text:
    SEATTLE TRUST & SAVINGS BANK, a Bank incorporated under the laws of the State of Washington, et al., Plaintiffs-Appeilants, v. The BANK OF CALIFORNIA, N.A., a national banking association, Defendant-Appellee, and William B. Camp, Comptroller of the Currency of the United States, Intervening Defendant-Appellee; John J. MCCARTHY, Supervisor, Division of Banking, Department of General Administration, State of Washington, Plaintiff-Intervenor-Appellant, v. The BANK OF CALIFORNIA, N.A., a national banking association, DefendantAppellee, and William B. Camp, Comptroller of the Currency of the United States, Intervening Defendant-Appellee.
    Nos. 72-2712, 72-2750.
    United States Court of Appeals, Ninth Circuit.
    Jan. 30, 1974.

      Lauren D. Studebaker (Argued) of Davis, Wright, Todd, Riese & Jones, Slade Gorton, Atty. Gen., and Richard A. Heath, Deputy Atty. Gen., Olympia, Wash., Thomas Beierle (Argued) (amici curiae) Seattle, Wash., for appellants.
    Noble Gregory (Argued), William I. Edlund, Walter J. Robinson, III, of Pillsbury, Madison & Sutro, San Francisco, Cal., Paul W. Steere of Bogle, Gates, Do-brin, Wakefield & Long, Seattle, Wash., John E. Shockey, Director of Litigation, Comptroller of the Currency, Dept, of the Treasury, Washington, D. C., James L. Browning, Jr., U. S. Atty., and Peter V. Shackter, Asst. U. S. Atty., San Francisco, Cal., Walter H. Fleischer, Anthony J. Steinmeyer (Argued) Civ. Div., Appellate Section, U. S. Dept, of Justice, Washington, D. C., for appellees.
    Before TRASK and CHOY, Circuit Judges, and KELLEHER, District Judge.

       Honorable Robert J. Kelleber, United States District Judge, for the Central District of California, sitting by designation.

   PER CURIAM:

In this action seven banks in the State of Washington challenged, in the District Court, a decision of the Comptroller of the Currency of the United States granting to the Bank of California, N. A., a national banking association, permission to open . a new branch in the City of Seattle, Washington. The trial court found that the Comptroller had properly applied federal and state law in reaching his decision and granted summary judgment in favor of defendants. The plaintiff banks and the Washington State Supervisor of Banking, as plaintiff intervenor, appeal. We affirm.

The parties apparently agree that no factual dispute exists and that summary judgment was an appropriate form of disposition by the trial court, each side having so moved the court.

On July I, 1970, the Bank of California applied to the United States Comptroller of the Currency for permission: (1) to relocate its existing Seattle office to a new location in Seattle, and (2) to establish a new branch at 815 Second Avenue in Seattle, the site of its existing Seattle office. Upon receipt of the application, competing national and state banks and the Washington Supervisor of Banking were notified of the application. Objections were filed to that portion of the application seeking to establish a new branch. The Comptroller allowed presentations by all interested parties and, after an independent investigation by a national bank examiner and review by his staff, issued his opinion granting the application and setting forth reasons for his decision.

Plaintiffs filed this action to enjoin the Bank of California from taking the Comptroller’s authorized action of opening a second branch in the City of Seattle ; the Comptroller of the Currency intervened as a defendant and the Washington Supervisor of Banking intervened as a plaintiff. Another group of banks, Western Independent Bankers, have also appeared as amicus curiae supporting plaintiffs. Upon cross-motions for summary judgment, the District Court held that the decision of the Comptroller was reasonable and entered judgments for defendants.

Appellants make three contentions here. First, they contend that the District Court erred in approving the Comptroller’s determination that the Bank of California is “situated” in Seattle, Washington, for purposes of Section 36(c) of the National Bank Act which regulates bank branching. Second, appellants argue that the trial court erred in approving the Comptroller’s determination that appellee had its “principal place of business” in Seattle within the meaning of the Washington State branch banking statute, RCW 30.40.020. Finally, appellants assert that the District Court erred in applying an erroneous standard of judicial review of the decision of the comptroller.

We consider first the question raised concerning the proper standard of judicial review of the Comptroller’s decision. Although this issue was not clearly presented or determined in the trial court, it does appear from the record that the District Court adopted the view urged by the Bank of California and the Comproller that the Courts should uphold the Comptroller’s administrative ruling unless he acted “unreasonably, arbitrarily and capriciously” in construing applicable statutes. Although this standard apparently was applied by the District Court, we deem the proper standard of review to have been a de novo determination of the legal issues involved herein. We consider the determination in the trial court to have accomplished a result entirely consistent in approach and result with the de novo review requirement.

The arbitrary and capricious standard has been judicially fashioned to protect against the wrongful exercise of discretion by the Comptroller regarding factual controversies. In this case, however, the principal issue was whether the Comptroller has acted within the limitations imposed upon him by federal and state law, not whether he has acted reasonably or unreasonably. If the Comptroller was incorrect in his interpretation of the law, he should have been overruled in the District Court. First National Bank of Logan, Utah v. Walker Bank & Trust Co., 385 U.S. 252, 87 S.Ct. 492, 17 L.Ed.2d 343, reh. den., 385 U.S. 1032, 87 S.Ct. 738, 17 L.Ed.2d 680 (1966). This standard of review has been customarily applied to eases involving interpretation of 12 U.S.C.A. § 36(c). See First National Bank v. Dickinson, 396 U.S. 122, 90 S.Ct. 337, 24 L.Ed.2d 312 (1966).

The District Court had before it a review of the legal determinations of the Comptroller. The trial court, and we, may give great deference to the interpretation given a statute by the officer charged with its administration, in this case, the Comptroller of the Currency. Udall v. Tallman, 380 U.S. 1, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965); Ramapo Bank v. Camp, 425 F.2d 333, 341 (3rd Cir.) cert. denied, 400 U.S. 828, 91 S.Ct. 57, 27 L.Ed.2d 58 (1970). We consider the record before us to establish a proper determination by the District Court of the applicable law, and, hence, to have been a de novo review of the Comptroller’s legal determination.

Appellants’ principal contention is that the Bank of California is prohibited from opening a branch in Seattle, Washington, by the National Banking Act, 12 U.S.C. § 36(c), which provides in applicable part as follows:

“(c) A national banking association may, with the approval of the Comptroller of the Currency, establish and operate new branches: (1) Within the limits of the city, town or village in which said association is situated, if such establishment and operation are at the time expressly authorized to State banks by the law of the State in question; and (2) at any point within the State in which said association is situated, if such establishment and operation are at the time authorized to State banks by the statute law of the State in question by language specifically granting such authority affirmatively and not merely by implication or recognition, and subject to the restrictions as to location imposed by the law of the State on State banks.” [Italics added.] 12 U.S.C.A. § 36(c).

In appellants’ view, the legislative history and obvious purpose of this section of the Act is contrary to the decision of the Comptroller that the Bank of California is “situated” in Seattle, Washington. It is their contention that the Bank of California is “situated” only in the State of California and that any further interstate branching by the Bank of California is prohibited by the statute.

After consideration of the extensive briefs of the parties and of amici curiae, we conclude that this statute should not be so construed. The construction which appellants would place on “situated” for the purpose of this section of the Banking Act would prove totally unworkable if applied in other sections of the Act. Throughout the Banking Act there are numerous provisions which refer to banks which are “situated in” or “located in” certain geographical areas. These provisions exist in the Act with respect to such items as security for government deposits, interest and fiduciary capacity. Such provisions govern the regulation of these aspects of banking by the state in which the bank is “situated” or “located”; they also insure that these national banks have rights equal to those of other banks in a particular state.

If the words “located” or “situated” in these provisions were to refer to the site of the Bank of California’s corporate headquarters in San Francisco, then the Bank’s performance in the State of Washington of many essential banking functions would be governed by the laws of California. The law of California would control even when these functions are carried on by non-California branches in dealings with local customers and in competition with banks subject to local state statutory limitations. Such an anomaly could not have been intended by Congress in establishing national banking policy through the National Banking Act.

