App. 394, 188 S.E.2d 162.

On this work-a-day problem we first must examine the provisions of the insurance policy and Plan D to see whether the language fairly construed the parties’ intentions for this contingency.

Paragraph 5 of Plan D provides that the “cancellation or non-renewal, prior to the end of the three year period of any policy designated in Table I shall be deemed to be cancellation of the retrospective rating plan” (see par. 5 [i], note 4, supra). Assuming that this phrase means what it says, Insurer’s claim to the additional premiums based on the Retrospective Rating Plan up to the date of cancellation cannot stand.

Insurer contends, however, that the phrase merely effectuates a cancellation of the Retrospective Rating Plan for future coverage and does not affect the earned premium to date. It buttresses this contention by emphasizing clause (ii): “and the premium for insurance subject to Plan D for the period such policies have been in force shall be computed in accordance with the other provision of this endorsement” (par. 5 [ii], note 4, supra).

But this hardly helps Insurer. First, if as Insurer contends the “other provision of this endorsement” means the retrospective rating plan, then the entire cancellation clause would read as follows: “The cancellation or non-renewal, prior to the end of the three year period of any policy designated in Table I shall be deemed to be cancellation of the retrospective rating plan, and the premium for insurance subject to Plan D for the period such policies have been in force shall be computed in accordance with the retrospective rating plan.”

That is either ambiguous or question-begging in the sense that it does not provide the answer to just what the retrospective rating plan would then prescribe. And probably what is more important, the argument conveniently ignores that little, simple but often troublesome, portentous “provided”. Provided what?

Provided what? is the key to this case. And it leads us to a decision not reached elsewhere or in the Court below.

Article 5 (note 4, supra) specifically takes care of several situations. In 5(a) the policy deals with cancellations by the Assured. By the operation of sub-par (1) the minimum retrospective premium is the [i] standard premium for all closed years plus [ii] the short rate standard premium for the period covered in the year of cancellation. The Assured gets no possible benefit from good experience since it must pay the standard premium for closed years and bear the much higher short rate premiums for the incompleted period of cancellation. But as proof that the Plan D is to penalize — and hence discourage cancellation by the Assured — it may even be much worse. Clause (2) fixes maximum retrospective premium as the sum of the audited standard premium, not up to the end of the closed years, but up to the date of cancellation, and the estimated standard premium to the end of the third year.

Under this formula Assured can get no benefit from good experience although under the maximum formula just summarized it may have to bear a substantial added burden for bad experience to the extent that (i) its completed experience justified a refund or (ii) the estimated standard premium for the remainder of the policy term exceeded what would be payable either under short rate or actual experience or both.

In short, 5(a) prescribes in detail the consequences in terms of the added costs imposed on a cancelling Assured. For this situation the “provided” makes clause 5 [i] absolute and obliterates almost altogether any operative effect of clause 5 [ii] because it is now clear that it is standard and short rates, actual or estimated, which alone control.

When it comes to cancellation by Insurer the Provided what? is limited to cancellations for non-payment of premiums by Assured. This is again a powerful stimulant not only to continue coverage but to pay premiums. For the consequence on Assured is the same as 5(a)(2).

Provided what? does not even begin to cover cancellation for bad loss experience. In view of that, there is no proviso to clause 5 [ii] which clearly prescribes that the premium for the period the insurance is effective “shall be computed in accordance with the other provisions of” Plan D. This brings into play paragraph 4 covering computations of premiums on a continuous three year retrospective basis.

Under par. 4 the concept of this rating plan (see note 4, supra [from AGS] is that Assured will be allowed to average his experience over the three year period. The computation is remade as each successive year is closed. If on the three year basis the loss experience calls for additional premiums, Assured must, up to 150%, pay them. If, on the contrary, loss experience calls for lesser premiums, Insurer must repay them.

Obviously it would be unfair in the absence of clear language to the contrary to allow Insurer to unilaterally cut off the right of Assured to have the benefit under the premium formula of what the post-cancellation experience would have afforded.

On the other hand there are no equities which would justify affording Assured more benefits than would have been received had Insurer not cancelled. And certainly nothing in the words used in Plan D either require or suggest such a result.

In this way the concept of leveling-off is kept intact. Neither party is prejudiced. Each is required merely to live up to his obligation to pay more or refund depending on loss experience. And it keeps faith with the plain words of clause 5 [ii].

Insurer may make the beguiling argument that allowing cancellation as we do (note 8, supra) this further application of par. 4 of Plan D anomously calls for continuation of the insurance without receipt of premiums. This is not so at all. Assured has no coverage from the date of cancellation. But, in computing the adjusted premium for the period from the attachment of the risk to the time of cancellation Assured’s loss experience for the post-cancellation period has to be taken into account with the pre-cancellation experience. What this really amounts to is an application of the law’s traditional technique used in a variety of situations of determining or measuring consequences for past conduct by subsequent events.

This course seems eminently preferable to following the easy way out of finding an ambiguity and then giving the full break to Assured, thus in effect imposing the full burden on Insurer for the cancellation we have held to be permissible. And this is so even though other Courts have taken the ambiguity route to reach opposite results.

Perhaps we add to the ambiguity by not relying on it. But we think we finally make sense of non-sense, interpret the bargain thereby, hold both parties to it and leave to the District Court the task of determining on remand and further proceedings the dollar consequences which this reading requires.

Reversed and remanded.

RONEY, Circuit Judge

(dissenting):

I agree that the judgment of the district court should be reversed, but I would hold that the plaintiff insurance company is entitled to standard premiums only and is not entitled to collect retrospective premiums.

This is a diversity case from Georgia and should be decided under Georgia law. The only Georgia case cited to us is Travelers Indemnity Co. v. Horace F. Allison d/b/a H. F. Allison Contract Hauling, Civil Action No. K-12,658, July 15, 1968, Hall County Georgia Superior Court. Although not compelling authority, it is the only Georgia law on point and is from a Georgia court located within the jurisdiction of the district court. There is no reason for a federal court not to follow it. The Georgia court recognized that there are good arguments on both sides of this question, but held that the ambiguity of the policy requires the resolution of the conflict against the insurer, which wrote the policy.

Of the cases cited from other jurisdictions which involved the identical cancellation clause, two were decided in favor of the insured, Bituminous Casualty Corp. v. Swartout, 270 Minn. 216, 133 N.W.2d 32 (Minn.1965); Traveler’s Insurance Co. v. Jeffries-Eaves, Inc., 166 Colo. 220, 442 P.2d 822 (1968), and one was decided in favor of the insurer, Bituminous Casualty Corp. v. Lewis Crane Service, Inc., 173 So.2d 715 (Fla.App.1965). The wording of the cancellation clause was materially different in Wimpy v. Maryland Casualty Co., 223 F.2d 649 (5th Cir. 1955).

      . The trial submission was virtually all on stipulation.

      . The agreed statement (AGS) states:
      “Restrospective rating is based on premiums, which have been developed through past experience, or other individual rating of risk. Manual rates are adjusted to reflect the experience of the individual concern, as it differs from the industry as a whole. This is experience rating, and is prospective rating. In other words, the experience of the past is taken as an indication of the experience expected for the renewal policy period. Restrospective Rating is nothing more than a practical method of determining current rates from the basis of current losses and this is superimposed upon the experience rate. The plan utilized in connection with the policies concerned in this action was Plan ‘D’.
      The basic premium is expressed as a percentage of the standard premium, and includes such items as acquisition cost, branch office expense, home office administration and audit expense, engineering and bureau expenses, profit and contingencies. The minimum premium is the least amount of money that the insurance company may charge in the event of excellent experience on behalf of the insured, and is usually expressed as a percentage of the standard premium. The maximum premium on the other hand is the maximum amount of money the insurance company may charge, if the loss record of the insured is poor, and this is expressed as a percentage of the standard premium. # * *
      The formula used in determining the final Retrospective Premium is as follows:
      Retrospective Premium = [basic premium + excess loss premium -|- (incurred losses x loss conversion factor)] x tax multiplier, subject to minimum and maximum retrospective premiums.”

      . “To make this plan more attractive it is usually written for more than one year. The plan in the instant case was written for three years.” (AGS).
      We agree, however, with Insurer that this contemplated the issuance of renewal policies for the second and third years.

      . For ease of reference we have inserted [i] and [ii] in the introductory par. 5:
      5. Cancelation.

        The cancelation or non-renewal, prior to the end of the three-year period, of any policy designated in Table I shall [i] he deemed to he cancelation of the retrospective rating plan, and [ii] the premium for insurance subject to Plan D for the period such policies have been in force shall he computed in accordance with the other provisions of this endorsement, provided:

      (a) Cancelation hy the named insured. In the event of cancelation by the named insured, (1) the standard premium shall be computed as the sum of the audited standard premium for all completed annual periods and the short rate standard premium for the period in which cancelation is effective; the minimum retrospective premium shall be the standard premium so computed; (2) in computing the maximum retrospective premium, the standard premium shall be computed as the sum of the audited standard premium to the date of cancelation and the estimated standard premium from the date of cancelation to the end of the throe year period.
      ¡(b) Cancelation hy the company. In the event of cancelation by the company because of non-payment of premium by the named insured, the maximum retrospective premium shall be computed on the basis of the audited standard premium from the beginning of the three year period to the date of cancelation and the estimated standard premium for the balance of the three year period.
      (c) Cancelation of part of insurer’s operations. Neither the insured nor the company may cancel the insurance applying to a part of the operations of the insured. (Emphasis supplied).

      . Applying Plan D under •which the minimum retrospective premium was 60% of the standard premium, and the maximum 150%, the Insurer claimed and the Court awarded:

      . The only possible operative effect left by 5[ii] is perhaps to put a ceiling of 150% on the maximum.

