author: FEINBERG, Circuit Judge:

text:
    UNITED STATES of America, Appellee, v. John C. KIFFER et al., Appellants.
    No. 576, Docket 72-2263.
    United States Court of Appeals, Second Circuit.
    Argued Jan. 30, 1973.
    Decided April 18, 1973.

      Alan Scribner, New York City (Aaron Jaffe and Hubert M. Cunniffe, New York City, Jerome Karp, Brooklyn, on the brief), for appellants.
    Robert Clarey, Asst. U. S. Atty. (Robert A. Morse, U. S. Atty., E. D. N. Y., L. Kevin Sheridan, Asst. U. S. Atty., on the brief), for appellee.
    Before ANDERSON, FEINBERG and MULLIGAN, Circuit Judges.
   FEINBERG, Circuit Judge:

Appellants John Kiffer, James Kehoe and Robert Harmash mount a broadside attack on the constitutionality of the Comprehensive Drug Abuse Prevention and Control Act of 1970 (“the Act”), 21 U.S.C. § 801 et seq., as it applies to marihuana. Appellants were arrested in December 1971, while in possession of approximately two tons of marihuana stored in a warehouse, part of which Kiffer was in the process of delivering by truck to a police informant. All three were indicted for possession of marihuana with intent to distribute, in violation of 21 U.S.C. § 841(a)(1), and conspiracy, in violation of 21 U.S.C. § 846. They were tried in October 1972 before Judge Leo F. Rayfiel and a jury in the United States District Court for the Eastern District of New York. Kiffer and Harmash were convicted on both counts, and Kehoe was convicted on the possession count.

Appellants make two claims — that the criminalization of marihuana is unconstitutional and that, even if this is not so, the classification of marihuana as a Schedule I controlled substance, 21 U.S. C. § 812(c), Schedule 1(c) (10), is irrational and arbitrary. As indicated below, the first issue is not before us in the broad form presented. What is before use is the question whether there is a constitutional right to sell marihuana in large quantities, obviously for profit. As to that, we answer no. As to appellants’ second argument, we hold that Congress has not acted irrationally. For these reasons, we affirm the judgments of conviction.

I

Before considering the merits of the constitutional arguments, we must deal with a preliminary question. The Government urges that appellants be precluded from challenging either the inclusion of marihuana under the Act or its Schedule I classification because they have failed to exhaust an available administrative remedy.

The remedy adverted to is a procedural feature of the Act added, presumably in part, because the state of scientific knowledge regarding the effects of many of the substances controlled is far from definitive. The Act covers a large number of substances, each of which is assigned to one of five schedules; this statutory classification determines the severity of possible criminal penalties as well as the type of controls imposed. However, under section 811 of Title 21, the Attorney General is empowered to add substances to, or remove substances from, the coverage of the Act, as well as to transfer substances between schedules, all based upon findings that the statutory criteria warrant such modification. Proceedings preliminary to such changes “may be initiated by the Attorney General (1) on his own motion, (2) at the request of the Secretary [of Health, Education, and Welfare], or (3) on the petition of any interested party.” 21 U.S.C. § 811(a). See 21 C. F.R. §§ 308.41-.48. Prior to such a proceeding, the Attorney General is required to obtain an evaluation from the Secretary of Health, Education, and Welfare (HEW), whose recommendations as to “scientific and medical” questions are binding upon the Attorney General. 21 U.S.C. § 811(b). Thus, if new information indicates that the original classification was incorrect or is no longer justified under the statutory criteria, an interested party can, at least in theory, seek a reconsideration of the coverage or classification. Citing the expertise of the Attorney General and of HEW and the need for effective enforcement of the drug laws, the Government stresses that appellants have not used this imposing corrective mechanism; the Government urges that appellants should therefore be estopped from attacking either the constitutionality of including marihuana as a controlled substance at all or the reasonableness of its classification in Schedule I.

We put to one side the obvious rejoinder that the administrative agency (here HEW and the Attorney General acting in concert) does not have the power to declare the Act unconstitutional. Whatever weight such an argument might have in the usual case, timely and successful use of this administrative remedy would have obtained for appellants the very relief they seek from us — a declaration either that marihuana should not be subject to the Act or that it should be covered only in another schedule carrying lesser penalties.

Nevertheless, we reject the Government’s argument for two reasons. First, there is some doubt whether appellants in fact have an administrative remedy at the present time. The procedures just described for controlling and classifying must be read in conjunction with 21 U.S.C. § 811(d), which applies to any substance that the Single Convention on Narcotic Drugs, March 30, 1961, [1967] 18 UST 1407, T.I.A.S. No. 6298 (ratified by United States in 1967), requires to be controlled. The Director of the Bureau of Narcotics and Dangerous Drugs — the Attorney General’s designated agent for this purpose, 28 C.F.R. § 0.100 — has taken the position that marihuana is covered by the Convention, see 18 UST at 1410-11, 1559; as a consequence, he has refused to reconsider the marihuana classification pursuant to a petition of an interested party. 37 Fed.Reg. 18097-98 (1972), appeal pending sub nom. National Organization for the Reform of Marijuana Laws v. Ingersoll, Civil No. 72-1854 (D.C. Cir.). Petitioners in that case are vigorously asserting that the Director is in error. We take no position as to that, but it appears now that the administrative route for these appellants would at best provide an uncertain and indefinitely delayed remedy. Second, even assuming the existence of a viable administrative remedy, application of the exhaustion doctrine to criminal cases is generally not favored because of “the severe burden” it imposes on defendants. McKart v. United States, 395 U.S. 185, 197, 89 S.Ct. 1657, 23 L.Ed.2d 194 (1969). The burden would be particularly harsh in this case, as appellants’ remedy is now so uncertain.

Having disposed of this preliminary question, we turn to the arguments addressed to the constitutionality of the statute.

II

Any court asked to undertake review of the multifarious political, economic and social considerations that usually underlie legislative prohibitory policy should do so with caution and restraint. In this case, the challenged legislation incorporates conclusions or assumptions concerning an array of medical, psychological and moral issues of considerable controversy in contemporary America. Indeed, as a recent perceptive study suggests, “Marijuana, in fact, has become the symbol of a host of major conflicts in our society, each of which exacerbates any attempt at a rational solution to the problem.” J. Kaplan, Marijuana — The New Prohibition 3 (1970). This should serve as a reminder that in most instances the resolution of such sensitive issues is best left to the other branches of government.

Reflecting this judgment, courts usually review challenged legislative acts with the understanding that they are presumed valid and will be so found unless it is shown that the statute in question bears no rational relationship to a legitimate legislative purpose. E. g., Williamson v. Lee Optical, Inc., 348 U.S. 483, 485-488, 75 S.Ct. 461, 99 L.Ed. 563 (1955); United States v. Carolene Products Co., 304 U.S. 144, 152-154, 58 S.Ct. 778, 82 L.Ed. 1234 (1938). The only eases that require a stricter standard of review are those that involve an infringement of a right explicitly enunciated in the Constitution or otherwise recognized as fundamental. E. g., Roe v. Wade, 410 U.S. 113, 93 S.Ct. 705, 35 L.Ed.2d 147 (1973); Griswold v. Connecticut, 381 U.S. 486, 85 S.Ct. 1678, 14 L.Ed.2d 510 (1965); Aptheker v. Secretary of State, 378 U.S. 500, 505-514, 84 S.Ct. 1659, 12 L.Ed.2d 992 (1964). See United States v. Carolene Products Co., supra, 304 U.S. at 152-153 n. 4, 58 S.Ct. 778, 82 L.Ed. 1234.

To invoke this stricter scrutiny in this case, appellants assert the existence of a fundamental “right of the individual to control of his own body and to indulge in private in what may be. condemned in public or deemed immoral or unacceptable to society at large.” In support of this proposition they cite the Supreme Court decisions in Griswold v. Connecticut, supra, and Stanley v. Georgia, 394 U.S. 557, 89 S.Ct. 1243, 22 L.Ed.2d 542 (1969), respectively invalidating convictions for use of contraceptives and for private possession of obscene materials. These cases are of little assistance to appellants. Whatever may be the merits of a claim to a protected right by one who is prosecuted for the private possession or use of marihuana, appellants are not in that position. They stand convicted, not of simple possession or use of marihuana, see 21 U.S.C. § 844(a), but rather of possession of two tons of it with intent to distribute, and of conspiracy to do so. Thus, analogies to the holdings of Griswold and Stanley are inappropriate. Far more comparable are those decisions holding that, notwithstanding Stanley’s protection of the ultimate consumer of obscene material, the Government may prohibit the commercial importation or mail distribution of pornography. See United States v. Thirty-Seven Photographs, 402 U.S. 363, 91 S.Ct. 1400, 28 L.Ed.2d 822 (1971); United States v. Reidel, 402 U.S. 351, 91 S.Ct. 1410, 28 L.Ed.2d 813 (1971).

Since there is no colorable claim of a fundamental constitutional right to sell marihuana — even partisans of the old economic due process analysis might blush at that notion — appellants must establish that prohibition of commercial distribution of marihuana lacks any reasoned justification. They have not succeeded in doing so.

