author: ROSENN, Circuit Judge. SEITZ, Chief Judge

text:
    UNITED STATES of America v. Charles HARRIS, Appellant in Nos. 73-2041, 2046 and Harold Young. Appeal of Harold E. YOUNG, appellant in Nos. 73-2040, 73-2045. UNITED STATES of America v. Alvin E. YOUNG, Appellant in No. 73-2043. Appeal of Harvey JOHNSON, Appellant in No. 73-2042.
    Nos. 73-2040 to 73-2043 and 73-2045, 73-2046.
    United States Court of Appeals, Third Circuit.
    Argued April 16, 1974.
    Decided May 30, 1974.
    Rehearing and Rehearing En Banc Denied July 12, 1974.

      Thomas C. Carroll, Defender Assn, of Philadelphia, Philadelphia, Pa., for appellant in No. 73-2042.
    Paul Yermish, for appellants in No. 73-2040 and No. 73-2043 and No. 73-2045.
    Joseph Alessandroni, Jr., for appellant in No. 73-2041 and No. 73-2046.
    Thomas J. McBride, Asst. U. S. Atty., Philadelphia, Pa., for appellee.
    Before BIGGS, ALDISERT and ROSENN, Circuit Judges.
   OPINION OF THE COURT

ROSENN, Circuit Judge.

This opinion disposes of the appeals of four defendants who were convicted, in a consolidated trial also involving one other defendant, of various violations of the narcotics laws. The facts of the case are comprehensively set forth in the opinion of the district court denying all of defendants’ post-trial motions, 368 F.Supp. 697 (E.D.Pa.1973), and we repeat only those facts necessary to our disposition of these appeals.

The primary contention of the defendants is that they are entitled to new trials because the Government failed to take timely action to correct false testimony of its key witness, Linda Johnson, concerning promises made to her by the Government in exchange for her testimony. Although we agree that the Government’s action in this case was improper, we believe that defense counsel waived their objections to the impropriety by consciously failing to take any steps to minimize the resulting prejudice to their clients. We therefore affirm the convictions at issue on this appeal.

The Government’s case relied heavily upon the testimony of Linda Johnson (unrelated to defendant Harvey Johnson), an informant and unindicted co-conspirator, who testified under immunity. As noted by the district court, none of the defendants took the stand and “[t]he principal thrust of all defendants was to destroy the credibility of the Government’s witnesses and primarily Linda Johnson.” 368 F.Supp. at 703. In furtherance of this objective, counsel for the defendants made vigorous efforts to show that Ms. Johnson had been induced to testify for the Government in return for its promise to help her get a reduced sentence on three counts of a state prosecution to which she had previously pled guilty but had not yet been sentenced. The record discloses the following fruits of this effort.

When testimony began on the second day of trial, Ms. Johnson was the first witness. Defense counsel established that she had recently pleaded guilty in state court xo assault with intent to kill, possession of heroin with intent to deliver, and possession of narcotics, but that she had not yet been sentenced on these counts. She then denied that the Government had promised her that she “would receive favorable treatment from the [state] court” because of her cooperation with the federal authorities, and she denied that she had been “promised any help” in the state proceeding by the Government.

On further cross-examination the following day, she stated that she had no “agreement with the . . . U.S. Attorney’s office as to what would happen in [her] ease,” and she stated that she did not expect anyone from the office to appear at her state court sentencing. When counsel for the defense asked her if she had any “agreements or understandings” with the federal authorities with regard to her testimony, the Government counsel first objected on the grounds that the question was “entirely too broad,” and then remained silent when the objection was overruled and Ms. Johnson answered in the negative.

On the following day, the fourth day of trial, Officer Beasley testified. He was the police department “contact” with Ms. Johnson. He testified that Mr. McBride, who was the Assistant United States Attorney trying this case, and Mr. Wochok, who was simultaneously serving as Assistant United States Attorney and Assistant District Attorney for Philadelphia, had advised Ms. Johnson to plead guilty to the state charges. Under persistent questioning, however, he refused to state that the two officials had promised to intercede in the state proceeding in exchange for her testimony in the instant case.

At that point, Mr. McBride requested a conference at side-bar. He told the court and counsel for the defense that

Taras Wochok and I sat down and talked and we sat down and talked with her and it was agreed that she should go and plead guilty and we would do anything, whatever we could, to influence the [state] court at the time of sentencing to give her a break for what she has been able to do. [Emphasis supplied.]

Mr. McBride offered to stipulate to this, but the district court, agreeing with defense counsel, stated that “I don’t think you can expect these defendants to stipulate to something that is a strong point in their favor, but ... I think you can get to the point clearly and promptly and unequivocally.” The court also stated that in light of what it termed Mr. McBride’s “revelation,” it would permit defense counsel to lead witnesses more than they usually might. When defense counsel stated that the Government’s conduct was outrageous in not correcting Linda Johnson’s testimony concerning the agreement while she was on the stand, the court stated, “If there is any kind of motion you have made, Mr. Carroll, it is denied.”

A convicted defendant is entitled to a new trial if he can establish that the Government intentionally or inadvertently failed to correct materially false testimony relevant to the credibility of a key Government witness at the trial, including evidence concerning “any understanding or agreement as to a future prosecution” between the witness and the Government. Giglio v. United States, 405 U.S. 150, 92 S.Ct. 763, 31 L.Ed.2d 104 (1972); Napue v. Illinois, 360 U.S. 264, 79 S.Ct. 1173, 3 L.Ed.2d 1217 (1964); United States v. Newman, 476 F.2d 733, 737-738 (3d Cir. 1973); United States v. Kaplan, 470 F.2d 100 (7th Cir. 1972), cert. denied, 410 U.S. 966, 93 S.Ct. 1443, 35 L.Ed.2d 701 (1973).

It is apparent in this ease that the Assistant United States Attorney sat silently by while Ms. Johnson gave testimony on cross-examination which at least gave the court and jury an impression directly contrary to what he ultimately stated was the truth concerning his agreement with Ms. Johnson. While she was testifying that she had no “agreements or understandings” with the Government, had not been “promised any help” in her pending cases, and that she did not expect anyone from the Government to appear at her state court sentencing appearance, the U.S. Attorney later admitted that he had promised that “we would do anything, whatever we could” to get her sentence minimized “to give her a break for what she has been able to do.”

The Government contends, however, that it had no obligation to “correct” Ms. Johnson’s testimony because it believed that she was answering the questions of defense counsel in good faith. It contends that although she was told that her cooperation would be made known to the state court at the time of her sentencing, she was also repeatedly told that “the Government can’t promise you anything.” Although this latter phrase clearly referred to the Government’s inability to promise Ms. Johnson any particular result at her sentencing, the Government contends that it was upon this phrase that she relied in good faith to deny, inter alia, that she had any “agreements or understandings” with the Government. Since Ms. Johnson therefore did not have the intent to lie which is necessary for a perjury conviction, the argument runs, the Government had no duty to correct the testimony even if the testimony misled the court, defense counsel, and jury into believing that the Government had not even promised to help her at sentencing.

Arguably, of course, Ms. Johnson did not commit perjury by her responses to defense counsel She might have believed in good faith that “agreements or understandings” only referred to specific promises concerning her sentence, which the Government could not and did not make. She might also have honestly believed, despite the Government’s promise as described by the U.S. Attorney, that no one would appear on her behalf at the state proceeding. Finally, the U. S. Attorney’s admission could be construed as a promise based solely upon Ms. Johnson’s past behavior, “for what she has been able to do,” and not to be affected by her future testimony in the instant case. Under this interpretation, her testimony would not technically be perjury since she had no intent to lie.

We do not believe, however, that the prosecution’s duty to disclose false testimony by one of its witnesses is to be narrowly and technically limited to those situations where the prosecutor knows that the witness is guilty of the crime of perjury. Regardless of the lack of intent to lie on the part of the witness, Giglio and Napue require that the prosecutor apprise the court when he knows that his witness is giving testimony that is substantially misleading. This is not to say that the prosecutor must play the role of defense counsel, and ferret out ambiguities in his witness’ responses on cross-examination. However, when it should be obvious to the Government that the witness’ answer, although made in good faith, is untrue, the Government’s obligation to correct that statement is as compelling as it is in a situation where the Government knows that the witness is intentionally committing perjury.