      . 4. Payments and Computations of Premium for Insurance Subject to Plan D.
      (a) Standard Premium. The named insured shall pay the standard premium to the company in accordance with the provisions of the policies, other than this endorsement, specifying the manner of premium payment.
      (b) Retrospective Premium. A computation of the retrospective premium applicable to the first annual period, based upon the standard premium and incurred losses for such period, such losses to be valued as of a date six months after the expiration of such period, shall be made by the company as soon as practicable after such valuation date. A computation of the retrospective premium, applicable to the first two annual periods, based upon the standard premium and incurred losses for such periods, such losses to be valued as of a date six months after the expiration of the second annual period, shall be made by the company as soon as practicable after such valuation date.
      A computation of the retrospective premium, based upon the standard premium and incurred losses for the three year period, such losses to be valued as of a date six months after the expiration of such period, shall be made by the company as soon as practicable after such valuation date. Such computation of the retrospective premium for the three year period shall be final if (1) all claims have been closed or it is apparent that the retrospective premium will exceed the maximum retrospective premium, and (2) within ninety days from approval of such computation by the organization having jurisdiction, the company, with the agreement of the insured, requests of such organization that the computation be final.
      If such computation is not final, a further computation of the retrospective premium, based upon incurred losses valued as of a date eighteen months after termination of the policies, shall be made by the company as soon as practicable after such valuation date. Such further computation shall be final unless, within ninety days from approval of such computation by the organization having jurisdiction, the company or the named insured requests of such organization that a further computation be authorized. Any subsequent computations, to be made only at intervals of twelve months, shall each be subject to a similar procedure.
      If the named insured disposes of his entire interest in the operations covered by the policies, or makes an assignment for the benefit of creditors, or is in a legal proceeding reorganized or declared bankrupt or insolvent, and if the retrospective premium as of the date of such change of status is greater than the standard premium for insurance to such date, the company may compute the retrospective premium as of such date, as soon as practicable thereafter. After each computation, if the premium thus computed exceeds the premium paid for insurance subject to Plan D, the named insured shall pay the difference to the company; if less, the company shall return the difference to the named insured.

      . This is not to hold in a left-handed way that Insurer could not cancel for bad experience. We simply say that exercising that right, Insurer had to recognize that for the balance of the three year term it runs the risk of substantial credits if Assured’s post-cancellation experience warrants it.

      . The correct method of computation we leave to the trial Court on remand, but it is not as complex as might first appear. On the hypothesis that post-cancellation would produce a credit for refund there would be no occasion for an offset for the premiums theoretically payable (but not paid) for the post-cancellation period. On the other hand, if post-cancellation experience would not produce a credit it would mean that Assured would be liable for the full retrospective premium computed on the basis of the experience from inception to cancellation not to exceed, of course, 150% of the standard premium for that period. In this way Assured would get the benefit of any post-cancellation credit, but in no ease would Assured be liable in excess of the retrospective rating premium computed to date of cancellation solely on the basis of precancellation loss experience. Nor should it be, since the most Insurer should get is the maximum amount permitted under the formula for coverage afforded to date of cancellation.

      . Falling back on ambiguity to give Assured here the standard premium basis where it is less than the retrospective rate would, as a Georgia -Brie precedent, compel us to apply this reading of Plan D to the next case of an Insurer preexpiration cancellation where the standard premium would be more than Assured’s retrospective rate up to date of cancellation. The doctrine of ambiguity permits the Court to construe it most favorably to Assured. But the process is construction, not contemporary equitable adjustment. Once construed, it must be applied evenhandedly, not on a basis of achieving the least dollar cost to Assured in the case of the day.

      . Bituminous Casualty Corp. v. Lewis Crane Service, Inc., Fla.App., 1965, 173 So.2d 715, held that the language involved clearly contemplated application of the retrospective rating plan to periods of past coverage regardless of who cancelled the policy or why. See also Wimpy v. Maryland Casualty Co., 5 Cir., 1955, 223 F.2d 649, involving different policy language. Two others found the policies to be severely lacking in clarity, Bituminous Casualty Corp. v. Swartout, Minn., 1965, 270 Minn. 216, 133 N.W.2d 32; Traveler’s Insurance Com. v. Jeffries-Eaves, Inc., Colo., 1968, 166 Colo. 220, 442 P.2d 822, and limited recovery to the standard premium.

      . We do not have to determine whether we should apply the suggestion in Boston Insurance Co. v. Gable, 5 Cir., 1965, 352 F.2d 368, 370, that when courts arrive at contrary conclusions on identical wording it must be ambiguous. This simplified approach submerges local policy considerations which frequently vary from state to state, especially in insurance problems. See American Agricultural Chemical Co. v. Tampa Armature Works, 5 Cir., 1963, 315 F.2d 856, 862-863 (Brown, J. concurring). Cf. United States v. Seckinger, 1970, 397 U.S. 203, 90 S.Ct. 880, 25 L.Ed.2d 224, reversing 5 Cir., 1969, 408 F.2d 146.

      . We are not the first tribunal to toil in this field. Several appellate courts have muddled along in an attempt to make sense of non-sense and find the golden fleece — “provided what?”. See note 11 supra. Perhaps our efforts have been somewhat clumsy. But if the result is unsatisfactory, it is not the responsibility of the judiciary. Speaking from the disinterested vantage of the judiciary, we can only express our hope that if the insurance fraternity is displeased with this result, that it will do the natural thing and provide what.


source: Caselaw Access Project

author: IRVING R. KAUFMAN, Circuit Judge:

license: Public Domain

text:
    UNITED STATES of America, Appellant, v. Vincent ROLLINS, Defendant-Appellee.
    No. 699, Docket 72-2399.
    United States Court of Appeals, Second Circuit.
    Argued March 2, 1973.
    Decided March 13, 1973.
    John W. Nields, Jr., and Dean C. Rohrer, Asst. U. S. Attys., New York City (Whitney North Seymour, Jr., U. S. Atty., S. D. N. Y., on the brief), for appellant.
    Phyllis Skloot Bamberger, New York City (Robert Kasanof, The Legal Aid Society, New York City, on the brief), for appellee.

      Before KAUFMAN and MANSFIELD, Circuit Judges, and BRYAN, District Judge.

       United States District Court, Southern District of New York, sitting by designation.

   IRVING R. KAUFMAN, Circuit Judge:

We are called upon to interpret a provision of this Court’s Rules Regarding Prompt Disposition of Criminal Cases, often referred to as the Second Circuit Speedy Trial Rules. In all candor, this case is somewhat of an anachronism in a legal system, such as ours, that contemplates precedential use of judicial decisions, inasmuch as the Speedy Trial Rules will shortly be replaced by a new Circuit plan for the Prompt Disposition of Criminal Cases, adopted pursuant to Rule 50(b), F.R.Cr.P., and under which the problem before us could not have arisen, see, infra, at 1111.

At issue in this case is the procedural interplay between Rule 4 and Rule 5(h) of the Speedy Trial Rules. Rule 4 requires the Government to be ready for trial in all criminal cases within six months from the date of arrest, service of summons, detention or the filing of a complaint or of a formal charge (other than a sealed indictment) upon which a defendant is to be tried, whichever is earliest in time. Unless the government is granted an extension of the six-month period under one or more of the exceptions found in Rule 5, the charge, upon proper application, must be dismissed. In Hilbert v. Dooling, 476 F.2d 355 (2 Cir., 1973), the Court, sitting en banc, announced that dismissals under Rule 4 are with prejudice.

Rule 5(h), the provision pertinent to our review of this matter, provides:

5. In computing the time within which the government should be ready for trial under rules 3 and 4, the following periods should be excluded:
(h) Other periods of delay occasioned by exceptional circumstances.

The question presented on "this appeal is whether the Government, if it wishes to secure a Rule 5(h) extension, must do so by motion prior to the expiration of the six-month period; and whether, having failed to do so, and also having failed to be ready for trial within six months, the Government must suffer dismissal of the charge against a defendant, despite the fact that it may have a valid 5(h) claim to raise in opposition to the defendant’s motion to dismiss.

The facts in this ease are quite simple. In a complaint dated March 30, 1972, the Government charged Vincent Rollins with the sale of heroin to an undercover agent. Rollins was arrested on March 30, and an indictment charging him with the distribution of heroin was filed on April 28, 1972. Rollins pleaded not guilty to the charge on May 15.

On October 13, 1972, six months and thirteen days after commencement of the six-month period, Rollins moved to dismiss the charge under the Second Circuit Rules for Prompt Disposition of Criminal Cases. During argument before Judge Tyler, the Government stated that it had been making good faith efforts to dispose of the case and thus avoid the necessity of proceeding to trial. It appeared that the undercover narcotics agent who allegedly had purchased heroin from the defendant had himself come under investigation for improper narcotics transactions. It was the Government’s view that if the charges of misconduct alleged against the undercover agent were in fact true, it “would affect his credibility and usability ... in this case.” The Assistant United States Attorney in charge of the Rollins prosecution stated that he had been in contact with defense counsel, attempting to negotiate a possible disposition, “and the six-months date, quite frankly, slipped past . . .

Although the Government pressed its claim for an extension of the six-month period due to “exceptional circumstances,” as provided in Rule 5(h), Judge Tyler, who himself had sought on a number of occasions, and without success, to determine the Government’s intentions concerning prosecution, concluded that “if the rule is to have any meaning at all” it must require the Government to move for a Rule 5(h) extension prior to the expiration of the six-month period. He believed that “the precept of this rule really is that even where the government, the prosecution, or, indeed, the Court, are guilty of an oversight, that’s not sufficient to carry the day.” Thus, despite the fact that Judge Tyler believed, as he stated, that a Rule 5(h) exception might have been justified had a motion for an extension been made prior to October 1, he concluded that he was foreclosed from reaching the merits of the Government’s Rule 5(h) claim. Accordingly, he granted the defendant’s motion to dismiss.