Appellants rely principally on the testimony of Dr. Lester Grinspoon, an associate clinical professor of psychiatry at Harvard Medical School and specialist in psychoaetive drugs. Dr. Grinspoon testified at a post-trial hearing before Judge Rayfiel on the question of the constitutionality of the marihuana prohibition. In addition, it was stipulated that five other experts would have supported Dr. Grinspoon’s conclusions, which were, in brief, that marihuana is neither physically nor psychologically harmful to most users and not particularly susceptible of abuse, and that those few who might suffer ill-effects through over indulgence probably have personality disorders that would lead them to abusive use of whatever drugs they might succeed in obtaining.

In response, the Government submitted an affidavit of Dr. Forrest Tennant of the Department of Psychiatry of the School of Medicine, University of California at Los Angeles, who reported that use of high-grade marihuana by volunteers in a study in which he is engaged “often” induces psychotic episodes. Dr. Tennant recommended against legalization at the present time. While acknowledging the need for reform of the present marihuana laws, Dr. Tennant indicated that legalization would be inappropriate until (1) an easily applied blood or urine test is developed to detect intoxicated drivers, (2) more is learned about the differences between marihuana and hashish, and (3) a system of eontrols is established to keep marihuana and other harmful substances out of the possession of minors.

On this limited record we are certainly not prepared to conclude that Congress could not reasonably decide that legalized commercial distribution of marihuana would pose a threat to the health of the American public. Moreover, recent discussions of this issue suggest that the present state of knowledge of the effects of marihuana is still incomplete and marked by much disagreement and controversy. Compare, e. g., Bartimo, Marijuana, 30 Fed.B.J. 343 (1971), with Trachtenberg & Paper, Marijuana: A Further View, 31 Fed.B.J. 258 (1972). Thus, although it is apparently generally accepted that most users do not suffer any significant ongoing harm, at least some — perhaps predisposed to such episodes — are reported to suffer severe temporary trauma, as Dr. Tennant reported in this case. See Marihuana: A Signal of Misunderstanding, The Official Report of the National Commission on Marihuana and Drug Abuse 72 (Bantam ed. 1972); Bartimo, supra, at 344-45, 347-48. Moreover, the long-term physical and psychological effects are as yet unclear. Thus, in testifying before Judge Rayfiel, Dr. Grinspoon acknowledged that a recent article in a British medical journal had “asserted that marijuana led to brain damage.” Although Dr. Grin-spoon indicated that this “was not a credible article,” he agreed that “the effect of marijuana regarding brain damage is not known.” Similarly, the first report of the National Commission on Marihuana and Drug Abuse (the Shafer Commission), referred to above, upon which appellants heavily rely, stated:

The Commission reemphasizes its concern about the small minority of heavy, long-term marihuana users who are exposed to a much greater relative risk of impaired general functioning in contemporary America.
. we must state that a significant increase in the at-risk population could convert what is now a minor public health concern in this eountry to one of major proportions.

See J. Kaplan, supra, at 156, 180-183; Bartimo, supra, at 345-46. It is true that the rationale for the criminalization of marihuana has shifted over time. See Bonnie & Whitebread, supra note 9, at 1012-16, 1055-57, 1061-62, 1071-74, 1126-27, 1162 (first explained, inter alia, by fear that drug would induce violent criminal conduct, insanity and even death, then by concern that it would serve as a stepping stone to harder drugs, and finally by apprehension as to its- short- and long-term physical and psychological effects). This, however, does not negate the possibility that the justification now principally relied upon may have some merit.

An argument might perhaps be made that in the absence of compelling justification, the police power does not extend so far as to permit the Government to protect an individual against himself and that the concern for public health and safety is relevant only insofar as the actions of one individual may threaten the well-being of others. See id. at 1149-55. While such an analysis would bring into question the prohibition against private possession and use of marihuana, see, e. g., People v. Sinclair, 387 Mich. 91, 131, 194 N.W.2d 878, 895-896 (1972) (opinion of Kavanagh, C. J.), that issue is not before us. In any event, such an argument does not undermine the authority of the Government to prevent some from aiding or inducing others to commit acts detrimental to their own health. The first report of the Shafer Commission accepted this very distinction. That report referred to the 1970 statute involved here and recommended that neither possession of marihuana for personal use nor casual distribution of small amounts of marihuana not for profit be an offense, although marihuana possessed in public would remain contraband subject to summary seizure and forfeiture. But the report made absolutely clear that these were the “only . . . changes in federal law” recommended. See Marihuana: A Signal of Misunderstanding, supra, at 191. This dual approach to the control of marihuana has since been reaffirmed by the Shafer Commission in its second and final report, Drug Use in America: Problem in Perspective, supra note 7, at 224-25. See also J. Kaplan, supra, at 315-30.

Appellants also argue that marihuana is much less harmful than tobacco and alcohol; the legal availability of the latter substances, they say, proves the irrationality of singling out marihuana for criminal penalties. Our knowledge is not sufficient for us to accept or reject appellants’ initial premise. But even if it is correct, see J. Kaplan, supra, at 263-310 (as to alcohol), this does not render the statute here unconstitutional. If Congress decides to regulate or prohibit some harmful substances, it is not thereby constitutionally compelled to regulate or prohibit all. It may conclude that half a loaf is better than none. See McDonald v. Board of Election Commissioners, 394 U.S. 802, 809-811, 89 S.Ct. 1404, 22 L.Ed.2d 739 (1969); Williamson v. Lee Optical, Inc., supra, 348 U.S. at 489, 75 S.Ct. 461.

In sum, although one cannot read the thorough first report of the Shafer Commission without agreeing that there is an “extensive degree of misinformation about marihuana as a drug” and a need, in the words of the report, to “demythologize” and to “desymbolize” it, the question before us is a narrow one. It is whether it can fairly be said that Congress acted irrationally in prohibiting the commercial distribution of marihuana. We believe that the answer to that question is no. Therefore, appellants’ constitutional attack upon that portion of the statute must fail. Accord, United States v. Rodriquez-Camacho, 468 F.2d 1220 (9th Cir. 1972).

III

Appellants’ second argument is that the statutory assignment of marihuana to Schedule I, together with such concededly dangerous narcotic drugs as heroin, is arbitrary and unreasonable in light of the criteria for classification established by the statute and what is known about the effects of these substances.

As already noted, the Act established a series of five schedules and listed a number of criteria based upon which the various controlled substances were each assigned by Congress to one of the schedules. See 21 U.S.C. § 812.- The criteria concern potential for abuse, currently accepted medical uses, and possible physical or psychological dependency effects. The severity of the statutory sanctions for drug distribution and related offenses is regulated by the schedule in which the drug in question is found, with the most severe penalties attaching to Schedule I and II drugs and the least severe to those in Schedule V. 21 U.S.C. § 841(b).

Appellants attack their sentences as the product of an irrational system of drug classification. They assert that the statutory penalties are not justified because scientific evidence shows that marihuana is not nearly as dangerous as heroin, and they suggest that marihuana should be classified, if anywhere, in Schedule V.

Congress listed marihuana in Schedule I principally on the recommendation of HEW, which urged “that marijuana be retained within Schedule I at least until the completion of certain studies now underway to” determine the physical and psychological dependency effects of the drug. See H.R. Report, supra note 3, at 4579, 4629-30. Apparently the potential for abuse and the absence of significant medical value were the determining grounds for placement of marihuana in the first schedule. See 116 Cong.Rec. 797 (daily ed. Jan. 28, 1970) (remarks of Sen. Hruska). Although we are in no position at this time and on this record to determine whether marihuana would be listed most appropriately where it is or in some other category, we can conclude that the current statutory arrangement is not so unreasonable or arbitrary as to endanger the validity of the sentences imposed on appellants.

The reasonableness of the provisions in question is grounded on two considerations. As indicated in Part II of this opinion, there is a body of scientific opinion that marihuana is subject to serious abuse in some cases, and relatively little is known about its long-term effects. Congress was advised by HEW that determination of the seriousness of these potential hazards would require further study, and in the meantime Congress was certainly not precluded from taking a cautious approach. It is apparently true that there is little or no basis for concluding that marihuana is as dangerous a substance as some of the other drugs included in Schedule I. But the focus of appellants’ attack is on the penalty provisions accompanying the schedule, and in this respect Congress has made a significant distinction. The penalties for possession of a Schedule I substance with intent to distribute differ substantially depending upon whether the substance in question is classified as a narcotic drug. Marihuana is not so classified. See 21 U.S.C. §§ 802(16), 812(c), Schedule 1(c) (10). Consequently, the maximum penalty for possession of it with the requisite intent is five years in prison and a $15,000 fine, compared with a possible 15-year sentence and $25,000 fine for similar possession of such Schedule I and II drugs as heroin and cocaine. See 21 U.S.C. §§ 841(b)(1) (A), (B).