These considerations are especially strong in the instant case. Defense counsel were attempting, by phrasing their questions as broadly as possible, to determine whether a prosecution witness had been promised anything in exchange for her testimony. Only the Government knew, by virtue of its former statements to her, that she was likely to narrowly construe the word “promise” to refer only to a promise of a particular sentence in the state proceeding. Defense counsel had every expectation that she would construe the word “promise” in its natural sense to include a promise by the Government to help her in the state proceeding. Under these circumstances, the Government may not sit back and require defense counsel to examine each witness extensively to determine whether that witness has been conditioned by the Government to give any particular word an unusual meaning.

Notwithstanding the Government’s breach of its duty to disclose a promise made to a Government witness, the convicted defendant is entitled to a new trial only if the false testimony denying the existence of an agreement could “in any reasonable likelihood have affected the judgment of the jury.” Giglio, supra, 405 U.S. at 154; United States ex rel Dale v. Williams, 459 F.2d 763, 767 (3d Cir. 1972). This factor is dependent upon the relative importance of the witness’ testimony to the Government’s case. Id.

The defendants in this case have met their burden of showing the significance of the Johnson testimony to the Government’s case against them. The Government does not seriously dispute the importance of this testimony, and this is confirmed by the testimony described in the district court opinion in this case. See 368 F.Supp. at 700-703. Nor do we believe that the impeachment of Ms. Johnson’s credibility on other grounds by defense counsel sufficiently mitigated the prejudice to defendants which might have arisen had they been unable to show the agreement made between her and the Government. See Napue, supra, 360 U.S. at 270; United States v. Kaplan, supra, 470 U.S. at 103.

Had the Government not disclosed the agreement with Ms. Johnson until after the conclusion of the trial, these considerations would impel us to reverse the convictions of the defendants. In the instant ease, however, the Government did in fact disclose the existence of the agreement. Although the disclosure was not made in a timely fashion, i.e., while Linda Johnson was still on the stand, the disclosure was made two days later, on the fourth day of the eleven day trial, while the prosecution was still presenting its case in chief

As we have noted, the district judge was quite willing, in light of the belated “revelation” by the Government, to permit defense counsel extra latitude in their conduct of the defense, agreeing with defendants that the prosecutor’s suggested stipulation was inadequate. The court explicitly told counsel that they would be permitted to ask leading questions concerning the agreement. Additionally, as noted by the district court in its opinion denying defendants a new trial, “Linda Johnson was subject to extensive cross-examination and to recall at any time by defense counsel for the purpose of exploring this alleged agreement and bringing same to the attention of the jury.” 368 F.Supp. at 714. Furthermore, there is no doubt that defense counsel could have put Mr. McBride himself on the stand and examined him concerning the agreement, since there is no doubt that the prosecutor “possesse[d] information vital to the defense.” See United States v. Newman, 476 F.2d 733, 738 (3d Cir. 1973).

Defense counsel, on the other hand, chose to do nothing of the sort. In fact, the record is bare of any effort whatever on their part to disclose to the jury the agreement with Ms. Johnson, acknowledged at side-bar by Mr. McBride. Counsel did not recall Ms. Johnson as a witness and did not call Mr. McBride to testify. This deliberate inaction by defense counsel persisted even after they elicited from Mr. Wochok testimony that he could not say that his state prosecutor’s office would not oppose leniency for Ms. Johnson in the state proceeding, in contradiction to the admission by Mr. McBride. The record does not reveal that defendants even submitted to the jury the proffered stipulation by Mr. McBride.

We believe that this inactivity by defense counsel following the “revelation” by the Government constitutes a waiver of their right to allege error on appeal. As we have repeatedly stated:

“* * * [I]f appellant’s counsel was of the opinion that the errors were prejudicial it was his obligation to interpose a timely objection and seek corrective action by the Court. [Citing cases.] He should have taken this course when he learned of the errors, but failed to do so. A defendant may not sit idly by in the face of obvious error and later take advantage of a situation which by his inaction he has helped to create.”

United States v. Chicarelli, 445 F.2d 1111, 1116 (3d Cir. 1971), quoting from United States v. Grosso, 358 F.2d 154, 158 (3d Cir. 1966), rev’d on other grounds, 390 U.S. 62, 88 S.Ct. 709, 19 L.Ed.2d 906 (1968). [Emphasis supplied.]

In this case, counsel did express his indignation at the Government’s conduct but made no specific motion. The court stated in reply that “If there is any kind of motion you have made, ... it is denied.” Notwithstanding this cryptic comment, the court had previously expressed to defense counsel a willingness to take remedial action. Defense counsel did nothing to “seek corrective action by the Court” in order to minimize any prejudice to the defense.

We do not believe the Government’s conduct in this case constituted per se reversible error. Although the judge plays a vital role in the trial of a criminal case, counsel for the parties are also essential components. They too share in the cause of justice. When error appears in a trial and counsel have opportunity to attempt to eradicate it but choose not to do so, they may not unload the burden of the error upon the trial judge. Defense counsel sat by in this case day after day without making the slightest effort to minimize the prejudice of which they now complain. The Government was slow in correcting the testimony of its key witness. Defense counsel, however, in the expectation that any ensuing conviction would be reversed, did nothing to take obvious corrective measures. We do not believe they may now profit from their inactivity and contend on appeal that the defendants are entitled to a new trial.

This is not to say that counsel, had they exercised their best efforts, would in all certainty have been able to minimize the prejudice to defendants to such a degree that reversible error could have been eliminated. We recognize the strategic importance to defense counsel of being able to impeach the credibility of a key Government witness while he is still on the stand, rather than by recalling him after the jury has possibly accepted the truthfulness of his statements. We are unable to say, however, that there is nothing that defense counsel could have done to overcome or reduce the alleged prejudice so as to secure a fair trial for their clients. Counsel by various defense tactics possibly could have succeeded in so reducing the prejudice to their clients. Had they taken these steps, we would now be in a position to evaluate the presence, if any, of the residual prejudice and its effect upon the fairness of the trial. Absent such effort, we conclude that defendants waived their objections to the possible prejudice from the Government’s action.

We find support for this view in United States v. Cerone, 452 F.2d 274 (7th Cir. 1971), cert denied, 405 U.S. 964, 92 S.Ct. 1168, 31 L.Ed.2d 240 (1972). In that case defendants contended, inter alia, that they had been prejudiced at trial by the testimony of the United States Attorney, who testified that a key witness had told him that he was afraid of “those fellows,” referring to the defendants. The defense contended on appeal that it was prejudiced by the failure of the United States Attorney to identify which, if any, of the defendants the witness had feared. The court held that the defendants “waived that issue by failing either to cross-examine the United States Attorney or to call [the witness] in surrebuttal on that point.” 452 F.2d at 288-289. See also United States ex rel. Felton v. Rundle, 410 F.2d 1300 (3d Cir. 1969) (en banc), cert. denied, 397 U.S. 993, 90 S.Ct. 1129, 25 L.Ed.2d 400 (1970); United States v. Cook, 432 F.2d 1093, 1100 (7th Cir. 1970), cert. denied, 401 U.S. 996, 91 S.Ct. 1224, 28 L.Ed.2d 535 (1971); Bohol v. United States, 227 F.2d 330 (9th Cir. 1955).

We have considered the other contentions of the defendants and find them without merit.

The judgments of the district court will be affirmed.

OPINION SUR PETITION FOR REHEARING

The dissent sur denial of the petition for rehearing would reverse on the ground that the prosecution must inform the fact finder as well as the court and defense counsel of the truth. This requirement appears to have been met in the instant case, however, by the prosecutor’s proffered stipulation during the Government’s case in chief as to the facts he admitted to the court and to counsel. This stipulation could also have been submitted to the jury if defense counsel so desired.

The dissent views the trial judge’s statement that he would deny a defense motion as effectively foreclosing the defendants from any significant means of relief. The trial judge, however, was apparently referring to a motion for mistrial. As we have indicated in our original opinion, he was not precluding the defense from other remedies which were readily available to them.

For an example of measures by defense counsel to reduce prejudice resulting from the prosecution’s belated disclosure of a bargain with a key witness, see United States v. Johnson, 487 F.2d 1318, 1322-1324 (5th Cir. 1974), petition for certiorari filed, 42 U.S.L.W. 3542 (U.S. March 26, 1974) (No. 73-1418).

SEITZ, Chief Judge

(dissenting sur denial of petitions for rehearing in banc).

I believe that these matters should be reheard by the Court in banc and the judgments of the district court reversed. The disposition of these appeals depends on our resolution of a question I consider to be of exceptional importance within the meaning of Rule 35(a) of the Federal Rules of Appellate Procedure: what is the scope of a federal prosecutor’s duty to correct known misstatements of government witnesses?