We are of the view, however, that neither the language nor the purpose of the Circuit’s Speedy Trial Rules justifies the position taken by the district judge. Although the Rules are silent on whether such a request by the Government must be made prior to, or may be made after, expiration of the six-month period, we believe that the Rules, when considered in their entirety, provide for a more flexible and more rational procedural scheme than that insisted upon by the judge below. The drafters of the Rules, when they wished to require parties to move prior to expiration of the six-month period, knew how to provide for it, as evidenced by language in Rules 5(b) and 5(c), quoted in the margin. These subsections emphasize that under certain circumstances the six-month period will not be tolled unless either defense counsel or the prosecuting attorney has previously moved for a continuance and been granted one by the district court. Continuances are granted under Rules 5(b) and (c) only after motion by counsel made prior to the expiration of the six-month period. If the drafters had intended the Government to move within the six-month period for an “exceptional circumstances” continuance under Rule 5(h), they would have followed the clear pattern of Rules 5(b) and 5(c). Because “Other periods of delay occasioned by exceptional circumstances,” was intended to cover extraordinary occasions that the drafters could not envision, they opted for a broader exception to be exercised at any time at the judge’s discretion.

Moreover, it must be recalled that the Second Circuit’s Rules Regarding Prompt Disposition of Criminal Cases was designed to secure “the interests of the public and the rights of defendants” in speedy trials. See, Statement of the Circuit Council to Accompany Second Circuit Rules Regarding Prompt Disposition of Criminal Cases. Neither the public interest nor the rights of defendants are diluted when the Government is permitted to make its request for an extension under Rule 5(h) after expiration of the six-month period. Ordinarily, the issue arises when the defendant has moved for a dismissal under the Speedy Trial Rules. At that time the court may consider whether “exceptional circumstances” justified the Government's failure to file a notice of readiness. If indeed there are mitigating “exceptional circumstances,” the six-month period is tolled, an outcome identical to that which would have resulted had the Government moved prior to expiration of the six-month period. If the court does not find “exceptional circumstances,” the case will be dismissed because the Government failed to file a notice of readiness. In either instance, neither the defendant nor the public will have suffered prejudice.

In fact, if policy were to be our guide, this Circuit’s recently adopted plan for achieving prompt disposition of criminal cases, under the authority of Rule 50(b), F.R.Cr.P., clearly indicates that the Government’s position in this appeal is the correct one. Rule 4 of the new 50(b) plan, which modifies Rule 4 of the Circuit’s old Speedy Trial Rules, now provides:

In all cases the government must be ready for trial within six months. . . . If it should appear that sufficient grounds existed for tolling any portion of the six months period under one or more of the exceptions in Rule 5, the motion [to dismiss] shall be denied, whether or not the government has previously requested a continuance (Emphasis supplied)

Had this case arisen under the new 50(b) plan, little more than a citation to the above-quoted provision would have been necessary to dispose of the matter. Clearly, then, although Judge Tyler may have believed that Rule 4 would not “have any meaning at all” if the Government were permitted to move for a Rule 5(h) extension after expiration of the six-month period, the circuit and district judges who approved the new Rule 4 were of a different view. We conclude with respect to a Rule 5(h) extension, that the new Rule is not a departure from the practice prescribed by Rule 4 of the old Speedy Trial Rules, but simply clarifies that which we believed was inherent in the old Rule.

Finally, recent decisions of this court in United States v. Scafo, 470 F.2d 748 (1972), and United States v. Valot, 473 F.2d 667 (1973), would be rendered wholly inexplicable if the position argued for by appellee Rollins in this case were to prevail. In those cases, defendants had moved in the district court to dismiss charges against them due to the Government’s failure to be ready for trial within six months. In each case, the Government successfully opposed the motion on the grounds that “exceptional circumstances,” as provided in Rule 5(h), justified the delay. On appeal, we remanded to the district court for further findings concerning the specific nature and content of the “exceptional circumstances.” Since in neither case had the Government moved tor a 5(h) extension prior to expiration of the six-month period, our remand for further findings would have been wholly inappropriate if the court had held to the view that even a proper showing of “exceptional circumstances” could not have justified tolling the six-month period. The clear import of the decisions in Scafo and Valot is that the Government’s failure to move for a 5(h) extension prior to termination of the six-month period is not fatal to its claim, raised in opposition to a defendant’s motion to dismiss for failure to file a timely notice of readiness, that “exceptional circumstances” warranted delay.

To the extent, therefore, that Judge Tyler relied upon an erroneous interpretation of this Court’s Speedy Trial Rules in dismissing the charge against appellant, that dismissal cannot stand. Accordingly, we yacate the order, and remand to the district court for consideration of the Government’s claim that its delay in filing a notice of readiness in this ease was justified in light of “exceptional circumstances.” Perforce, we express no opinion on the merits of that claim but state simply that the district judge was not foreclosed by the Speedy Trial Rules, as he believed he was, from considering the Government’s excusing argument.

Vacated and remanded for proceedings not inconsistent with this opinion.

      . By vote of the Second Circuit Judicial Council on February 28, 1973, the Circuit’s Rule 50(b) plan will take effect on April 1, 1973. On that date, the Second Circuit Rules Regarding Prompt Disposition of Criminal Cases will be effectively repealed.

      . 5. In computing the time within which the government should be ready for trial under rules 3 and 4, the following periods should be excluded:
      (b) The period of delay resulting from a continuance granted by the district court at the request of, or with the consent of, the defendant or his counsel. The district court shall grant such a continuance only if it is satisfied that postponement is in the interest of justice, taking into account the public interest in the prompt disposition of criminal charges. A defendant without counsel should not be deemed to have consented to a continuance unless he has been advised by the court of his rights under these rules and the effect of his consent.
      (c) The period of delay resulting from a continuance granted at the request of a prosecuting attorney if:
      (i) the continuance is granted because of the unavailability of evidence material to the government’s case, when the prosecuting attorney has exercised due diligence to obtain such evidence and there are reasonable grounds to believe that such evidence will become available within a reasonable period; or
      (ii) the continuance is granted to allow the prosecuting attorney additional time to prepare the government’s case and additional time is justified by the exceptional circumstances of the case.

      . There is some language in Judge Tyler’s opinion below indicating that the dismissal in this case may have rested upon Rule 48(b) F.R.Cr.P., which authorizes the court to dismiss an indictment “if there is unnecessary delay in bringing a defendant to trial.” Rule 48(b) authorizes a district judge to dismiss, in his discretion, with or without prejudice, whereas a dismissal under the Speedy Trial Rules, under our en banc decision in Hilbert v. Dooling, supra, must be with prejudice. Under the circumstances the district judge need not consider application of Rule 48 to the defendant’s motion for dismissal of the charges against him. If the court, in deciding that motion, is of the view that “exceptional circumstances” justified the Government’s delay, and that a Rule 5(h) extension is warranted, there would not have been an “unnecessary delay in bringing a defendant to trial” such as would warrant dismissal with or without prejudice under Rule 48(b). If, on the other hand, the court finds that the Government’s delay was not excused by “exceptional circumstances” within the meaning of Rule 5(h), dismissal with prejudice will be required. In either event, consideration of Rule 48(b), F.R.Cr.P., would appear to be irrelevant to the district court’s ultimate disposition.


author: ADAMS, Circuit Judge.

text:
    Harry DEAKTOR et al., Plaintiffs-Appellants, v. FOX GROCERY COMPANY, a Pennsylvania corporation and John F. Fox, Defendants-Appellees.
    No. 72-1327.
    United States Court of Appeals, Third Circuit.
    Argued Feb. 13, 1973.
    Decided March 27, 1973.

      James H. McConomy, John McN. Cramer, John C. Unkovic, Reed, Smith, Shaw & McClay, Pittsburgh, Pa., for appellants.
    Ralph H. German, John D. Houston, II, Thomas E. Lippard, Houston, Cooper, Speer & German, Pittsburgh, Pa., for appellees.
    Before VAN DUSEN and ADAMS, Circuit Judges, and BRODERICK, District Judge.
   OPINION OF THE COURT

ADAMS, Circuit Judge.

The basic issue on this appeal is whether plaintiffs’ evidence regarding damages was adequate to support a claim for alleged antitrust violations.

Fox Grocery Company (Fox), franchisor of retail supermarkets doing business under the “Foodland” name in Western Pennsylvania, discussed with Harry Deaktor, an experienced supermarket operator, the possibility of opening a Foodland franchise store, in the Squirrel Hill section of Pittsburgh, under the management of Mr. Deaktor. E. D. Foods, Inc. was formed to operate the proposed supermarket, and in November, 1966, Harry Deaktor and his wife Edith signed an agreement prepared by Fox dealing with the ownership of E. D. Foods, Inc. and the operation of the store.

Under the agreement, the supermarket was financed by an investment by the Deaktors of $14,700. for 49% of the issued stock, and an investment of $15,-300. provided by Fox for 51% of the issued stock. The Deaktors also lent E. D. Foods, Inc. $6,300. in cash and approximately $6,000. worth of equipment. Substantial corporate borrowings were secured by the guaranty of Fox and the Deaktors and by a pledge of the Deaktors’ assets. The agreement provided in part that if after one year E. D. Foods, Inc. did not show a net profit of 1% on sales before taxes, Fox had the right, among other alternatives, to purchase the Deaktors’ stock in the corporation at its then book value.

The supermarket was opened on November 30, 1966. On March 17, 1968, Fox advised the Deaktors that because the store had failed to produce a 1% net profit, as provided by the agreement, it was exercising the option to purchase the Deaktors’ stock.

Suit was brought in the district court by the Deaktors individually and derivatively on behalf of E. D. Foods, Inc. against Fox and its president, John Fox. The complaint contained five counts:

I. Derivative action on behalf of E. D. Foods, Inc. for alleged violations of the antitrust laws, including price-fixing and tie-in sales.
II. Action on behalf of Harry and Edith Deaktor for damages allegedly caused to them by the same alleged antitrust law violations.
III. Action on behalf of Harry and Edith Deaktor for violation of Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and Rule 10b-5 of the Securities and Exchange Commission by the alleged publication of false and misleading information in connection with the acquisition of the Deaktors’ stock in E. D. Foods, Inc. by Fox.
IV. Action on behalf of Harry and Edith Deaktor for alleged common law fraud on the same facts as Count III.
V. Action on behalf of Harry and Edith Deaktor for alleged breach of the fiduciary duty owed a minority shareholder by a majority shareholder based upon the alleged antitrust violations in Counts I and II.