In view of these disparities in the statutory sanctions and the ongoing dispute regarding the potential effects of marihuana, we cannot say that its placement in Schedule I is so arbitrary or unreasonable as to render it unconstitutional. Moreover, a final observation is appropriate. The provisions of the Act allowing periodic review of the control and classification of allegedly dangerous substances create a sensible mechanism for dealing with a field in which factual claims are conflicting and the state of scientific knowledge is still growing. The question whether a substance belongs in one schedule rather than another clearly calls for fine distinctions, but the statutory procedure at least offers the means for producing a thorough factual record upon which to base an informed judgment. True, the position taken thus far by the Attorney General’s designate (the propriety of which is now being litigated), see Part I supra, has halted this procedure at the outset for marihuana. But the very existence of the statutory scheme indicates that, in dealing with this aspect of the “drug” problem, Congress intended flexibility and receptivity to the latest scientific information to be the hallmarks of its approach. This, while not necessary to the decision here, is the very antithesis of the irrationality appellants attribute to Congress.

Judgments of conviction affirmed.

      . Harmash was sentenced to three and a half years in prison, Kiffer to three years, and Kehoe to two and a half years. In addition, each received a special parole term of three years and was fined $2,500.

      . For further discussion of the schedules, see Part III infra.

      . Section 811(c) lists eight factors that should be considered in deciding whether to control, decontrol, or transfer a substance. Like the criteria in § 812 governing the classification of the controlled substance, see note 14 infra and accompanying text, these principally concern possible dangers and current knowledge of the effects of the substance. See H.R. Report No. 91-1444, 91st Cong., 2d Sess., U.S.Code Cong. & Admin.News, pp. 4602-03 (1970).

      . Section 811(d) provides:
      If control is required by United States obligations under international treaties, conventions, or protocols in effect on the effective date of this part, the Attorney General shall issue an order controlling such drug under the schedule he deems most appropriate to carry out such obligations, without regard to the findings required by subsection (a) of this section or section 812(b) of this title and without regard to the procedures prescribed by subsections (a) and (b) of this section.
      See H.R. Report, supra note 3, at 4603; 21 U.S.C. § 812(b).

      . The hearing and Dr. Grinspoon’s testimony were also directed to appellants’ alternative argument that the statutory classification of marihuana under 21 U.S. C. § 812 as a Schedule I drug is unreasonable. See Part III infra.

      . Three were identified as physicians associated with medical schools, one as a sociologist, and one as a professor of law. The last is Professor John Kaplan of Stanford Law School, author of Marijuana — The New Prohibition, which is cited in the text of this opinion.

      . The results of the most recent studies concerning the effect of marihuana on driving ability are briefly summarized in Drug Use in America: Problem in Perspective, Second .Report of the National Commission on Marihuana and Drug Abuse 184-85 (1973). These studies appear to support Dr. Tennant’s concern about this matter.

      . Marihuana: A Signal of Misunderstanding, supra, at 113.

      . The absence of hard evidence of long-term ill effects is not necessarily a result of there not being any, but may simply reflect the practical obstacles to controlled scientific observation and measurement. See J. Kaplan, supra, at 156; Bonnie & Whitebread, The Forbidden Fruit and the Tree of Knowledge: An Inquiry into the Legal History of American Marijuana Prohibition, 56 Va.L.Rev. 971, 1102-04 (1970).

      . One observer has pointed out, in regard to the question of whether marihuana is safe enough to justify legalization:
      How much scientific evidence should be required before a drug is considered harmless is an open question. Popular standards seem to vary with the drug being considered. Some people, who on the basis of scant evidence have satisfied themselves that marijuana is relatively harmless, demand that insecticides and other mundane chemicals be subjected to strict and prolonged examination before they can be legally marketed.
      Schneyer, Book Review, 24 Stan.L.Rev. 200 n. 4 (1971).

      . The constitutionality of laws prohibiting the possession of marihuana for personal use has been the subject of a number of recent judicial opinions. See, e. g., United States v. Drotar, 416 F.2d 914 (5th Cir. 1969), vacated on other grounds, 402 U.S. 939, 91 S.Ct. 1628, 29 L.Ed.2d 107 (1971); Commonwealth v. Leis, 355 Mass. 189, 243 N.E.2d 898 (1969) (both upholding such laws); People v. Sinclair, supra (law held invalid, though no consensus as to grounds; opinions suggest, inter alia, cruel and unusual punishment, irrational classification and invasion of personal liberty); State v. Kantner, 53 Haw. 327, 493 P.2d 306, cert. denied, 409 U.S. 948, 93 S.Ct. 287, 34 L.Ed.2d 218 (1972) (law upheld, but dictum in concurring opinion that “right to the ‘enjoyment of life, liberty and the pursuit of happiness’ includes smoking of marijuana,” id. at 312; dissenting opinions assert criminalization violates due process and right of privacy). We intimate no view as to whether an argument of uneonstitutionality advanced by a defendant charged with private possession would require stricter scrutiny than here applied or yield a different result. For a thoughtful discussion of this issue, see Bonnie & Whitebread, supra note 9, at 1125-55. See also Drug Use in America: Problem in Perspective, supra note 7, at 247-49.

      . For approval of the distinction proposed by the Shafer Commission between continued prohibition of commercial distribution and legalization of possession for personal use, see Buckley, The Spirit of the Law, XXIV National Review 1348 (1972). It is noteworthy that the Act itself distinguishes between commercial possession or distribution of marihuana on the one hand and possession for personal use or gratuitous transfers of small amounts on the other. Persons who are convicted of possession without intent to distribute or of distribution of a small amount without remuneration are subject to a prison term of up to one year and a maximum fine of $5,000. 21 U.S.C. §§ 841(b)(4), 844(a). In contrast, commercial possession and distribution are punishable by imprisonment for as much as five years and a maximum fine of $15,000. 21 U.S.C. § 841(b)(1)(B).

      . Marihuana: A Signal of Misunderstanding, supra, at 210.

      . Thus, for example, the criteria for Schedule I are:
      (A) The drug or other substance has a high potential for abuse.

        (B) - The drug or other substance has no currently accepted medical use in treatment in the United States.
      (C) There is a lack of accepted safety for use of the drug or other substance under medical supervision.
      21 U.S.C. § 812(b)(1).

      . Thus, appellants argue that marihuana is less harmful than barbiturates, which are listed in Schedule IV. See, e. g., People v. McCabe, 49 Ill.2d 338, 344, 275 N.E.2d 407, 411 (1971) (per curiam). This reasoning may be persuasive, but it is not undisputed. See “Marijuana and Society,” statement by the Council on Mental Health and the Committee on Alcoholism and Drug Dependence of the American Medical Association, quoted in J. Kaplan, supra, at 187 (cannabis found to be more potent than the barbiturates).

      . Appellants do not suggest that their sentences violate the constitutional guarantee against cruel and unusual punishment. See, e. g., United States v. Lozaw, 427 F.2d 911, 917 (2d Cir. 1970). But cf. People v. Sinclair, supra, 387 Mich. at 131, 148, 194 N.W.2d at 895, 904-906 (opinions of Kavanagh, C. J., & Brennan, J.).


source: Caselaw Access Project

author: O’SULLIVAN, Senior Circuit Judge.

license: Public Domain

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Claude KILPATRICK, Defendant-Appellant.
    No. 72-1521.
    United States Court of Appeals, Sixth Circuit.
    Argued Dec. 4, 1972.
    Decided April 17, 1973.

      Hughie Ragan (Court Appointed), Jackson, Tenn., for defendant-appellant.
    Glen Reid, Jr., Asst. U. S. Atty., Memphis, Tenn., Thomas F. Turley, Jr., U. S. Atty., Glen Reid, Jr., Asst. U. S. Atty., Memphis, Tenn., on brief, for plaintiff-appellee.
    Before PECK, Circuit Judge, and CECIL and O’SULLIVAN, Senior Circuit Judges.
   O’SULLIVAN, Senior Circuit Judge.

Claude Kilpatrick appeals from his conviction upon jury trial of unlawful possession of untaxed distilled spirits— “moonshine” — in violation of 26 U.S.C. § 5604(a)(1). He was sentenced to the custody of the Attorney General for a period of nineteen months, one month to be served in an institution with the remainder of the sentence suspended.

Appellant raises the following issues:

1. Insufficiency of the evidence.
2. Failure of District Judge to submit to jury defense of entrapment.
3. Impropriety of V. S. Attorney calling a witness, knowing such witness would assert his Fifth Amendment rights.
4. Improper argument of United States Attorney.

1. Insufficiency of the evidence.

Appellant’s arrest and conviction was the product of an extensive undercover operation by special and regular employees of the Alcohol, Tobacco and Firearms Division of the Internal Revenue Service. Included in such activities was the actual setting up of a moonshine still in the County of Wayne, Tennessee. The agents and one James Earl Stricklin a known “moonshiner” who was unaware that his coadventurers were government agents, began the manufacture of the illegal whiskey in a barn on the premises owned by one of the government’s special employees. A flourishing business was apparently carried on, with Stricklin and one of the special employees sharing in the profits. One of such special employees was also paid a daily wage and received a substantial bonus for his allegedly good performance. The offense of which appellant was charged and convicted was the purchase of five gallons of such illegally manufactured moonshine.