The prosecutor here knew at the time the testimony was given, on two consecutive days, that it was untrue. His only effort to correct the misstatement was his revelation of the testimony’s untruth to the judge and defense counsel out of the jury’s presence. Neither the prosecutor nor the district court ever brought the error to the jury’s attention.

The panel, however, holds that once defense counsel was aware of the misstatement, responsibility for taking corrective measures was defendants’ and their failure to take such corrective measures constituted a waiver of their right to assert this error. Because the prosecutor did not inform defense counsel that the testimony was false until after the witness involved had left the stand and another witness had taken it, defense counsel had no expeditious means of bringing this development to the jury’s attention without the court’s or the government’s assistance. Certainly, the trial judge’s statement that he denied any motion defense counsel was making concerning this matter may be viewed as effectively foreclosing any means by which defendants, without a considerable lapse of time and possibly significant injury to the presentation of their case, could have corrected this error.

While I disagree with the panel as to whether the defendants here reasonably could be expected to have corrected the misstatement, that is not what makes this case appropriate for rehearing. The important question is why defendants are required to bring the witness’ misstatement to the jury’s attention. I believe the panel in placing this burden on defendants was guided by a conception of the defendants’ rights and prosecutor’s duty that differs fundamentally from my own.

The sole right involved here is defendants’ right to a fair trial implicit in the guarantee that no person shall be deprived of liberty without due process. Prosecutors, as well as courts, are under a general duty to insure that criminal defendants enjoy this right. As part of this general duty, and not as independent technical requirements, prosecutors are barred from employing false testimony to obtain convictions, Mooney v. Holohan, 294 U.S. 103, 112, 55 S.Ct. 340, 79 L.Ed. 791 (1935), and are required, upon request, to make exculpatory evidence available to defendants, Brady v. Maryland, 373 U.S. 83, 87, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963). The prosecutor’s “‘responsibility and duty to correct what he knows to be false and elicit the truth,’ ” Napue v. Illinois, 360 U.S. 264, 270, 79 S.Ct. 1173, 1177, 3 L.Ed.2d 1217 (1959), derive from the same source. Napue does not permit the prosecutor to fulfill this duty by telling defense counsel that certain testimony was false. The decision requires the prosecutor to correct the error, which can be done only by informing the fact-finder of the truth: the requirement that a prosecutor “elicit the truth” to “correct what he knows to be false” is a meaningless inconsistency unless the prosecutor must elicit the truth before the jury. If he fails to do so to remedy a material statement he knows to be false, the prosecutor has violated his duty to insure defendants a fair trial. I do not see how defense counsel’s failure to correct testimony known to the prosecutor to be false can waive defendants’ right to a fair trial; and I find the conclusion of waiver here particularly baffling in light of the established rule that every reasonable presumption should be indulged against waiver of the right to a fair trial, e. g., Brady v. United States, 397 U.S. 742, 748, 90 S.Ct. 1463, 25 L.Ed.2d 747 (1970); Brookhart v. Janis, 384 U.S. 1, 4, 86 S.Ct. 1245, 16 L.Ed.2d 314 (1966); cf. Johnson v. Zerbst, 304 U.S. 458, 464, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938). The solution reached by the panel encourages game-playing by government attorneys; I would rather we encouraged them to preserve defendants’ right to a fair trial.

GIBBONS and WEIS, Circuit Judges, join in this dissent.

      . We review in this opinion the convictions of Charles Harris, Alvin Young, Harold Young, and Harvey Johnson. The appeal of Robert Green, who was also convicted in the district court, raises a distinct issue and is still pending before this court. James Simmons, whose trial was severed from that of the remaining defendants, is not before us on this appeal.

      . All four defendants were convicted of conspiracy to possess with intent to distribute and to distribute heroin in violation of 21 U.S.C. § 846. Additionally, Charles Harris was convicted of possession of heroin with intent to distribute, 21 U.S.C. § 841; Harold Young was convicted of aiding and abetting Charles Harris in the possession of heroin with intent to distribute, 21 U.S.C. § 841 and 18 U.S.C. § 2; Alvin Young was convicted of use of a telephone in facilitating the possession of heroin with intent to distribute by other defendants, 21 U.S.C. §§ 841, 843(b).

      . Defendant Harvey Johnson made a pretrial motion for discovery of any “agreement, understanding or communications made to [Linda] Johnson by any law enforcement agent concerning any benefit, including leniency, concessions or accommodations made to her, in consideration of her cooperation with the Government in this case or any related case.”
      The Government responded by refusing to supply this information “for the reason that such matters are properly the subject of cross-examination of the witnesses . . . . ”
      The district court denied the motion, and this decision is not contested on appeal.

      . On cross-examination, Linda Johnson testified as follows:
      Q. Now, have you been promised by anyone other than the public defender that you would receive favorable treatment from the court in these three cases because you are in fact cooperating with the police and the federal authorities?
      A. No.
      Q. Is it your testimony that you have not been promised any help in your pending cases by the Government, by the United States Attorney, or by the police?
      A. No, the regular cops that I know, they told me they would help me as much as possible, but not because of this case, because I don’t think they even know of this case.

      . Ms. Johnson further testified:
      Q. Now, did you have any agreement with the Marshals or the U.S. Attorney’s office as to what would happen in your case?
      A. No.
      Q. As long as you testified?
      A. No.
      Q. You have no idea what your sentence will be?
      A. No. I haven’t even been told I might be sent away.
      Q. Do you expect anybody to appear in court on your behalf and testify as to why you shouldn’t go to jail?
      A. I would like someone to, but if they didn’t, that would be all right, too.
      Q. You don’t expect Mr. McBride or any of his associates to appear in [State] Court, do you?
      A. No.
      Q. Did any law enforcement agent including a police officer or detective state to you that, “When your case comes up, don’t worry about it; we will take care of it”?
      A. No.

      . Ms. Johnson testified:
      Q. All right. Do you have any agreements or understanding with the Federal authorities with regard to your testimony today?
      s¡; sf: s¡; # sH
      Mr. McBride: I object to that, sir, on two grounds:
      One, I think she has answered it about a half a dozen times already and I think Mr. Meyers has asked it.
      But Number 2, if the Court does feel it should be answered again, I would ask that Mr. Meyers narrow it down. As it stands now, it is entirely too broad. “Any understandings or agreements” could encompass a myriad of things to her.
      The Court: Well, that’s Mr. Meyers’ point. He wants to find that out. I think it is a little repetitious but I will permit her to answer at this time.

        % :¡: * sjs
      A. No.
      * * * * *
      Q. Do you have any agreements or understandings with anyone in the State Government, State authorities [relative to your testimony in court today] ?
      *****
      A. No.
      [Emphasis supplied.]

      . We must accept as true the admission of the U. S. Attorney made to the court at side-bar, since he does not deny the truth of this admission on appeal. See Giglio v. United States, 405 U.S. at 153. We note, however, that Mr. Woehok, whom he also implicated in the deal with Ms. Johnson, denied under oath that he had agreed to anything. See note 9, infra.

      . In moving that the court place Ms. Johnson in protective custody, Mr. McBride stated in an affidavit dated May 26, 1973, (less than a month before the trial began) that “her testimony comprises at least seventy-five per cent of the Government’s case.”

      . Mr. Wochok stated that the only understanding was that “sentence [on the state charges] would be deferred and an opportunity would be given to the Government to explain to the Court the degree of her cooperation.”

      . i3ee ABA Standards Relating to the Defense Function § 1.1(a) (Approved Draft 1971).

      . We are aware of Nash v. Illinois, 389 U.S. 906, 88 S.Ct. 222, 19 L.Ed.2d 223 (1967) (opinion by Mr. Justice Portas, joined by Mr. Chief Justice Warren and Mr. Justice Douglas, dissenting from the denial of certiorari). In that case, the defendant had been convicted of murder largely on the testimony of Triplett, who had denied being promised anything in exchange for his testimony. The prosecutor, knowing this denial was false, said nothing. Later in the trial, defense counsel called Triplett’s lawyer as well as the prosecutor, both of whom admitted that Triplett had been promised leniency in exchange for his testimony.
      Mr. Justice Portas, joined by Mr. Chief Justice Warren and Mr. Justice Douglas, stated that he “would grant certiorari and reverse.” His first reason for reversing was that the defendant was prejudiced because the subsequent admission “could not adequately overcome the jury’s initial impression of the [Triplett] testimony.” Our holding in the instant case is fully consistent with this rationale, because defense counsel in Nash attempted to reduce the prejudice to their client but arguably failed in this difficult task. We recognize the possible prejudice to defendants in the instant case, but hold that their failure to attempt to overcome the prejudice constitutes a waiver.
      Mr. Justice Portas’ second reason for reversing was that “it is by no means clear” that the defendant must show prejudice from such prosecutorial misconduct, “especially in a capital case.” To the extent that this means that even in a non-capital case the prosecutor’s belated disclosure constitutes per se reversible error despite succeeding inaction by defense counsel, we respectfully disagree. We note further that the prosecutorial misconduct in the instant case was not as offensive as that in Nash, where the prosecutor admitted the agreement only when forced to under oath. Here, Mr. McBride voluntarily made the admission before Ms. Johnson’s denials of any agreement had been contradicted by any witness.