After extensive discovery, both defendants moved for summary judgment or dismissal of the complaint. By opinion and order dated October 12, 1971, the district court, 332 F.Supp. 536, dismissed Count II of the complaint for failure to state a claim upon which relief can be granted, granted summary judgment for the defendants on Count III, and dismissed Count IV, which was grounded upon pendent jurisdiction, as a discretionary matter.

The case came on for jury trial in February, 1972 on Counts I and V of the complaint. At the conclusion of the plaintiffs’ evidence, the court granted the defendants’ motion for a directed verdict as to Count I on the alternative grounds that “the evidence as to causal connection between the alleged antitrust violations and the damages which it is alleged that E. D. Foods suffered is too speculative to submit to the jury, and that the evidence as to the alleged damages suffered by E. D. Foods is too speculative to submit to the jury.”

Having carefully examined the record below and considered the contentions presented in briefs and at oral argument, we affirm the judgment of the district court.

There was clearly no error committed by the district court’s actions concerning Counts II, III, and IV of the complaint. Count II sought relief on behalf of the Deaktors individually for damages allegedly caused to them (loss of income and loss of equity investment) by Fox’s alleged antitrust violations. This Court’s decision in Kauffman v. Dreyfus Fund, Inc., 434 F.2d 727 (3d Cir. 1970), cert. denied, 401 U.S. 974, 91 S.Ct. 1190, 28 L.Ed.2d 323 (1971), established that shareholders of a corporation, qua shareholders, have no antitrust claim for harm suffered as a consequence of injury to the corporation allegedly caused by a defendant’s conduct in violation of the antitrust laws. The Deaktors argue that the Kauffman principle is inapplicable to the present case because they are seeking relief for injury caused directly to them, not for injury caused to E. D. Foods, Inc. It is unnecessary, however, for this Court to examine the implications of this proffered distinction, for the district court’s disposition of Count II must be affirmed in any event.

The basis for the Deaktors’ claim that they were personally and directly injured by Fox’s alleged antitrust violations is the contention that Fox’s conduct caused the failure of the supermarket to produce a 1% net profit, thus triggering Fox’s right to purchase the Deaktors’ stock and thereby depriving them of their income and equity investment. As the district court concluded, and as this Court holds today, infra, the Deaktors were unable to demonstrate satisfactorily in support of Count I, which rests upon the same contention as that urged to uphold Count II, that Fox’s activity caused the financial losses of Deaktor’s Foodland. Under these circumstances, it would serve no purpose, even assuming a distinction between this case and Kauffman, to remand this case to the district court to enable plaintiffs to endeavor to prove that which they have already failed to establish.

With respect to. Count III of the complaint, the district court held that even assuming misrepresentations (accounting errors) regarding Fox’s purchase of the Deaktors’ stock, such were not material and, thus, not actionable under Rule 10b-5 of the Securities and Exchange Commission. 17 C.F.R. § 240.-10-5. The parties disagreed as to the relevant date from which the agreement’s one-year period commenced in determining whether the store was operating at a 1% net profit. The district court committed no error in concluding that the provision, “on or after one year from the date hereof,” meant on or after one year from the date of the agreement. Because, as the Deaktors conceded,, the store always operated at a loss, any alleged accounting errors could at most have varied the amount of the store’s loss and, if corrected, would not have placed the supermarket above the 1% net profit figure. Therefore, such errors, even if they existed, were not material.

The district court’s ruling as to Count IV must also be affirmed. Pendent jurisdiction for this common law fraud claim depends upon the relationship between the facts alleged in support of Count III and those alleged in Count IV. To the extent that Count IV is based upon the same facts as those alleged in support of Count III, the district court’s conclusion as to the immateriality of any alleged accounting errors, which we affirm, supra, serves as an adequate foundation for the rejection of both claims, since materiality is an essential element of common law fraud. To the degree that Count IV is based on facts different from those alleged in support of Count III, (1) if those facts are still sufficiently similar to conclude that only one constitutional “case,” under the United Mine Workers v. Gibbs principle, fn. 2, supra, is presented, we hold that the district court did not abuse its discretion in dismissing Count IV, and (2) if the facts are sufficiently different so as not to present one constitutional “case,” we conclude that the district court lacked power to adjudicate the Count IV claim. Upon these alternative bases, therefore, we affirm the district court’s disposition of Count IV.

The primary thrust of the Deaktors’ argument on appeal has been directed toward the issues underlying Count I of the complaint. Mr. Deaktor testified that Fox required Deaktor’s Foodland to sell at suggested retail prices. He also testified that the store was required, as a condition of obtaining a Foodland franchise and of not having to pay higher rent, to purchase products exclusively from Fox Grocery Company. Price-fixing and tie-ins, if proved, are illegal under the antitrust laws. See, e. g., Fortner Enterprises, Inc. v. United States Steel Corp., 394 U.S. 495, 89 S.Ct. 1252, 22 L.Ed.2d 495 (1969) (tie-in); Albrecht v. Herald Co., 390 U.S. 145, 88 S.Ct. 869, 19 L.Ed.2d 998 (1968) (maximum price-fixing); Siegal v. Chicken Delight, Inc., 311 F.Supp. 847 (N.D.Cal.1970), aff’d, 448 F.2d 43 (9th Cir. 1971), cert. denied, 405 U.S. 955, 92 S.Ct. 1172, 31 L.Ed.2d 232 (1972) (tie-in). In order to recover under the antitrust laws, however, a plaintiff must, in addition to demonstrating an antitrust violation, prove: (1) a causal relationship between the antitrust violation and the alleged injury, and (2) measurable damage to his business or property.

Even assuming that the Deaktors have satisfied their burden of proving that Fox was engaged in price-fixing and tie-in sales, after our own independent examination of the record we cannot say that the district court erred in concluding that the plaintiffs’ evidence on damages was too speculative to send to the jury.

The Deaktors’ theory of recovery is that the prices fixed by Fox for the Foodland stores were too low and the cost of merchandise tied to the Food-land franchise and the low rent too high to realize a net profit. Plaintiffs’ sole witness on the amount of damages was Harry Deaktor, who testified that if he had been permitted to buy meat from a relative and produce directly from the produce yards, and to raise the store’s selling prices by 2 or 3%, in his opinion, Deaktor’s Foodland would have realized a gross profit of 21%. Other than the unsupported statement that net profit would have increased in the same amount as gross profit, the record was barren of evidence concerning net profit. Furthermore, the 21% gross profit figure itself was characterized by Mr. Deaktor as an “objective” and a “goal.” Mr. Deaktor’s testimony was ambiguous concerning the supermarket’s competitors, the extent to which he would have been able to raise prices absent Fox’s alleged price-fixing, and the relevant cost figures necessary to determine net profit. Plaintiffs’ failure to produce evidence concerning the factors essential to establish net profit as opposed to gross profit, in effect, meant that the jury would have had to speculate as to the amount of damages. The district court committed no error in concluding that plaintiffs did not meet their burden of establishing the quantum of damages.

In addition, the plaintiffs’ causation theory was conjectural. Their own expert witness, Professor Applebaum, testified regarding the various reasons that might cause a retail supermarket to be unprofitable, but assigned no specific cause for the financial losses of Deaktor’s Foodland. The district court did not err in concluding that, based upon Professor Applebaum’s and Mr. Deaktor’s testimony, the evidence concerning causation was speculative.

An order will be entered affirming the judgment of the district court. Costs taxed against appellants.

      . The district court denied defendants’ motion for a directed verdict as to Count V. On joint motion of both parties, the court continued the hearing of Count V until decision by this Court of the present appeal. Under these circumstances, we intimate no view concerning the issues raised by Count V, except to note that the potential liability of the individual plaintiffs on their guarantees made to secure the borrowings of E. D. Foods, Inc. may be covered by this Count.

      . Under the doctrine of pendent jurisdiction, federal courts have power to adjudicate claims based upon state law whenever there is a substantial federal claim “and the relationship between that claim and the state claim permits the conclusion that the entire action before the court comprises but one constitutional ‘case’.” United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966). Exercise of the power is discretionary and depends upon such considerations as judicial economy, convenience, and fairness to the litigants. Id. at 726, 86 S.Ct. 1130.

      . See id. at 725, 86 S.Ct. 1130.

      . In this regard, it is appropriate to note that plaintiffs’ failure to satisfy their burden of proving the amount of damages “was so only because [they] chose to rely almost entirely on one expert witness and one lay witness for [their] proof of damages. Any inadequacy which may have resulted should be attributed to [plaintiffs’] own presentation of [their] case rather than to the law or the court’s application of it here.” Farmington Dowel Products Co. v. Forster Mfg. Co., 421 F.2d 61, 83-84 (1st Cir. 1969).


author: DYER, Circuit Judge:

text:
    In the Matter of SCHOOL BOARD OF BROWARD COUNTY, FLORIDA. SCHOOL BOARD OF BROWARD COUNTY, FLORIDA, Petitioner, v. DEPARTMENT OF HEALTH, EDUCATION AND WELFARE, UNITED STATES OFFICE OF EDUCATION, Respondent.
    No. 72-3215.
    United States Court of Appeals, Fifth Circuit.
    March 21, 1973.

      Edward J. Marko, Edward G. Stephany, Fort Lauderdale, Fla., for petitioner.
    Thomas M. Larson, Education Section, U. S. Dept, of Justice, Michael Lottman, Office of General Counsel, James W. Moore, Asst. Deputy Comm, for Emergency School Assistance, Duane J. Mattheis, Deputy Comm., S. P. Marland, Jr., U. S. Commissioner of Educ., Office of Education, Brian K. Landsberg, Civ. Rights Div., Dept, of Justice, Washington, D. C., Henry C. Barrett, Jackson, Miss., for respondent.
    Before GEWIN, GOLDBERG and DYER, Circuit Judges.
   DYER, Circuit Judge:

The question presented for our decision is whether a determination by the Commissioner of Education issued in administrative proceedings to enforce the Emergency School Assistance Program (P.L. 91-380, 84 Stat. 800) and the regulations of the Office of Education (45 C.F.R. Part 181) is subject to judicial review here. We conclude that this Court is without jurisdiction and accordingly dismiss the petition.