On the day of the charged offense, Stricklin directed his associates to load some twenty-five gallons of their product and to join him in selling the same. They drove to the home of appellant. Stricklin and the appellant conducted the negotiations which led to appellant’s purchase of five gallons of the whiskey. The record contains no reason why Stricklin considered Kilpatrick a likely purchaser — nothing to show Kilpatrick was a known handler of moonshine. Stricklin asked if appellant had any liquor for the winter. Appellant replied “he had been selling a little bonded.” The worth of this remark as corroboration of Kilpatrick’s criminal purpose does not appear except as the witness— one of the special government employees —thereafter attributed significance to it by saying that the “little bonded” is regular government tax-paid “whiskey just usually sold in dry counties, and not out of the liquor store.” Upon objection, the District Judge admonished the jury that they were to consider only the offense charged. Upon argument to the jury, the United States Attorney commented upon the foregoing evidence as follows:

“* * * and Mr. Stricklin asked Mr. Kilpatrick: ‘Do you have any whiskey for the winter?’ And he answered: ‘No, I’m just selling a little bonded whiskey.’ Bonded whiskey, of course, is labeled (legal) whiskey, taxed whiskey, and Mr. Kilpatrick made this statement, and this, ladies and gentlemen, that is, the statement is, an admission on his part, it is an admission of interest. It is, in my opinion, a confession that he knew that this whiskey was moonshine whiskey; that Mr. Stricklin was there in the business of — .” (Emphasis supplied.)

Stricklin’s above inquiry was followed by a conversation between him and Kilpatrick in which Kilpatrick was asked if he wanted some liquor.

“[A]nd he [Stricklin] was wanting ten dollars a gallon for it, and they argued back and forth * *

Kilpatrick held out for a price of nine dollars a gallon. Stricklin capitulated and accepted the nine dollars. The whiskey — five gallons in one gallon glass jugs — was unloaded and, at Kilpatrick’s direction, was put down “at the end of the house, across the road, in a junk pile, in a refrigerator.” The agent present at the transaction was asked how he knew that the contents of the jugs was whiskey. He responded, “We made it, sir.” Such is, indeed, direct evidence.

Without assigning how it would be relevant here, appellant asserts that most all of the victims caught in the government net, including Stricklin, were acquitted upon trial. It is said that,

“Out of five different cases and the trial of at least 13 persons who went to trial, this defendant in this one case was the only one convicted.”

This gratuitous assertion, made for the first time on appeal, has no support in the record. The government does not challenge such a statement and is not required to do so. It would be irrelevant, even if true.

In the brief here, appellant is referred to as an “aged, sick man.” Other than a reference to him as an elderly gentleman, there is no evidentiary support for counsel’s above description of him. An “aged, sick man” might excite a jury’s sympathy, but would not excuse criminal conduct.

If all of the foregoing is true, it might be said of the government’s quite elaborate operation that “the mountain labored and brought forth a mouse.” (Poetic license!)

We test the government’s evidence by the familiar rule that it and the legitimate inferences to be drawn therefrom are to be considered in the light most favorable to the government, Glasser v. United States, 315 U.S. 60, 62 S.Ct. 457, 86 L.Ed. 680 (1942). We find it sufficient to have warranted submission of defendant’s guilt to the jury.

2. Entrapment.

Defendant did not take the stand to tell whether he did or did not do the acts charged to him. Ordinarily an admission that an accused did the acts which he claims were induced by entrapment is a necessary ingredient of such a defense. United States v. Lamonge, 458 F.2d 197, 201 (6th Cir. 1972); Ortega v. United States, 348 F.2d 874 (9th Cir. 1965). We need not place total reliance on such rule as there is no evidence of any undue persuasion of defendant to buy and possess the moonshine delivered to him.

The District Judge correctly refused to submit entrapment to the jury.

3. Prosecution calling Stricklin as a witness.

Appellant charges prejudice in the prosecution calling Stricklin to the stand, knowing he would exercise his Fifth Amendment rights. In the contest, we find no reversible error resulted. Inasmuch as Stricklin had been identified as the one who conducted the illegal transaction with appellant, the prosecution’s case would be seriously prejudiced by a failure to offer him as a witness. Following Stricklin’s refusal to answer, the District Judge carefully admonished the jury, “You will not take the witness’ invocation of his Fifth Amendment right in any fashion with respect to the guilt or innocence of this defendant.”

In United States v. Compton, 365 F.2d 1 (6th Cir. 1966), we said:

“Government counsel need not refrain from calling a witness whose attorney appears in court and advises court and counsel that the witness will claim his privilege and will not testify. However, to call such a witness, counsel must have an honest belief that the witness has information which is pertinent to the issues in the case and which is admissible under applicable rules of evidence, if no privilege were claimed.” 365 F.2d at 5.

Certainly Stricklin had information “pertinent to the issues.” We do not find bad faith on the part of the United States Attorney.

b. Improper argument to the jury.

Defendant did not take the stand. In arguing to the jury, the United States Attorney said, inter alia:

“* x x j think it is fairly evident, is very evident, that Mr. Kilpatrick did have possession of this whiskey, under the law he did have, and under the facts of this case he is guilty beyond a reasonable doubt of possessing this whiskey, and I ask you ladies and gentlemen to give very much thought and consideration to your duty as jurors — You have got a tough job, x x x jjy j0b is not so tough, x x x All Mr. Ragan [defense counsel] has to do is to come up here and put forth all proof and evidence and witnesses that he can to try to prove his man innocent — .” (Emphasis supplied.)

Upon objection by defense counsel, the United States Attorney conceded that his argument was error and the District Judge gave an instruction that,

“ * * * the burden is upon the government to prove the case and the defendants are not required, unless they see fit, to put on any proof or evidence, and no inference in the law is to be drawn of any statement of counsel. Counsel of the defendant is not required to put on any proof.”

The United States Attorney concluded his argument with the following:

“That is your duty. By the same token, when there is enough evidence you have to convict him and I do believe that, considering all of the reasonable inferences in this case, you will have no trouble in doing just that.”

No objection was interposed by defense counsel to this conclusion, but we recite it as part of the total context of the trial. We believe that it could be read as expressing the U. S. Attorney’s personal belief that defendant was guilty. We find no case which forbids such conduct in cases tried in the Federal Courts, but such has been condemned by state courts. In People v. Bigge, 297 Mich. 58, 297 N.W. 70 (1941) Justice Boyles, speaking for the Supreme Court of Michigan, said:

“It is not proper for the prosecuting officer to tell the jury that he believes the defendant guilty. However, it is not error for a prosecutor to argue from the testimony that the defendant is guilty and to state what evidence convinces him and should convince them of such guilt.” 297 Mich. at 68, 297 N.W. at 74.

The American Bar Association 1970 report by its Advisory Committee on the Prosecution and Defense Functions, says under Argument to a Jury:

“(b) It is unprofessional conduct for the prosecutor to express his personal belief or opinion as to * * * the guilt of the defendant.”

There was no evidence that Kilpatrick had been a handler of moonshine; there was no direct evidence that he knew that the whiskey offered for sale by Stricklin was unstamped, illegal moonshine. We have said that a jury could infer knowing and willful violation of the law by him. It is not at all inconceivable, however, that but for the prosecutor’s embellishment of the record and his improper argument, a jury might indeed have given Kilpatrick the benefit of a reasonable doubt as to whether he had knowingly entered into the charged illegal conduct.

The writer is not an advocate for any further advances by the federal courts in extending tender care to those accused of crime, and would not joiti in establishing a rule making such expression by a prosecutor impermissible conduct. We consider it only as background to be considered with the U. S. Attorney’s admittedly wrong assertion that it was the burden of Kilpatrick to prove his innocence.

We have earlier set out the assertion by a prosecution witness that Kilpatrick’s reference to selling “a little bonded” meant an activity whereby such “bonded” whiskey was “usually sold in dry counties, and not out of the liquor store.” Except for this inference there was no evidence that Kilpatrick had been a law violator.

We do not announce a categorical holding that the prosecutor’s statement that it was the responsibility of defendant’s counsel to “come up here and put forth all proof * * * . that he can to try to prove his man innocent” was the equivalent of commenting upon Kilpatrick’s failure to take the witness stand. It comes sufficiently close, however, to persuade us that it, with the other occurrence at the trial commented upon above, denied Kilpatrick a fair trial.

The District Judge did a creditable job in seeking to erase the prejudice that was visited upon Kilpatrick by the occurrences reviewed above. We have spoken on the sometime insufficiency of cautionary instructions. United States v. Rudolph, 403 F.2d 805, 806 (6th Cir. 1968). And see, of course, the relevant discussion in Bruton v. United States, 391 U.S. 123 at page 129, 88 S.Ct. 1620, 20 L.Ed.2d 476 (1968). Notwithstanding the able efforts of the District Judge, we believe that, in total, the foregoing trial events denied Kilpatrick a fair trial.