Alternatively, this Court could hold that “situated” in this particular provision is to have a different meaning and import then the words “situated” or “located” in other provisions of the Act. We reject this construction in the absence of clear expression to this effect of congressional intent; we cannot find in the legislative history of the Act any such congressional intent.

Appellant relies upon the expressed general intent of Congress, under the Act, to proscribe or limit interstate banking. This general intent, however, is insufficient to support the strained construction here sought by appellants. In finding that the Bank of California is “situated” in Seattle, Washington, for the purposes of 12 U.S.C.A. § 36(c), we adopt a construction consistent not only with the plain meaning of the statutory language, but also with other provisions of the Banking Act.

This construction is given further support by the past conduct of both state and federal banking officials. For over fifty years the Bank of California has held a document from the State Supervisor of Banking certifying that it is a National Bank located in the State of Washington and allowed there to exercise trust powers. The Superior Court of the State of Washington for King County has reaffirmed that under these statutory provisions applying to banks located in Washington, the Bank of California is authorized to engage in trust business in the State of Washington. Krueger v. Bank of California, (Civil No. 738663, July 28, 1971, unreported). Indeed, had the Comptroller followed the appellants’ reasoning in the instant case, the Supervisor of Banking for the State of Washington would not have been notified by the Comptroller of the Bank of California’s relocation and new branch applications since the Comptroller’s regulations provide for notice of such application to the “state official who supervises state commercial banks in the state in which the applicant is or will be located.”' 12 C.F.R. § 5.2(c).

Section 36(c)(1) and (2) of the Act must be interpreted in the light of congressional desire to foster a climate of “competitive equality” between national and state banks; it is not for the courts, in construing the Act, to frustrate that clear congressional purpose. First National Bank of Logan, Utah v. Walker Bank and Trust Co., 385 U.S. 252, 261, 87 S.Ct. 492, 17 L.Ed.2d 343, reh. den., 385 U.S. 1032, 87 S.Ct. 738, 17 L.Ed.2d 680 (1966). In determination of this application to branch, the Comptroller made extensive factual inquiry into the banking industry in Seattle. The record establishes that branch banking there has grown at an accelerating rate. The number of competing branches in downtown Seattle has doubled in the last ten years. Based on his investigation, the Comptroller found the Bank of California unable to compete equally with state and national banks authorized to branch freely in Seattle. The District Court found that the evidence béfore the Comptroller amply supported his finding that without the right to branch in Seattle, the Bank of California would suffer a competitive disadvantage within the State of Washington.

To the extent that we are here concerned with the proper judicial review by the District Court of any factual determination of the Comptroller, we cannot disagree with the Court’s finding that the Comptroller’s “determinations are adequately supported and his decision reasonable.” Clearly, they could not have been found “arbitrary” or “capricious.” In this determination of “competitive equality” the findings of the Comptroller must be accorded great deference. “Courts have, in the main, consistently recognized the wide areas of discretion delegated by Congress to the Comptroller in the complex field of national banking. . . . ” Ramapo Bank v. Camp, 425 F.2d 333, 341 (3rd Cir.), cert. denied, 400 U.S. 828, 91 S.Ct. 57, 27 L.Ed.2d 58 (1970).

In addition to the specific limits placed on branch banking by 12 U.S.C.A. § 36, this section also requires that branch banking be established in compliance with the state law governing branching of state banks. In this case the controlling state statute is RCW 30.-40.020 of the Washington Banking Code. In pertinent part, it provides:

“No bank or trust company shall establish or operate any branch in any city or town outside the city or town in which its principal place of business is located in which any bank, trust company or national banking association regularly transacts a banking or trust business, except by taking over or acquiring an existing bank, trust company or national banking association or the branch of any bank, trust company or national banking association operating in such city or town.”

The Comptroller found no applicable Washington precedent interpreting “principal place of business” and determined that this was the “principal place of business within the State of Washington.” The Comptroller further determined that Seattle was the principal place of business of the Bank of California for the purposes of RCW 30.40.020. This interpretation of the Washington statute should be affirmed. RCW 30.-40.020 is specifically applicable to state banks. There is no such thing as a Washington state bank with its principal place of business outside Washington. Moreover, this construction, is supported by the words “within the state” in the first sentence of RCW 30.40.020. Interpretation of this statute to mean a “principal place of business” outside of the jurisdiction would be an awkward and strained application of Washington banking laws which regulate only banking activities within Washington. This view is further supported by the past practice of the Washington Supervisor of Banking in its relations with the Bank of California. In day to day administration of banking activities within Washington, the Supervisor has treated Seattle as the principal place of business of the Bank of California.

The principle of competitive equality, discussed above, reinforces this interpretation of RCW 30.40.020. Since all state banks may branch freely within one city of the state, forbidding the Bank of California comparable banking opportunity is anti-competitive and runs counter to the clear policy of Congress as manifest in the National Banking Act.

We hold that the trial court, by appropriate standard of judicial review, properly upheld the Comptroller’s determination.

Judgment affirmed.

      . See, e. g., 12 U.S.C.A. § 24 (authorizing charitable contributions), 12 U.S.C.A. § 85 (interest rates which must be charged), 12 U.S.C.A. § 371 (interest rates which must be paid), 12 U.S.C.A. § 92 (the power to act as trustee), and 12 U.S.C.A. § 90 (security authorized for safe-keeping of public funds).


source: Caselaw Access Project

author: CLARK, Circuit Judge: BELL, Circuit Judge BY THE COURT:

license: Public Domain

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Nathan George DINITZ, Defendant-Appellant.
    No. 73-2109.
    United States Court of Appeals, Fifth Circuit.
    April 4, 1974.
    Rehearing En Banc Granted June 10, 1974.

      Fletcher N. Baldwin, Jr., Univ. of Fla. College of Law, Gainesville, Fla. (Court-appointed), for defendant-appellant.
    William H. Stafford, Jr., U. S. Atty., Robert L. Crongeyer, Jr., Nick P. Geeker, Asst. U. S. Attys., Pensacola, Fla., for plaintiff-appellee.
    Before BELL, DYER and CLARK, Circuit Judges.
   CLARK, Circuit Judge:

I.

Nathan George Dinitz was convicted of violating 21 U.S.C. § 846 by conspiring to distribute a schedule I controlled substance (LSD) and of violating 21 U.S.C. § 841(a)(1) by distributing LSD. Dinitz’s first trial ended in a mistrial. He contends that retrying him violated his fifth amendment rights against double jeopardy. Because we agree that the retrial constituted double jeopardy, we do not reach any of the other arguments Dinitz advances.

Like almost all mistrial-double jeopardy cases this one turns on the facts of its particular procedural context. Illinois v. Somerville, 410 U.S. 458, 93 S.Ct. 1066, 35 L.Ed.2d 425 (1973). Dinitz was charged with participating in a sale of LSD to Steve Cox, a government informer. He initially employed Attorney Jeffrey Meldon to represent him. Mel-don appeared with him at arraignment and filed numerous pretrial motions. Approximately five days before Dinitz’s trial, Attorney Maurice Wagner was hired to act as lead counsel and conduct the trial. Wagner had not been admitted to practice before the Northern District of Florida, but the court allowed him to appear pro hac vice in Dinitz’s case. Meldon was also present at trial along with a professor of law from the University of Florida, as counsel for Dinitz. After the jury had been sworn and the government had made its opening statement, Wagner began an opening statement in behalf of Dinitz. The crux of the government’s case on both counts was to be the testimony of agent Cox as to the circumstances of his purchase from Dinitz. Wagner’s trial strategy was to attack the credibility of Cox, and a part of this strategy was to put before the jury at the outset the idea that Dinitz had been “set up” with the sale to Cox as a predicate for a subsequent extortion attempt. Wagner intended to offer proof that a week after his arrest Dinitz had received a phone call from someone who offered to arrange for all charges to be dropped if Dinitz would pay over a certain amount of money. Obviously, Wagner hoped the jury would infer from this evidence either that Cox was the extortionist or that he had some part in the scheme. Ample proof of the attempt at extortion was known to be available to the defense but, as it subsequently developed, no connection between Cox and the extortion attempt could ever be demonstrated. In the early part of his opening statement, Wagner started an attack obviously aimed at Cox.