Petitioner, School Board of Broward County, Florida, applied for assistance under the ESAP program on August 10, 1971, and was awarded a grant of $1,-737,000 on September 1, 1971. The petitioner was later notified that because of its failure to comply with assurances made in its application for ESAP funds the Commissioner of Education would seek to have the grant terminated and declared void ab initio. Subsequent to a hearing and an appeal to the Commissioner, the petitioner was ordered to repay all funds received by it under the 1971-72 grant. The petitioner filed in this Court a Petition for Review of the decision of the Commissioner.

The respondent, United States Department of Health, Education, and Welfare, moved to dismiss the Petition for Review. Pointing out that the statutes and regulations upon which the administrative proceedings in this matter were based do not authorize courts of appeals to hear petitions for review of the decisions of the Commissioner, HEW contends that unless empowered by statute or rule, this Court has no jurisdiction to consider an appeal or petition for review.

Petitioner responds by taking us on a circuitous and unnecessary journey, not to a special statutory review provision but to the Administrative Procedure Act, 5 U.S.C.A. §§ 701-706. The petitioner’s starting point is 45 C.F.R. § 181.15(c) which is clearly inapposite to the question of our jurisdiction. That section provides that the procedures established by the Office of Education regulations shall not preclude the Commissioner from pursuing any other remedies authorized by-law, and then states:

Proceedings pursuant to Part 80 of this title with respect to the eligibility of an applicant for assistance under Title VI of the Civil Rights Act (42 U.S.C. 2000d) shall be governed by the regulations in that part or Part 81.

We, of course, are not here concerned with proceedings under the Civil Rights Act, but with proceedings to enforce the Emergency School Assistance Program, P.L. 91-380, and the regulations of the Office of Education, 45 C.F.R. Part 181. Petitioner nevertheless continues on the wrong road to 42 U.S.C.A. § 2000d-2 which, although not applicable here because its provisions are specifically limited to actions taken under the Civil Rights Act of 1964, provides inter alia that any persons aggrieved because of the termination of financial assistance, upon a finding of failure to comply with any requirement imposed pursuant to regulations adopted by the federal agency making the grant may, if the action is not otherwise subject to judicial review, obtain such judicial review in accordance with 5 U.S.C.A. § 1009 (now 5 U.S.C.A. §§ 701-706, the Administrative Procedure Act).

The short of it is that there is “no special statutory review proceeding” contained in either the Emergency School Assistance Program, P.L. 91-380, the Office of Education regulations promulgated thereunder, or the Civil Rights Act of 1964 (relied on by petitioner, but clearly inapplicable).

“Petitioner is thus driven, by the absence of provisions for special statutory review, to the provisions of Sec. 1009 [5 U.S.C.A. § 703], only to find that these provisions for review by ‘any applicable form of legal action’ deal not with appellate court review but with review by an original action in a court of competent jurisdiction. The court of appeals is not such a court unless specially authorized by statutory grant of power. We are not in any doubt that this court has no such jurisdiction and that the petition must be dismissed.” City of Dallas, Texas v. Rentzel, 5 Cir. 1949, 172 F.2d 122, 123. See Arizona State Department of Public Welfare v. Department of Health, Education and Welfare, 9 Cir. 1971, 449 F.2d 456, 464; Rettinger v. F.T.C., 2 Cir. 1968, 392 F.2d 454, 457; Schwab v. Quesada, 3 Cir. 1960, 284 F.2d 140, 143; cf. State of Wisconsin v. F.P.C., D.C.Cir. 1961, 110 U.S.App.D.C. 260, 292 F.2d 753, 755.

The Petition for Review is dismissed without prejudice to a request by petitioner for relief in a district court.

Petition dismissed.

      . There is likewise no such authority in the statutes underlying the ESAP appropriation, i. e., Part D of the Education Professions Development Act (20 U.S.C.A. §§ 1119-1119a-1) ; the Cooperative Research Act (20 U.S.C.A. §§ 331-332b) ; Title IV of the Civil Rights Act of 1964 (42 U.S.C.A. §§ 2000c to 2000c-9) ; section 807 of the Elementary and Secondary Education Act of 1965 (20 U.S.C.A. § 887); section 402 of the Elementary and Secondary Education Amendment of 1967 (20 U.S.C.A. § 1222); Title II of the Eeonomie Opportunity Act of 1964 (42 U. S.C.A. §§ 2781-2837) ; and the Education Amendments of 1972, P.L. 92-318.

      . The general jursidictional statute, 28 U.S.C.A. § 1291, is obviously inapplicable. It provides in pertinent part:
      The courts of appeals shall’have jurisdiction of appeals from all final decisions of the district courts of the United States * * * except when a direct review may be had in the Supreme Court.

      . 5 U.S.C.A. § 70S provides in pertinent part:
      The form of proceeding for judicial review is the special statutory review proceeding relevant to the subject matter in a court specified by statute or, in the absence or inadequacy thereof, any applicable form of legal action, including actions for declaratory judgments or writs of prohibitory or mandatory injunction or habeas corpus, in a court of competent jurisdiction * * *.


author: PER CURIAM:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Raymond Edward STACEY, Defendant-Appellant.
    No. 72-2937.
    United States Court of Appeals, Ninth Circuit.
    Feb. 12, 1973.

      Kevin J. Mclnerney, of Mclnerney, Milchen & Frank, San Diego, Cal., for defendant-appellant.
    Harry D. Steward, U. S. Atty., Stephen G. Nelson, Jeffrey F. Arbetman, Asst. U. S. Attys., San Diego, Cal., for plaintiff-appellee.
    Before HAMLEY and WALLACE, Circuit Judges, and REAL, District Judge.

       The Honorable Manuel L. Real, United States District Judge for the Central Distriet of California, sitting by designation.

   PER CURIAM:

Raymond Edward Stacey appeals from his conviction on counts one and two of a three-count indictment charging counterfeiting offenses in violation of 18 U.S.C. § 485. His only points on appeal are that the trial court abused its discretion in not granting him an opportunity to depose the jurors as to whether, at the time of their deliberations, they understood that specific intent to defraud was an essential element of the offenses charged in counts one and two, and in denying defendant’s motion for a new trial based on jury misconduct and in the interest of justice.

In support of his request to depose the jury and his motion for a new trial, defendant filed a “declaration” in which his attorney alleged substantially as follows: Within twenty minutes after the verdict was returned, Stacey’s counsel met with three of the jurors and was told that, had they known that intent to defraud was an element of the offense, they would have acquitted Stacey. The jurors stated that the reasons for their misunderstanding were: (1) the unanswered question, in the jury room, of one juror as to whether intent to defraud was not an element, and (2) a request, also in the jury room, by another juror for a copy of the indictment so that she might learn whether intent to defraud was an element, and the response by another juror that a copy was unnecessary.

During the course of instructing the jury, the counts of the indictment, containing the element of specific intent to defraud, were read aloud and the court also expressly instructed the jury that one essential element of the offenses charged was intent to defraud.

After a verdict is returned a juror will not be heard to impeach the verdict when his testimony concerns his misunderstanding of the court’s instructions. Walker v. United States, 298 F.2d 217, 226 (9th Cir. 1962), This rule does not violate a defendant’s constitutional rights. See Stein v. New York, 346 U.S. 156, 178-179, 73 S.Ct. 1077, 97 L.Ed. 1522 (1953).

Stacey’s contention that this case is distinguishable from Walker and that the rule there applied should not be applied here is incorrect. It is true that some jurors had the knowledge which would enable them to testify, objectively, of incidents tending to indicate that other jurors may have misunderstood the court's instructions on the elements of the offense. However, the inquiry would still concern the mental processes by which the jurors reached their decision and would therefore be barred by the nonimpeachment rule. The reason for a rule barring a juror from testifying concerning his own mental processes — frankness and freedom of discussion in the jury room, Stein, supra, at 178, 73 S.Ct. 1077 — applies with equal force to testimony by other jurors concerning objective manifestations of those processes. See American Bar Association, Standards Relating to Trial by Jury, § 5.7(a) 164-173 (1968).

Affirmed.

      . Since the facts alleged in counsel’s declaration do not demonstrate any jury misconduct, our decision in Smith v. Cupp. 457 F.2d 1098, 1100 (9th Cir. 1972) also requires this holding. See also, American Bar Association, Standards Relating to Trial by Jury, § 5.7(a) 164-173 (1968) ; 8 Wigmore, Evidence. §§ 2345-2346 (McNaughton Rev.1961). The same rule is stated, in effect, in Rule 606(b), Rules of Evidence for United States Courts and Magistrates, and the Advisory Committee Note thereon. These Rules of Evidence are not to become effective until July 1, 1973, but at least with respect to Rule 606(b), the rules purport to codify the existing federal law.


author: PER CURIAM.

text:
    William TAYLOR, Petitioner-Appellant, v. UNITED STATES of America, Respondent-Appellee.
    No. 72-2012.
    United States Court of Appeals, Sixth Circuit.
    Submitted Feb. 14, 1973.
    Decided April 5, 1973.

      Joseph G. Glass, Louisville, Ky., for petitioner-appellant.
    Gorge J. Long, U. S. Atty., James H. Barr, Asst. U. S. Atty., Louisville, Ky., for respondent-appellee.
    Before WEICK and EDWARDS, Circuit Judges, and WILSON, District Judge.

       Honorable Frank W. Wilson, Chief Judge, United States, District Court for the Eastern District of Tenessee.

   PER CURIAM.

In his appeal, Taylor is attacking the validity of a thirty-year sentence imposed upon him in the District Court where he was resentenced on two convictions for violation of the narcotics laws in 1967 and 1968.

The 1967 conviction was on a two-count indictment numbered Cr. 26,943 which charged him with selling heroin on July 5, 1967. He was originally sentenced to twenty (20) years imprisonment and fined $5,000 on Count 1 of the indictment, and ten (10) years imprisonment on Count 2 — the sentences to be served consecutively. In imposing this sentence, the District Court treated Taylor as a second offender because he had previously been convicted of a narcotics violation in the United States District Court for the Northern District of Ohio.

