author: WATERMAN, Circuit Judge:

text:
    In the Matter of Alphonse PERSICO, Appellant.
    No. 867, Docket 74-1101.
    United States Court of Appeals, Second Circuit.
    Argued Feb. 5, 1974.
    Decided Feb. 19, 1974.

      Nancy Rosner, New York City, for appellant.
    Robert G. DelGrosso, Denis E. Dillon, Attys., Dept. of Justice; Edward J. Boyd Y, U. S. Atty., E.D.N.Y., for U. S.
    Before WATERMAN and MULLIGAN, Circuit Judges, and BRYAN, District Judge.

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

   WATERMAN, Circuit Judge:

This is an appeal from an adjudication of civil contempt pursuant to 28 U.S.C. § 1826(a) for refusal to answer a question propounded by a grand jury. Appellant refused to answer certain earlier questions on constitutional grounds and was granted “use” and “derivative use” immunity. Then, after answering a few questions, he objected to a particular question and, relying on Gelbard v. United States, 408 U.S. 41, 92 S.Ct. 2357, 33 L.Ed.2d 179 (1972), maintained that the question was derived from electronic surveillance which he claimed was presumptively illegal. The Government eventually acknowledged that the line of questioning the grand jury had been pursuing was a product of the electronic interception of oral communications but strenuously affirmed that the surveillance was conducted under proper court orders and was in complete conformity with the requirements of federal law under 18 U.S.C. §§ 2510-2520. We are thus called upon to decide whether appellant, in defending the contempt action brought against him when he refused, though granted “use” and “derivative use” immunity, to answer before a Grand Jury a question derived from electronic surveillance conducted under court order, has a right in a civil contempt proeeeding to litigate the legality of that surveillance. We hold that he does not.

The facts in this case are not complex. On January 23, 1974, appellant was called as a witness before a federal grand jury “investigating racketeering influence in legitimate business.” Relying on his Fifth Amendment privilege, he initially refused to answer any questions concerning his employment. Thereupon, pursuant to 18 U.S.C. §§ 6002 and 6003 Pérsico was granted “use” and “derivative use” immunity. At this point appellant continued to be recalcitrant and began to object to questioning with reference to his employment on the ground that the questions were the product of illegal electronic surveillance. The Government requested that Judge Orrin Judd issue a contempt citation for refusal to testify. Judge Judd regarded the request as premature and, not perceiving any connection between the question and the surveillance, ordered Pérsico to testify under threat of contempt. Pérsico then answered some questions regarding his lawful employment but refused to respond to a question regarding “any other occupation.” This refusal was again based on appellant’s contention that the question was a “fruit” of illegal electronic surveillance. The Government, conceding that this question was derived from electronic surveillance, argued that the surveillance, which was conducted pursuant to three court orders, was entirely legal. Judge Judd inspected the court orders in camera, found them to be proper, refused to grant appellant’s motion that a suppression hearing be held to test the legality of the surveillance, and renewed his order to testify.

Pérsico returned to the grand jury where he acknowledged that he did indeed have other business interests, more particularly, an illegal gambling business involving “horses, sports and numbers.” His cooperation ceased, however, when he was asked to identify the individuals who worked for him in these surreptitious enterprises. He again grounded his objections, inter alia, on the alleged illegality of the electronic surveillance which was the source of the question, saying: “You know the answer to that question as a result of electronic surveillance of my home.” Upon this refusal to respond, Judge Judd held Pérsico to be in contempt and sentenced him to 60 days in jail, subject, however, to immediate release should appellant decide to answer the question. Pérsico then reinstituted his motion to suppress and claimed the right to examine the court orders and accompanying documents under which the three wiretaps had been authorized. This motion was denied. A concurrent motion for bail pending appeal was likewise unsuccessful. On January 28, 1974, we also denied Persico’s separate application to us for bail pending appeal, but, a notice of appeal on the merits having been filed on January 25, we ordered that the appeal be speedily brought on, and it was argued on February 5.

Chapter 119 of Title 18 of the United States Code, entitled “Wire Interception and Interception of Oral Communications,” 18 U.S.C. §§ 2510-2520, represents an assiduous congressional effort to balance the individual’s right to privacy against the Government’s legitimate interest in gathering information necessary for the prosecution of crimes. Integral to the statutory scheme are elaborate precautions taken to insure that electronic surveillance is not used unnecessarily and that when it must be used its duration is narrowly circumscribed. To maximize compliance with the provisions of Chapter 119 by investigative authorities who desire to employ wiretaps and other electronic devices the chapter contains its own “exclusionary rule,” 18 U.S.C. § 2515, which provides:

Whenever any wire or oral communication has been intercepted, no part of the contents of such communication and no evidence derived therefrom may be received in evidence in any trial, hearing, or other proceeding in or before any court, grand jury, department, officer, agency, regulatory body, legislative committee, or other authority of the United States, a State, or a political subdivision thereof if the disclosure of that information would be in violation of this chapter.

The apparently ample breadth of this proscription has been confirmed by Gel-bard v. United States, supra. In that case the Supreme Court held that in contempt proceedings instituted under 28 U.S.C. § 1826(a) for failure to obey a court order to answer a question before a grand jury, the witness refusing to give the testimony may avail himself of the defense that the question propounded to him violates § 2515 because it was derived from electronic surveillance conducted in violation of Chapter 119. Appellant believes that Gelbard controls our adjudication of the facts before us and that before answering questions he believes are the product of electronic interception he is entitled to have a hearing as to whether the interception was in violation of Chapter 119. Insofar as Gelbard permits a grand jury witness to refuse to answer a question derived from concededly unlawful electronic surveillance and then successfully to defend a contempt proceeding for so refusing, we agree with appellant. Gel-bard does indeed govern that narrow situation. The holding there, however, was expressly predicated on an assumption by the Court “that the communications were not intercepted in accordance with the specified procedures and thus that the witnesses' potential testimony would be ‘disclosure’ in violation of Title III. See 18 U.S.C. §§ 2511(1), 2517(3).” The Court left undecided the issue of “whether [witnesses] may refuse to answer questions if the interceptions of their conversations were pursuant to court order.” Id. at 61 n. 22, 92 S.Ct. at 2368. Here appellant urges that the mere existence of a court order should not preclude the witness from fully litigating in the contempt proceeding the lawfulness of the surveillance. We disagree. Although the Gelbard footnote technically left “undecided” the scope of any inquiry designed to determine the legality of a court-ordered surveillance, a careful examination of that decision is revealing. Mr. Justice White in a concurring opinion supplied the decisive vote for the majority’s reversal of the Ninth Circuit’s holding in Gelbard, 443 F.2d 837 (1971). In that opinion he intimated, 408 U.S. at 70, 92 S.Ct. at 2372, 33 L.Ed.2d 179, that when, during grand jury proceedings, the Government does produce a court order the traditional notion that the functioning of the grand jury system should not be impeded or interrupted could prevail at that time over the witness’s interest in exploring in depth the validity of the surveillance.

Where the Government produces a court order for the interception, however, and the witness nevertheless demands a full-blown suppression hearing to determine the legality of the order, there may be room for striking a different accommodation between the due functioning of the grand jury system and the federal wiretap statute. Suppression hearings in these circumstances would result in protracted interruption of grand jury proceedings. At the same time, prosecutors and other officers who have been granted and relied on a court order for the interception would be subject to no liability under the statute, whether the order is valid or not; and, in any event, the deterrent value of excluding the evidence will be marginal at best.

Congressional concern over disruption of smooth and efficient operation of the grand jury system is found in the legislative history of Chapter 119, also. Senate Report No. 1097, printed in 1968 U.S.Code Cong. & Admin.News p. 2112, appears to controvert Persico’s contention that in defending the contempt proceedings resulting from his refusal to answer a question before the grand jury he is entitled to a suppression hearing. Though the legislative history recognizes that illegally obtained wiretap evidence, or the fruits thereof, must be excluded from any proceedings before a grand jury, the history further discloses that the exclusionary rule “must, of course, be read in light of section 2518 (10) (a) discussed below, which defines the class entitled to make a motion to suppress.” Senate Report No. 1097, supra U.S.Code Cong. & Admin.News 1968, at p. 2185. Most crucial to our task, therefore, is the congressional understanding of the effect of § 2518(10) (a) on the grand jury process:

“Paragraph (10) (a) provides that any aggrieved persons, as defined in section 2510(11), discussed above, in any trial hearing or other proceeding in or before any court department, officer, agency, regulating body or other authority of the United States, a State, or a political subdivision of a State may make a motion to suppress the contents of any intercepted wire or oral communication or evidence derived therefrom. This provision must be read in connection with sections 2515 and 2517, discussed above, which it limits. It provides the remedy for the right created by section 2515. Because no person is a party as such to a grand jury proceeding, the provision does not envision the making of a motion to suppress in the context of such a proceeding itself. Normally, there is no limitation on the character of evidence that may be presented to a grand jury, which is enforcible by an individual. (Blue v. United States, [United States v. Blue] 86 S.Ct. 1416, 384 U.S. 251 [16 L.Ed.2d 510] (1965).) There is no intent to change this general rule. It is the intent of the provision only that when a motion to suppress is granted in another context, its scope may include use in a future grand jury proceeding. .” Senate Report No. 1097, supra U.S.Code Cong. & Admin.News 1968, at p. 2195. (Emphasis supplied).