Mr. Wagner: After working on this case over a period of time it appeared to me that if we would have given nomenclature, if we would have named this case so there could be no question about identifying it in the future, I would have called it the case—
Mr. Reed (Asst. U. S. Attorney): Your honor, we object to personal opinions.
The Court: Objection sustained. The purpose of the opening statement is to summarize the facts [that] the evidence will show [and] state the issues, not to give personal opinions.
Mr. Wagner: Thank you, your honor. I call this the ease of the incredible witness.

The jury, then, was removed from the courtroom and the court warned Wagner in the following terms:

The Court: You appeared at this trial late, you showed up, you were not counsel of record, you have never filed an appearance. This court was not aware of your participation until the jury was to be selected. I do not approve of your behavior and if you attempt to bait this court once again I am going to refuse to allow you to practice law in this court again.

Wagner then continued with his opening statement, bringing his chronological recitation of what the evidence would show up to the time of the indictment. At that point he began this statement: “some week or ten days later Nat [Din-itz] began to get telephone calls offering —.” The government’s objection again caused the jury to be removed from the courtroom. In the jury’s absence the court asked Wagner what he was about to discuss. He responded that he was going to discuss the extortion attempt against Dinitz. The court demanded that he demonstrate that he had proof that Cox was the man who picked up the parcel at the trash container. When it became apparent that the defense had no such proof, the following exchange transpired (still in the absence of the jury):

The Court: You will leave this courtroom immediately and you will never practice law in this court again Mr. Wagner. I direct you to leave now. Mr. Marshal, see that he leaves the building immediately [Wagner departs]. This is the worst exhibition I have ever heard of since I have sat on the bench. It is plain character assassination, and I hope Mr. Meldon that you are not responsible for any part of it. I will ask you now if you are. Did you discuss with Mr. Wagner what his opening statement was going to consist of and the evidence that he was going to attempt to put before this jury with respect to those phone calls and extortion attempts ?
Mr. Meldon: Your honor, I did not prepare the opening statement, and Mr. Wagner prepared his opening statement independently.
The Court: This is the worst exhibition I have seen. I am going to inquire of you further as to your knowledge of what Mr. Wagner was attempting to do. Mr. Wagner knew without doubt that this was inadmissible, highly prejudicial and nothing but character assassination, and I am going to inquire of you further, and if I find that you had anything to do with it I am going to take further action in your regard, too.

After the Assistant U. S. Attorney interjected that Meldon might well have been aware in advance of Wagner’s intended trial tactics, the court continued to address Meldon as follows:

The Court: All right, convince me, Mr. Meldon, that you had no control over Mr. Wagner. You were the lead counsel in this case. Apparently, you called him in to be associated with you. Explain to me that you had no control over his activities and had no knowledge that he was planning to present this case in this manner.

Meldon thereupon denied ever telling Wagner that Cox was the extortionist and disclaimed any responsibility for Wagner’s planned opening statement. The court then inquired of Meldon if he was prepared to proceed at that time, whereupon the following exchanges occurred :

Mr. Meldon: The Defendant has stated to me that since I was not hired to argue the case he is in a quandary because he hired Mr. Wagner to argue the case and he feels he needs more time to obtain outside counsel to argue the case for him.
The Court: That comes too late. You are his counsel and have been. I will consider it between now and 9:00 o’clock tomorrow morning.
* * * -X- * *
Mr. Meldon: I need additional time to prepare in that I have not discussed it with the witnesses and Mr. Wagner has done all of the preparation.
The Court: It is your responsibility to contact your witnesses and discuss this case with them between now and 9:00 o’clock tomorrow morning, because that is when we will continue.

At 9:00 the following morning in chambers Meldon again advised the court that Dinitz did not want him to try the case and that in any event, he was unprepared to take the lead in the trial at that time. The judge advised counsel that he did not think that the government or the defendant could get a fair trial and stated that he was seriously considering granting a mistrial. He then declared a thirty minute recess and requested counsel for both sides to consider the alternatives. After the recess, the transcript shows this colloquy:

Mr. Weldon: Your Honor, I have conferred with the Defendant and he wishes to move for a mistrial at this time and after full consideration of the situation and an explanation of the alternatives before him, he feels that he would move for a mistrial and that this would be in his best interest.
The Court: What does the Government have to say?
Mr. Crongeyer: Your Honor, we have discussed this at some length and we think that for the reasons you have set forth already on the record a mistrial might be appropriate in this case, and the Government would not oppose a mistrial.
The Court: Then I am going to declare a mistrial, gentlemen. I think under all of the circumstances in this ease that it would be in the interest of justice to declare a mistrial and that is what I plan to do.

Subsequently, the court granted Mel-don leave to withdraw as Dinitz’s counsel. Prior to his second trial, Dinitz moved to dismiss the indictment on the basis of double jeopardy and alternatively to have Wagner reinstated as his trial counsel, but both motions were denied. At his second trial Dinitz represented himself and was convicted on both counts in the indictment.

II.

United States v. Perez, 22 U.S. (9 Wheat.) 579, 6 L.Ed. 165 (1824) is the customary starting point for determining whether retrial following a preverdict discharge of the first jury violates the defendant’s fifth amendment rights against double jeopardy. In Perez, a murder case, the trial judge acting sua sponte granted a mistrial after the jury was unable to agree on a verdict. The Supreme Court per Mr. Justice Story, in the course of holding that the fifth amendment’s double jeopardy clause did not prohibit retrial stated, “[w]e think that in all cases of this nature, the law has invested courts' of justice with the authority to discharge a jury from giving any verdict whenever in their opinion, taking all the circumstances into consideration, there is manifest necessity for the act, or the ends of public justice would otherwise be defeated.” This rule represents a balancing on the one hand of a criminal defendant’s valued right to complete his trial before a particular jury, United States v. Jorn, 400 U.S. 470, 91 S.Ct. 547, 27 L.Ed.2d 543 (1971); and on the other, society’s interest in fair trials and preventing “the guilty from going free”, Smith v. Mississippi, 478 F.2d 88 (5th Cir. 1973). Inspired by language in Perez, subsequent cases have consistently applied this test on a case by case basis and refused to catalogue specifically the circumstances in which the declaration of a mistrial would be supported by “manifest necessity” or the “ends of public justice.”

Last year in Illinois v. Somerville, 410 U.S. 458, 93 S.Ct. 1066, 35 L.Ed.2d 425 (1973) the Court distilled from previous cases a “general approach” to mistrial-double jeopardy cases premised on the “public justice” policy of Perez. See also Smith v. Mississippi, supra, and McNeal v. Hollowell, 481 F.2d 1145 (5th Cir. 1973). One line of cases holds that a mistrial is proper “if an impartial verdict' cannot be reached, or if a verdict of conviction could be reached but would have to be reversed on appeal due to an obvious procedural error in the trial.” Another supplementary line of cases forbids the granting of a mistrial on the basis of any ruling or procedure which would lend itself to prosecutorial manipulation. See, Downum v. United States, 372 U.S. 734, 83 S.Ct. 1033, 10 L.Ed.2d 100 (1963); McNeal v. Hollowed, supra; and United States v. Cheung, 485 F.2d 689 (5th Cir. 1973).

Notwithstanding the require ments of Perez for mistrials granted sua sponte or at the prosecution’s behest, “where circumstances develop not attributable to prosecutorial or judicial overreaching, a motion by defendant for mistrial is ordinarily assumed to remove any barrier to reprosecution, even if the defendant’s motion is necessitated by prosecutorial or judicial error.” United States v. Jorn, supra, 400 U.S. at 485, 91 S.Ct. at 547, 557, 27 L.Ed.2d at 543 (1971). Thus, even if manifest necessity for a mistrial is lacking, in the absence of prosecutorial or judicial overreaching, a defendant’s motion for or consent to a mistrial normally removes any double jeopardy barrier to reprosecution. United States v. Iacovetti, 466 F.2d 1147 (5th Cir. 1972), cert. denied, 410 U.S. 908, 93 S.Ct. 963, 35 L.Ed.2d 270 (1972); United States v. Beasley, 479 F.2d 1124 (5th Cir. 1973); and United States v. Romano, 482 F.2d 1183 (5th Cir. 1973) [1973]. However, the mere fact of consent does not have such talis-manic qualities that “mere mouthing of the motion (mistrial motion) in open court constitutes in every case waiver of a subsequent plea in bar.” United States v. Walden, 448 F.2d 925 (4th Cir 1971).