      . Defendants contend, inter alia, that (1) the district court erred in failing to give an accomplice charge concerning Linda Johnson; (2) the statement by a prosecution witness that he had once arrested one of the five co-defendants was so prejudicial as to warrant a new trial; (3) defendant Harvey Johnson was entitled to a severance of his trial from that of the remaining defendants; (4) a new trial should be granted because the prosecutor allegedly induced a Government witness to violate a sequestration order.

      . By focusing on the prosecutor’s duty to assure defendants a fair trial, I do not intend to de-emphasize the court’s duty in this regard. The district court had a duty to see that the jury was made aware of the prosecutor’s promise to the witness. The initial responsibility for correcting this error, however, was on the prosecutor, for he, not the judge and not defendants or their counsel, knew when the testimony was given that it was false. The court’s failure to fulfill its duty here does not excuse the prosecutor’s initial or subsequent dereliction.


source: Caselaw Access Project

author: BREITENSTEIN, Circuit Judge.

license: Public Domain

text:
    Marie Anne BROWN, Plaintiff-Appellant, v. Leonard J. DeLAYO, Individually and as Superintendent of Public Instruction, et al., Defendants-Appellees.
    No. 73-1699.
    United States Court of Appeals, Tenth Circuit.
    Argued and Submitted March 21, 1974.
    Decided June 12, 1974.

      Dale B. Dilts, Albuquerque, N. M., for plaintiff-appellant.
    C. Emery Cuddy, Jr., Agency Asst. Atty. Gen. (David L. Norvell, Atty. Gen., Matías L. Chacon, Española, N. M., and Charles S. Solomon, Santa Fe, N. M., on the brief), for defendants-appellees.
    Before BREITENSTEIN, SETH and McWILLIAMS, Circuit Judges.
   BREITENSTEIN, Circuit Judge.

In this civil rights action under 42 U. S.C. §§ 1981 and 1983, with jurisdiction under 28 U.S.C. § 1343(3) and (4), plaintiff-appellant Brown claims deprivation of 14th Amendment due process rights by improper termination of her employment as a school teacher. The defendants-appellees are various New Mexico officials and boards concerned with public education. The trial court granted defendants’ motion to dismiss.

Plaintiff became a teacher in a New Mexico public school in 1930. In May, 1962, she was notified that she would not be rehired for the next school year. Her request for a hearing was denied. The ensuing litigation has produced four decisions of the New Mexico Supreme Court and one of the state Court of Appeals. They are Brown v. Romero, 77 N.M. 547, 425 P.2d 310; State ex rel. Brown v. Hatley, 80 N.M. 24, 450 P.2d 624; Brown v. State Board of Education, N.Mex.Ct. of App., 81 N.M. 460, 468 P. 2d 431; Brown v. New Mexico State Board of Education, 83 N.M. 99, 488 P.2d 734; and State ex rel. Brown v. Hatley, 84 N.M. 694, 507 P.2d 441. The procedural complications discussed in these opinions need not be mentioned. It is enough to say that a trial court’s grant of mandamus requiring that the teacher be given a hearing was affirmed, 450 P.2d at 626-627; that a hearing was held with the result adverse to the teacher, 507 P.2d at 442; and that the decision of the trial court that the hearing satisfied the requirements of the mandamus writ was affirmed by the state supreme court, Ibid. On the basis of the transcript of the last state appeal and the decision therein, 507 P.2d at 442, the federal district court held that the teacher’s due process claim had been litigated to an adverse final judgment in the state courts and that the judgment was res judicata in the federal suit.

The issue is not res judicata because that principle “applies to repetitious suits involving the same cause of action.” Commissioner of Internal Revenue v. Sunnen, 333 U.S. 591, 597, 68 S.Ct. 715, 719, 92 L.Ed. 898. The §§ 1981 and 1983 claims presented here were not before the state courts. However, the state claims and the present civil rights claims all depend on the determination of the question of whether the teacher was denied due process. In this situation the judgment in the prior actions “operates as an estoppel * * * ‘as to those matters in issue or points controverted, upon the determination of which the finding or verdict was rendered.’ ” Ibid, at 598. The principle of collateral estoppel by judgment precludes the relitigation of matters litigated and determined in a prior proceeding. Ibid.

The teacher’s claim that she was denied due process presents a federal constitutional question which state courts are competent to decide. Palmore v. United States, 411 U.S. 389, 407, 93 S.Ct. 1670, 36 L.Ed.2d 342; Robb v. Connolly, 111 U.S. 624, 637, 4 S.Ct. 544, 28 L.Ed. 542; and Chandler v. O’Bryan, 10 Cir., 445 F.2d 1045, 1058, cert. denied 405 U.S. 964, 92 S.Ct. 1176, 31 L.Ed.2d 241. Absent certiorari review in the United States Supreme Court, and none was sought in the proceedings with which we are concerned, the state decision is final and conclusive because only the Supreme Court may review a state court decision. Atlantic Coast Line Railroad Co. v. Brotherhood of Locomotive Engineers, 398 U.S. 281, 286, 90 S.Ct. 1739, 26 L.Ed.2d 234. A prior state court adjudication of a federal constitutional right bars a subsequent federal action seeking vindication of the same right. Hanley v. Four Corners Vacation Properties, Inc., 10 Cir., 480 F.2d 536, 538. The rule applies even though the federal action is brought under §§ 1981 and 1983. The Civil Rights Act is not a vehicle for a collateral attack on a final state court judgment. Bricker v. Crane, 1 Cir., 468 F.2d 1228, 1231, cert. denied 410 U.S. 930, 93 S.Ct. 1368, 35 L.Ed.2d 592. See also Parker v. McKeithen, 5 Cir., 488 F.2d 553, 557-558; Tang v. Appellate Division of New York Supreme Court, First Department, 2 Cir., 487 F.2d 138, 141-143, cert. denied 416 U.S. 906, 94 S.Ct. 1611, 40 L.Ed.2d 111 and Coogan v. Cincinnati Bar Association, 6 Cir., 431 F.2d 1209, 1211.

The teacher seeks to avoid estoppel by claiming different issues and parties in the state and federal actions. As to issues she points to her claims of back pay, retirement benefits, and conflict of interest of a state official. These are all ancillary to and dependent upon determination of the fundamental due process claim. She voluntarily litigated that claim in the New Mexico courts and had a full and fair opportunity to present her contentions, with an adverse result. Determination of her right to lost income between the date of discharge and the date of the hearing on the propriety of discharge cannot be determined on the appeal before us.

The change in identity of parties because of inclusions and exclusions of certain New Mexico boards and officials is of no moment. The application of collateral estoppel in federal courts is not grounded upon the “mechanical requirements of mutuality.” P I Enterprises v. Cataldo, 1 Cir., 457 F.2d 1012, 1015. The test is whether a litigant has had a “full and fair opportunity for judicial resolution” of the issue. Blonder-Tongue Laboratories, Inc., v. University of Illinois Foundation, 402 U.S. 313, 328, 329, 91 S.Ct. 1434, 28 L.Ed.2d 788. The teacher had that full and fair opportunity and may not relitigate the issue in federal court.

Affirmed.


author: WEBSTER, Circuit Judge.

text:
    CAESAR’S WORLD, INC., formerly known as Lum’s, Inc., Appellant, v. SPENCER FOODS, INC., Appellee.
    No. 73-1771.
    United States Court of Appeals, Eighth Circuit.
    Submitted Feb. 15, 1974.
    Decided June 20, 1974.

      William R. Glendon, Rogers & Wells, New York City, for appellant.
    Robert R. Eidsmoe, Sioux City, Iowa, for appellee.
    Before GIBSON, STEPHENSON and WEBSTER, Circuit Judges.
   WEBSTER, Circuit Judge.