Reversed and remanded for a new trial.


author: DYER, Circuit Judge:

text:
    William F. COLE, Plaintiff-Appellant, v. CHEVRON CHEMICAL COMPANY-ORONITE DIVISION, Defendant-Appellee, MECHANICAL CONTRACTING ENGINEERS, INC., and Liberty Mutual Insurance Company, Third Party Defendants-Appellees-Appellants.
    No. 72-1025.
    United States Court of Appeals, Fifth Circuit.
    April 23, 1973.
    Rehearing and Rehearing En Banc
    Denied June 19, 1973.

      George J. Kambur, Clark A. Richard, New Orleans, La., for plaintiff-appellant.
    Lloyd C. Melaneon, New Orleans, La., for Chevron Chemical Co.
    John V. Baus, New Orleans, La., for Mechanical Contracting Engineers, Inc., and Liberty Mutual Ins. Co.
    Before GEWIN, GOLDBERG and DYER, Circuit Judges.
   DYER, Circuit Judge:

Two questions are presented on appeal in this Louisiana-based diversity case: (1) whether the work that Mechanical Contracting Engineers, Inc., performed for Chevron at its plant in Belle Chase, Louisiana, was, as a matter of law, part of Chevron’s “trade, business, or occupation” for the purposes of establishing coverage under § 6 of the Louisiana Workmen’s Compensation Statute, La. Rev.Stat.Ann. § 23:1061; and (2) whether in Louisiana, an indemnity agreement that does not expressly specify the indemnitor’s intent to indemnify for the indemnitee’s own negligence is enforceable where the damage is caused by the concurrent negligence of the indemnitee and indemnitor, rather than by the sole negligence of the indemnitee. We affirm in part and reverse in part.

Mechanical was hired by Chevron to do general welding and pipe fitting work at its Belle Chase plant. The job primarily consisted of cutting and removing old pipes, valves,-gratings, and other refinery paraphernalia to make way for construction of additional facilities and installation of new equipment. In February 1968 Cole, a welder employed by Mechanical for the Chevron job, was injured during the course of his employment at the Belle Chase plant. He sued Chevron under the general negligence law of Louisiana for damages he sustained as a result of his slipping and falling in a puddle of oil while he was helping a fellow employee carry a heavy piece of steel grating. The puddle was comprised of both “old” and “new” oil; the new oil was spilled when Mechanical’s welders cut pipes containing the oil, but the old oil had been left from Chevron’s earlier operations.

Cole contended that Chevron was negligent in that it breached the duty it owed him as a Mechanical employee to remove old oil from the floor before Mechanical began working in the area and that Chevron’s firewatcher breached his duty to clean up the spilled new oil. Chevron countered that it was Cole’s “statutory employer” within the meaning of La.Rev.Stat.Ann. § 23:1061 and that therefore Cole’s exclusive remedy for his injury was workmen’s compensation since under Louisiana law a workman cannot maintain a tort action against his statutory employer. La. Rev.Stat.Ann. § 23:1032. In response to Cole’s claim, Chevron also asserted a third-party complaint against Mechanical and its insurer, Liberty Mutual Insurance Company, on the basis of a written indemnity agreement between Chevron and Mechanical for the work being performed by Mechanical when Cole was injured.

Prior to trial Chevron filed a motion for summary judgment supported by affidavits; the motion was granted and the suit dismissed. On appeal, this Court reversed that judgment and remanded the cause for trial on the merits because material factual issues remained to be tried. Cole v. Chevron Chemical Co., 5 Cir. 1970, 427 F.2d 390. In so holding the Court pointed out that:

In cases such as Arnold v. Shell Oil Company, 5 Cir., 1969, 419 F.2d 43, and Allen v. United States Fire Insurance Company, 222 So.2d 887 (La.Ct.App.1969), the factual picture of the principal employer’s business operations, and of the part the activity in issue played in those operations, was well defined. Here, on the other hand, the picture of Chevchem’s operations at its Oronite Division Plant is not clear. That Chevchem is engaged in the production of petro-chemicals derived from hydrocarbons is not conclusive of the issue whether all types of welding work performed at its Oronite Division Plant — demolition and construction work, as well as “repair” and “maintenance” work — are part of the “regular operations” at the Plant. Further factual development is necessary. . . .

427 F.2d at 394.

On remand, Cole’s suit against Chevron was tried in two parts. The first day of testimony related only to the issue of whether Chevron was the statutory employer of Cole. This issue was submitted to the jury; it determined that the work for which Chevron contracted with Mechanical was not part of Chevron’s “trade, business, or occupation.” After the second phase of the trial was completed on the following day, a special verdict was rendered. The jury found that Cole was injured, that his injury was caused by the negligence of Chevron, that Cole was not contributorily negligent, and that he was entitled to damages of $67,500.

Subsequently, Chevron filed a motion for a judgment notwithstanding the verdict and alternatively for a new trial. The district court granted the motion for a judgment N.O.V. and conditionally granted a new trial, contingent on the judgment N.O.V. not being affirmed on appeal. In the meantime, Chevron’s indemnity action against Mechanical was tried without a jury, and the district court, 334 F.Supp. 263, held that Chevron was entitled to indemnification because Mechanical had been concurrently negligent in that it had a contractual obligation to keep “a competent man in the immediate vicinity .. . . to supervise the work” and its personnel failed to call the spillage of new oil to the attention of Chevron’s firewatcher. Reasoning that Cole’s injuries were therefore caused “directly or indirectly” (the words of the indemnity agreement) by Mechanical, the court concluded that Mechanical was bound to indemnify Chevron for any damages that it might owe Cole as well as for its costs of defense, which were stipulated to be $6,915. This appeal by Cole on the statutory employer question and by Mechanical on the indemnity issue ensued.

Was the Work Performed by Mechanical and Cole Part of Chevron’s “Trade, Business, or Occupation”?

Section 6 of the Louisiana Workmen's Compensation Statute, La. Rev.Stat.Ann. § 23:1061, provides that any person (referred to as a principal) who contracts out work which is a part of his “trade, business, or occupation” is liable for workmen’s compensation to any of the contractor’s employees who are injured while engaged in such work to the same extent as if the contractor’s injured employee were one of the principal’s own employees. In other words, under certain circumstances, the principal is considered to be the statutory employer of the independent contractor’s employees for the purpose of establishing coverage under the Workmen’s Compensation Statute. The purpose of this provision is to prevent the principal from evading his workmen’s compensation responsibility by interposing an independent contractor between himself and employees who are actually utilized in performing a part of the principal’s “trade, business, or occupation.” Cole v. Chevron Chemical Co., 5 Cir. 1970, 427 F.2d 390, 392; Arnold v. Shell Oil Co., 5 Cir. 1969, 419 F.2d 43, 46. Section 23:1061 benefits the employees of the contractor when the contractor is financially impoverished, because the principal may be held liable for their workmen’s compensation. “On the other hand, when the contractor is able to fulfill his compensation responsibilities, the provision operates to limit his employees to the maximum benefits payable under the Workmen’s Compensation Statute, since the principal, as their ‘statutory employer,’ is, like the contractor, immunized from tort liability to the employees by the exclusive-remedy provision of that act. La.Rev.Stat.Ann. § 23:1032.” Cole v. Chevron Chemical Co., supra at 392-393.

The standard for determining whether a given activity performed by an independent contractor is part of a principal’s “trade, business, or occupation” is, to a degree, dependent upon the factual context of the ease. The Louisiana courts in the early cases of Seabury v. Arkansas Natural Gas Corp., 1930, 14 La.App. 153, 127 So. 25, and Dandridge v. Fidelity & Casualty Co., La.App.1939, 192 So. 887, applied a two-pronged test based on business necessity and employment of similar workers. However, keeping in mind the policy that workmen’s compensation law should be liberally construed regardless of whether the employer or employee is the party asserting coverage, the Louisiana courts in Turner v. Oliphant Oil Corp., La.App.1940, 200 So. 513; Thibodaux v. Sun Oil Co., La.App.1949, 40 So.2d 761; Doucet v. W.H.C., Inc., La.App.1968, 212 So.2d 267; and Allan v. United States Fire Insurance Co., La.App.1969, 222 So.2d 887, retreated somewhat from this two-pronged test. In these cases, the courts held that the fact that the principal did not have any employees engaged in a similar activity was not controlling where the work contracted out was so necessary to the principal’s operations that, if it were not performed by the independent contractor, the principal would have to hire workers of its own to perform the task.

In Arnold v. Shell Oil Co., supra, the Fifth Circuit was confronted by an analogous factual situation. An employee of an independent contractor was injured while repairing a Shell heater-treat-er, which is a device used to separate sand and salt water from freshly mined oil. Shell had no workers employed on this job and, in fact, had always contracted out its heater-treater maintenance work. It was undisputed, however, that the proper functioning of the heater-treater is necessary to the efficient operation of an integrated oil company, because the salt water and sand would corrode the pipeline if not removed before pumping the oil to the refinery. Based on these facts, the Court held that Shell was the injured employee’s statutory employer as a matter of law, concluding that to determine if an activity is part of a principal’s “trade, business, or occupation” for purposes of Louisiana’s Workmen’s Compensation Statute, the proper test is “whether the particular activity is essential to the business.” In so holding, the Court relied heavily on the rationale of the latter line of Louisiana cases that under such circumstances, the “fact that the employer or the industry as a whole always contracts out the activity is not controlling.” 419 F.2d at 50.