As noted, though Congress prescribed that illegal wiretap evidence must be excluded from all grand jury proceedings, hearings to suppress evidence were not to be permitted during such proceedings. These seemingly inconsistent policy determinations can be reconciled only by interpreting the statute as requiring exclusion only when it is clear that a suppression hearing is unnecessary, as when the Government concedes that the electronic surveillance was unlawful or when the invalidity of the surveillance is patent, such as, for example, when no prior court order was obtained, or when the unlawfulness of the Government’s surveillance has been established in a prior judicial proceeding. In these situations both statutory policies—the exclusion of illegally acquired evidence and the maintenance of unimpeded grand jury proceedings—are served. But where illegality is claimed and, if established, can be established only by way of a plenary suppression hearing, one important aim of the legislation would be frustrated.

Appellant, however, referring also to the language of the legislative history quoted above, would have us find that the contempt proceeding here is a proceeding in “another context” and therefore the general proscription against hearings upon motions to suppress in grand jury proceedings does not prevent motions to suppress and hearings thereon in contempt proceedings arising out of a witness’s refusal to answer a grand jury’s question. While appellant’s argument is a superficially plausible one, his reasoning in support of the argument is unrealistic. The contempt mechanism employed here to coerce testimony is so intimately connected with the grand jury proceedings in which the testimony is desired as to be really a part of those proceedings. Obviously, any expansion of the breadth of inquiry permissible in a contemporaneous contempt proceeding initiated because of the recalcitrance of a grand jury witness necessarily inhibits the smooth functioning and efficient operation of that grand jury.

Moreover, Congress could not have intended that a contemporaneous civil contempt proceeding such as the one involved here—a proceeding whose only purpose is to invite a recalcitrant witness to cooperate with the grand jury— is a proceeding “in another context” rather than in the context of the grand jury’s proceedings. . That the congressional intent was so limited is demonstrated by the language of the Senate Report that the scope of a suppression order granted “in another context” may extend to a “future grand jury proceeding,” that is, may extend only to a grand jury proceeding which clearly postdates the proceeding “in another context.” Therefore the term “another context” could not have been intended to include a hearing on a contempt citation contemporaneous with the grand jury proceeding.

We hold that in contempt proceedings initiated when a witness who has been granted “derivative use” immunity refuses to answer questions propounded by a grand jury because he claims he is entitled to a hearing to ascertain whether the questions posed are the product of unlawful electronic surveillance the witness is not entitled to a plenary suppression hearing to test the legality of that surveillance. We hold that the refusal would be permissible only if there is an absence of a necessary court order or if there is a concession from the Government that the surveillance was not in conformity with statutory requirements or if there is a prior judicial adjudication that the surveillance was unlawful. Here there were three court orders. Inasmuch as Judge Judd conducted an in camera inspection to ascertain whether they complied with the statute and found that they did comply, Pérsico received all that he was entitled to receive. He therefore has no basis for complaint that his motions for suppression hearings were denied.

Pérsico also asserts that the procedure provided for by Rule 42 of the Federal Rules of Criminal Procedure establishes the procedure which should have been, but was not, followed in this case. This contention is without merit. Rule 42 applies only in those contempt proceedings in which the purpose is punitive, i. e., in criminal contempt proceedings. Here Pérsico has the power to secure his own release from confinement by agreeing to answer the question he refused to answer. Thus, the purpose of holding Pérsico in contempt was to coerce him to answer the grand jury’s question and was not to punish him for reprehensible conduct. Pérsico was only a recalcitrant witness, his contempt was manifestly civil in character, and, as such, the summary procedure and the limitation of permissible confinement set forth in 28 U.S.C. § 1826 was, and is, applicable here.

As his final point, appellant claims that the immunity conferred upon him, as explained to him by the Government, was not co-extensive with his privilege against self-incrimination and therefore he could not be held in contempt for refusing to testify. The Government’s explanation of the “use” and “derivative use” immunity conferred on Pérsico under 18 U.S.C. § 6002 was not the epitome of either precision or lucidity. Nevertheless, it probably sufficiently apprised Pérsico of the extent of the immunity he had been granted; at the very least its extent was implicit in the prosecutor’s remark to Pérsico that he could be prosecuted for crimes involved in matters about which he was testifying “if the government should show independent evidence.” In any event, we are not persuaded that appellant was misled inasmuch as his experienced and competent counsel must have been fully aware of the extent of § 6002 immunity. For instance, she acknowledges that she previously challenged the alleged technical insufficiency of the Government’s explanation of the scope of the immunity, presumably on the ground that that explanation appeared to attribute to § 6002 immunity a narrowness incompatible with both the plain meaning of and the Supreme Court’s understanding of the section, see Kastigar v. United States, 406 U.S. 441, 453, 92 S.Ct. 1653, 32 L.Ed.2d 212 (1972), cited in her brief on appeal. We cannot believe that she ever understood that the Government intended to confer anything less than the full “use” and “derivative use” immunity “explicitly” conferred by § 6002. See Kastigar v. United States, supra at 453, 92 S.Ct. 1653. She objected to the explanations given to Pérsico; but whatever semantic deficiencies, if any, there may have been in those explanations they did not prevent her from outlining to her client the extent of the immunity conferred upon him.

We affirm the order below adjudging appellant in civil contempt and directing his imprisonment.

      . The immediate questioning which led up to the contempt order followed an admission by Pérsico that he was a sole operator of an illegal gambling business:
      Q. (Mr. DelGrosso) Where is your base of operations today?
      A. Before I answer that, can I speak to my counsel, before I answer that question?
      Q. Sure, you may.
      At this time Mr. Pérsico left the Grand Jury Boom and reentered after consulting with his counsel.
      Mr. DelGrosso: Bead the question back, reporter.
      At this time the question was read back.
      A. I—you take them off the street corner. People take bets, you know. So there is really no place, in the house maybe, they’ll take it in one day.
      Q. Are you the boss of this organization?
      A. Yes.
      Q. Do you have people working for you?
      A. Yes.
      Q. You do?
      A. Yes.
      Q. Who are these people?
      A. I guess we have to go back to the Judge again.
      Mr. DelGrosso : Okay. We’ll go upstairs to the Judge.
      Whereupon, Mr. DelGrosso and Mr. Pérsico left the room and reentered the room without going up to the Judge.
      Q. The question was, who were the individuals who worked for you?
      A. Can I read this into the record?
      Q. Yes, you may.
      A. You already told me that my house was bugged last spring.
      Mr. DelGrosso: Yes.
      A. Now you’re asking me who works for my gambling business. You know the answer to that question as a result of electronic surveillance of my home. As a result of electronic surveillance, I feel you’re only asking me, for me to refuse to answer, because you know this information from the electronic surveillance in my home.
      I still maintain that the electronic surveillance on my home was unlawful and should not be permitted and you should not be permitted to ask me these questions.
      Q. Is that it?
      A. Yes.
      Q. I again ask you, sir, who are the individuals that work for you, and are you refusing to answer that question?
      A. Yes.
      Q. I ask the Grand Jury foreman to order the witness to answer that question.
      The Foreman: You are hereby ordered to answer the questions under the terms of the power of the grant of immunity and the power of the Grand Jury.
      A. Immunity pertains to only me. Is that so?
      Q. That’s so.
      A. It does not pertain to anybody else?
      Mr. DelGrosso: No, it does not.
      Whereupon Mr. DelGrosso and Mr. Pérsico then left the Grand Jury chamber and reentered.
      Q. The question was, who are the individuals involved in the gambling operation, and do you refuse to answer? You were ordered to do so. You were ordered to do so by the Grand Jury foreman. Is that not correct?
      A. Yes.
      Q. Are you going to give us those names, sir?
      A. Before answering this question, I would like to know whether or not, if I am correct, that you already have this informamation as a result of illegal bugs in my home?
      Mr. DelGrosso: I need not answer any such question. You have been ordered to give those names. If you will give those names, you will not be brought up before the judge. If you will not answer, we will have to go to the judge.
      You are going to have to go to the judge, sir? Is that it, sir?
      A. Yes, let’s go to the judge.

      . The striking of this balance is achieved primarily through the statutory provisions requiring the Government to obtain a court order authorizing the electronic interception. See 18 U.S.C. §§ 2511(1) (a), 2516(1). As might be expected, the statute also contains some express exceptions to this general mandate. See, e. g., 18 U.S.C. §§ 2511(3), 2518 (7).