We granted appellant Caesar’s World, Inc. leave to pursue this interlocutory appeal from an order of the District Court denying the motion of Caesar’s World to dismiss for lack of personal jurisdiction the complaint of Spencer Foods, Inc. alleging breach of contract and fraudulent misrepresentation. We hold that personal jurisdiction of appellant was acquired by the lawful application of the Iowa long-arm statute and affirm the order of the District Court.

Caesar’s World, Inc. was formerly known as Lum’s, Inc. and was the creator of a franchise restaurant system known as “Lum’s System”. Lum’s wholly owned a number of subsidiary corporations which carried on various aspects of the business of this system, including Lum’s Restaurant Corporation (“LRC”) and Dirr’s Gold Seal Meats, Inc. (“Dirr’s”). Spencer Foods, Inc. (“Spencer”) is a Delaware corporation engaged in the meat packing business, with its principal headquarters in Spencer, Iowa. On July 15, 1970, Lum’s and Dirr’s entered into an agreement with Spencer and a newly created subsidiary of Spencer, Spencer-Dirr’s, Inc., a Florida corporation, pursuant to which all the assets of Dirr’s were acquired by Spencer-Dirr’s. As a part of that agreement, Lum’s undertook to purchase from Spencer-Dirr’s “its entire requirements for meat and meat products for use in restaurants (but not hotels) owned by it or its subsidiaries in the continental United States. . . . ” Previously, restaurants in the Lum’s chain received their meat supplies from Dirr’s.

In August, 1971, Lum’s sold its interest in LRC and the Lum’s System to a third- party who in turn sold it to Riviana Foods, Inc. Riviana notified Spencer on September 8, 1972 that it would discontinue using Spencer’s products in Lum’s Restaurants effective September 29, 1972. Spencer filed this lawsuit on January 4, 1973, alleging breach of contract for failure to perform the five year requirements provision and fraudulent misrepresentation, claiming that Lum’s knew it was going to sell its franchising business when it entered into the contract. Appellant moved to dismiss for lack of in personam jurisdiction, asserting that the contract did not come within the Iowa long-arm statute and that Lum’s did not have sufficient contacts with the state of Iowa to satisfy due process requirements.

The trial court found that Lum’s had agreed to purchase the meat requirements for all Lum’s restaurants from Spencer-Dirr’s and that there were several Lum’s restaurants in Iowa, and it therefore concluded that the contract was to be performed in part in Iowa within the meaning of the long-arm statute, Iowa Code § 617.3. The trial court further concluded that the minimum contacts test of the due process clause was satisfied because Lum’s had guaranteed the leases for the Iowa franchises, was named as an additional insured on all policies insuring the premises covered by these leases and, under the franchise agreements, “had considerable control over how these restaurants were operated”. The court found it unnecessary to consider the relationship between Lum’s and its subsidiaries to determine whether the subsidiaries’ contacts might be attributable to Lum’s for jurisdictional purposes because it found Lum’s direct contacts sufficient to sustain jurisdiction. The court also stated: “The fact that defendant has sold its restaurant divisions and is no longer doing business in Iowa is of no consequence.”

Appellant argues on this appeal that (1) the contract was primarily for the sale of assets of one Florida corporation to another and was not to be performed in whole or in part in Iowa; (2) even if the long-arm statute is deemed applicable, its application would violate due process because Lum’s contacts with Iowa have not been sufficient to satisfy the minimum contacts requirement; and (3) Lum’s had no contacts with Iowa at all at the time the cause of action arose or at the time it was served and therefore cannot be sued in Iowa consistent with due process.

The Iowa, Long-Arm Statute

The Iowa long-arm statute provides in part:

If a foreign corporation makes a contract with a resident of Iowa to be performed in whole or in part by either party in Iowa, . . . such [act] shall be deemed to be doing business in Iowa by such foreign corporation for the purpose of service of process or original notice on such foreign corporation under this section, and, if the corporation does not have a registered agent or agents in the state of Iowa, shall be deemed to constitute the appointment of the secretary of state of the state of Iowa to be its true and lawful attorney upon whom may be served all lawful process or original notice in actions or proceedings arising from or growing out of such contract. .
Iowa Code § 617.3.

When the contract was executed, appellant was a foreign corporation and appellee had its principal place of business in Iowa. The only question under the long-arm statute therefore is whether the contract was to be performed in whole or in part by either party in Iowa.

Whether a state long-arm statute applies in any particular case is a question of state law. Simpkins v. Council Mfg. Corp., 332 F.2d 733 (8th Cir. 1964); Jennings v. McCall Corp., 320 F.2d 64 (8th Cir. 1963). The Iowa statute is to be liberally applied in actions involving foreign corporations. Lundell v. Massey-Ferguson Services N. V., 277 F.Supp. 940 (N.D.Iowa 1967); Tice v. Wilmington Chemical Corp., 259 Iowa 27, 141 N.W.2d 616 (1966). Under Iowa law, jurisdiction under the long-arm statute will be sustained “if plaintiff makes a prima, facie showing of the existence of a contract ‘to be performed in whole or in part’ in Iowa.” Midwest Packaging Corp. v. Oerlikon Plastics, Ltd., 279 F.Supp. 816, 818 (S.D.Iowa 1968); Sporcam, Inc. v. Greenman Bros., Inc., 340 F.Supp. 1168 (S.D.Iowa 1972); Fisher v. First National Bank of Omaha, 338 F.Supp. 525 (S.D.Iowa), appeal dismissed, 466 F.2d 511 (8th Cir. 1972). Once this prima facie showing has been made, the burden is on defendant to overcome or rebut that showing. Miller v. Vitalife Corp. of America, 173 N.W.2d 91, 92 (Iowa 1969); Tice v. Wilmington Chemical Corp., supra.

The contract provides that “a portion of the inducement for Spencer and Spencer-Dirrs into this Agreement is the assurance that business relationship between Dirr’s and Lum’s will continue, and if possible expand, between Spencer-Dirrs and Lum’s, following the Closing.” It specifically obligates Lum’s to purchase its entire meat requirements for use in restaurants owned by it or its subsidiaries from Spencer-Dirr’s for five years. At the time of execution and thereafter restaurants owned by Lum’s or its subsidiaries were located and operating in Iowa.

The thrust of appellant’s effort to rebut this prima facie showing is that the substance of the contract was the sale of assets of one Florida corporation to another and that all provisions relating to the transfer were carried out exclusively in Florida. This argument fails because it ignores that “portion of the inducement” quoted above. A similar argument was likewise rejected in Robinson v. Merlite Land Sea & Sky, Inc., 61 Misc.2d 462, 305 N.Y.S.2d 289 (1969), affirmed, 64 Misc.2d 911, 316 N.Y.S.2d 455 (1970). In that case, an Iowa plaintiff sued a New York firm for breach of contract under the Iowa long-arm statute and obtained a default judgment when the defendant failed to appear in Iowa court. When the plaintiff sued on the judgment in New York, the defendant challenged Iowa’s jurisdiction, claiming it had “done nothing more than sell gift certificates to plaintiff in New York.” 305 N.Y.S.2d at 292. The court held the judgment was entitled to full faith and credit because the contract provided, in addition to the sale of gift certificates, that defendant would not compete with plaintiff in Iowa and defendant would recruit Iowa agents for plaintiff’s benefit — promises to be performed in Iowa and therefore supplying jurisdiction under the Iowa long-arm statute.

Lum’s argues, however, that the contract does not require any performance in Iowa. Lum’s reliance on Fisher v. First National Bank of Omaha, 338 F.Supp. 525, 528 (S.D.Iowa), appeal dismissed, 466 F.2d 511 (8th Cir. 1972), is misplaced. Fisher involved a credit card contract dispute between an Iowa resident and a Nebraska bank. Use of the card had the effect of issuing a draft on the bank which the bank promised to pay on presentation through ordinary banking channels at its Omaha headquarters. The bank had no agreements with Iowa merchants regarding use of the card and the cardholder’s payments were to be made to the bank in Omaha. The court held that the contract claim did not meet the requirement of the Iowa long-arm statute that a contract with an Iowa resident must be performed in whole or in part in Iowa before the long-arm statute becomes available to obtain jurisdiction. 338 F.Supp. at 528. Signing a credit card purchase draft in Iowa on a Nebraska bank cannot be equated with purchasing meat from an Iowa resident for use in an Iowa restaurant. Spencer was a “resident” of Iowa and subsidiary-owned Lum's restaurants were in operation in Iowa at the time the contract was entered into. Thus an unrebutted prima facie showing has been made; the statutory requirements of Iowa Code, § 617.3 ‘are satisfied.