III.

The instant case is an unusual one indeed, and its unique facts must be placed in proper perspective before these legal principles can be applied. After Wagner’s banishment and the court’s explicit threats to deal severely with Mel-don if he had ever been aware of Wagner’s proposed opening statement, the court was faced with three possible courses of action: (1) it could have proceeded with trial; (2) it could have granted a continuance and reconvened with the same jury at a later date; (3) or it could have declared a mistrial.

Proceeding with the trial would have been so altogether unreasonable as to carry the probability of a reversal on appeal. See Somerville, supra. The court’s expulsion of Wagner left Dinitz without the counsel he had employed to lead the conduct of his defense. The threats to Meldon placed the only remaining trial attorney in the inconsistent position of having to protect his own standing as a member of the bar of the Northern District of Florida against any suggestion of complicity with the line of defense Wagner had begun and of acting as a vigorous and effective advocate on behalf of Dinitz. Additionally, Meldon had not prepared himself to try the case, and, after Wagner’s dismissal, Dinitz made it clear that he did not want Meldon to represent him.

The second course, a continuance of sufficient length to permit the employment of new counsel was also unreasonable and would likewise have failed Somerville’s “general approach.” There would have been a very real probability of prejudice inherent in releasing the jurors to go about their normal affairs in contact with the general public and news media for such a period of time. Sequestering them would have been out of the question. Additionally, the break in the continuity of the trial would poorly serve juror’s memories. Most importantly, however, a continuance would saddle Dinitz with the unfavorable inferences the jurors would surely draw from the delay itself and from Wagner’s absence at the rescheduled trial.

Usually, the declaration of a mistrial is contemporaneous with the event which in the court’s judgment operates to make a mistrial necessary. As a result, the appellate court normally tests to determine whether the precipitating event created the requisite manifest necessity to abort the trial. The instant case does not fit this mold. The actions of the court in banishing ■ Wagner and threatening Meldon inexorably led the trial down the path to mistrial. As the government forcefully argues manifest necessity was present when the mistrial was finally granted, but we would be wrong to focus the inquiry there. The die was cast with the trial judge’s response to the conduct of defense counsel.

Before testing the validity of this response, we must resolve the threshold issue of whether Dinitz’s consent to the mistrial operated to bar his subsequent double jeopardy plea. If it did not so operate, we must then determine whether what the trial judge did at the time of Wagner’s disbarment met the manifest necessity requirements of Perez and Somerville.

IV.

When Dinitz consented to a mistrial did he bar himself from raising the double jeopardy issue? In answering this question we need not characterize the trial judge’s actions as judicial overreaching which under Jorn, supra, would allow Dinitz to plead double jeopardy notwithstanding consent on his part. Using a defendant’s consent to a mistrial to bar his subsequent complaint of double jeopardy implies that he has bound himself to accept an abandonment of the first trial by exercising something more substantial than a Hobson’s choice. If a defendant is able to continue the trial even though harmed by prosecutorial or judicial error, but desires to abort that proceeding, he has waived his right to proceed before the jury first selected. In the instant case, however, the actions of the trial judge had the effect of rendering Dinitz unable to conduct his defense. With Wagner excluded and Meldon disabled, Dinitz had no choice but to move for or accept a mistrial. Under the circumstances of this ease, see United States v. Walden, supra, he can hardly be said to have relinquished voluntarily his right to proceed before the first jury.

V.

Since the court’s actions at the time of Wagner’s banishment made the subsequent grant of a mistrial inevitable, appellate review must center on these actions rather than on the resulting declaration. Dismissal of an attorney in the midst of a criminal trial is not per se wrong. The discretion reposed in the trial court to see that the proceedings before it accord justice to the litigants is, in the abstract, broad enough to encompass such a removal. For example, if defense counsel by his actions so prejudices the jury trying his client that manifest necessity exists to declare a mistrial; he may be expelled and a mistrial declared. The fact that the mistrial may be attributed to the absence of counsel is of no moment. Despite such formal characterization, the ultimate cause of the mistrial remains the counsel-provoked jury prejudice. Additionally, it is possible that an attorney’s conduct can be so disruptive of the orderly processes of justice as to require his removal from the proceedings and an ensuing mistrial. Again, the manifest necessity for declaring a mistrial would be found in the state of affairs created by counsel before the court takes action. Here our scrutiny must first be directed to the impact on the jury of Wagner’s activity at this point to determine if jury prejudice can sustain the ousting of Wagner and the threats of a similar fate for Meldon.

Wagner’s conduct beginning with the motion to suppress and ending with the phone call statement had required retiring the jury from the courtroom several times. Although these in-térruptions were vexatious, it certainly cannot be said that, individually or cumulatively, they would'have made an impartial verdict impossible. See Somerville, supra. Furthermore, we recognize that Wagner was guilty of improper conduct when, despite the court’s ruling, he “labeled” the proceeding as the case of the incredible witness. However, this transgression had been corrected before the jury and was past when Wagner’s comment about a post-arrest phone call to Dinitz was stopped in mid-sentence by an objection. This record contains no intimation that the trial judge thought the jury had been prejudiced by Wagner’s mistakes of conduct up to the time they were excused upon the government’s objection to the phone call statement. Even at that point the court’s only expressed concern was to determine whether the anticipated comment was one that could be supported by admissible evidence. Even if we were to assume that counsel’s actions were intended to affect the jury, the facts in the record at this time will not permit justifying the mistrial because of jury prejudice, for this jury never heard the matter which the judge termed “character assassination.” If the court below considered that the jury in the first case had been prejudiced by Wagner’s conduct up to this point, such prejudice could have been cured by a cautionary instruction. This being so, the existence of such curable prejudice would not support a mistrial. See Carsey v. United States, 129 U.S.App.D.C. 205, 392 F.2d 810 (1967).

In United States v. Jorn, 400 U.S. 470, 91 S.Ct. 547, 27 L.Ed.2d 543 (1971), the court based its holding that the mistrial' was not supported by manifest necessity on the trial judge’s failure to consider other alternatives. See also United States v. Cheung, supra. In the instant case, the court had not ruled on the matter of the admissibility or permissibility of the extortion attempt line of defense. Except for his single lapse in the “incredible witness” comment, Wagner had not demonstrated an unwillingness to comply with the court’s rulings. Thus an obvious alternative to disbarring Wagner and precipitating a mistrial would have been a ruling prohibiting reference to the extortion attempt and a warning to Wagner against future interjection of this matter without first establishing a valid basis in proof. In United States v. Whitlow, 110 F.Supp. 871 (D.C.D.C.1953) the court held that the defendant’s rights against double jeopardy would be violated by retrial, after a mistrial, because the defendant’s attorney had exceeded the bounds set by the court in examining witnesses. In Whitlow the court stated that grant of a mistrial for misconduct of defense counsel would not be proper except in case of misconduct going to the very vitals of the trial itself. “Minor misconduct of defense counsel, such as overstepping the limits set by the court for the examination of the witness, does not under the authority warrant a mistrial, thereby depriving the defendant of his right to secure a verdict from the jury that has been sworn to try him.” 110 F.Supp. at 876.