      . The Supreme Court’s continuing concern over potential obstructions to the expeditious performance of the grand jury’s function is illustrated by its recent decision in United State v. Calandra, 414 U.S. 338, 94 S.Ct. 613, 38 L.Ed.2d 561 (1974), in which the Court held that a grand jury witness cannot refuse to answer questions on the ground that they are’the product of unlawful searches and seizures. The Court, echoing the concerns expressed in Mr. Justice White’s concurring opinion in Gelbard v. United States, supra, there stated:
      Permitting witnesses to invoke the exclusionary rule before a grand jury would precipitate adjudication of issues hitherto reserved for the trial on the merits and would delay and disrupt grand jury proceedings. Suppression hearings would halt the orderly progress of an investigation and might necessitate extended litigation of issues only tangentially related to the grand jury’s primary objective. The probable result would be “protracted interruption of grand jury proceedings,” Gelbard v. United States, 408 U.S. 41, 70 [92 S.Ct. 2357, 33 L.Ed.2d
        179] (1972) (White, X, concurring), effectively transforming them into preliminary trials on the merits. In some cases the delay might be fatal to the enforcement of the criminal law. Just last Term we reaffirmed our disinclination to allow litigious interference with grand jury proceedings:
      “Any holding that would saddle the grand jury with mini-trials and preliminary 491 F.2d—73 V2 showings would assuredly impede its investigation and frustrate the public’s interest in the fair and expeditious administration of the criminal law.” United States v. Dionisio, 410 U.S. 1, 17 [93 S.Ct. 764, 35 L.Ed.2d 67] (1973)'.
      94 S.Ct. at 620-621 (footnotes omitted; citations partially omitted).

      . See transcript of January 23, 1974 proceedings, p. 20.


source: Caselaw Access Project

author: WEIGEL, District Judge:

license: Public Domain

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Robert Blaine BOYD, Defendant-Appellant.
    No. 72-2620.
    United States Court of Appeals, Ninth Circuit.
    April 18, 1973.

      Raymond W. Haman (argued), Lane, Powell, Moss & Miller, Seattle, Wash., for defendant-appellant.
    Bruce Carter, Asst. U. S. Atty. (argued), Stan Pitkin, U. S. Atty., Kent Frizzell, Asst. Atty. Gen., Seattle, Wash., Edmund B. Clark, Peter R. Steenland, Dept. of Justice, Washington, D. C., for plaintiff-appellee.
    Before HAMLIN and DUNIWAY, Circuit Judges, and WEIGEL, District Judge.

       Honorable Stanley A. Weigel, United States District Judge, Northern District of California, sitting by designation.

   WEIGEL, District Judge:

This case presents a question of first impression as to the validity of Regulations of the Department of the Interior prohibiting discharges of oil into the navigable waters of the United States. As applied to the facts in this case, we have concluded that both the regulations and the statute upon which they are based are valid.

Appellant Robert Blaine Boyd was charged by information with violation of 33 U.S.C. § 1161(b) (4) which declares it to be a crime for any captain of a vessel in United States navigable waters to fail to notify immediately the “appropriate” federal agency in the event of a known “discharge of oil from such vessel.” Conviction may result in a fine of not more than $10,000 or imprisonment for not more than one year or both. The type of discharge which brings the provisions of paragraph (4) into operation is defined therein by reference to paragraph (2) of subsection 1161(b) which provides:

The discharge of oil into or upon the navigable waters of the United States, ... in harmful quantities as determined by the President under paragraph (3) of this subsection, is prohibited, except (B) where permitted in quantities and at times and locations or under such circumstances or conditions as the President may, by regulation, determine not to be harmful. Any regulation issued under this subsection shall be consistent with maritime safety and with marine and navigation laws and regulations and applicable water quality standards. (Emphasis added.)

Paragraph (3) provides for the issuance of regulations by the President to delineate those quantities of discharges which will be “harmful to the public health or welfare of the United States, including, but not limited to, fish, shellfish, wildlife, and public and private property, shorelines, and beaches. ...”

These provisions were enacted as part of the general statutory scheme embodied in section 1161 for the control of oil pollution. Section 1161 is, in turn, part of the Water Quality Improvement Act of 1970 (Pub.L. 91-224, Title I, § 102, 84 Stat. 91, 97-117, codified in 33 U.S.C. § 1151 et seq.), which amended, inter alia, section 11 of the Federal Water Pollution Control Act of 1956 (Ch. 518, § 1, 70 Stat. 498).

Pursuant to subsection 1161(b)(3), the President by Executive Order (Exec. Ord. #11548, July 22, 1970, 3 C.F.R. 539 (Supp.1972)) delegated to the Secretary of the Interior his regulation-making duties. On September 9, 1970, Secretary Hickel issued the Regulations which were duly noticed and eventually codified as Environmental Protection Agency, Regs., Discharge of Oil, 40 C. F.R. Part 110. Of these Regulations, subsections 110.3 and 110.6 are salient to this case.

§ 110.3 Discharge into navigable waters harmful.

For purposes of Section 11(b) of the Federal Act [i. e., subsection 1161(b)], discharges of such quantities of oil into or upon the navigable waters of the United States or adjoining shorelines determined to be harmful to the public health or welfare of the United States include discharges which: . . . (b) cause a film or sheen upon or discoloration of the sur face of the water or adjoining shorelines. . . . (Emphasis added.) § 110.6 Exception for vessel engines. For purposes of Section 11(b) of the Federal Act, discharges of oil from a properly functioning vessel engine are not deemed to be harmful. . (Emphasis added.)

Reading the statute and regulations together, a discharge of oil from a ship is “harmful” and prohibited, if it produces a sheen on the water’s surface and if it does not come from a properly-functioning vessel engine. Under subsection 1161(b) (4), any ship captain who does not immediately notify the appropriate agency of such a discharge may be criminally prosecuted. (The administrative determination of discharges “in harmful quantities”, stated in Regs. §§ 110.3, 110.6, will hereafter be referred to as the “sheen test”.)

. This brings us to the facts of this case. Just before trial the parties stipulated that: On September 4, 1971, Boyd was captain of the merchant ship M/V MERCATOR, a crab processing vessel which was then moored at a wharf on the Salmon Bay Waterway in Seattle. A crewman on the ship was transferring diesel fuel oil from the port to the starboard fuel tank by means of a hose. He accidentally knocked the hose out of the starboard tank, and “approximately thirty gallons” of oil were discharged into the water, causing a visibly iridescent slick or sheen on the surface. Captain Boyd knew of this spill at the time, but he failed to notify the U. S. Coast Guard or any other government agency. The next morning a Coast Guard safety patrolman noticed the oil slick around the MERCATOR and reported it.

Upon being charged with a failure to report under subsection 1161(b)(4), Boyd had moved to dismiss the information on two grounds. His first claim was that it did not state facts sufficient to constitute an offense against the United States; his second, that paragraphs (2) and (4) of subsection 1161(b) are unconstitutional. After the filing of extensive briefs and after a hearing, the district judge granted the motion to dismiss. The prosecution filed for reconsideration, and after another hearing the judge again granted the dismissal. However, on May 2, 1972, the judge wrote a letter to the parties stating that he had decided his prior decision was erroneous. He declared that the sheen test was a “proper determination” of harmfulness of discharge “ . . . and must stand unless shown to have been arbitrarily or capriciously concluded. No such showing has been made.” The motion to dismiss was thus finally denied, and only thereafter did the parties enter into the stipulation of facts as set out above. Since a dismissal motion raising the issues of law had been denied, the stipulation concludes: “[T]he facts set forth above, without more, provide a sufficient basis from which the Court can find, beyond a reasonable doubt, that . Boyd is guilty of the offense charged. . . . ”

After trial to the court, the judge convicted Boyd, suspended sentence, and placed him on probation for one year.

Boyd’s major contention on appeal is this: The sheen test improperly defines as “harmful” a broader class of oil discharges than Congress intended; the direct result is to make criminal a failure to report a discharge in cases where it is not harmful; therefore, the entire regulatory scheme (originally codified in 18 C.F.R. §§ 610.1-610.9, and now codified in 40 C.F.R. §§ 110.1-110.9), of which the sheen test is the cornerstone, is invalid as an abuse of the rule-making power which Congress gave to the Executive Branch. Boyd also argues that subsection 1161(b)(4) is void for vagueness.

We turn first to the attack on the Regulations themselves. Where a statute specifically delegates to an administrative agency the power to make rules, courts recognize a presumption that such rules, when duly noticed, are valid. See, e. g., Gray v. Powell, 314 U.S. 402, 411-412, 62 S.Ct. 326, 86 L.Ed. 301 (1941); A.T. & T. Co. v. United States, 299 U.S. 232, 236-237, 57 S.Ct. 170, 81 L.Ed. 142 (1936); Pacific States Box & Basket Co. v. White, 296 U.S. 176, 186, 56 S.Ct. 159, 80 L.Ed. 138 (1935). The presumed validity of a general regulation, in contrast to that of an individual adjudication, does not require special findings. Pacific States Box & Basket Co. v. White, supra, at 186, 56 S.Ct. 159. This presumption is rebuttable, particularly where the governing statute is penal, upon a showing that the challenged regulation is an unreasonable exercise of the delegated power—i.e., inconsistent with the statute. See, e. g., Commissioner v. Acker, 361 U.S. 87, 90-92, 80 S.Ct. 144, 4 L.Ed.2d 127 (1959); United States v. Calamaro, 354 U.S. 351, 358-359, 77 S.Ct. 1138, 1 L.Ed.2d 1394 (1957). The burden placed on Captain Boyd is thus a heavy one, for he must show that the sheen test determination of harmfulness cannot be considered a reasonable expression of the Congressional will, even though Congress has given the Executive broad authority to make that determination.