Likewise, the panel of this Court that ^originally considered the case sub judice when it was on appeal from the entry of summary judgment pointed out that similarly not controlling is the fact that the principal hires employees of his own to do work related to the activity being performed by the contractor’s employees. “Instead, the decisive factors are the nature of the activity being contracted out, the nature of the principal employer’s business, and the relationship between the particular activity and the broader business operation.” Cole v. Chevron Chemical Co., supra at 394. Although the employment of similar workers is not controlling, where a principal in fact acts as his own general contractor or has a number of his own employees regularly performing a task substantially similar to the activity which he contracts out, the principal thereby affords a definite indication that the work engaged in by the contractor’s employees is part of his own trade or business. See La.Rev.Stat.Ann. § 23:1061, comment at 489-490; cf. Lutz v. Long-Bell Lumber Sales Corp., La.App.1934, 154 So. 645. See also Horrell v. Gulf & Valley Cotton Oil Co., 1930, 15 La. App. 603, 131 So. 709. Indeed, in the recent case of Doss v. American Ventures, Inc., 1972, 261 La. 920, 261 So.2d 615, the Louisiana Supreme Court held that American, the owner-lessor of a building that was nearly destroyed by a hurricane, was liable for workmen’s compensation to the injured employee of a contractor hired to rebuild the structure, on the ground that American was engaged in the construction business when the employee was injured since, at the time of the injury, American was acting as its own general contractor for the project. See also Gray v. Louisiana Power and Light Co., La.App.1971, 247 So.2d 137, where the court held that, because LP&L acted as its own general contractor in erecting towers for power transmission lines, it was the statutory employer of an injured worker employed by a sub-contractor hired to construct the foundation on which to erect the towers.

In the present case, the general welding and pipe fitting work that Chevron hired Mechanical to do and that Cole was performing when injured was part of a complex plan of expansion and renovation which Chevron established soon after the Belle Chase plant was opened in 1943 and which proceeded rather continuously over the following 26 years, dependent only on economic activity. Over 100 tanks, innumerable pipes, and various types of other equipment for producing petro-chemicals were added, and the value of the plant was increased some 25 times.

Significantly, the expansion of the Belle Chase facilities was always directly supervised by Chevron itself. The company employed a full-time maintenance crew of 35 men, each of whom was trained as welders and pipefitters and cross-trained as carpenters and electricians. Depending upon the size of a particular project and the workload of the maintenance crew at the time, Chevron would either have its own staff do the construction and renovation work, or it would contract out part or all of the work. However, even when the work was contracted out, Chevron acted as its own general contractor. Chevron’s engineers prepared the blueprints, planned the schedule for each project, coordinated the work schedules among the various projects, and' as the work progressed on each project intermittently made quality control tests.

Below, the district court granted a judgment N.O.V. in favor of Chevron on the basis that there was no substantial evidence to support the jury’s verdict. The proper standard for granting a directed verdict or judgment N.O.V., and for reviewing the granting or denial of such motions on appeal, has been exhaustively explained in Boeing Co. v. Shipman, 5 Cir.1969, 411 F.2d 365, 374-376. Basically, granting the motions is proper when, viewing all of the evidence and all of the reasonable inferences that can be drawn therefrom most favorably toward the party opposed to the motion but without weighing the evidence or inferences and without determining the credibility of the witnesses, the facts and legitimate inferences point so overwhelmingly in favor of the moving party that reasonable men could not arrive at a contrary decision.

Applying these principles to the instant case, we determine that the granting of Chevron’s motion for a judgment N.O.V. by the district court was proper. The uncontroverted evidence conclusively established that a number of Chevron’s full-time employees were regularly engaged in the same type of work as being performed by Mechanical and Cole, that Chevron had been in the process of modernizing and expanding its Belle Chase facilities on a continuous basis for over a quarter century, that throughout this period Chevron had as a matter of course acted as its own general contractor for the work which its own maintenance crew did not have the time to handle, and that Mechanical was but a sub-contractor on this project. Thus, as in Owen v. Kaiser Aluminum and Chemical Corp., 5 Cir.1969, 417 F.2d 303, it is clear that La.Rev.Stat.Ann. § 23:1061 applies.

Moreover, unlike the sugar refinery in Moak v. Link-Belt Co., La.App.1970, 229 So.2d 395, the evidence here shows that Chevron could not have continued to operate its business indefinitely without completing the expansion and renovation work undertaken by Mechanical. The uncontroverted testimony of the operations manager of the Belle Chase plant, Mr. Estopinnal, which was the only relevant evidence regarding the necessity or essentiality of Mechanical’s work for Chevron, was to the effect that, although Chevron presumably would have been able to continue its operations at the plant for the time being without the work being done, the modernization and expansion of the Belle Chase plant would somehow have been finished — even if Mechanical had refused to perform under the terms of the contract — because the work was essential to the plant’s continued efficient and competitive operation.

In short, we agree with the district court that there was no substantial evidence to support the jury’s finding that the work which Mechanical was hired to do was not part of Chevron’s “trade, business, or occupation.” Even when the record is viewed in the light most favorable to Cole, the evidence that Chevron is Cole’s statutory employer is completely overwhelming; we cannot conceive how reasonable men could reach a different conclusion.

Contractual Indemnity

The only other issue on appeal, involving Chevron’s third-party complaint against Mechanical, is whether under Louisiana law indemnity is owed when the indemnitee is wholly or partially at fault and the indemnity agreement fails to expressly require indemnification for accidents resulting from the indemnitee’s negligence. A careful review of the relevant Louisiana cases convinces us that indemnity is not owed in such a situation.

The pertinent contractual provision between Chevron and Mechanical was:

General Liability: CONTRACTOR shall indemnify and save COMPANY harmless from and against any and all loss, damage, injury, liability, and claims thereof for injuries to or death of persons, and all loss of or damage to property of others, resulting directly or indirectly from CONTRACTOR’S performance of this contract.

Based on a finding of concurrent negligence on the part of both the indemnitor, Mechanical, and the indemnitee, Chevron, the district court held that Chevron was entitled to indemnity under the agreement. Since Mechanical’s negligence partially caused Cole’s accident, the court reasoned that his consequent injuries were embraced by the phrase “resulting directly or indirectly from CONTRACTOR’S performance.”

We disagree. Louisiana law is clearly to the effect that the failure of the parties to refer expressly to “negligence” in an indemnity contract is evidence of the parties intention not to provide indemnification for the indemnitee’s negligent acts. Bagwell v. South Louisiana Electric Co-op Assoc., La.App.1969, 228 So.2d 555; Arnold v. Stupp Corp., La.App.1967, 205 So.2d 797; see Plantation Pipeline Co. v. Kaiser Aluminum and Chemical Corp., La.App.1969, 222 So.2d 905; Elephant, Inc. v. Hartford Accident & Indemnity Co., La.App.1968, 216 So.2d 837; Brady v. American Insurance Co., La.App.1967, 198 So.2d 907. The parties’ clear and unequivocal intent to indemnify against damages caused solely by the indemnitee’s own negligence must be expressly articulated by specific reference to “negligence.” Otherwise, the presumption is that the indemnification is applicable only to vicarious responsibility of the indemnitee resulting from negligent acts of the indemnitor. Bagwell v. South Louisiana Electric Co-op Assoc., supra; Arnold v. Stupp Corp., supra; Garsalitz v. Olin Mathieson Chemical Corp., 5 Cir.1970, 429 F.2d 1033; and Grigsby v. Coastal Marine Service of Texas, Inc., 5 Cir.1969, 412 F.2d 1011. Compare Jennings v. Ralston Purina Co., La.App.1967, 201 So.2d 168.

These same precepts and presumptions are equally applicable where the damage is caused by the concurrent negligence of the indemnitee and indemnitor, rather than by the indemnitee’s sole negligence. In the recent case of Strickland v. Nutt, La.App.1972, 264 So.2d 317, which involved a finding of concurrent negligence and an indemnity agreement remarkably similar to the one in the case sub judice, the Louisiana court specifically rejected the district court’s decision below in the present case, Cole v. Chevron Chemical Co., E.D. La.1971, 334 F.Supp. 263, and denied indemnity.