Due Process

Having held the long-arm statute applicable by its terms, we must next determine whether its application in this case offends due process. This depends on whether the nonresident defendant has sufficient minimum contacts with the forum state so as to comply with traditional notions of fair play and substantial justice, International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945), whether appellant has invoked the benefits and protections of Iowa law by reason of its activities there, Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958), and, since this is a contract dispute, whether the contract has a “substantial connection” with the forum state, McGee v. International Life Ins. Co., 355 U.S. 220, 223, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957). This court has articulated five factors to be considered in determining whether personal jurisdiction can be exercised under these general guidelines:

(1) the nature and quality of the contacts with the forum state; (2) the quantity of contacts with the forum state; (3) the relation of the cause of action to the contacts; (4) the interest of the forum state in providing a forum for its residents; and (5) the convenience of the parties.
Electro-Craft Corp. v. Maxwell Electronics Corp., 417 F.2d 365, 368 (8th Cir. 1969).

See also Aftanase v. Economy Baler Co., 343 F.2d 187 (8th Cir. 1965); Thompson v. Ecological Science Corp., 421 F.2d 467 (8th Cir. 1970); Gardner Engineering Corp. v. Page Engineering Co., 484 F.2d 27 (8th Cir. 1973); Block Industries, Inc. v. DHJ Industries, Inc., 495 F.2d 256 (8th Cir. 1974). These factors do not establish a mathematical formula from which to derive fair play and substantial justice, but rather provide a general guide in applying that abstract concept. See Gardner Engineering Corp. v. Page Engineering Co., supra, 484 F.2d at 31.

Appellant’s jurisdictional contacts with Iowa are substantial. In addition to the contract with Spencer to be performed in part in Iowa, Lum’s was the creator of the franchise restaurant system bearing its name, and seven of the nine Lum’s restaurants in Iowa were franchised under this system. The Iowa franchisees executed franchise agreements with separate franchisors, each a wholly owned Iowa subsidiary of Lum’s Restaurant Corporation, itself a subsidiary of appellant. These Iowa agreements expressly reserve numerous rights and benefits for appellant, although it is not a signatory party. Among the numerous express references to appellant in the franchise agreement, the franchisee promises “to indemnify and save and hold harmless Lums [appellant] and its Franchisor” from any claims or loss or damage arising from the operation of the franchise. Franchisee also “covenants to purchase from Lums all Frankfurters used in the preparation of Lumdogs, the basic ingredients for Lumburgers and such other items as Lums may from time to time designate” and franchisee “further covenants not to offer for sale or include on his menu any items which have not been approved in writing by Lums or Franchisor” (emphasis added). The substantial control over the operation of these franchised restaurants reserved to appellant in the franchise agreement is a significant contact with Iowa. Appellant also guaranteed the leases on the Iowa property on which these restaurants were located and was named as an additional insured on the insurance policies relating to those properties.

Appellant has clearly invoked the benefits and protections of Iowa law by reason of its activities there. Hanson v. Denckla, supra, 357 U.S. at 253. Since the contract was to be performed in part in Iowa, it has a “substantial connection” with that state, McGee v. International Life Ins. Co., supra, 355 U.S. at 223, and the convenience of the parties is served at least as well in Iowa as anywhere since the contract in dispute provides that it “shall be governed by and construed and enforced in accordance with the law of the State of Iowa.” The exercise of jurisdiction in Iowa over appellant in this case is entirely consistent with traditional notions of fair play and substantial justice.

Service of Process

Appellant has argued that because it sold its entire interest in the “Lum’s System” over a year before the alleged breach of contract and had no contacts with Iowa after the sale, it is immune from service of process under the minimum contacts requirement. The trial court, in declaring these facts “inconsequential”, relied on Electrical Equipment Co. v. Daniel Hamm Drayage Co., 217 F.2d 656 (8th Cir. 1954), and Snyder v. Eastern Auto Distributors, Inc., 357 F.2d 552 (4th Cir.), cert. denied, 384 U.S. 987, 86 S.Ct. 1889, 16 L.Ed.2d 1004 (1966). We agree with the trial court’s conclusion, but since these cases do not fully dispose of appellant’s argument, some additional comment is appropriate.

In the Electrical Equipment Co. case, the Court held:

A foreign corporation which has ceased to do business in a state is still subject to service of process in suits on causes of action which arose out of business carried on by defendant in the state.
217 F.2d at 663 (emphasis added).

The case involved a tort which accrued while defendant was doing business in Iowa and was caused by defendant’s activities in that state. The court had no reason to look at defendant’s contacts at other times in order to sustain jurisdiction. Snyder followed Electrical Equipment Co. and involved an alleged breach of an exclusive dealership contract. When defendant cancelled plaintiff’s contract, it was doing business in South Carolina. Because it had ceased to do business in that state prior to plaintiff’s filing suit, it challenged both jurisdiction and venue. The court held:

The focal time in determining whether Eastern is subject to the Court’s jurisdiction and whether venue is proper is when the cause of action arose, [citing Electrical Equipment Co.] If jurisdiction and venue were proper at the time of cancellation, as we have determined, Eastern could not thwart subsequent suit by immediate withdrawal from the State. Having conducted its affairs in South Carolina for a period of seven years, Eastern remained answerable there for its contract responsibilities for a reasonable time after cessation of its business in the State.
357 F.2d at 556 (emphasis in original) .

Again, the court had no reason to inquire of some other appropriate time in order to sustain jurisdiction.

A breach of contract entitles a party injured thereby to redress in the courts. The timing of the breach does not determine whether traditional notions of fair play and substantial justice exist in a particular forum. In McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957), the only apparent contacts defendant had with California were sending a contract into the state and receiving premiums from the insured. It was obliged to defend a suit on the contract in California even though no contacts existed when the cause of action accrued. The Court stated: “It is sufficient for purposes of due process that the suit was based on a contract which had substantial connections with that State.” 355 U.S. at 223. We think this focus on the contract is equally applicable here. Moreover, Spencer’s cause of action is premised in part on the very fact that appellant ceased doing business in Iowa and to allow that same circumstance to serve as grounds for appellant’s defeating Iowa jurisdiction would be anathema to the due process concept of fair play and substantial justice.

The order of the District Court denying the Motion to Dismiss is affirmed.

      . Paragraph 15 of the contract provides in part:
      15. Continuation of Business with Lum’s. It is acknowledged that for a period of years prior to this Agreement Dirr’s has supplied Lum’s with various meat and meat product items sold by Lum’s in its business operation and that a portion of the inducement for Spencer and Spencer-Dirrs into this Agreement is the assurance that business relationship between Dirr’s and Lum’s will continue, and if possible expand, between Spencer-Dirrs and Lum’s, following the Closing. Lum’s agrees that for a period of five (5) years from and after the Closing hereunder, Lum’s will purchase from Spencer-Dirrs its entire requirements for meat and meat products for use in restaurants (but not hotels) owned by it or its subsidiaries in the continental United States provided that Spencer-Dirrs is able to provide, in each instance, meat or meat products of the type and quality sought by Lum’s at a price, and with service, at least equal to or comparable with the price and service in good faith offered by Lum’s by other suppliers of such products.

      . Spencer-Dirr’s, Inc. was merged into Spencer Foods, Inc. in March, 1971.

      . Note 1, supra. Although irrelevant to the jurisdictional issue an indication of the significance of this “portion of the inducement” is Spencer’s admission on interrogatories that its sale to Lum’s Restaurants between the closing and the alleged breach totalled over $8.5 million,

      . The court, however, upheld jurisdiction over the bank by finding a wholly owned subsidiary of the bank (1) was “no more than an instrumentality or adjunct of the bank and (2) in entering into contracts in Iowa it was acting as the bank’s agent to se extent that its activities constituted the doing of business in Iowa by the bank.” 338 F.Supp. at 529. The court disposed of the case by transferring venue to the District of Nebraska pursuant to 12 U.S.C. § 94.