To meet this burden, Boyd argues at the outset that Congress did not intend all oil discharges to be deemed “harmful”, and therefore there is a certain class of de minimis discharges to which the sanctions of subsection 1161(b)(4) do not apply. We agree. If Congress had meant the reporting requirement to apply to all discharges, it could have said so in plain language, rather than delegate determination of a “harmful” spill to the President as it did in paragraphs (2) and (3).

The question before us is whether or not the sheen test, on the particular facts in this ease, is a valid basis for distinction between those discharges which are harmful and those which are not.

Arguing against validity, Boyd asks the Court to judicially notice that not every quantity of oil creating a sheen or discoloration on a water surface is “harmful”; that, for example, a single drop is not harmful. Here the prosecution was for a spill of some thirty gallons. The facts in this case, not hypothetical situations, should govern our decision. See United States v. Raines, 362 U.S. 17, 21-23, 80 S.Ct. 519, 4 L.Ed.2d 524 (1960). Even assuming that Boyd might have standing to complain of hypothetical applications of the sheen test, he cannot rely upon judicial notice as to the effect of oil spills. See 9 Wigmore, Evidence, § 2571, pp. 547-550 (3rd ed. 1940). Boyd’s argument is, therefore, speculation, unsupported by the record.

Appellant next contends that the sheen test was devised in order to achieve workable administration, thereby subverting Congressional intent. He quotes from the affidavit of Kenneth Biglane, an Interior Department administrator whose self-described duties included the formulation and direction of “national programs to respond to discharges of oil and hazardous materials and to prevent such discharges, pursuant to sections 11 and 12 of the .Federal Water Pollution Control Act [i. e., §§ 1161-1162], as amended. . . . ” Concerning the sheen test, the Biglane affidavit states:

A major purpose of [this regulation] is to define discharge of oil for the purposes of the notification requirement of section . 1161(b)(4). For this purpose the film or sheen test is especially well suited, since its effect is to require notification of any oil discharges whose effect can be seen as a film or sheen of oil upon the surface of the water. Thus it is a simple matter for a responsible person to know which discharges must be reported. It has been my experience in investigating oil spills that persons at the scene, and persons responsible for the spill, are frequently unaware of how much oil has been discharged and its effect on the environment, even within very broad limits. Thus a notification requirement based on the amount discharged would be unworkable in many cases.

On the basis of these observations by Biglane, appellant contends that the sheen test sacrifices statutory intent on the altar of “workability”. While the Biglane affidavit does show that one reason for the sheen test was workable administration, this is by no means an irrational factor for the Department to consider. As a practical matter, the sheen test is more appropriate than, for example, a numerical test, or a determination that a “substantial” amount of spilled oil is harmful. A numerical test creates not only the inherent difficulty of accurate observation as to the quantity discharged, it also may spawn an incentive to be inaccurate so as to avoid the obligation of reporting. Moreover, if the term “substantial” were used, there would be endless confusion over its meaning. In any case, ease of administration is not an “impermissible factor” in the Department’s determination. Cf. Environmental Defense Fund, Inc. v. Ruckelshaus, 142 U.S.App.D.C. 74, 439 F.2d 584, 597 (1971).

There is no evidence that the sheen test was devised to alter the meaning of the statute, or to avoid making a determination of harmfulness. On the contrary, the Biglane affidavit expressly states that “smaller spills (10 barrels or less) have a seriously degrading effect on the environment . . . particularly ... [in areas] near the coastline. . . . Where a discharge of oil is large enough to cause a film or sheen on the surface of the water, it is large enough to cause significant harm to the environment.” This statement is supported by reference to summaries of scientific studies attached as exhibits and is not refuted by appellant. Thus the Biglane affidavit evidences the Department’s administrative assessment of enforcement problems as well as its investigation and determination of what constitutes a harmful discharge. The two considerations are not mutually exclusive.

Appellant further contends that the exception to the sheen test—i. e., “discharges of oil from a properly functioning vessel engine . . . ”—demonstrates the irrationality of the sheen test itself. He points out that this exception allows a ship captain to escape the nonreporting penalty for any amount of oil spilled from a properly functioning engine, whether or not it is enough to create a sheen. In other words, the harmfulness of the spill is made to depend on its source. While at first blush this may seem a curious result, we are persuaded that the exception is reasonable. The exception relates to a specific class and, as the trial judge wrote in his letter denying Boyd’s motion to dismiss, “is necessary and proper if there is to be traffic upon the seas and inland navigable waters.” Footnote 2, supra.

Determination of harmfulness “to the public health or welfare of the United States” requires balancing the competing interests of environmental protection and unrestricted passage on navigable waters. It is precisely this balancing which the “properly functioning engines” exception reflects. Indeed, the exception was included in the Regulations at the behest of Congress. When the Regulations were originally proposed, after passage of the Act, the sheen test did not contain the exception. During committee hearings on the proposed Regulations, Senator Muskie remarked :

.' . . At a minimum the President can and should immediately by regulation prohibit the discharge of oil which exceeds the amount normally anticipated in operation of a vessel.
It is obvious, then, that both committees [the House and Senate committees working on the bill] felt that the minimal amounts of oil discharged in the normal operation of a properly functioning vessel engine ought not to be subject to the notice requirements of the law. . . . (Emphasis added.)
Hearings on Proposed Regulations of the Department of the Interior on Oil Pollution under the Water Quality Improvement Act of 1970, before the Subcommittee on Air and Water Pollution, Senate Committee on Public Works, 91st Cong., 2d. Sess. at 34 (Aug. 4,1970).

After these hearings, the exception was adopted by the Department. As qualified thereby, the sheen test met no further Congressional objections.

We now briefly address Boyd’s contention that the statute, construed together with the Regulations, violates Fifth Amendment due process of law. This claim rests on the premise that subsection 1161(b)(4), when coupled with the sheen test, is void for vagueness. See, Connally v. General Construction Co., 269 U.S. 385, 391, 46 S.Ct. 126, 127, 70 L.Ed. 322 (1926) (classic statement of vagueness doctrine). However, as has been discussed, one salutary aspect of the sheen test is the simplicity of its application. The statute and Regulation read together amount to a clear command to a ship captain: “If you can see the spill, report it!” That duty of reporting, depending as it does simply on one’s sense of sight, is anything but vague. No man “of common intelligence must necessarily guess at [the statute’s] meaning and differ as to its application. ...” Id.

A spill of approximately thirty gallons may seem small to some, particularly in comparison to the 1967 Torrey Canyon casualty off the shores of England and France, or the Santa Barbara blowout in 1969. However, Congress enacted a law cf. broad application when it caused the provisions of subsection 1161(b) to be triggered by any oil discharge in a “harmful” quantity. Nothing has been shown, on the facts in this case, to indicate that the Department’s Regulations determining harmfulness go beyond the statutory mandate.

Judgment affirmed.

      . “Oil”, “discharge”, and “vessel” are defined in lay language under subsection 1161(a), a general “Definitions” section. Unless otherwise stated, statutory section references herein are to Title 33 of the United States Code.

      . Also pertinent is the following comment by the judge:
      “I note that the basis for my oral decision was the exception to the Secretary’s determination that oil discharged upon such water from a properly functioning vessel engine is not deemed to be harmful. I was not able to understand how such an oil spillage could be harmful or not depending upon the source of the spillage. I have now concluded, however, that the exception relates to a reasonably specific class and is necessary and proper if there is to be traffic upon the seas and inland navigable waters. The exception is therefore permissible.”

      . Boyd does not question the legality of the President’s delegation, by Executive Order, of his duties to the Secretary of the Interior.

      . In fact, the legislative history of the 1970 Act indicates that the Senate and House conferees gave up their efforts to specify what was harmful and decided that the President, with his considerably greater research resources, was better equipped to make that determination. During the hearings of the committee reviewing the Department’s proposed regulations, after the Act’s final passage, Senator Muskie remarked :
      We were troubled about the notice provisions of the law, as well as the liability provisions of the law. It was conceivable that de minimis quantities of oil ought not to be subject to the notice provisions and ought not to be subject to the penalty provisions of the law. It was difficult to define these quantities in the statute.
      The definition, we felt, would depend upon more extensive study than we could give, and even if we were in a position to give that kind of study, there were other reasons why such specificity ought not to be included in the law.
      We finally gave the authority to the President to define those quantities.
      Hearings on Proposed Regulations of the Department of the Interior on Oil Pollution under the Water Quality Improvement Act of 1970 before the Subcommittee on Air and Water Pollution, Senate Committee on Public Works, 91st Cong., 2d Sess. at 34 (August 4, 1970).

      . The original House bill', H.R. 4148, would have required reporting only with respect to discharges “in substantial quantities”. (Emphasis added.) Conf.Rep.No.91-940, 91st Cong., 2d Sess., 1970 U.S.Code Cong, and Admin.News, pp. 2712, 2713—re § 17 (b) of H.R. 4148. The Senate amendment, S. 7, prohibited all discharges, except where permitted by Presidential regulations consistent with maritime laws and water quality standards. Id. at p. 2719—re § 12(b) (1) of S. 7. Section 102 of the conference substitute struck down both versions and was eventually enacted into law. This history at least demonstrates that Congress did not deem every oil spill to be a “harmful” one, since the changes in the legislation from original introduction to final enactment were not insignificant.