Assuming for the sake of argument Wagner was engaged in a deliberate, contemptuous course of baiting the court and improperly attempting to assassinate the character of the principal prosecution witness, still no manifest necessity for his immediate dispatch would have existed. Such misconduct could never be condoned, but insofar as the trial then in progress was concerned, other alternatives available to the trial judge had to be considered. See United States v. Jorn, supra. For example, the judge could have warned Wagner that he would be cited for contempt if such practices continued. He could have actually cited him for contempt and imposed post trial sanctions for each citation, if he thought Wagner’s conduct amounted to obstructing the performance of his judicial duty. See 18 U.S.C. § 401; and In re McConnell, 370 U.S. 230, 82 S.Ct. 1288, 8 L.Ed.2d 434 (1962). The trial judge could have caused a complaint to be filed with the grievance committee of the state bar or taken post trial steps to prevent him from being admitted to practice before the Northern District of Florida. In view of these and any other alternatives which would not affect the ability to continue the trial, we cannot say that there was manifest necessity for the trial judge’s actions.

We have carefully read and reread the record and, although Wagner’s conduct was far from exemplary and may have justified disciplinary action, we cannot conclude that taken separately or together his mistakes vested the court with discretion to deprive his client of representation in this criminal case. For emphasis, we reiterate our refusal to rule that there are no circumstances in which such a midstream disbarment would be proper. Similarly, we caveat that we do not intend to fashion any rule which would permit obstructionary conduct by defense counsel, any attempt to create a mistrial, or the adoption of a trial strategy of creating jury prejudice. Evidence of such reprehensible practices would present a different case. We hold only that Wagner’s actions did not rise to the malevolent level of creating incurable jury prejudice or requiring the banishment of counsel from the courtroom to preserve the orderly processes of justice. Adequate alternatives were available to deal with the errors which did not require sacrificing of the defendant’s ability to continue his defense.

Reversed.

BELL, Circuit Judge

(dissenting):

I respectfully dissent. Two basic precepts in a system of criminal justice are (1) that it be a workable institution and, (2) that it be administered in an even handed manner. The majority opinion violates both precepts. It distorts the application of the Double Jeopardy Clause of the Constitution to the extent of burdening the system, and the only result of the distortion is a windfall to defendant Dinitz.

The distortion arises out of misconception on the part of the majority as to how the Double Jeopardy Clause is to be administered. In United States v. Jorn, 1971, 400 U.S. 470, 91 S.Ct. 547, 27 L.Ed.2d 543, the court was concerned with a case where the double jeopardy bar was claimed because of the grant of a mistrial by the trial court on its own motion. The test applied was that of whether the trial court abused its discretion. The majority applies the same test here, apparently giving no consideration to the different rule that obtains when the defendant seeks the mistrial. The Jorn decision points up the difference in its discussion of the policy underlying the application of the Double Jeopardy Clause. The right involved is that of a defendant to have his trial completed by a particular tribunal. In adverting to circumstances when reprosecution is allowed or not allowed, the court draws the distinction between those instances when the defendant gives up his option to have the cause determined by the first jury such as by motion for mistrial, a new trial, or by appeal, and those instances where the court deprives the defendant of such option. The court said:

“If that right to go to a particular tribunal is valued, it is because, independent of the threat of bad-faith conduct by judge or prosecutor, the defendant has a significant interest in the decision whether or not to take the case from the jury when circumstances occur which might be thought to warrant a declaration of mistrial. Thus, where circumstances develop not attributable to prosecutorial or judicial over-reaching, a motion by the defendant for mistrial is ordinarily assumed to remove any barrier to re-prosecution, even if the defendant’s motion is necessitated by prosecutorial or judicial error.” 400 U.S. at 485, 91 S.Ct. at 557.

The court explicated the prosecutorial or judicial overreaching situation by commenting that in such cases reprosecution might well be barred despite the defendant having made a motion for mistrial. 400 U.S. 485, n. 12, 91 S.Ct. 547. Jorn goes on to point out that in the absence of a motion for mistrial by the defendant, manifest necessity for the mistrial must appear. It was under the manifest necessity doctrine that the court applied the abuse of discretion test.

Here we have a motion by defendant' for a mistrial and the error of the majority is seen in the avoidance of determining whether there was judicial overreaching on the part of the district court as distinguished from judicial error (equated by the majority opinion with an abuse of discretion). Under the teaching of Jorn, this issue cannot be avoided. The majority is correct in applying the double jeopardy bar if there was in fact judicial overreaching. The majority is in error if the conduct of the district court fell short of judicial overreaching.

This posture, of the case for decision is demanded by our own decisions following Jorn. See United States v. Romano, 5 Cir., 1973, 482 F.2d 1183, 1187-1188; United States v. Beasley, 5 Cir., 1973, 479 F.2d 1124, 1125-1126; United States v. Iacovetti, 5 Cir., 1972, 466 F.2d 1147, 1151-1152. In each of these cases the bar of double jeopardy was denied the defendant because of having sought the mistrial. Indeed, we recognized the premise in McNeal v. Hollowell, 5 Cir., 1973, 481 F.2d 1145, 1150-1151, that a defendant who engages in a course of conduct calculated to necessitate the granting of a mistrial, although not actually requesting a mistrial, máy be barred from relying on a double jeopardy defense.

The question for consideration then is whether the record makes out a case of judicial overreaching. The defendant was a third year law student who was charged with selling LSD. He was represented by retained counsel, Mr. Mel-don, from the time of his arrest to trial, a period of a little over two months, and the representation was vigorous from the standpoint of efforts to discover and suppress. On the day of the trial Mr. Meldon was joined in the defense by Mr. Baldwin, the law professor who handled this matter on appeal, and by Mr. Wagner, a Florida lawyer who resided in another district and who was not admitted to practice in the Northern District of Florida. Mr. Wagner stated to the court that he would handle the facts and that Mr. Baldwin would handle law questions and that the three appeared as co-counsel. The issue to be tried was a simple one: whether the jury would believe an undercover government agent who claimed that he purchased the LSD from the defendant. The defense was to discredit the informer by showing an effort by someone to extort money from the defendant after his arrest, presumably for dropping the prosecution.

While recognizing the possibility and even probability in some cases of different inferences being drawn by different readers of records, I draw the distinct conclusion from the record that Mr. Wagner conducted himself in an improper manner from almost the moment of his entry into the case. The trouble started in a preliminary hearing on a motion to suppress. There was impropriety on Wagner’s part in the opening statement in the form of arguing, rather than stating the case and, with regard to the baseless charge of extortion against the government witnesses. The district court gained the impression that Mr. Wagner was baiting the court and I find ample support for that impression. At any rate, after Wagner was removed from the case and after the discussion between his remaining two lawyers and an overnight delay, one of his lawyers made the following representation to the court:

“Your Honor, I have conferred with the Defendant and he wishes to move for a mistrial at this time and after full consideration of the situation and an explanation of the alternatives before him, he feels that he would move for a mistrial and that this would be in his best interest.”

Absent such a motion the district court could have gone forward with the trial. It may be, as is said in the majority opinion, that the case would have been reversed because of error in removing Mr. Wagner but there would have been no double jeopardy bar. It would have been the defendant who sought the reversal based on the removal of Mr. Wagner. Jorn, supra, 400 U.S. at 484, 91 S.Ct. 547, 27 L.Ed.2d 556.

It may be, of course, as the majority points out that other methods of control short of removal were available to the court. It may be that another judge would have utilized other methods but the question is whether the method utilized in this instance reached the proportions of judicial overreaching. My answer is in the negative.

The sum of the majority opinion is to apply to this case the abuse of discretion test of Jorn where a mistrial was granted by the court sua sponte. This is simply an incorrect approach and confuses two separate tests. Here the defendant sought the mistrial and there is no factual basis for a finding of judicial overreaching as distinguished from error amounting to an abuse of discretion. The majority does not contend otherwise but simply fashions a new doctrine of double jeopardy: the bar is applicable on the basis of error amounting to an abuse of discretion on the part of the trial court despite appellant seeking the mistrial. This is contrary to Jorn.

There are two unfortunate aspects to the majority opinion. First, the ratio decidendi is too extreme to be workable and will give rise to much reluctance in granting mistrials. The trial courts will understand that society will be better served by completing a trial, even after clear error has arisen and the defendant seeks the mistrial, than the alternative of a mistrial and the possible bar of double jeopardy based on the error. The time and expense involved in completing the trial, taking an appeal, and in the retrial, will often be a small price to pay to protect the societal interest in law enforcement.