      . The specific references to appellant include : Lum’s is named as the “originator and creator” of the “Lums System”; Lum’s is the sole owner of the various marks used by a Lum’s restaurant franchise; franchisees are promised access to the supply establishments of Lum’s products; the franchisor is to inspect franchisees’ premises “to insure adherence to Lums standardized operational formulae”; a “Lums Operator-Manager” is provided the franchisee to assist with the opening; franchisee is licensed to use the names and marks owned by Lum’s and such use “can only be carried on by Franchisee with permission of Lums, the owner of such service marks, and/or trademarks and tradenames”; franchisee agrees to maintain the confidentiality of Lum’s trade secrets; Lum’s as well as the franchisor has the right to inspect the franchisee’s business; franchisee must post a security if “Franchisor, or Lum’s, Inc., is required to make guarantees or real estate investments in connection with Franchisee’s ‘Locations’ ”; and “Neither Franchisee, Franchisor, nor Lums shall be deemed to be in violation of this Agreement if either is prevented from performing any of its obligations hereunder for any reason beyond its control. ...”

      . Appellee urges this court, as it did below, to ignore the corporate entities of appellant’s wholly-owned subsidiaries and attribute their Iowa related activities to appellant for purposes of jurisdiction. The trial court found it unnecessary to do this because appellant’s direct contacts were deemed sufficient. Appellant asserts, however, that the court’s use of appellant’s “considerable control” over the operation of the franchised restaurants as a “contact” demonstrates that the court did in fact pierce the corporate veil. This might well be a case in which the separate corporate entities could be ignored, see Lauck v. E.C.K. Chivers & Associates, 320 F.Supp. 463 (E.D.Ark.1.970) (in which the corporate veils were pierced and Lum’s, Inc. was subjected to Arkansas jurisdiction because of the activities of its subsidiaries); Bland v. Kentucky Fried Chicken Corp., 338 F.Supp. 871 (S.D.Tex.1971); Fisher v. First National Bank of Omaha, 338 F.Supp. 525 (S.D. Iowa), appeal dismissed, 466 F.2d 511 (8th Cir. 1972), but it is unnecessary to do so given appellant’s own substantial contacts with Iowa. The franchise agreement between the Iowa franchisees and appellant’s subsidiaries’ subsidiaries invest appellant itself with considerable control over the question of these restaurants bearing its name. That appellant is not a signatory party does not diminish its protection as a beneficiary of the contracts under Iowa laws. Likewise, we need not determine whether the appellant’s permitting its name to be used in the Iowa franchises is sufficient to subject it to jurisdiction in that state. Doug Sanders Golf Intercontinental of Southeastern Wisconsin, Inc. v. American Manhattan Industries, Inc., 359 F.Supp. 918 (E.D.Wis.1973).

      . The time reference for venue purposes under 28 U.S.C. § 1391(c) discussed in Snyder is a different problem. See, e. g., Welch Scientific Co. v. Human Engineering Institute, Inc., 416 F.2d 32, 35 (7th Cir. 1969), cert. denied, 396 U.S. 1003, 90 S.Ct. 552, 24 L.Ed.2d 494 (1970); Farmers Elevator Mutual Insurance Co. v. Carl J. Austad & Sons, Inc., 343 F.2d 7, 11-12 (8th Cir. 1965); and Ward v. Island Creek Fuel & Transportation Co., 261 F.Supp. 810 (N.D.W.Va.1966).


author: PHILLIPS, Chief Judge.

text:
    Mitchell WATSON et al., Plaintiffs-Appellants, v. KENLICK COAL COMPANY, INC., et al., Defendants-Appellees.
    No. 73-2234.
    United States Court of Appeals, Sixth Circuit.
    Argued April 18, 1974.
    Decided June 21, 1974.

      William H. Allison, Jr., Louisville, Ky., for plaintiffs-appellants.
    Donald Combs and William J. Baird, Pikeville, Ky., for defendants-appellees.
    Before PHILLIPS, Chief Judge, and MILLER and LIVELY, Circuit Judges.
   PHILLIPS, Chief Judge.

Plaintiffs-Appellants (“the Watson family” or “the Watsons”) claim that the destruction of surface rights in land owned by them incident to past and prospective strip mining by the defendants-appellees is actionable under 42 U. S.C. § 1983. They sue for an injunction and damages. Specifically, the Watson family contends that appellees, who admittedly own the minerals in, on and under the Watson land, are acting under color of state law and depriving them of their property .without due process and just compensation, all in violation of the Fourteenth and Fifth Amendments.

District Judge H. David Hermansdorfer, finding no state action or constitutional deprivation, dismissed the complaint for lack of subject matter jurisdiction. His decision is reported at 365 F.Supp. 456 (E.D.Ky.1973). We affirm.

The Watsons are private citizens who own the surface rights to certain land located in Magoffin County, Kentucky. Defendants-appellees, the Howards, are private citizens who own the minerals, including coal, in, on and under the land. The Howards derived their rights as remote successors in interest of a mineral severance grant or deed from the former owners-predecessors of the title to the Watsons. Defendants-appellees, the Kenlick Coal Co., Inc. and the Tip Top Coal Co., Inc., are lessees who engage in strip mining the land. Defendants-appellees, the Baileys, are officers of the coal companies.

The gravamen of the complaint is that the appellees, without the Watsons’ consent, have been strip mining the land; and that these strip mining operations have resulted in the destruction of the Watsons’ surface rights in the land and constitute a denial of due process and a taking of the land without just compensation. State action is premised upon the issuance of permits to strip mine by the Division of Reclamation, a division of the Kentucky Department of Environmental Protection, or, in the alternative, upon decisions of the Court of Appeals of Kentucky in unrelated cases.

A prerequisite to the vesting of federal jurisdiction for an alleged wrong under § 1983 is the deprivation of a right guaranteed by the Constitution and laws of the United States. Such deprivation must be “under color of law.” There must be state action. Adickes v. S. H. Kress & Co., 398 U.S. 144, 150, 152, n. 7, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); United States v. Price, 383 U.S. 787, 794, n. 7, 86 S.Ct. 1152, 16 L.Ed.2d 267 (1966). We find neither a constitutional deprivation nor state action.

Appellees have been strip mining the Watsons’ land under authority of a “broad form” deed executed in 1905. The deed, which included a waiver of damages, severed the mineral rights from the surface estate thereby creating two distinct estates in the land by conveying the rights to:

“all coal minerals and mineral substances and products; all oils and gases; all salt and salt mineral waters; all fire and potters clay; all iron and iron ores; all stone; all slate; all ores and mines; and all subterranean substances and products; and all combinations of same, or any or all of the same; situated, lying and being in, on or under the hereinafter described land, or that may hereafter be found thereon, therein or thereunder; and such of the standing timber thereupon as may, at any time of the use thereof, be, or by the party of the second part, its successors or assigns, be deemed necessary or convenient for mining purposes, or so deemed necessary or convenient for the exercise and enjoyment of any or all the property, rights and privileges herein bargained, sold, granted or conveyed, including timber necessary for dams and railroads, or branch lines thereof, as may hereafter be constructed upon the said lands; and the exclusive rights-of-way for any and all railroads, tram roads, haul roads and other ways, pipe lines, telephone and telegraph lines that may hereafter be located on said land by the parties of the first part, their heirs, representatives or assigns, or by the party of the second part, its successors or assigns, or by any person or corporation with or without the authority of either of said parties, their, or its heirs, representatives, successors or assigns; and also the right to maintain, keep in repair and operate the same and said railroads, tram roads, haul roads, ways, pipe lines, telephone and telegraph lines; and also the exclusive right to enter upon said land and drill thereupon for oil and gas, and to pump for and store the same upon said land, and remove pipe and transport the same therefrom; and to use and operate the said land and surface thereof and any and all parts thereof, including the right to use, divert, dam and pollute water courses thereon in any and every manner that may, by party to the second part, its successors or assigns, be deemed necessary or convenient for the full and free exercise and enjoyment of any and all the property, rights and privileges hereby bargained, sold, granted or conveyed, including, but not limiting to, that of drilling, mining, pumping and therefrom removing or otherwise utilizing the said pipe, telegraph and telephone lines, rights-of-way, roads, ways, timber, coal, minerals, slate, oil, gas, salt water, clay, iron ore, mines, stone and subterranean substances and products thereof, and any and all other property and rights hereby bargained, sold, granted or conveyed, and for the transportation therefrom of said articles; and also the right to build, erect, alter, repair, maintain and operate upon said land, and at its option to therefrom remove, any and all houses, shops, buildings, tanks, derricks, inclines, tipples, dams, coke-ovens, store and ware rooms, and machinery and mining and any and all equipment, that may, by party of the second part, its successors or assigns, be deemed necessary or convenient for the full and free exercise and enjoyment of any and all the property, rights and privileges hereby bargained, granted, sold or conveyed; and the right to thereupon convert, reduce, refine, store, dump and manufacture the said, or any or all of said property, or products, in, upon or under said land, or other land owned, or hereafter acquired by said party of the second part, its successors or assigns, by purchase, lease or otherwise; and the right to dump, store and leave upon said land any and all muck, bone, shale, water or other refuse from said mines, wells, ovens or houses; and any and all matters and products that may be excavated from mines or produced by the exercise or enjoyment of any or all the property, rights and privileges hereby bargained, sold, granted or conveyed; and the right to remove all pillars and other lateral and subjacent supports without leaving pillars to support the roof or surface; and the right to use said land for removal or storage of the products taken out of any other land owned, or hereafter acquired by party of the second part, its sucessors or assigns by lease or otherwise; and the right to erect upon said land and maintain, use, repair and operate, and at their pleasure remove therefrom, any and all buildings and structures, and machinery and mining and any and all equipment, whether specifically enumerated herein or not, that may, by party of the second part, its successors or assigns, be deemed necessary or convenient for the exercise or enjoyment of any or all the property, rights and privileges herein bargained, sold, granted or conveyed; and also the free access to, upon and over said land for the purpose of surveying and prospecting for said property and interests.”