      . A barrel of oil is defined in the Biglane affidavit as 42 gallons at 60° Fahrenheit.


author: PER CURIAM.

text:
    Jane E. RISSE, Plaintiff-Appellant, v. X. O. WOODARD and Clarence E. Hughey, Defendants-Appellees.
    No. 73-1299.
    United States Court of Appeals, Seventh Circuit.
    Argued Jan. 21, 1974.
    Decided Feb. 21, 1974.

      Michael H. Lyons, Chicago, Ill., for plaintiff-appellant.
    Robert J. Baron, James E. Babcock, Joliet, Ill., for defendants-appellees.
    Before SWYGERT, Chief Judge, HASTINGS, Senior Circuit Judge, and CUMMINGS, Circuit Judge.
   PER CURIAM.

Plaintiff Jane E. Risse brought this diversity action against defendants X. 0. Woodard and Clarence E. Hughey seeking damages for injuries sustained as a result of the alleged negligence of the defendants. The case was tried before a jury which became deadlocked in their deliberations. As a result of the jury’s inability to return a verdict the district court declared a mistrial and thereafter directed verdicts in favor of both defendants. Upon appeal, we reverse.

The skeletal facts precipitating the controversy before us are as follows. On March 26, 1970 at approximately 10:00 p. m. plaintiff and her family were traveling west on Route 6 in Will County, Illinois. Her husband, the driver, desired to make a lefthand turn (south) on Frontage Road which was perpendicular to Route 6. Plaintiff’s vehicle was situated in the westbound lane of Route 6 and waiting to make the desired lefthand turn onto Frontage Road. At the same time defendant Hughey was approaching plaintiff’s vehicle and traveling in the eastbound lane on Route 6. Additionally, defendant Woodard was proceeding north on Frontage Road and desired to turn right onto Route 6. Defendant Hughey’s vehicle collided first with defendant Woodard and thereafter collided with plaintiff’s vehicle.

Plaintiff urges on appeal that the district court erred in not ordering a new trial subsequent to declaring a mistrial; directing a verdict in favor of both defendants ; and determining that the plaintiff did not establish the amount of damages necessary to sustain jurisdiction in a diversity cause of action.

I

Setting aside for the moment the issue of whether the district court erred in failing to grant a new trial, we first address ourselves to the propriety of the granting of a directed verdict. An analysis of the issue must be viewed against the appropriate standard for directing a verdict. Illinois substantive law controls and the pertinent decisional law is found in Pedrick v. Peoria & E.R.R., 37 Ill.2d 494, 229 N.E.2d 504 (1967). There the Illinois Supreme Court enunciated the following standard:

..... verdicts ought to be directed and judgments n. o. v. entered only in those cases in which all of the evidence, when viewed in its aspect most favorable to the opponent, so overwhelmingly favors movant that no contrary verdict based on that evidence could ever stand.

Upon application of this standard to the evidence, we conclude that the district court erred in directing verdicts in favor of the defendants. Accordingly, the granting of a new trial would have been the appropriate vehicle for disposing of this matter after the district court had declared a mistrial. It is unnecessary for us to go into intricate detail to explain our disposition other than to articulate the following. The vehicle in which plaintiff was a passenger was stopped, with directional signal operating, in the westbound lane of Route 6 and waiting to make a lefthand turn onto Frontage Road. Defendant Hughey was traveling in the eastbound lane of Route 6. As Hughey approached the intersection of Frontage Road and Route 6 he noticed defendant Woodard who was on Frontage Road and desiring to make a righthand turn onto Route 6. Before entering the intersection Hughey applied his brakes, struck the Woodard vehicle, and then careened into the plaintiff’s vehicle which was situated in the westbound lane of Route 6. The exact circumstances giving rise to the collision with plaintiff’s vehicle are uncertain. Who was responsible for the accident is clouded by some contrarity in the testimony of the two defendants. What is certain is that there is a conspicuous absence of evidence that the plaintiff’s vehicle was in any way the cause of the accident or improperly situated. There is no proof that plaintiff’s husband was in any way contributorily negligent. What we have are two defendants, each pointing to the other as the one responsible for the collision. In these circumstances the posture of this case made it clearly inappropriate for disposal by directed verdict. In short, we cannot conclude, after considering the record against the Pedrick rule, the evidence favoring defendants is so overwhelmingly against plaintiff that a verdict for her could not stand.

II

Plaintiff’s final contention is that the district court erred in determining that the jurisdictional amount of $10,000 had not been met in this case. We are uncertain whether the district court actually ruled on the jurisdictional amount or merely commented on the same by expressing skepticism over whether the amount had been proved. In either ease, however, we find that the requisite amount to sustain jurisdiction was proper in this case. Plaintiff in her complaint alleged damages in excess of the amount necessary to sustain jurisdiction in a diversity action. Moreover, plaintiff’s counsel in his opening statement requested that the jury return a verdict in favor of the plaintiff in excess of the jurisdictional amount.

It is not incumbent upon a plaintiff to show with absolute certainty that she will recover the amount alleged in the complaint. The only requirement is that the amount sought be in good faith. Miami Beach Yacht Corp. v. Ferro Corp., 461 F.2d 770 (5th Cir. 1972). The basic criterion for determining whether the amount sought was not made in good faith is if it can be concluded beyond a legal certainty that the plaintiff would under no circumstances be entitled to- recover the jurisdictional amount. We cannot conclude after a review of the record that the amount sought by plaintiff was colorable in the sense of having been made in bad faith. Moreover, there is no claim of bad faith on the part of plaintiff with regard to the amount sought by either of the defense counsel or by the district court at any time prior to the court’s remarks after the jury had indicated it was deadlocked.

The judgment of the district court directing a verdict for defendants is reversed and the case remanded for a new trial.

      . On appeal only defendant Woodard has filed an appearance and submitted a brief.

      . Our review of the record compels us to question the propriety of the way the district court handled this case subsequent to the jury’s inability to return a verdict.
      THE COURT: Mr. Foreman, have you arrived at a verdict?
      JURY FOREMAN: No, sir, we haven’t.
      THE COURT: Do you think there is any remote possibility of arriving at a verdict?
      JURY FOREMAN: No, Sir.
      THE COURT : Without indicating which way, if there is a split, what is the count, without saying which way it goes? (Emphasis supplied.)
      JURY FOREMAN: It would be an even split, your. Honor.
      Our concern centers on the following statement by the trial judge to plaintiff’s counsel after the mistrial had been granted and the directed verdict entered: “We have a practice over here, give the jury one bite at the apple and when they decide 50-50, that is the end of the lawsuit.”
      If there is a “practice” of granting directed verdicts for defendants in damage suits when a jury is deadlocked, as characterized by the district court, we think it is entirely improper and should be abandoned in all future cases.

      . Hughey testified that Woodard’s vehicle did not stop from the time when he first saw it until the time of the collision which he stated occurred in the eastbound lane of Route 6. Woodard testified, however, that his vehicle at no time had entered upon Route 6 and that he was stopped on Frontage Road waiting to make a righthand turn.


text:
    UNITED STATES of America, Plaintiff-Appellee, v. Donald Milton ORAND, aka John Lee Bear, aka Johnny Lee Bear, Defendant-Appellant.
    No. 72-2064.
    United States Court of Appeals, Ninth Circuit.
    March 6, 1973.
    Rehearing Denied May 14, 1973.
    Certiorari Denied Nov. 5, 1973.
    See 94 S.Ct. 365.

      T. Leonard O’Byrne (argued), of MeMenamin, Jones, Joseph & Lang, Portland, Ore., for defendant-appellant.
    D. Richard Hammersley, Asst. U. S. Atty. (argued), Sidney I. Lezak, U. S. Atty., Portland, Ore., for plaintiff-appellee.
    Before HAMLIN and DUNIWAY, Circuit Judges, and WEIGEL, District Judge.

       Honorable Stanley A. Weigel, United States District Judge, Northern District of California, sitting by designation.

   WEIGEL, District Judge:

Appellant Donald Orand was indicted on two counts by a grand jury in the United States District Court for the District of Oregon. Count I charged him with the felonious taking of money and travelers checks (totaling $35,400) “by force, violence, and intimidation” from the Bank of St. Helens in Scappoose, Oregon on or about April 15, 1971, in violation of 18 U.S.C. §§ 2113(a), 2. Count II charged him with the knowing and wilful use of a firearm in the commission of the robbery, in violation of 18 U.S.C. §§ 924(c), 2. Orand was found guilty by a jury on both counts. The court sentenced him to terms of fifteen years on Count I and ten years on Count II, the sentences to run concurrently.

Orand makes four claims of error. We have concluded that none should prevail and affirm the judgment.

Assessment of Orand’s first—and major—contention requires a short summary of the facts. The prosecution’s case consisted essentially of the testimony of bank witnesses, of police, and of accomplices Bonham and Golden. In sum, they testified that a team of four robbed the bank: Bonham, Golden, Oman, and Orand. Bonham and Golden positively identified Orand as a participant in the holdup. Each stated that Orand held a rifle at the bank entrance while they robbed the tellers’ cages and Oman waited in the getaway car. Bonham and Golden also testified as to Orand’s preparations for and participation in the robbery. Orand testified, denying any role in the robbery, but admitting he knew it was going to take place.