The 1968 conviction was also on a two-count indictment, numbered Cr. 26,942, charging Taylor with selling heroin on August 1, 1967. He was sentenced to thirty (30) years imprisonment on each of two counts of the indictment — -the same to be served concurrently with each other and concurrently with the sentences imposed in the 1967 conviction, Cr. 26,943. The second conviction made him a third offender.

Taylor’s conviction in the Northern District of Ohio was reversed on appeal for errors of law occurring at the trial and a new trial was ordered. United States v. Rudolph, 403 F.2d 805 (6th Cir. 1968). The record does not show that the new trial was ever conducted.

Taylor then filed a motion in the District Court asserting that his sentences of thirty years as a “second offender” were invalid. The District Court granted the motion and set aside the sentences. In Case No. Cr. 26,943 he reduced the sentences by one-half imposing a sentence of ten (10) years on Count 1 and five (5) years on Count 2.

In Case Cr. No. 26,942 he reduced the sentences by one-half imposing a sentence of fifteen (15) years on Count 1 and fifteen (15) years on Count 2, to be served concurrently with each other but consecutively with the sentences imposed in Cr. No. 26,942.

The result of the resentencing was that Taylor was sentenced to a total of thirty (30) years on the two convictions which was the same as the total previous sentences.

In his appeal, Taylor asserts two grounds of error in the re-imposed sentences of thirty years. First, he contends that he has, in effect, been penalized for appealing his original conviction in the Northern District of Ohio in that the District Court did not reduce his heroin conviction sentences when the prior Ohio conviction was set aside. He relies on North Carolina v. Pearce, 395 U.S. 711, 89 S.Ct. 2072, 23 L.Ed.2d 656 (1969), and Pendergrass v. Neil, 456 F.2d 469 (6th Cir. 1972). Second, he asserts that he should have been resentenced under the Comprehensive Drug Abuse Prevention and Control Act of 1970, 21 U.S.C. §§ 801 et seq., and not under 26 U.S.C. § 7237(d) which was repealed by the Act after his conviction but before his resentencing.

I.

Taylor’s first contention has no merit for two reasons. His appeal from his conviction in the Northern District of Ohio did not result in a longer sentence on that charge for he was never retried. He never appealed from his two narcotics convictions in the District Court in the present case and they have become final. He does not claim that these convictions are invalid. Actually, the second indictment for an identical offense committed on a later date made him a second offender.

Furthermore, in the resentencing, his sentences were not increased. The total time to be served remained the same.

North Carolina v. Pearce, supra, and Pendergrass v. Neil, supra, are inapposite.

II.

Taylor’s contention that he should have been resentenced under the provisions of the Comprehensive Drug Abuse Prevention and Control Act rather than under 26 U.S.C. § 7237(d) was rejected by the Supreme Court in Bradley v. United States, 410 U.S. 605, 93 S.Ct. 1151, 35 L.Ed.2d 528 (decided March 5, 1973), and resolved the conflict which existed in the Circuits on this issue.

The sentence originally imposed by the District Judge, while severe, was well within his statutory authority. He expressed a desire to deter others from trafficking in narcotic drugs, which is commendable. We do not find that in the resentencing the District Judge abused his discretion.

However, it does seem to us that in the resentencing the District Judge was presented with an entirely different picture than he was in the original sentencing. Taylor had served five years of his sentence. His prison record was good. He may have been rehabilitated in the prison. The severe original sentence had already accomplished whatever deterrent effect it could.

The District Judge, upon remand, has jurisdiction to reconsider the sentence and may want to do so, particularly if requested. Rule 35, Federal Rules of Criminal Procedure.

Affirmed.


text:
    Angus J. De PINTO, Cross-Complainant, Appellee, v. Hjalmar B. LANDOE, Cross-Defendant, Appellant. Angus J. De PINTO, Cross-Complainant, Appellee, v. Francis I. SABO, Cross-Defendant, Appellant.
    Nos. 71-1486, 71-1487.
    United States Court of Appeals, Ninth Circuit.
    Feb. 12, 1973.

      Joseph B. Gary (argued), Hjalmar B. Landoe (argued), Thomas I. Sabo, Bozeman, Mont., for appellants.
    Herbert Mallamo (argued), Elsing & Crable, Phoenix, Ariz., for appellee.
    Before BARNES, HAMLEY and JERTBERG, Circuit Judges.
   PER CURIAM:

This appeal involves another phase of the litigation pertaining to the diversion of assets of United Security Life (United), an Arizona stock insurance corporation, which has been before this court for many years. In its present posture the case is so unique that our decision herein will be of little interest to anyone except the parties. In the following discussion we will accordingly write mainly for the parties and will assume that the reader is completely familiar with what has gone before. It will nevertheless be necessary to make some reference to past proceedings.

Following our last decision herein, announced in De Pinto v. Landoe, 411 F.2d 297 (9th Cir. 1969), Angus J. De Pinto, against whom Provident Security Life Insurance Company (Provident) had obtained a $314,794.19 judgment, continued with his efforts to collect this amount from various cross-defendants, including Hjalmar B. Landoe and Francis I. Sabo. He did so by filing a motion for summary judgment against the cross-defendants. Landoe and Sabo resisted this motion and filed cross motions for summary judgment.

All pending motions for summary judgment were then denied. A pretrial order was later entered limiting the trial to one issue — the liability of the cross-defendants, if any, to United as a result of their alleged conduct and thus their liability over to cross-complainant De Pinto “under principles analogous to subrogation.”

Landoe and Sabo then filed new motions for summary judgment, based upon the ground that settlement agreements they made with Provident, as a result of which Provident executed Covenants Not To Sue, precluded De Pinto from recovering from Landoe and Sabo upon the theory of subrogation or upon principles analogous thereto. These motions were denied and we permitted Landoe and Sabo to take this interlocutory appeal.

For the reasons stated in the memorandum and order of the district court, filed January 20, 1971 (D.C.Ariz.1971), we hold that, under the special circumstances of this case, the settlements which Landoe and Sabo entered into with Provident, including Provident’s Covenant Not To Sue, do not preclude De Pinto from seeking recovery over from Landoe and Sabo on the theory of subrogation or principles analogous thereto.

Landoe and Sabo also urge, however, that in any event De Pinto is not entitled to the benefits of the equitable remedy of subrogation for the reason that he does not have clean hands in relation to Provident and clean hands concerning the subject matter of this litigation.

This was not a ground stated in Landoe’s and Sabo’s motions for summary judgment now under consideration. The only ground there relied upon was that the settlement Landoe and Sabo made with Provident precluded De Pinto from recovering on the theory of subrogation or principles analogous thereto. In Landoe’s memorandum filed in support of his last motion for summary judgment, there are some observations which might be construed as a tangential reference to the doctrine of clean hands, although no specific reference is made to that doctrine. There may also have been similar indirect references to the doctrine of clean hands in the oral argument before the district court on these motions.

The district court apparently did not consider that the “clean hands” issue was involved in the new motions for summary judgment. The memorandum and order under review makes no reference to such an issue. Accordingly we do not regard this issue as ripe for consideration at this time, although it may ultimately come to this court for decision.

Note has previously been taken of the fact that Landoe may occupy a different position than does Sabo or other cross-defendants, with reference to any liability any of them may have to De Pinto. See 411 F.2d, at 301. Nothing said in this opinion is intended to indicate a view that all of the cross-defendants are necessarily equally liable to De Pinto.

The judgment is affirmed and the cause is remanded for further proceedings consistent with this opinion.

      . The first decision involving this controversy was rendered in Mauser v. United Security Life, 267 F.2d 3 (9th Cir. 1959). Subsequent decisions are referred to in De Pinto v. Provident Security Life Insurance Company, 374 F.2d 37, 40-41, n. 2 (9th Cir. 1967); and De Pinto v. Landoe, 411 F.2d 297, 299, n. 6 (9th Cir. 1969).

      . The quoted words were taken from the following' statement in our opinion in De Pinto v. Landoe, 411 F.2d 297 (9th Cir. 1969):
      “De Pinto’s right to obtain indemnity from Landoe, Pegram and Sabo for their alleged derelictions therefore arises not from the existence of a joint tort-feasor relationship he shares with them, but by reason of the consensual relationship between De Pinto and United, out of which De Pinto’s fiduciary duty to United arose. Upon the theory of subrogation or upon principles analogous thereto, he stands in the place of United. He is entitled to recover from Landoe, Sabo and Pegram (assuming that they participated in the raid on United) what they should have paid to United’s successor and what he, in effect, has paid in their behalf.” 411 F.2d, at 300.

      . There may have been more direct referenees to this doctrine in previous motions for summary judgment and written or oral argument advanced in their support. But those arguments were not before the court in connection with the order now under review,


author: EUGENE A. WRIGHT, Circuit Judge:

text:
    NATIONAL LABOR RELATIONS BOARD, Petitioner, v. SAN FRANCISCO LABOR COUNCIL, AFL-CIO, Respondent.
    No. 72-1013.
    United States Court of Appeals, Ninth Circuit.
    March 27, 1973.

      Marjory S. Godfreed, Atty. (argued), Marcel Mallet-Prevost, Asst. Gen. Counsel, Peter G. Nash, Gen. Counsel, NLRB, Washington, D. C., for petitioner.
    Victor J. Van Bourg (argued), Michael B. Rogers, of Levy & Van Bourg, San Francisco, Cal., for respondent.
    Before MERRILL, WRIGHT and KIL-KENNY, Circuit Judges.
   EUGENE A. WRIGHT, Circuit Judge:

We are asked to enforce a Board order and must determine whether the findings of the Board are supported by substantial evidence. Respondent San Francisco Labor Council also argues that the Regional Director acted arbitrarily in refusing to accept an informal settlement agreement after the complaint was issued and asserts that enforcement should be denied on equitable considerations.