We reject the proposition that indemnity contracts should be interpreted differently depending on whether the indemnitee is solely negligent or there is concurrent negligence on the part of both indemnitee and indemnitor. We are aware of the case of Cole v. Chevron Chemical Company-Oronite Division, 334, F.Supp. 263 (U.S.D.C., E.D.La.1971) wherein the Federal District Judge indicated that the holding of Jennings v. Ralston Purina Co., 201 So.2d 168 (La.App.2d Cir.1967) and Arnold v. Stupp Corp., 205 So.2d 797 (La.App.1st Cir.1967) were applicable only where there was sole negligence on the part of the indemnitee. We agree rather with the language of the U.S. Fifth Circuit Court of Appeals in Transcontinental Gas Pipe Line Corp. v. Mobile Drilling Barge, 424 F.2d 684 (1970) that,
“Although in Batson-Cook [Bat-son-Cook Co. v. Industrial Steel Erectors, 5 Cir. 1958, 257 F.2d 410] the indemnitor was not negligent and the damage was caused solely by the negligence of the indemnitee, the rule requiring specificity of the intent to indemnify for the indemnitee’s own negligence is equally applicable in situations where, as here, the concurring negligence of the indemnitee and indemnitor causes the damage. See United States v. Seckinger, 5 Cir.1969, 408 F.2d 146, reversed on other grounds 397 U.S. 203, 90 S.Ct. 880, 25 L.Ed.2d 224 (October 13, 1969).”
We are of the opinion that the above language sets forth the better rule for interpreting indemnity agreements and that the Courts of this state should adopt that rule. .

264 So.2d at 323.

Accordingly, because the jury found that Cole’s injuries were proximately caused by Chevron’s negligence and since the indemnity agreement does not use the talismanic word “negligence” or otherwise make unequivocally clear the parties’ intent to indemnify for injuries caused, in part or in whole, by the negligence of the indemnitee, we conclude that Chevron is not entitled to recover under the indemnification provision of the contract.

The district court’s judgment N.O.V. in favor of Chevron is affirmed. The judgment of the district court that Mechanical must indemnify Chevron for its costs of defense and for any damages owed to Cole as a result of the injuries he sustained at the Belle Chase plant in 1968 is reversed with directions to enter judgment for Mechanical.

Affirmed in part and reversed in part.

      . La.Rev.Stat. § 23:1061 provides:
      Where any person (in this section referred to as principal) undertakes to execute any work, which is a part of his trade, business, or occupation or which he had contracted to perform, and contracts with any person (in this section referred to as contractor) for the execution by or under the contractor of the whole or any part of the work undertaken by the principal, the principal shall be liable to pay to any employee employed in the execution of the work or to his dependent, any compensation under this Chapter which he would have been liable to pay if the employee had been immediately employed by him; and where compensation is claimed from, or proceedings are taken against, the principal, then, in the application of this Chapter reference to the principal shall be substituted for reference to the employer, except that the amount of compensation shall be calculated with reference to the earnings of the employee under the employer by whom he is immediately employed.
      Where the principal is liable to pay compensation under this Section, he shall be entitled to indemnity from any person who independently of this Section would have been liable to pay compensation to the employee or his dependent, and shall have a cause of action therefor.


author: BARRETT, Circuit Judge. MURRAH, Circuit Judge

text:
    In the Matter of James George STAFOS, Bankrupt-Appellant, v. Laurence M. JARVIS, Trustee in Bankruptcy, Appellee.
    No. 72-1495.
    United States Court of Appeals, Tenth Circuit.
    Argued and Submitted Jan. 12,1973.
    Decided April 30, 1973.
    Rehearing Denied May 31, 1973.

      Thomas E. Joyce, Kansas City, Kan. (Wash H. Brown, Kansas City, Kan., on the brief), for appellant.
    Gerald T. Elliott, Kansas City, Kan. (Robert M. Kaplan, Kansas City, Kan., on the brief, Schnider, Shamberg & May, Kansas City, Kan., of counsel), for appellee.
    Before MURRAH, SETH and BARRETT, Circuit Judges.
   BARRETT, Circuit Judge.

James George Stafos filed a voluntary petition in bankruptcy on December 24, 1970, listing unsecured debts of $612,-132.06 which he had incurred as a self-employed broker-distributor and packager of truck farming produce. He claimed as exempt homestead property, inter alia, a 13.2 acre tract of land in Wyandotte County, Kansas, acquired by him and his wife, Reva, who is not a party to this proceeding, in 1945 as joint tenants, with right of survivorship. Stafos, his wife and children have continually resided on the property since 1945. In his petition, Stafos estimated the value of the property at $35,000.00. With some minor exceptions, the property has been used as the family home and for farm crop income. Reva Stafos has been actively engaged in the farm operations on the acreage and some 60 acres of adjacent leased acreage. Stafos testified that they did about $200,000.00 “worth of business” from the farming operation in 1971.

Stafos relied upon the provisions of Article 15, § 9 of the Kansas Constitution and K.S.A. § 60-2301 in support of his contention that the entire 13.2 acres is exempt. The language contained in the above cited statute is identical to the language contained in Article 15, § 9. Until March 1, 1966, the acreage was located outside the limits of any incorporated city or town. On that date, by ordinance enacted in accordance with the then applicable law, the 13.2 ácres was annexed to the city of Kansas City, Kansas. Neither Stafos nor his wife consented to the annexation, nor is there any evidence that they were movants in respect thereto. No portion of the acreage has been platted.

The Trustee in Bankruptcy filed his report on March 4, 1971, allowing Stafos one acre to be set aside as his exempt homestead, which is to include his family home out of the total 13.2 acres, value unknown. Stafos objected and a hearing was held before the Referee in Bankruptcy on March 18,1971. One Rex Vickers, a real estate expert, testified that on that date the Stafos acreage was part of the “Muncie Industrial Area” zoned “J” for heavy industry and that considerable industry had already located in the immediate vicinity. He further testified that part of the Stafos acreage had been previously used as an office building constructed by Miller Construction Company, now occupied and used as a salvage yard at a monthly rental to Stafos of $140.00. He also testified with respect to a building used by Fouts Trucking Company. In his expert opinion “the whole area there gives the complexion of an industrial site and an industrial area; not a farm.” He would not classify the acreage as rural land, but rather as urban industrial land of a minimum value of $10,000.00 per acre. He did acknowledge that when he viewed the acreage the only major visible use being made thereof was farming. Harry Duckers, County Agricultural Agent, testified that the Stafos’ have continually farmed the land since 1948.

On January 24, 1972, the Referee filed his Order, with detailed findings and conclusions, approving the Trustee’s Report and denying Stafos’ objection. From that Order Stafos filed his petition for review before the presiding United States District Judge, Honorable Earl E. O’Connor. The Court entered its Order on May 19,1972, fully adopting the Referee’s findings and conclusions. It held that annexation reduced Stafos’ homestead to one acre. It is from that Order that this appeal is taken.

Stafos contends here, as he did below, that the federal courts should abstain because the homestead exemption issue decided in In The Matter of Stafos, Bankrupt, 354 F.Supp. 299 (D.Kan.1972), has not been decided by the Kansas state courts and that the Kansas courts are the best judges of the Kansas Constitution. We have no argument with these contentions, per se. 11 U.S. C.A. § 24 allows bankrupts the exemptions prescribed by state laws at the date of filing. In Re Cummings, 413 F.2d 1281 (10th Cir. 1969), cert. denied Sears, Roebuck & Co. v. Horton, 397 U. S. 915, 90 S.Ct. 918, 25 L.Ed.2d 95 (1970). While a state procedure in the nature of a Declaratory Judgment action was available to the Trustee after Stafos filed his homestead claim (K.S.A. § 60-1701 et seq.), this does not detract from the fact that the federal district court had exclusive jurisdiction of the subject matter. In Re Cummings, supra; Texaco, Inc. v. Pruitt, 396 F.2d 237 (10th Cir. 1968). While dictum and therefore not directly controlling, we note that the following language from Sarahas v. Fenlon, 5 Kan. 592 (1870) has not been repudiated by subsequent Kansas decisions :

[H]e [the owner] could hold but one acre as a homestead, exempt from execution, no matter whether it was worth $10 or $10,000, or whether it was used for farming purposes or was covered all over with palatial residences. One acre is all that is exempt as a homestead under the Constitution. If he lived on that part in the city, that acre would be his homestead, and the residue of the city property, as well as his land in the country, would be subject to forced sale under execution. This is the plain letter of the Constitution; . . . 5 Kan. 592 at 596.

The decision of the federal trial court as to the law of the state where he is sitting will be accepted on appeal unless clearly erroneous. Industrial Indemnity Company v. Continental Casualty Company, 375 F.2d 183 (10th Cir. 1967). Certainly Sarahas v. Fenlon, supra, weighs heavily in favor of the trial court’s application of Kansas law. One court has held that in the absence. of ascertainable state court interpretation, the bankruptcy court must construe the statute and determine its application. Doethlaff v. Penn Mut. Life Ins. Co., 117 F.2d 582 (6th Cir. 1941), cert. denied 313 U.S. 579, 61 S.Ct. 1100, 85 L.Ed. 1536 (1941). In addition, the rights of creditors have been held in “limbo” awaiting resolution of this exemption issue for more than two years. This case does not present all of those “special circumstances” dictating the imposition of abstention- as in Kaiser Steel Corp. v. W. S. Ranch Co., 391 U.S. 593, 88 S.Ct. 1753, 20 L.Ed.2d 835 (1968); Baggett v. Bullitt, 377 U.S. 360, 84 S.Ct. 1316, 12 L.Ed.2d 377 (1964), and Meredith v. Winter Haven, 320 U.S. 228, 64 S.Ct. 7, 88 L.Ed. 9 (1943).