Dinitz goes free but there should be little likelihood of a district court falling into a trap of the kind set here, whether set purposely or by happenstance, now that the law elucidated in the majority opinion has surfaced. Hopefully, the majority decision will thus spend itself.

ON PETITION FOR REHEARING AND PETITION FOR REHEARING EN BANC

Before BROWN, Chief Judge, and WISDOM, GEWIN, BELL, THORN-BERRY, COLEMAN, GOLDBERG, AINSWORTH, GODBOLD, DYER, SIMPSON, MORGAN, CLARK, RONEY and GEE, Circuit Judges.

BY THE COURT:

A member of the Court in active service having requested a poll on the application for rehearing en banc and a majority of the judges in active service having voted in favor of granting a rehearing en banc.

It is ordered that the cause shall be reheard by the Court en banc on briefs without oral argument. The Clerk shall set a briefing schedule for the filing of supplemental briefs.

      . The professor, Fletcher Baldwin, advised the court at the outset of the proceedings that he was not a trial attorney and would not aetually participate in Dinitz’s trial. He did brief and argue the instant appeal.

      . Dinitz had promptly reported the extortion attempt to the Federal Bureau of Investigation and, at the suggestion of the FBI, an envelope was filled with paper and placed underneath a large trash container at the supposed pick-up spot. Johnson, an FBI agent, in an attempt to catch the extortionist kept the trash container under surveillance and reported that he saw someone' pick up the envelope but was unable to apprehend the pick-up man. However, Johnson was able to describe the physical appearance of the man picking up the envelope and the subject did not in any way resemble Cox.

      . The fifth amendment’s double jeopardy “prohibition is not against being twice punished, but against being twice put in jeopardy,” United States v. Ball, 163 U.S. 662, 16 S.Ct. 1192, 41 L.Ed. 300 (1896). Thus, jeopardy can attach before a trial is completed, and the Supreme Court has held that in a jury trial jeopardy attaches when the jury is impaneled and sworn. See e. g., Downum v. United States, 372 U.S. 734, 83 S.Ct. 1033, 10 L.Ed.2d 100 (1963).

      . For examples of cases see note, Twice in Jeopardy, 75 Yale L.J. 262 (1965).

      . The continuance would have had the effect of a mistrial if the same jury was not reconvened, since jeopardy attaches when the jury is sworn, see footnote 3, supra.

      . Dinitz, a third year law student at the time, was similarly unprepared to represent himself.

      . The government argues and the trial judge indicated that there might have been other grounds for granting the mistrial at the time it was granted. The case had been highly publicized, and it had been reported to the court before trial that some of the jurors had overheard a comment potentially prejudicial to Dinitz by a security guard. However, the court was aware of these reasons long before Wagner was excluded and if it thought them sufficient to warrant granting of a mistrial, it would have acted earlier.

      . We do not reach Dinitz’s argument that Meldon’s position of divided loyalty between representing his client and protecting his own interests operated to require a personal consent from Dinitz to the mistrial. Cf. Glasser v. United States, 815 U.S. 60, 62 S.Ct. 457, 86 L.Ed.2d 680 (1942).

      . Judge Bell incorrectly premises his dissenting remarks upon the supposition that we have either misread or misunderstood Jorn. As his analysis of the law of that holding shows, that is not the source of our difference. Bather, it is purely due to fact analysis. For emphasis, we reiterate that this record discloses to us that the trial judge’s response to the conduct of defense counsel deprived Dinitz’s motion for a mistrial of its necessary consensual character.

      . In making this determination we liave not failed to give full consideration to the trial judge’s superior opportunity to observe the effect of particular statements on the jury. See, e. g., Gori v. United States, 367 U.S. 364, 81 S.Ct. 1523, 6 L.Ed.2d 901 (1961).

      . It is not at all clear that the discord between the court and Wagner was not the result of a basic misunderstanding. The court was only concerned with the existence of proof that the undercover agent Cox was the same man who had picked up the bundle left for the extortionist. If the court ever considered that Wagner may have been urging a broader contention — that Dinitz had been set up for the criminal contact with Cox in order to enable someone, not necessarily Cox or a confederate, to extort funds from him — it is not apparent from the transcript.

      . Given the view of the majority that further prosecution is barred, I do not reach defendant’s other assignments of error including whether tlie district court was in error at all in removing defendant’s co-counsel from tlie case.

      . A strong argument could be made for the proposition that Mr. Wagner pursued a course of conduct calculated to cause a mistrial. Cf. McNeal v. Hollowell, supra.


author: LUMBARD, Circuit Judge:

text:
    SPERRY SYSTEMS MANAGEMENT DIVISION, SPERRY RAND CORPORATION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, and Local 445, International Union of Electrical, Radio and Machine Workers, AFL-CIO, Intervenor.
    No. 296, Docket 73-1621.
    United States Court of Appeals, Second Circuit.
    Argued Jan. 8, 1974.
    Decided Feb. 15, 1974.

      Herbert Prashker, New York City (Poletti Freidin Prashker Feldman & Gartner, Eric Rosenfeld, and Edward R. Cohen, New York City, on the brief), for petitioner.
    Jonathan G. Axelrod, N. L. R. B., Washington, D. C. (Paul J. Spielberg, Atty., Peter G. Nash, Gen. Counsel, John S. Irving, Deputy Gen. Counsel, Patrick Hardin, Associate Gen. Counsel, Elliott Moore, Deputy Associate Gen. Counsel, Washington, D. C., on the brief), for respondent.
    Everett E. Lewis, New York City (Vladeck Elias Vladeck & Lewis, and Sylvan H. Elias, New York City on the brief), for intervenor.
    Before DANAHER, LUMBARD and TIMBERS, Circuit Judges.

       Senior Circuit Judge o£ the District of Columbia Circuit, sitting by designation.

   LUMBARD, Circuit Judge:

Pursuant to § 10(f) of the National Labor Relations Act, 29 U.S.C. § 160(f), the Sperry Systems Management Division of the Sperry Rand Corporation (the Company) petitions this court to review and set aside an order of a divided National Labor Relations Board which on March 5, 1973 dismissed a complaint against Local 445 of the International Union of Electrical, Radio and Machine Workers, AFL-CIO (the Union), 202 N.L.R.B. No. 18. The complaint charged, and the Company here argues, that the actions of Local 445 constituted the unfair labor practice of refusing to bargain collectively in violation of § 8(b) (3) of the Act, 29 U.S.C. § 158(b)(3). We find that on this record the Board erred in dismissing the complaint, and, therefore, we grant the petition, set aside the Board’s order, and remand for further proceedings.

I.

On June 6, 1962, the Board certified Local 445 as the bargaining representative for certain of the Company’s technical employees at its plants in “metropolitan New York City, including Nassau and Suffolk Counties [the remainder of Long Island], on temporary assignments wherever located from said plants, and on temporary or permanent assignments from said plants to customer or vendor installations, wherever located.” At all times relevant to this proceeding, Article 1 of the collective bargaining agreement between the Company and the Union provided, “This Agreement shall apply to all plants now operated by the Employer, its successors and assigns, wherever situated.” This discrepancy between the certification and the agreement concerning the proper collective bargaining unit would lead to complex litigation of which the instant case is but a part.

In the spring of 1970, the Company commenced operations in a new facility in Vallejo, California, in which it employed, among others, three draftsmen who performed work similar to that performed by Local 445’s members on Long Island. No draftsman was transferred to the California facility from the New York City area. In November 1970 the Union, having learned that the three employees at Vallejo had been given different titles and lesser pay than workers doing comparable work in New York, filed a grievance with the Company which demanded that the Company apply the New York City agreement to the Vallejo employees.

The Company denied the grievance and the matter went to arbitration pursuant to the contractual procedures. The issue presented at a hearing before Arbitrator Benjamin C. Roberts was “[w]hether the technical personnel performing drafting work at Vallejo, California, are under the coverage of the collective bargaining agreement with Local 445.” On April 19, 1971, Arbitrator Roberts issued a 22-page opinion in which he concluded that the parties in Article 1 did mean to apply the agreement to all of the Company’s plants, wherever located. He, however, said that he could not apply the representation provisions of the agreement to the Vallejo employees without violating their right under the Act not to organize. Consequently, he required compliance only with the wages and other conditions of employment, which provisions he felt could be legally enforced.