During deliberations, the jury sent the trial judge a note reading: “Can the defendant be found guilty of participation by virtue of neglecting to alert authority when knowing of pending robbery?” The judge called the jury into court and expressed surprise, since he had previously given a precise instruction concerning participation. He then stated that the answer to the jury’s question was “No,” and that Orand had not been charged with a failure to alert authority. The judge then explained:

“For instance, if you believe that he did not participate in the bank robbery itself, you have got to turn him out. But that means you believe the defendant as against the other witnesses. If you believe the other witnesses against the defendant, then you wouldn’t come to this conclusion. You can’t find the defendant guilty of a charge that wasn’t made against him. He is being tried solely on the basis of the bank robbery.”

Thereafter the following additional colloquy took place:

“THE COURT: Let me clarify this. I said whatever a man can do by himself he can do through others. In other words, you don’t have to show that a defendant actually took the money himself. If he is in concert working with other people who are robbing the bank, then each one is responsible for the actions of the other people who were in the bank. He is being charged with bank robbery, not failure to stop a crime.
Is that clear now ?”
“THE JUROR [Foreman]: Yes sir.”

Then, after the jury had retired for further deliberations, defense counsel requested an additional instruction distinguishing between “aiding and abetting” or “participation” on the one hand, and “mere knowledge” of commission of a crime on the other. The judge denied this request. It is this denial which Orand claims to have been erroneous.

Orand argues that the judge, by his denial of the additional requested instruction, refused to cure evident confusion in the minds of the jurors (as displayed by. their note). However, the record quoted above reveals precisely the contrary. Twice the judge had stated, in different ways, that a guilty verdict necessitated, inter alia, a finding that Orand participated “in the robbery itself”, either by actually taking the money himself or by “working in concert” with others who were. Thus the judge adequately distinguished between actual participation in the crime and mere knowledge of its commission. He avoided the problems of using elaborate hypothetical to explain the distinction (cf. United States v. Garguilo, 310 F.2d 249, 254 (2d Cir. 1962)). Moreover, we are not at liberty to doubt the jury foreman’s reply, to the effect that the applicable law was clear as a result of the court’s explanation. Any additional instruction would have been superfluous and indeed might háve led the jury back into confusion.

Orand’s second claim of error is that the court should not have admitted into evidence an invalid driver’s license found in his possession. The license was apparently a counterfeit version of a Maryland license and was one of many circulating in that state. The potential relevance of this item to the trial was that some of the travelers checks stolen from the bank were cashed by means of one of these invalid Maryland licenses— although not the same one as the license, found in Orand’s possession. Because of this difference, Orand claims that the license found on him was irrelevant to the trial and that its admission prejudiced him unduly. The question of relevance is a close one; however, even assuming, arguendo, that the admission of the license constituted error, such error was harmless in the light of the entire record. Fed.R.Crim.P., Rule 52(a). There was ample independent evidence to support the verdict.

Third, Orand claims that prejudicial publicity during the trial required the judge to grant a mistrial motion under the due process reasoning of Sheppard v. Maxwell, 384 U.S. 333, 362, 86 S.Ct. 1507, 16 L.Ed.2d 600 (1966). The publicity was an article published after the first day of trial in the one Portland evening newspaper. It stated that Or- and “had entered a plea of guilty but later changed it to innocent.” The judge read the article himself the morning of the second trial day. He then polled the jurors, who all answered that they had not read any such report. Moreover, the jury was closely guarded during recesses. Since none of the jurors read the article or knew its contents prior to verdict, there could be no prejudice to Orand resulting from it.

Orand’s fourth contention is that his counsel’s questioning of a defense witness was improperly cut short by the court. The effect, it is said, was to deny Orand the right to have the jury “perform its function as finders of fact.” The defense witness referred to was called to impeach a prosecution witness. The record shows that defense counsel was improperly trying to elicit the impeachment by the use of leading questions. The judge had ample discretion to intervene.

Judgment affirmed.

      . 18 U.S.C. § 2113(a) provides in pertinent part that anyone who takes or attempts to take, “by force and violence, or by intimidation,” any money or other thing of value from a bank whose deposits are federally insured, or enters the bank with the intent to do so, is guilty of a felony.
      18 U.S.C. § 2 provides in pertinent part that (a) whoever aids or abets in the commission of an offense against the United States is punishable as a principal, and that (b) whoever “willfully causes an act to be done which if directly performed by him or another would be an offense against the United States, is punishable as a principal.”
      18 U.S.C. § 924(c) makes it a felony to use a firearm (as defined in 18 U.S.C.
      § 921 (a) (3)) to commit any felony punishable under federal law, or to carry a firearm during the commission of any felony punishable under federal law.

      . The three accomplices had previously pled guilty and been sentenced.

      . The testimony of accomplices Bonham and Golden was corroborated by other prosecution witnesses, thus distinguishing this ease from United States v. Hibler, 463 F.2d 455, 458-459 (9th Cir. 1972), cited by appellant in his “Additional Authorities.”

      . The judge’s first instruction on this point stated in pertinent part:
      “In order to find the defendant guilty, it is not necessary for the Government to prove that the defendant personally did every act constituting the offense charged because:
      Whoever commits an offense against the United States or willfully aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.
      Therefore, every person who willfully participates in the commission of a felony may be found to be guilty of that offense. Participation is willful if done voluntarily and purposely and with specific intent to do some act the law forbids; that is to say, with bad purpose to disobey the law.”


author: FRIENDLY, Circuit Judge:

text:
    Arthur Yale KAVIT, Plaintiff-Appellee, v. A. L. STAMM & CO., a Co-partnership, and Jack R. Levien, Defendants-Appellants.
    No. 149, Docket 72-1994.
    United States Court of Appeals, Second Circuit.
    Argued Dec. 17, 1973.
    Decided Jan. 22, 1974.

      Norman Winer, New York City (Nathan, Mannheimer, Asche, Winer & Friedman, New York City, of counsel), for defendants-appellants.
    David L. Tecklin, New York City, for plaintiff-appellee.
    Before LUMBARD, FRIENDLY and OAKES, Circuit Judges.
   FRIENDLY, Circuit Judge:

The opinion of this court in Ryan v. J. Walter Thompson Co., 453 F.2d 444, 445 (2 Cir. 1971), began by saying:

This case is another example of a trend we have observed with disturbing frequency, namely, invocation of the salutary anti-fraud provisions of the federal securities laws in cases where those provisions are wholly inappropriate and wide of the Congressional mark. Moreover, the vice of this practice is compounded here by engrafting upon the misplaced federal securities law claim a state law claim that, but for the federal gloss, should have been litigated in the state courts.

The problem presented by this action by a customer against a stockbroker and a registered representative fits this description and goes well beyond it. In Ryan, both the federal and state claims were disposed of on summary judgment. Here the federal claims were even weaker and in our view should have been dismissed on motion, while the pendent state claims were far more substantial —resulting, in fact, in recovery for the plaintiff. Moreover, the state claims would have gone to arbitration under the standard customer agreement if they had stood alone. Permitting a plaintiff to try such claims on the basis of pendent jurisdiction not only adds to the burdens of the federal courts and deprives the parties of the opportunity to obtain in a more fitting tribunal “a surer-footed reading of applicable law,” United Mine Workers v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966), but it strips the defendant of its contractual right to arbitration.

This court has not been grudging in its application of the pendent jurisdiction principles set out in United Mine Workers v. Gibbs, supra. See, e. g., Astor-Honor, Inc. v. Grosset & Dunlap, Inc., 441 F.2d 627 (2 Cir. 1971); Leather’s Best, Inc. v. S. S. Mormaclynx, 451 F.2d 800, 809-811 (2 Cir. 1971); Almenares v. Wyman, 453 F.2d 1075, 1083-1085 (2 Cir. 1971), cert. denied, 405 U.S. 944, 92 S.Ct. 962, 30 L.Ed.2d 815 (1972). In none of those decisions, however, did a federal trial involve any risk of loss of rights beyond the possibility, in Astor-Honor and Leather’s Best, that the federal court would misread state law. A quite different case is presented where, as here, dismissal or a stay of the state claims would enable the defendant to have those claims determined by arbitrators rather than by a court. It is true that Gibbs suggests that the determination whether to invoke pendent jurisdiction or not should generally rest in the sound discretion of the district court, see 383 U.S. at 727-728, 86 S.Ct. 1130, 16 L.Ed.2d 218, but the Court used mandatory language in directing that when the federal claims are dismissed before trial, “even though not insubstantial in a jurisdictional sense, the state claims should be dismissed as well.” 383 U.S. at 726, 86 S.Ct. at 1139.