Because of a labor dispute between the United Farm Workers Organizing Committee, AFL-CIO and some California grape growers, the Executive Council of the AFL-CIO voted in May 1968 to conduct a boycott of California table grapes. Respondent Labor Council, composed of a number of affiliated local unions, undertook in concert with the AFL-CIO, Farm Workers, and other local unions an effort to influence food retailers in the San Francisco Bay area to cease selling table grapes.

Meetings were arranged between representatives of the food retailers and representatives of the Labor Council, AFL-CIO, Farm Workers, and the Retail Clerks union. The Board heard evidence that at these meetings representatives of the Labor Council told the food retailers that, if they would not cooperate by ceasing to sell California table grapes, the boycott would expand to include picketing of their stores. They were further told that the boycott might be extended to the docks and warehouses, and that it “might not be simply informational in nature.” The Labor Council representatives also indicated that all unions were supporting the boycott, that they would attempt to “cut off the grapes at the source,” and implied that there might be trouble on the picket lines and general harassment.

Two employers filed unfair labor practice charges against the AFL-CIO, Farm Workers, Retail Clerks, and the Labor Council. Charges were dismissed or settled informally as to all but the Labor Council and a complaint was issued against it in July 1969. The complaint alleged a violation of § 8(b)(4)(ii)(B) of the National Labor Relations Act.

The hearings before a trial examiner did not take place until January-1971. The facts were in the main undisputed. The evidence shows that respondent did more than sympathize with the Farm Workers. Its efforts were not merely directed to inform the public or union members of the Farm Workers labor struggle. Rather, the facts disclose that respondent did “threaten and coerce” certain food retailers to induce them to cease selling California table grapes. In short, there was substantial evidence to support the Board’s order.

The Labor Council contends, however, that we should not enforce the Board’s order because the Regional Director refused to accept an informal settlement agreement. Settlement of unfair labor practice charges is to be encouraged, and we note that the Board itself provides for and encourages both informal and formal settlement agreements (29 C.F.R. §§ 101.7 and 101.9). The informal settlement agreement in question here was not executed by the Labor Council until after the complaint was issued. In such cases, 29 C.F.R. § 101.9 provides that a formal settlement agreement may be approved by the Board, or that an informal settlement agreement, of the type executed by respondent here, may be approved by the Regional Director at his discretion.

Here the Regional Director refused to accept the informal settlement agreement and elected to proceed to formal hearings. As the Director stated in a letter notifying the Labor Council of his decision, the charging parties had refused to enter into the settlement agreement, and his investigation in related cases indicated that the Labor Council might be continuing its § 8(b)(4) unfair labor practices. In such circumstances, we find that the Regional Director did not abuse his broad discretion in refusing to accept an informal settlement agreement.

The Board’s petition for enforcement of its order is granted.

      . Section 8(b) (4) (ii) (B) of the Act provides that it shall be an unfair labor practice for a labor organization or its agents:
      (ii) to threaten, coerce or restrain any person engaged in commerce, or in an industry affecting commerce, where in either case an object thereof is—
      (B) forcing or requiring any person to cease using, selling, transporting, or otherwise dealing in the products of any other producer, processor, or manufacturer, or to cease doing business with any other person . . . . Provided, That nothing contained in this clause (B) shall be construed to make unlawful, where not otherwise unlawful, any primary strike or primary picketing.

      . The regulations indicate that the Board favors a formal settlement agreement after the issuance of a complaint. The agreement executed by the Labor Council was not a formal settlement agreement, as outlined in 29 C.F.R. § 101.9(b)(1) :
      In such an agreement, the parties agree to waive their right to hearing and agree further that the Board may issue an order requiring the respondent to take action appropriate to the terms of the settlement. Ordinarily the formal settlement agreement also contains the respondent’s consent to the Board’s application for the entry of a decree by the appropriate circuit court of appeals enforcing the Board’s order.


text:
    Carrie Dell COPELAND and Betty Bennett, Individually and for all Others Similarly Situated, Plaintiffs-Appellants, v. Herschel SAUCIER, Director of the Division of Family and Children Services, Defendant-Appellee.
    No. 72-2698.
    United States Court of Appeals, Fifth Circuit.
    April 4, 1973.

      See also, D. C., 330 F.Supp. 383.
    Jay E. Loeb, Michael H. Terry, Atlanta, Ga., for plaintiffs-appellants.
    Arthur K. Bolton, Atty. Gen., Timothy J. Sweeney, Asst. Atty. Gen., Atlanta, Ga., for defendant-appellee.
    David A. Webster, Atlanta, Ga., for other interested parties.
    Before BELL, INGRAHAM and RONEY, Circuit Judges.
   PER CURIAM:

This appeal arises out of the welfare system. The recipients of welfare are entirely dependent on the government for sustenance. They cannot subsist absent their monthly checks, else they would not qualify for welfare in the first instance.

Complainants sought relief from what they contend are inordinate delays on the part of Georgia in replacing lost or stolen welfare checks. The district court denied relief after a careful study of the Georgia method of replacement. We affirm.

Georgia has not adopted a system of requiring welfare recipients to obtain their monthly checks by hand. Instead, the checks are forwarded to recipients in the United States mail. The problem comes in the fact that some checks are lost or stolen before delivery. In such cases, the intended recipient is rendered destitute pending replacement of the check.

The questions presented are (1) whether Georgia must immediately replace the lost or stolen check pending a hearing or, in the alternative, (2) whether the delay in the process which is employed in replacing the lost or stolen checks is so unreasonable as to constitute a denial of due process of law. It is the position of petitioners that such cheeks should be replaced in a maximum period of eight days after the initial report of the missing check.

We hold that the district court did not err in rejecting the first contention of complainants. We are unable to find any support in the appertaining statutes or regulations which makes the circumstances of replacing lost or stolen checks tantamount to cutting off welfare funds with the result of mandating a hearing and an immediate interim replacement of the lost or stolen check.

As to the claim of a due process denial in the delay in replacing checks, it appears that a missing check which has not been cashed is replaced within an average of 15 days after the initial report of non-receipt. The average is 45 days in those cases where the check has been cashed. A good deal of the delay in this latter type case is consumed in having the bank credit the state’s bank account. The state contends that this must be done to make the necessary funds available.

It can be argued, of course, that these times could be reduced by more expeditious practices on the part of the state and the banks which are involved. We do not doubt this contention and it does appear that the state recognizes the seriousness of the problem and is attempting to reduce the time lags.

Assuming arguendo a due process right couched in terms of reasonably prompt replacement of lost or stolen welfare checks once the welfare system is constituted, there is no basis in the record before us for holding that the district court erred in concluding, based on the underlying facts, that the delays here were not unreasonable.

Moreover, the record is that the delays in Georgia are substantially in line with the delay in the federal process of replacing lost or stolen Social Security checks. This is not to say that two wrongs make a right; it is to say that a parallel is a factor to be considered.

Affirmed.

      . Georgia has not yet adopted an emergency assistance program for use in the circumstances presented by complainants here and is not required to do so since such a program is optional to the states. 42 U.S.C.A. §§ 603(a) (5), 606(e).


text:
    UNITED STATES of America, Plaintiff-Appellee, v. Alex POPEKO, Defendant-Appellant.
    No. 72-3102
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    March 19, 1973.
    Rehearing Denied April 16, 1973.
    Alex Popeko, pro se.
    William S. Sessions, U. S. Atty., San Antonio, Tex., for plaintiff-appellee.
    Before JOHN R. BROWN, Chief Judge, and DYER and SIMPSON, Circuit Judges.

       Rule 18, 5 Cir.; See Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5 Cir. 1970, 431 F.2d 409, Part I.

   PER CURIAM:

On September 29, 1960, petitioner-appellant was convicted of three offenses: two counts charging transportation in interstate commerce of falsely made securities, Title 18 U.S.C. Section 2314, and one count under Title 18 U.S.C. Section 371 of conspiracy to violate Section 2314. He was sentenced to two consecutive ten-year terms of imprisonment for the substantive charges, and a concurrent five-year term under the conspiracy count.

Immediately after sentence was imposed November 9, 1960, petitioner-appellant signed an election not to commence service of the sentence pending appeal pursuant to the provisions of F. R.Crim.P. 38(a)(2) then in effect. That election stated:

“I understand that as a result of making this election I will not receive credit on my sentence for time spent in jail . . . awaiting the outcome of my appeal.”

Because he failed to meet the requirements for bail, petitioner-appellant remained in the county jail until his conviction was affirmed by this Court on August 16, 1961, and his motion for rehearing was denied on September 14, 1961. Popeko v. United States, 5 Cir. 1961, 294 F.2d 168. Shortly thereafter he was moved to a federal prison and commenced serving his sentence.

Petitioner-appellant moved in the district court for his sentence to be corrected so that he will receive credit for the period of time spent in the county jail pending the final adjudication of his appeal, asserted to be 354 days. Notwithstanding the signed election his motion asserted that he did not sign the Rule 38(a)(2) waiver voluntarily or with a full understanding of its consequences. Therefore he contends, it should be of no binding effect. The district court denied relief, without a hearing, relying on Shelton v. United States, 5 Cir. 1956, 234 F.2d 132, where we held:

“After his motion for new trial was denied, he gave notice of appeal and then elected not to serve his sentence. Having thus voluntarily elected not to serve, service of his sentence automatically ceased, . . . (citations omitted) . . . and he may not now complain of the results of his voluntary action.” 234 F.2d at 133-134.

Before deciding whether petitioner-appellant is entitled to credit for the time he served in jail pending his appeal, it is necessary to answer a more basic inquiry. The key question is the truth or falsity of the assertion that his execution of the Rule 38(a)(2) election was neither voluntary nor entered into with a full understanding of its consequences. Davis v. United States, 7 Cir. 1971, 446 F.2d 847, 849; Johnson v. United States, 9 Cir. 1969, 414 F.2d 807; Bujese v. United States, 3 Cir. 1968, 404 F.2d 615; and Cephus v. United States, 1967, 128 U.S.App.D.C. 366, 389 F.2d 317. Indeed, the Shelton court assumed this premise in answering the question of credit for time served in jail pending appeal. We repeat for emphasis a portion of our quotation from Shelton, supra:

“Having thus voluntarily elected not to serve, service of his sentence automatically ceased . . . (citations omitted) . . . and he may not now complain of the results of his voluntary action.” (Emphasis added)

Because findings of fact as to Popeko’s allegation that his election was neither voluntarily nor knowingly executed are absent, we reverse and remand for an evidentiary hearing below so that such findings may be made.