His award read:
As a matter of law, the technical personnel performing drafting work at the Company’s plant at Vallejo, California, are not under the coverage of the collective bargaining agreement with Local 445. However, they shall be governed by the wages and other terms of employment contained in the Local 445 Agreement (excluding the Union Shop and other representation clauses) and retroactive to June 5, 1970.

On May 3, 1971, the Union’s president, Henry Zylla, wrote the Company, saying that the Union expected the award to be applied to all the Company’s plants. In following weeks Zylla met with Company officials several times in an effort to enforce the award. The Company was told that the Union did not seek to represent the Vallejo workers, but rather was trying to protect the job security of the Long Island workers, which might be threatened if the Company continued to pay lower wages in California. Zylla also said that the Union interpreted the arbitrator’s award as only setting a minimum for the California employees — the Company could pay them more if it desired.

On July 26 the Union filed a second grievance with the Company which alleged that the Company had failed to comply with Article 1 of the Agreement as interpreted by the arbitrator and which demanded that the Company comply with the award, recall the two Vallejo draftsmen who had been laid off in March by procedures allegedly improper under the contract, and make the two whole. One response of the Company was to file on August 2 the unfair labor practice charges that led to the instant case. The other was to deny the grievance after a meeting its labor relations supervisor had on August 11 with Zylla and another union official. Zylla at this meeting listed the Union’s demands relating to compliance with the award which dealt with wages; severance, vacation and sick pay; pension contributions; tuition refunds; overtime payments ; the participation in a merit kitty; the recall of the two draftsmen; reimbursement of their medical expenses ; and the reclassification of the drafting personnel wrongly classified. Following the Company’s rejection on August 25, the Union proposed arbitration and an arbitrator was agreed upon, but the parties subsequently postponed the arbitration indefinitely.

Simultaneously with its efforts to enforce the arbitration award, Local 445 also attempted to become the bargaining representative for the Vallejo employees. On May 10 it filed a representation petition with the Board’s Region 20 in San Francisco. On July 8 the Regional Director ordered an election in a unit consisting of the draftsmen and two clerical employees, which the Union lost on August 5 by a vote of 2 to 0, with one vote being challenged. The Union challenged this result and filed unfair labor practice charges against the Company alleging, inter alia, that the two draftsmen had been laid off because of their union activity. Following an investigation, the Regional Director dismissed the charges on September 14. He found that the layoffs had been caused by a lack of work and that when work subsequently became available the Company for business reasons had subcontracted it. On December'3 this dismissal was sustained by the General Counsel, and on December 16 the Regional Director overruled the Union’s objections and certified the election results.

Meanwhile, Sperry on July 20 filed a petition in the New York County Supreme Court to modify the arbitrator’s award insofar as it applied the New York City agreement to Vallejo, on the grounds that the award went beyond the only issue submitted to the arbitrator which was whether the agreement applied in toto to the California employees and that the Company’s compliance with the award would violate the rights of the California employees. On November 2, Justice Amsterdam filed a decision granting the Company’s petition on both grounds, 80 L.R.R.M. 2061. The Union appealed, but on its motion the Appellate Division postponed hearing the appeal until after the Board’s decision in the instant case. Following that decision, the Appellate Division affirmed without opinion on June 19, 1973, 42 A.D.2d 691, 345 N.Y.S.2d 972, and on October 17, the Court of Appeals denied leave to appeal, 33 N.Y.2d 517.

II.

The complaint before the Board charged that the Union’s efforts to enforce the arbitration award after May 1, 1971 constituted the unfair labor practice of refusing to bargain collectively. After a hearing held on March 6, 1972, Trial Examiner Paul Bisgyer handed down a decision on July 12, 1972 finding that the Union’s activities aimed at enforcing the award were motivated by a desire to protect the job security of the Long Island employees and not by a desire to represent the Vallejo employees. He found nothing in the arbitrator’s award or in the Union’s actions that was repugnant to the National Labor Relations Act. He, therefore, recommended dismissal of the complaint.

Three members of the Board, Chairman Miller and Members Fanning and Jenkins, agreed with the trial examiner that the complaint should be dismissed. Although their opinion is not entirely clear, they apparently found that the object of Local 445’s efforts in enforcing the award was preservation of the work of the New York City unit and not recognition as bargaining agent in California. They assumed that the arbitrator was correct in finding that the parties had voluntarily agreed to apply the terms of the New York agreement as minimum terms for employees doing similar work outside of the unit, which they said did not contravene the Act. Finally, they noted that none of Local 445’s actions in securing enforcement of the award was “necessarily disruptive” of the bargaining relationship in New York. Stated another way, the Board held that, if the Union’s goal was not representation, the minimum wages and conditions of employment of the Vallejo employees were permissive subjects of bargaining in the New York City unit and that the Union’s efforts at enforcing the award did not constitute bargaining to impasse. Such a result is necessary before there can be a failure to bargain in such circumstances. See generally NLRB v. Wooster Division of Borg-Warner Corp., 356 U.S. 342, 78 S.Ct. 718, 2 L.Ed.2d 823 (1958).

Members Kennedy and Penello in dissent argued that the evidence established that the Union’s efforts in securing the Company’s compliance with the award were representational. They also argued that regardless of motive the Company could not agree with the representative of the New York City employees about the terms of employment of its California employees without violating the § 7 rights of the California employees, 29 U.S.C. § 157. For reasons that appear below, we agree with the Board’s dissenters.

III.

In Douds v. International Longshoremen’s Association, 241 F.2d 278 (2d Cir. 1957), we upheld the district court’s granting of a preliminary injunction sought by the Board against a union. In so doing, we held that a union fails to bargain in good faith when it demands over the company’s objections a change in the bargaining unit so that it can represent other employees after the Board determines that the unit should remain unchanged. The Seventh Circuit in Smith Steel Workers v. A. O. Smith Corp., 420 F.2d 1 (7th Cir. 1969), enforced a Board order that held that a union failed to bargain when it continued to insist that it represented certain workers and sought arbitration of the issue after a Board decision that the workers were part of a unit represented by another union. The court held that following the Board’s clarification order, the union had no right to employ griev-anee procedures to overturn it. The thrust of both decisions is that after a valid Board decision of the appropriate bargaining unit under § 9 of the Act, 29 U.S.C. § 159, a union’s attempt to represent workers outside that unit constitutes failure to bargain collectively. See also Boire v. International Brotherhood of Teamsters, 479 F.2d 778 (5th Cir. 1973); Local 7-210, OCAW v. Union Tank Car Co., 475 F.2d 194 (7th Cir.), cert. denied 414 U.S. 875, 94 S.Ct. 68, 38 L.Ed.2d 120 (1973).

We believe that Douds and Smith control the result here. First, it is clear that at all relevant times, all parties agreed that the Vallejo employees were a separate bargaining unit from the New York City unit. Several of the events at issue occurred after the Board validly ordered an election at a unit consisting only of the Vallejo draftsmen and clerical employees. And even before this order the union did not claim that the Vallejo employees were an accretion to the New York City unit, which the Board certified in 1962. See generally Melbet Jewelry Co., 180 N.L.R.B. 107 (1969); Supermarkets General Corp., 170 N.L.R.B. 446 (1968), enforced sub nom. Local 919, Retail Clerks v. N.L.R.B, 135 U.S.App.D.C. 103, 416 F.2d 1118 (1969).