Quite apart from the arbitration problem, the flimsy nature of federal claims may call for dismissal of pendent state claims. See McFaddin Express, Inc. v. Adley Corp., 346 F.2d 424 (2 Cir. 1965), cert. denied, 382 U.S. 1026, 86 S.Ct. 643, 15 L.Ed.2d 539 (1966). In the cautionary part of his opinion in Gibbs, 383 U.S. at 726-727, 86 S.Ct. at 1139, which perhaps is not read enough, Mr. Justice Brennan noted that dismissal of common law claims might be merited if “[p] retrial procedures or even the trial itself . . . reveal a substantial hegemony of state law claims.” The Justice added that “recognition of a federal court’s wide latitude to decide ancillary questions of state law does not imply that it must tolerate a litigant’s effort to impose upon it what is in effect only a state law case. Once it appears that a state claim constitutes the real body of a case, to which the federal claim is only an appendage, the state claim may fairly be dismissed.” 383 U.S. 727, 86 S.Ct. 1139. If it appears that the federal claims are subject to dismissal under F.R.Civ.P. 12(b)(6) or could be disposed of on a motion for summary judgment under F. R.Civ.P. 56, the court should refrain from exercising pendent jurisdiction absent exceptional circumstances. Indeed, this is essential to avoid a result where, as has been happily said, “the dog would be wagged by his tail.” Hart & Wechsler, The Federal Courts and the Federal System 925 (2d ed. 1973).

An even greater degree of circumspection is demanded when, as here, exercise of pendent jurisdiction over a state claim will result in the claim being tried to a court rather than to arbitrators. In such cases the federal court normally should stay the trial of the state claims or dismiss them in the absence of any other ground of federal jurisdiction, if properly requested to do so, even when the federal claims cannot be disposed of without a trial. While exceptional circumstances might justify a contrary course, at the moment we cannot think of any.

It is with this background that we turn to the instant case, a rather minor fall-out of the Canadian mineral strike by Texas Gulf Sulphur Company [TGS] in April, 1964, which has consumed so much time of the district court—ironically, of Judge Bonsai in particular— and of this court. Plaintiff, Dr. Kavit, a veterinarian and speculator, had maintained accounts with four brokerage houses in Richmond, Va., including the Richmond office of Francis I. duPont & Co. Defendant Levien, who had become his registered representative there, left duPont in February 1964 and became a registered representative with defendant Stamm & Co. in New York City. To Stamm’s misfortune, Dr. Kavit opened an account with it and later had his duPont accounts transferred there. The news of the TGS mineral strike and the sharp rise in the stock came not long after the Stamm account was opened. On April 10, 1964, TGS closed at 30%; by April 17, it had climbed to a close of 40%. Convinced at that point that the stock was ready to fall, Dr. Kavit made two short sales of 100 shares of TGS, one on April 20 at 42% and the other on April 21 at 39%. Unhappily for Dr. Kavit the stock rebounded and the short sales were ultimately covered at 58)4, with a resulting loss of $3,602.26.

The complaint contained two counts under the Securities Exchange Act and two at common law. The first count, relying on § 10(b) and the ever-present Rule 1 Ob-5, alleged that Levien' had made a number of reckless predictions of the downward path that TGS shares would take, and that the April 21 short sale had been made without Dr. Kavit’s consent. The fourth count alleged a violation of §§ 7 and 29 of the Securities Exchange Act. The theory underlying that claim was that between April 16 and May 6, 1964, Stamm knew that plaintiff’s account was substantially undermargined, but that the company continued “encouraging and permitting purchases through the account.” Plaintiff therefore claimed that the transactions in his account during that period were in violation of the margin requirements provision, 15 U.S.C. § 78g, and that the contracts of purchase and sale in plaintiff’s account thus violated 15 U.S.C. § 78cc. The second and third counts, one alleging negligence and the other charging conversion, were based on a melange of Levien’s predictions, the allegedly unauthorized short sale of April 21, and Levien’s failure to carry out instructions that if the market went up, he would cover the two short sales in the range of 43-44.

Defendants moved to dismiss the complaint for failure to state a claim under the Securities Exchange Act and, with respect to diversity, see note 3, supra, for lack of the required jurisdictional amount. In the alternative, they sought an order “staying all proceedings under U.S.C. Title 9 and Rule 81(a)(3) pursuant to the arbitration clause contained in the contract of the parties dated April 10, 1964.” The motion was supported by extensive affidavits, to which plaintiff responded, and memoranda of law were received from both sides. Judge Metzner denied the motion in an opinion dated April 3, 1967. Although he thought the allegations were “thin insofar as a fraud action is concerned,” he believed them sufficient under what had just been stated in A. T. Brod & Co. v. Perlow, 375 F.2d 393, 398 (2 Cir. 1967). He said nothing about the claim under §§ 7 and 29, or about the motion for a stay. On rehearing, he noted merely that “the plaintiff has stated a claim under the Securities Exchange Act of 1934,” and that the arbitration clause was “inoperative to bind the plaintiff to arbitration of this [Rule 10b-5] claim.” Consequently, he denied the motion “to stay all proceedings in this action pending arbitration.” In support of his ruling, the judge referred to his opinion in Pawgan v. Silverstein, 265 F.Supp. 898 (S.D.N.Y.1967), see note 2 supra, which held an arbitration clause void with respect to an alleged § 10(b) violation. Pawgan also held, however, that the nonwaiver provisions of the federal securities law, 15 U.S.C. §§ 77n, 78cc(a), do not apply to pendent state claims, and that those claims are thus subject to valid arbitration agreements. The reference to Pawgan suggests that Judge Metzner might well have looked favorably upon a motion to stay or dismiss which was limited to the common law claims, but defendants took no such step.

Alternatively, the defendants could have pursued an appeal from Judge Metzner’s orders. In fact, they filed notices of appeal both from the initial order and from the order on rehearing. However, they failed to pursue these, and the appeals were dismissed for lack of prosecution. Although defendants now say the orders were unappealable, the denial of a stay pending arbitration in an action at law has long been held appealable under the doctrine of Enelow v. New York Life Ins. Co., 293 U.S. 379, 55 S.Ct. 310, 79 L.Ed. 440 (1935), and Ettelson v. Metropolitan Life Ins. Co., 317 U.S. 188, 192, 63 S.Ct. 163, 87 L.Ed. 176 (1942). See Shanferoke Coal & Supply Corp. v. Westchester Service Corp., 293 U.S. 449, 452, 55 S.Ct. 313, 79 L.Ed. 583 (1935); Council of Western Electric Technical Employees v. Western Electric Co., 238 F.2d 892, 894-895 (2 Cir. 1956); Standard Chlorine of Delaware, Inc. v. Leonard, 384 F.2d 304 (2 Cir. 1967); 9 Moore, Federal Practice ¶¶[ 110.20 [3], [4.1].

If the appeals had been pursued, we would have reversed. The 10b-5 claim was too “thin” to be rescued by the rule, restated in Brod, that a complaint need not prove that a plaintiff is entitled to recover. The complaint in Brod sufficiently alleged fraud in a traditional sense, even though it may have seemed doubtful that plaintiff could establish his claim. Here the complaint advanced nothing more than erroneous and perhaps unfounded predictions by a registered representative to an experienced speculator; there was no claim that Levien did not sincerely believe what he allegedly said or that no reasonable man would do so. The portion of the first count charging that the unauthorized short sale of April 21 “operated as a fraud and a deceit upon the plaintiff” was similarly lacking in any sufficient allegations of fraudulent conduct. Although the count claiming a violation of the margin requirements recited facts sufficient to survive a motion to dismiss, the affidavits that had already been submitted made it clear that defendants were entitled to summary judgment. In uncontroverted affidavits defendants demonstrated that, with one small exception, plaintiff’s account was adequately margined throughout the disputed period. They pointed out that during the period that Dr. Kavit’s account was being transferred from duPont to Stamm, the company properly computed the two accounts as if they were a single account, under § 6(d) of the Federal Reserve Board’s Regulation T. In addition, defendants pointed out that'§§ 3(b) and 3(g) of Regulation T permit “day-light trades”: fluctuations in the customer’s balance that would otherwise result in an insufficient margin are permissible if the customer is left with sufficient margin in his account at the end of the day. In light of these two principles, there was only one possible violation of the margin requirements during the April 16 to May 6 period. On April 22 plaintiff was sent a margin call for $322, which, after his protest, Levien allegedly told him to ignore. In fact the call was in error on the high side, resulting in part from a failure to take account of a small credit balance in one of the accounts transferred from duPont. The right figure was $36 but Stamm did not send out a new call until May 4. While this did constitute a technical violation, § 6(k) of Regulation T excuses “innocent mistakes”; and if ever a transaction came within § 6(k), this was it. In view of that disposition of the federal claims, we would have reversed Judge Metzner’s denial of a stay pending arbitration. Indeed, we would very likely have gone further and directed dismissal of the state claims since diversity jurisdiction failed for lack of sufficient amount, see note 3 supra.

Two years after dismissal of the appeals for lack of prosecution, a pre-trial conference was held, in September, 1969, before Judge Cannella. An extensive pretrial order, entered on May 14, 1970, reviewed the history of the case and outlined the issues to be tried. Nothing in the order indicated that defendants wished to have the two counts under the Securities Exchange Act tried first, so that they could move for a stay or dismissal if these were determined in their favor.