Reversed and remanded.

      . F.R.Crim.P. 38(a)(2) in 1960 permitted the defendant to stay the commencement of his sentence, and thus remain within the district of his conviction, provided an appeal was taken and the defendant elected not to commence service of the sentence:
      “A sentence of imprisonment shall be stayed if an appeal is taken and the defendant elects not to commence service of the sentence or is admitted to bail.” F.R.Crim.P. 38(a) (2) was amended in
      1966 to eliminate the procedure for election not to commence service of sentence:
      “A sentence of imprisonment shall be stayed if an appeal is taken and the defendant is admitted to bail.”

      . Not to be confused with a separate and later Shelton, case brought by the same petitioner, J. Paul Shelton on a separate ground of claimed involuntariness of his guilty plea. See Shelton v. United States, 5 Cir. 1957, 242 F.2d 101, set aside en banc, 1957, 246 F.2d 571, reversed per curiam, 1958, 356 U.S. 26, 78 S.Ct. 563, 2 L.Ed.2d 579.


text:
    UNITED STATES of America, Appellee, v. Edwin Joseph HUCKENSTEINE, Appellant.
    No. 72-1350.
    United States Court of Appeals, Eighth Circuit.
    Submitted March 15, 1973.
    Decided March 22, 1973.
    John A. Rava, Huseh, Eppenberger, Donohue, Elson & Cornfeld, St. Louis, Mo., on briefs for appellant.
    Daniel Bartlett, U. S. Atty., and Jerry L. Murphy, Asst. U. S. Atty., St. Louis, Mo., on brief for appellee.
    Before MATTHES, Chief Circuit Judge, and ROSS and STEPHENSON, Circuit Judges.
   PER CURIAM.

Edwin Joseph Huckensteine appeals from his conviction by the district court of five charges of violation of 18 U.S.C. § 472. Appellant was convicted of four charges of passing a counterfeited obligation of the United States and one charge of possessing and concealing counterfeited obligations of the United States. The district court sentenced appellant to six years imprisonment for each of the five counts, the sentences to be served concurrently.

On the evening of February 3, 1972, appellant was arrested by Deputy Sheriff Kimbrow of the Poplar Bluff City Police. The arrest occurred after a series of events beginning when appellant passed a counterfeit twenty dollar bill in Mike’s Lounge in Poplar Bluff, Missouri. The Poplar Bluff Police were notified of this occurrence, and Deputy Sheriff Kimbrow went to Mike’s Lounge to pick up the counterfeit note. Deputy Pickett was given a description of appellant and the car, located the car, and began following it. Appellant went to three other bars in the Poplar Bluff area and passed counterfeit notes; Deputy Pickett at no time lost sight of the car during this time and was in constant radio contact with Deputy Sheriff Kim-brow. Deputy Sheriff Kimbrow went to each bar after appellant had left and picked up the counterfeit notes which appellant passed. Deputy Pickett then lost sight of the car. The Poplar Bluff City Police spotted the car about an hour later and sent a radio dispatch. Deputy Sheriff Kimbrow immediately proceeded to the vicinity, blocked appellant’s car and ordered the occupants out of the car. Trooper Ronald Jones of the Missouri State Highway Department, who had been in constant radio contact with the Poplar Bluff Police the entire evening, arrived at the scene approximately one minute after Deputy Sheriff Kimbrow. As Trooper Jones approached the group standing around the car, he overheard that appellant was under arrest. He then noticed that the right rear door was open about four inches and opened it all the way. When he opened the door he observed a pack of counterfeit money wedged between two paper bags and seized it.

Appellant alleges as error

(1) That the counterfeit notes found in the back of the car were illegally seized by Trooper Jones and that therefore the district court erred in denying his motion to suppress.
(2) That he was prejudiced by the district court’s denial of his motion for production and inspection of the grand jury minutes.

We reject appellant’s contention that the counterfeit notes were illegally seized. The police had ample cause to stop the appellant’s car. Appellant had been described by several persons as the person who was passing the counterfeit notes and had been observed by Deputy Pickett entering the different bars where the notes had been passed. In addition, the notes had been verified as counterfeit. Consequently, the police had probable cause to stop the car, and to arrest appellant. Under Chambers v. Maroney, 399 U.S. 42, 90 S.Ct. 1975, 26 L.Ed.2d 419 (1970) and Orricer v. Erickson, 471 F.2d 1204 (8th Cir. 1973) they therefore were entitled to search the ear for instruments of the crime.

We also note that the evidence which appellant sought to suppress was essential only to the proof of the fifth count on which he was convicted — possession and concealment of counterfeit notes. Under the concurrent sentence doctrine, if the conviction under one count is proper, that conviction will support the judgment. Kilcrease v. United States, 457 F.2d 1328 (8th Cir. 1972). We hold that appellant was convicted properly of the other four counts.

With regard to appellant’s second alleged error, the record shows that the Grand Jury minutes were not recorded. We have previously held that a defendant is not denied due process because the Grand Jury which indicted him made no written record of its proceedings. United States v. Gray, 464 F.2d 632, 635 (8th Cir. 1972); United States v. Harflinger, 436 F.2d 928 (8th Cir. 1970), cert. denied, 402 U.S. 973, 91 S.Ct. 1660, 29 L.Ed.2d 137 (1971). Therefore, appellant was not prejudiced by the district court’s denial of his motion for production and inspection of the Grand Jury minutes.

Affirmed.


author: PHILLIPS, Chief Judge.

text:
    ASSOCIATED STUDENTS OF WESTERN KENTUCKY UNIVERSITY et al., Plaintiffs-Appellants, v. Dero G. DOWNING, President of the Western Kentucky University et al., Defendants-Appellees.
    No. 72-1894.
    United States Court of Appeals, Sixth Circuit.
    Argued Jan. 30, 1973.
    Decided March 28, 1973.

      Thomas L. Hogan, Louisville, Ky., Robert Allen Sedler, Lexington, Ky., on brief, for plaintiffs-appellants.
    J. David Francis, Bowling Green, Ky., William E. Bivin, Bowling Green, Ky., on brief, for defendants-appellees.
    Before PHILLIPS, Chief Judge, PECK, Circuit Judge, and KENNEDY, District Judge.

       Honorable Cornelia G. Kennedy, United States District Judge for the Eastern District of Michigan, sitting by, designation.

   PHILLIPS, Chief Judge.

The governing officials of Western Kentucky University at Bowling Green made a decision that the sponsoring by the University of a certain motion picture film and its showing on the campus under University auspices would be inappropriate. Accordingly, the University cancelled the booking contract which it previously had executed for the showing of the film. District Judge Rhodes Bratcher, after a comprehensive evidentiary hearing, found that the decision of the University was within the rights and powers of its governing officials.

We affirm.

The appellants are Associated Students of Western Kentucky University, the student government organization, two of the officers of that organization and two other University students.

The appellee Board of Regents is the duly constituted governing body of the University. K.R.S. § 164.350. The President and Dean of Student Affairs also were named parties defendant.

Since about 1966 the University and the Associated Students have planned and operated jointly a series of cultural, social and educational programs for the benefit and enjoyment of students. The District Court held that the University is an indispensable party, both as to selection and content of the programs under consideration in the series. The programs are financed through an item in the University’s budget, which in 1971 was set at a maximum of $52,000. All agreements in connection with the series required the approving signature of the University as a necessary contracting party.

A showing of “The Films of John Lennon and Yoko Ono” was scheduled on the campus on February 2, 1971. The University signed a booking contract for this program. After a preliminary showing of the film, the University can-celled the contract.

One segment of the film in question was titled “The Fly.’’ Judge Bratcher described it as follows:

“The Court has seen the questioned film in chambers and it has been described in the testimony. Briefly, it consists of a camera focused upon what appears to be an ordinary house fly as it crawls and meanders over, around, in, on and about the body of a nude female model lying in bed on her back with her legs spread apart. The camera, on occasion, zooms in for close-up showings of the open vaginal orifice with the ever-present fly crawling in and around the exposed area.
“The travels of the fly take it to the legs, arms, nipples of breast, ears, hair of the head, hair under the arms and substantially the entire body of the model, all accompanied by background music.”

The Dean of Student Affairs concluded that: “It would be inappropriate for the University to continue as a contracting party.” The President of the University concurred in this conclusion. There is no dispute that the making of this decision was within the scope of authority delegated by the Board of Regents.

The appellants sought declaratory judgment and injunctive relief to protect certain rights alleged to have been violated in derogation of constitutional guaranties. After a full hearing Judge Bratcher ruled that the University, as a party to the booking contract and pursuant to its terms, had the right to cancel the contract in the absence of a clear case of constitutional infringement.

We believe this case to be distinguished from situations where University officials have censored programs sponsored by students or student organizations or otherwise interfered with the exercise of First Amendment rights. See, e. g., Brooks v. Auburn University, 412 F.2d 1171 (5th Cir. 1969); Korn v. Elkins, 317 F.Supp. 138 (D.Md.1970); Antonelli v. Hammond, 308 F.Supp. 1329 (D.Mass.1970). In the present case the University did nothing more than to make a determination that, with respect to a particular experimental film, it would be “inappropriate for the University to continue as a contracting party.”

The evidence supports the conclusion of the District Court that appellants demonstrated no violation of any constitutional right. The findings of fact of the District Court are not clearly erroneous, but to the contrary are supported by substantial evidence. Rule 52(a), Fed.R.Civ.P. The University had the prerogative to determine, as it did, that it was inappropriate for it as an institution of higher learning to sponsor the showing of the questioned film as a part of its educational program.

Affirmed.