Stafos alleges that the trial court erred, as a matter of law, in adopting the findings and conclusions of the Referee. He contends that a farming homestead is exempt from forced sale under any process of law and cannot be alienated without the joint consent of husband and wife even though it was annexed to the City without depriving him of due process of law in violation of the Fourteenth Amendment to the -Constitution of the United States. He alleges that he had a vested interest in the 13.2 acres as a farming land homestead within the meaning of the Kansas Constitution prior to the passage of the City Ordinance incorporating the 13.2 acres because he and his wife owned the property as joint tenants.

• The test of our review is prescribed under Rule 52, Fed.R.Civ.P., as required by 11 U.S.C.A. § 47(b) and Bankruptcy Gen.Order 36, 28 U.S.C.A., which specifically provide that the United States Courts of Appeal shall exercise appellate jurisdiction from the several courts of bankruptcy in their respective jurisdictions in the form and manner of an appeal in civil actions, including Rules of Civil Procedure for the District Courts.

The question for the appellate court under Rule 52(a) is not whether it would have made the findings the trial court did, but whether “on the entire evidence [it] is left with the definite and firm conviction that a mistake has been committed.” Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 123, 89 S.Ct. 1562, 1576, 23 L.Ed.2d 129 (1969).

The same rule applies in cases involving constitutional rights. Williams v. Eaton, 468 F.2d 1079 (10th Cir. 1972). If a trial court adopts a Referee’s findings and conclusions, they are thereby adopted and approved as its own. Earhart v. Callan, 221 F.2d 160 (9th Cir. 1955), cert. denied 350 U.S. 829, 76 S.Ct. 59, 100 L.Ed. 740 (1955). Under Bankruptcy General Order 47, 28 U.S.C.A., the Trial Court is bound to accept the Referee’s findings of fact unless they are clearly erroneous. Moran Bros., Inc. v. Yinger, 323. F.2d 699 (10th Cir. 1963). The “clearly erroneous” rule does not apply on questions of law or on mixed questions of fact and law. See cases cited in 9 Wright & Miller, Federal Practice and Procedure: Civil §§ 2588, 2589; Wright, Law of Federal Courts, 2nd Ed., § 96. However, in our Circuit it is settled law that the views of a Federal Distriet Judge, who is a resident of the state where the controversy arose in a case involving interpretations of the law of that state, carry extraordinary persuasive force on appeal, if the Court of Appeals is not aided in its consideration by either administrative interpretation or judicial expression from state courts. Hardberger and Smylie v. Employers Mutual Liability Insurance Company of Wisconsin, 444 F.2d 1318 (10th Cir. 1971); Hamblin v. Mountain States Telephone and Telegraph Company, 271 F.2d 562 (10th Cir. 1959); Bradshaw v. Superior Oil Co., 164 F.2d 165 (10th Cir. 1947).

The Referee and the Trial Court relied on the weight of case authority in limiting Stafos to a one-acre homestead exemption which must include the “home” or “residence” of the family, by specific reference to the general rule set forth in 40 C.J.S. Homesteads § 58:

While there is authority to the contrary, in most jurisdictions where the question has been raised it has been held that, even without the owner’s consent and against his wishes, the limits of a city, town, or village may be extended so as to include what was formerly a rural homestead and to afford the owner only the amount available as an urban homestead. Where the mere fact that land lies within the boundaries of the city, town, or village, is not regarded as necessarily stamping it with the character of urban property for homestead purposes, as discussed supra § 53, it is necessary, in order that the owner shall lose the right to a rural homestead and be restricted to the right to an urban homestead, that the land, in addition to being embraced within the extended municipal limits, shall be otherwise actually impressed with an urban character. .

We specifically concur with the findings of the Referee and Trial Court that although the Stafos acreage remains unplatted, that neither the Kansas Constitution nor statutes require that the land incorporated be platted or laid out for urban purposes in order to be impressed with urban character. There is substantial evidence supporting the finding that the character of the Stafos acreage is urban and that his homestead should be limited to one acre after annexation. Nothing expressed in the Kansas Constitution, Article 15, § 9, K.S.A. § 60-2301, or the Kansas decisions which we have reviewed in detail convince us that the trial court committed error. United States v. Jones, 229 F.2d 84 (10th Cir. 1955).

Affirmed.

MURRAH, Circuit Judge

(concurring specially):

I readily concur in the ultimate result reached in this case but I am unable to agree with the reasoning by which my brethren reached that result. In my view the lawsuit is more simply stated and decided, and I am, therefore, constrained to briefly state my views.

When the bankrupt acquired his 13.2 acres of land, it was outside the city limits of Kansas City, Kansas. He was living on the land as his homestead and truck farm when it was annexed and brought within the city limits, and was so using it when this proceeding was commenced, although the land had been zoned for urban industrial use. He claimed all of the 13.2 acres as his homestead exemption. The referee and the trial court allowed only one acre under the provisions of the Kansas constitution and statute, which provide that “[a] homestead to the extent of one hundred sixty acres of farming land, or of one acre within the limits of an incorporated town or city, occupied as a residence by the family of the owner, together with all the improvements on the same, shall be exempted from forced sale under any process of law, ' . . . .”

In his brief the bankrupt concedes that the referee correctly stated the question involved, as follows: “Did the extension of the city limits, annexation and incorporation of the entire tract of 13.2 acres into the city of Kansas City, Kansas, subsequent to the ownership and occupancy of the entire tract as a homestead by the bankrupt and his family outside the limits of an incorporated town or city, limit the homestead exemption to one acre?” The bankrupt answers that the extension of the city limits to include his homestead did not operate to “eliminate” or “alienate” his homestead rights in the 13.2 acres. His argument is not entirely clear, but, as we read it, it is twofold: (1) the land continued to be occupied and used for farming purposes, and was, therefore, exempt as farming land, although incorporated within the city limits and zoned for urban industrial use; and (2) any other construction of the Kansas constitution and laws would operate to deny him Fourteenth Amendment due process.

Indisputably the bankrupt is entitled to claim a homestead exemption prescribed by the law of the State of Kansas, but the power of the city to annex the property, even without the consent of the owner, is unquestioned. The question is, as the referee stated, whether inclusion in the city limits can be said to reduce the quantity of the homestead rights from 13.2 acres to one acre. As thus reduced the homestead admittedly remains inviolate.

The homestead provisions of the Kansas constitution and statutes came on for consideration before the Supreme Court of Kansas about one hundred-years ago in Sarahas v. Fenlon. In that case the lands claimed as a homestead exemption were partly within and partly without incorporated city limits. The lands within the city limits were sold on execution, and the question reaching the Supreme Court was whether the husband-wife owners could claim the city property as their homestead exemption. The Supreme Court held that they could not claim any of the city property as their homestead, simply because they did not live on it. But the court did not stop there. It went on to say that “even if the claimant lived on that part of the land within the city, he could hold but one acre as a homestead, exempt from execution, no. matter whether it was worth $10 or $10,000, or whether it was used for farming purposes or was covered all over with a palatial residence. One acre is all that is exempt as a homestead under the constitution. If he lived on that part in the city, that acre would be his homestead, and the residue of the city property as well as his land in the country would be subject to forced sale under execution. This is the plain letter of the constitution; it cannot be enlarged by construction or made plainer by argument.” As far as we can find this unequivocal dictum has never been repudiated or challenged in any court since its pronouncement.

After canvassing the legal effect of the use to which the land was put on the quantity of the exemption, the referee finally concluded that regardless of the value, the use or the zoning classification, the Kansas constitution controlled, and that it meant just what it said, to wit: Since at the time of bankruptcy the 13.2 acres were within the limits of an incorporated city, only one acre was exempt as a homestead. I agree that the mandate of the constitution is too clear for mistake or debate. In this view there is no justification whatsoever for abstention. This is a Meredith case, not a Kaiser Steel case. But even if there was any room for interpretation the word of the Kansas judge, recently of the Supreme Court of that State, is quite good enough for me. See United States v. Hershberger, 475 F.2d 677 (10th Cir., filed Mar. 13, 1973). Beyond stating the point there is no argument in the brief on the due process question and I will leave it there.

      . Article 15, § 9 provides in pertinent part: A homestead to the extent of one hundred and sixty acres of farming land, or of one acre within the limits of an incorporated town or city, occupied as a residence by the family of the owner, together with all the improvements on the same, shall be exempted from forced sale under any process of law, and shall not be alienated without the joint consent of husband and wife, when that relation exists; but no property shall be exempt from sale for taxes, or for the payment of obligations contracted for the purchase of said premises, or for the erection of improvements thereon: Provided, The provisions of this section shall not apply to any process of law obtained by virtue of a lien given by the consent of both husband and wife: . . .