Ultimately, the trial occurred before Judge Bonsai in June, 1972. Levien could no longer be found, and Stamm had to rely on his deposition. No request was made for a separate trial of the federal claims, nor did the defendants ask Judge Bonsai to stay trial of or to dismiss the state claims. In an opinion rendered after completion of the trial, the court found there was no evidence to support either the 10b-5 claim or the claim for violation of the margin requirements. However, it thought the case appropriate for the exercise of pendent jurisdiction under Gibbs since the claims arose from “a common nucleus of operative fact” and because “there is diversity of citizenship between the parties and the evidence satisfies the court that the plaintiff brought his action in good faith.” The judge refused to credit plaintiff’s testimony that he had not authorized the second short sale but did believe his testimony that he had instructed Levien to cover in the range of 48-44. Accordingly, the judge awarded damages of $2,949.08, the difference between the actual loss of $3,602.26 and the $653.16 which plaintiff would have suffered if Levien had covered at 44, together with 6% interest from April 29, 1964 and costs. While we must confess that Dr. Kavit’s testimony strains our credulity, especially with respect to his claim that he instructed Levien to cover the April 20 short sale if TGS should rise as little as % of a point, F.R.Civ.P. 52(a) directs that “due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses.”

Defendants argue that arbitrators knowledgeable in the ways of the marketplace would almost certainly have reached a different conclusion. This may well be so, and the guidelines laid down at the beginning of this opinion should correct such matters for the future. But the defendants here did not effectively protect their right to arbitration of the common law counts. They failed to prosecute their appeals from Judge Metzner’s orders; they never moved for a dismissal or stay of the common law claims considered separately ; and they made no attempt, either at the pretrial conference or at the trial, to obtain a determination of the claims under the Securities Exchange Act adverse to plaintiff so that they could move for a stay or dismissal unhampered by the presence of the federal counts.

In retrospect it appears clear that this simple $3000 negligence claim by a customer against his broker should never have been tried in a federal court. Yet by the time Judge Bonsai inherited the case for trial, the parties and the court had both invested a significant amount of time in it. While it would have been well within the judge’s discretion to refuse to consider the state claims even at that late stage, see Rogers v. Valentine, 426 F.2d 1361, 1363 & n. 2 (2 Cir. 1970), such a refusal would have signaled a substantial waste of judicial energy. See Rosado v. Wyman, 397 U.S. 397, 403-404 & n. 4, 90 S.Ct. 1207, 25 L.Ed.2d 442 (1970). We are thus faced with two choices, neither particularly attractive. One would be to send this small claim, nearly a decade old, back for the arbitration to which defendants would have been entitled if they had timely moved before Judge Bonsai for dismissal or a stay of the common law claims or for summary judgment on the federal claims. The other is to hold that, on the special facts here presented, the district court did not abuse its discretion by exercising pendent jurisdiction. Without enthusiasm we think the latter course more just under the circumstances, 28 U.S.C. § 2106.

Judgment affirmed. No costs.

      . Due largely to unconscionable delays by the attorneys for both parties, particularly the plaintiff, this case has been knocking around the District Court for the Southern District of New York and this court since 1966. An example of these delays is furnished by the history of the instant appeal. After obtaining four successive extensions of time, appellants filed their brief on March 1, 1973; appellee’s brief was ordered to be filed on April 12. Appellee then obtained four extensions of time, but still fell into default on November 9. Finally, appellee was allowed to file his 26-page typewritten brief on December 7, only 10 days before the date set for argument.

      . The arbitration clause reads :
      Any controversy between you and the undersigned arising out of or relating to this contract or the breach thereof, shall be settled by arbitration, in accordance with the rules, then obtaining, of either the Arbitration Committee of the Chamber of Commerce of the State of New York, or the American Arbitration Association, or the Board of Arbitration of the New York Stock Exchange, as the undersigned may elect. If the undersigned does not make such election by registered mail addressed to you at your main office within five (5) days after receipt of notification from you requesting such election, then the undersigned authorizes you to make such election in behalf of the undersigned. Any arbitration hereunder shall be before at least three arbitrators and the award of the arbitrators, or of a majority of them, shall be final, and judgment upon the award rendered may be entered in any court, state or federal, having jurisdiction.
      Appellee contends that, despite the breadth of the arbitration clause, it does not apply even to claims arising under state law because the agreement also provided that all transactions would be subject to § 29 of the Securities Exchange Act, which voids arbitration agreements between brokers and customers as a means of resolving future questions of compliance “with any provision of this chapter or of any rule or regulation thereunder, or of any rule of an exchange required thereby,” see Greater Continental Corp. v. Schechter, 422 F.2d 1100, 1103 (2 Cir. 1970) ; Reader v. Hirsch & Co., 197 F.Supp. 111, 116-117 (S.D.N.Y.1961) ; cf. Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953) (similar provision of § 12(2) of Securities Act of 1933). The contention is unfounded either in reason or in authority. See Stockwell v. Reynolds & Co., 252 F.Supp. 215 (S.D.N.Y.1965) ; cf. Robinson v. Bache & Co., 227 F.Supp. 456. (S.D.N.Y.1964) ; Pawgan v. Silverstein, 265 F.Supp. 898, 901 (S.D.N.Y.1967) ; Cohen v. Tenney Corp., 318 F.Supp. 280, 283 (S.D.N. Y.1970). Reader v. Hirsch & Co., supra, and Moran v. Paine, Webber, Jackson & Curtis, 389 F.2d 242 (3 Cir. 1968), cited by appellee, are not in point. Reader involved a claim brought solely under the federal securities laws. In Moran the customer voluntarily submitted both her common law claims and her federal securities law claims to arbitration, and the court held that the award precluded subsequent recourse to the courts to enforce federal securities remedies.

      . Plaintiff asserts that he had the right to bring his case in federal court regardless of the applicability of pendent jurisdiction principles, since diversity jurisdiction existed under 28 U.S.C. § 1332, he being a citizen of Virginia and the defendants being citizens of New York. Without going into detail, we are convinced that, despite the allegations of the complaint, it appears “to a legal certainty” that plaintiff’s claim was “really less” than the required jurisdictional amount. St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288-289, 58 S.Ct. 586, 82 L.Ed. 845 (1938). Of course, even if plaintiff had sufficiently alleged diversity jurisdiction, defendants would have been entitled to a stay of state claims pending arbitration, 9 U.S.C. § 3. See Whitney v. New York Stock Exchange, [1967-1969 Transfer Binder] CCH Fed.See.L.Rep. ¶ 92,106 (S.D.N.Y.1967).

      . Such circumstances might be found when the defendant fails to call the court’s attention to the weakness of the federal claim before the court has invested a substantial amount of time in the case, see, e. g., A. H. Emery Co. v. Marcan Products Corp., 389 F.2d 11, 19-21 (2 Cir.), cert. denied, 393 U.S. 835, 89 S.Ct. 109, 21 L.Ed.2d 106 (1968) ; when the pendent claim significantly invokes questions of federal policy, as in Gibbs itself, see also Almenares v. Wyman, supra, 453 F.2d at 1085; or when dismissal of the pendent claims would otherwise sharply clash with the directive in Gibbs that pendent jurisdiction serve the ends of “judicial economy, convenience and fairness to litigants.” 383 U.S. at 726, 86 S.Ct. at 1139.

      . While suggesting that there are limits beyond which the practice should not be permitted to extend, the courts of appeals have given broad rein to district courts that have exercised pendent jurisdiction even when the federal claims have been disposed of before trial. See Gem Corrugated Box Corp. v. National Kraft Container Corp., 427 F.2d 499, 501 n.1 (2 Cir. 1970) ; Ryan v. J. Walter Thompson Corp., supra; Gray v. Heat & Frost Insulators Local 51, 447 F.2d 1118, 1120 (6 Cir. 1971) ; Springfield Television, Inc. v. City of Springfield, 462 F.2d 21 (8 Cir. 1972). For examples of the very rare instances in which courts of appeals have reversed district courts on the ground that the federal claim was insufficient to support the exercise of pendent jurisdiction, see Elberti v. Kunsman, 376 F.2d 576 (3 Cir. 1967) ; and Brough v. United Steelworkers, 437 F.2d 748 (1 Cir. 1971).

      . In Pearlstein v. Scudder & German, 429 F.2d 1136 (2 Cir. 1970), cert. denied, 401 U.S. 1013, 91 S.Ct. 1250, 28 L.Ed.2d 550 (1971), this court sustained a private cause of action for violation of § 7 of the Securities Exchange Act. The Fifth Circuit has recently expressed some misgivings about the breadth of that opinion. Gordon v. duPont Glore Forgan, Inc., 487 F.2d 1260, 1262 (5 Cir. 1973).

      . This reads:
      If any failure to comply with this regulation results from a mistake made in good faith in executing a transaction, recording, determining, or calculating any loan, balance, market price or loan value, or other similar matter, the creditor shall not be deemed guilty of a violation of this regulation if promptly after the discovery of the mistake he takes whatever action may be practicable in the circumstances to remedy the mistake.

      . While the counts under the federal and state claims are separate and distinct, the claims are not sufficiently divergent to offend the Gibbs requirement that they be “such that [the plaintiff] would ordinarily be expected to try them all in one judicial proceeding,” 383 U.S. at 725, 86 S.Ct. at 1138.

      . If the court meant there was diversity jurisdiction under 28 U.S.C. § 1332, we disagree for the reason stated in note 3. We assume the reference to good faith was meant to embrace a good faith belief in the validity of the federal claims. The judge was more charitable on this than we would be, but he had seen the plaintiff and we have not.