Second, the Board’s finding that the Union’s efforts were motivated by a desire to protect the job security of the Long Island employees and not by a desire to represent the Vallejo employees was not supported by substantial evidence. See Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951). The Union’s efforts to secure the reinstatement of the two draftsmen who had been laid off in March 1971 is utterly inconsistent with the Union’s alleged purpose of protecting the job security of the New York City unit employees. Moreover, it is difficult to see how the Union at the times relevant to the charges here could have believed that the Vallejo unit affected the job security of the New York City unit. At the hearing before the trial examiner, Zylla made the unsubstantiated claim that the Company in the fall of 1970 was planning to expand the Vallejo facility, but by March 1971 it was clear that the Company was contracting the unit. Only one draftsman was employed there after that date. It strains credulity to believe that the Union honestly believed that its New York City unit consisting of a large number of employees was significantly threatened by a single draftsman working for lower wages almost three thousand miles away. The only reasonable conclusion is that the Union was seeking to represent the Vallejo employees through both the representation election in California and the grievance procedures in New York.

Thus, the Union’s activities in enforcing the award must be characterized as a sub rosa attempt to gain the de facto recognition as bargaining agent of the Vallejo employees which it might not and did not gain in the election. The rationale of Douds and Smith prohibits unions from engaging in covert attempts to subvert the Board’s orders regarding the proper bargaining unit as well as the overt attempts at issue there.

IV.

We also hold that, regardless of the Union’s motive in seeking enforcement of the arbitration award, it committed an unfair labor practice because the subject of the wages and working conditions of the Vallejo employees was not a permissible subject of bargaining in the New York City unit. Section 7 of the Act guarantees employees the right to organize and bargain collectively and the right to refrain from such activities. Generally, an employer commits the unfair labor practices of interfering with employees’ § 7 rights and supporting a union in violation of § 8(a)(1) and (a) (2) when it imposes on employees of one unit the contract and bargaining agent of another unit. See, e. g., Sheraton-Kauai Corp. v. NLRB, 429 F.2d 1352 (9th Cir. 1970); Welch Scientific Co. v. NLRB, 340 F.2d 199 (2d Cir. 1965).

The Board’s majority held that no provision of the Act was violated when parties voluntarily agree that the terms of their collective bargaining agreement will be the minimum terms of employment for the employer’s employees not in the bargaining unit if the purpose of the agreement is to protect the job security and wage structure of the employees within the unit. This ruling, however, raises the possibility of serious infringements on the rights of those employees outside the unit, especially where, as is the case here, there is no evidence that the job security of workers in the unit may be affected. The interests of employees within and without the unit might conflict at several points. For example, the workers outside the unit might wish to accept lower wages in return for more jobs. Requiring them to accept as a minimum the higher wages of other employees’ collective bargaining agreement may thwart their desires. This difficulty is compounded when, as happened here, the union insists that minimum terms for the workers outside its unit match the terms of its agreement down to such minutiae as tuition refunds. The workers outside the unit, either individually or collectively, might have differing economic priorities, such as preferring take-home pay to fringe benefits, even though the total cost to the employer of their demands be the same.

In support of its holding, the Board cites Local 24, Teamsters v. Oliver, 358 U.S. 283, 79 S.Ct. 297, 3 L.Ed.2d 312 (1959). In that ease the Court held that a state could not hold a portion of a multi-employer collective bargaining agreement illegal under its antitrust law since the matter was a mandatory subject of bargaining under the National Labor Relations Act. The agreement between the carriers and their truck drivers required that when trucks rented by the carriers were driven by their owners the owner-drivers must be paid the wages provided in the carriers’ agreement with the drivers and a certain minimum rental for the trucks. The record indicated that the minimum rental was the estimated cost to the truck owner of the trip and was negotiated in response to the practice of the carriers negotiating rentals that were below the owner-drivers’ costs. The owner-drivers were in effect accepting lower wages than the agreement called for. The Court in Oliver held that the minimum rental paid to the owner-drivers was a mandatory subject of bargaining between the carriers and their drivers since it represented “a direct frontal attack upon a problem thought to threaten the maintenance of the basic wage structure established by the collective bargaining agreement.” 358 U.S. at 294, 79 S.Ct. at 304.

Oliver’s holding that the terms of employment of those outside the unit can be mandatory subjects of bargaining has been limited to situations in which those terms “vitally affect” the unit employees. Chemical Workers, Local 1 v. Pittsburgh Plate Glass Co., 404 U.S. 157, 179, 92 S.Ct. 383, 30 L.Ed.2d 341 (1971). A balancing of the interests of the employees inside and outside the bargaining unit requires, we believe, that bargaining over the terms of employment of workers outside the unit be likewise limited. Even though in an interdependent economy the wages of one group of workers potentially might affect the wages of all other workers, an employer generally cannot bargain with a union over the wages that the union will negotiate with other employers, see United Mine Workers v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626, (1965), nor can a union bargain with an employer over the wages that the company will negotiate with its other employees absent evidence that the other employees’ wages vitally affect the terms of employment of the workers the union represents. As noted above, there is no evidence that the terms of employment at the Vallejo unit affected the New York City unit. Therefore, the Company could not have complied with the arbitrators’ award without infringing upon the rights of the Vallejo employees in violation of § 8(a)(1) and (a)(2) of the Act, and the Union’s attempt to require it do so constitutes a failure to bargain collectively in violation of § 8(b) (3) of the Act.

Accordingly, the Company’s petition is granted, the Board’s order is vacated, and the case is remanded for further proceedings consistent with this opinion.

      . The Company did transfer several members of the Engineers Union, which had a contract provision similar to Article 1, from its Great Neck, Long Island facility to Vallejo. As a result, the Company recognized that union as the representative of both the assigned and newly hired engineers.

      . As mentioned earlier, two of the three draftsmen had been laid off. They were allowed to vote, subject to later challenge. Only one of them did. Since the two employees who did vote voted against the Union, the challenged vote was not counted.

      . The title has since been changed to administrative law judge.

      . The Company interprets the Board’s holding as saying that irrespective of whether or not the Union was seeking to represent the Vallejo employees, there was no unfair labor practice since there was no disruption in the New York relationship between Company and Union. If this is what the Board held, it is clearly wrong. Demands by a union to represent employees outside the certified union are unfair labor practices even if no disruption occurs. See Smith Steel Workers v. A. O. Smith Corp., 420 F.2d 1 (7th Cir. 1969); Douds v. International Longshoremen’s Association, 241 F.2d 278 (2d Cir. 1957).

      . The Board’s majority described the Union’s efforts at arbitrating the validity of the layoffs as merely an attempt to discuss whether its objections to them were representational or were related to the economic benefits given the California employees. There is, however, no evidence that the Union was seeking reinstatement of the two draftsmen only if their economic benefits affected the New York City unit. The Board’s attempt in its brief to label the reinstatement demand as being merely “inadvertent” is similarly unpersuasive. Most of the second sentence of the two-sentence grievance filed on July 26 dealt with this issue.
      The trial examiner argued in his opinion that the reinstatement demand was consistent with the Union’s efforts to win the representational election in California, and was, therefore, proper. Certainly the demand was consistent with the Union’s desire to win the election, but the issue here is what was the Union’s dominant motive in employing the grievance procedure of the New York City agreement. The reinstatement demand shows that it was to represent the employees in California.

      . The Board has held that an employer may insist upon a “most favored nation” clause in an agreement. Dolly Madison Industries, Inc., 182 N.L.R.B. 1037 (1970).

      . This is not a situation in which a collective bargaining agreement requires that certain work be done by workers in the unit even though workers outside the unit may be affected. See National Woodwork Manufacturers Association v. NLRB, 386 U.S. 612, 87 S.Ct. 1250, 18 L.Ed.2d 357 (1967); Local 24, Teamsters v. Oliver, 362 U.S. 605, 80 S.Ct. 923, 4 L.Ed.2d 987 (1960) (Oliver II). Cf. Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203, 85 S.Ct. 398, 13 L.Ed.2d 233 (1964). Here the Union is attempting to set the minimum terms of employment for workers outside the unit.

      . It is no defense that the arbitrator determined that the New York City agreement applied to the Vallejo unit, because his award was repugnant to the Act. See Pix Manufacturing Co., 181 N.L.R.B. 88 (1970). See generally Ryder Technical Institute, 199 N.L.R.B. No. 85 (1972); Collyer Insulated Wire, 192 N.L.R.B. No. 150 (1971).