The Court of Appeals of Kentucky has held that a “broad form” deed gives the mineral owner the right to strip mine and subjects him to liability only if he exercises that right wantonly, oppressively, maliciously or arbitrarily. See, e. g., Martin v. Kentucky Oak Mining Co., 429 S.W.2d 395, 399 (Ky.1968); Croley v. Round Mountain Coal Co., 374 S.W.2d 852, 854 (Ky.1964); Blue Diamond Coal Co., Inc. v. Campbell, 371 S.W.2d 483, 485 (Ky.1963); Ritchie v. Midland Mining Co., 347 S.W.2d 548 (Ky.1961); Kodak Coal Co. v. Smith, 338 S.W.2d 699, 701 (Ky.1960); Blue Diamond Coal Co. v. Neace, 337 S.W.2d 725, 728 (Ky.1960); Bevander Coal Co. v. Matney, 320 S.W.2d 301, 302 (Ky. 1959); Buchanan v. Watson, 290 S.W.2d 40, 43 (Ky.1956).

The Watsons contend that this interpretation of the deed by the Kentucky Court of Appeals so as to authorize strip mining on their property has denied them due process and constitutes a taking without compensation because: 1) The Court retroactively has expanded and enlarged the mineral owner’s rights under the deed; 2) the Court has given the coal miners a privileged position to the detriment of the surface owners; and 3) the deed does not specifically authorize strip mining, and, indeed, strip mining was not contemplated at the time the mineral rights were conveyed.

As support for their argument that the Court of Appeals of Kentucky unconstitutionally has enlarged the rights conveyed by a “broad form” deed, appellants rely on West Kentucky Coal Co. v. Dilback, 219 Ky. 783, 784, 294 S.W. 478, 479 (1927), wherein the Court stated:

“As we have said, the right to mine is subservient to the right of the surface owners to have the surface maintained in its natural state free from subsidence or partings of the soil, and this right of support is absolute and not dependent upon any question of negligence.”

We fail to see how this case, which recites the general rule, lends support to the argument of the Watson family. The Watsons have assumed that they had rights under the “broad form” deed which were subsequently destroyed by decisions of the Court of Appeals of Kentucky. This assumption completely sidesteps the threshold question in this case, that is, did the Watsons’ predecessors in title give up the rights that the Watsons now complain have been taken from them. Thus, the success of the Watsons’ case depends on whether they possess rights under the deed which they complain have been taken from them. Under the common law of Kentucky, the predecessors in title to the Watsons gave up the right to prevent the appellees from strip mining.

The question of the rights and liabilities under a grant or deed is a question of state property law of which the federal courts can have no concern unless there is a violation of the Constitution or laws of the United States. American Railway Express Co. v. Kentucky, 273 U.S. 269, 47 S.Ct. 353, 71 L.Ed. 639 (1927); Tracy v. Ginzberg, 205 U.S. 170, 27 S.Ct. 461, 51 L.Ed. 755 (1907). Accord Evans v. Abney, 396 U.S. 435, 439, 443-444, 90 S.Ct. 628, 24 L.Ed.2d 634 (1970). Absent an actionable violation, it is not the role of the federal judiciary to act as a super-legislature by setting aside the property law of a state simply because we might consider the law to be unwise or harsh. To do so would constitute an abdication of the responsibility of federal judges “to construe and enforce the Constitution and laws of the land as they are and not to legislate social policy on the basis of our own personal inclinations.” 396 U.S. at 447. See also North Dakota State Board of Pharmacy v. Snyder’s Drug Stores, Inc., 414 U.S. 156, 94 S.Ct. 407, 38 L.Ed.2d 379 (1973). As stated by Mr. Justice Harlan in Tracy, supra:

“The decision of a state court, involving nothing more than the ownership of property, with all parties in interest before it, cannot be regarded by the unsuccessful party as a deprivation of property without due process of law, simply because its effect is to deny his claim to own such property. If we were of opinion, upon this record, that the money received by Ginzberg from O’Hearn really belonged to Tracy, — upon which question we express no opinion, — still it could not be affirmed that the latter had, within the meaning of the Constitution, and by reason of the judgment below, been deprived of his property without due process of law. Under the opposite view every judgment of a state court, involving merely the ownei'ship of property, could be brought here for review, — a result not to be thought of. The 14th Amendment did not impair the authority of the States, by their judicial tribunals, and according to their settled usages and established modes of procedure, to determine finally, for the parties before it, controverted questions as to the ownership of property, which did not involve any right secured by the Federal Constitution, or by any valid act of Congress, or by any treaty. Within the meaning of that Amendment, a deprivation of property without due process of law occurs when it results from the arbitrary exercise of power, inconsistent with ‘those settled usages and modes of proceeding existing in the common and statute law of England before the emigration of our ancestors, and which are shown not to have been unsuited to their civil and political condition by having been acted on by them after the settlement of this country.’ ” 205 U.S. at 178.

These same principles were reaffirmed in American Railway Express Co., supra, wherein the Court stated:

“The Kentucky court had jurisdiction and has determined only that under common law principles, in the peculiar circumstances above narrated, where the facts were or might have been known to the purchasing corporation it became liable for claims against the vendor resulting from transactions within the state. The action of the court followed a fair hearing, and there is no pretense that the challenged views were adopted in order to evade a constitutional issue. We cannot interfere, unless the judgment amounts to mere arbitrary or capricious exercise of power, or is in clear conflict with those fundamental ‘principles which have been established in our systems of jurisprudence for the protection and enforcement of private rights.’ Pennoyer v. Neff, 95 U.S. 714, 733 [24 L.Ed. 565]; Booth v. Illinois, 184 U.S. 425, 429 [22 S.Ct. 425, 46 L.Ed. 623]; Truax v. Corrigan, 257 U.S. 312, 329 [42 S.Ct. 124, 66 L.Ed. 254].
“It is firmly established that a merely erroneous decision given by a state court in the regular course of judicial proceedings does not deprive the unsuccessful party of property without due process of law. Arrowsmith v. Harmoning, 118 U.S. 194, 195 [6 S.Ct. 1023, 30 L.Ed. 243]; Iowa Central Ry. Co. v. Iowa, 160 U.S. 389, 393 [16 S.Ct. 344, 40 L.Ed. 467]; Tracy v. Ginzberg, 205 U.S. 170, 177 [27 S.Ct. 461, 51 L.Ed. 755]; Bonner v. Gorman, 213 U.S. 86, 91 [29 S.Ct. 483, 53 L.Ed. 709]; McDonald v. Oregon R. R. & Nav. Co., 233 U.S. 665, 669 [34 S.Ct. 772, 58 L.Ed. 1145].” 273 U.S. at 273.

More recently, in Evans, supra, the Supreme Court addressed itself to this question of federal interference with state law. Evans was a case where the Supreme Court of Georgia had terminated a trust that had established a park open only to whites. The intent of the testator had been specific in that only whites were allowed to use the park. The Georgia cy pres doctrine would not allow the Georgia courts to reform the trust, but rather would give effect to the desire of the testator to have the trust terminated instead of integrating the park. The Supreme Court affirmed, noting that there was no violation of any constitutionally protected rights because both whites and non-whites had been deprived of the use of the park. The effect of this decision, however, was to uphold state law that enforced clearly discriminatory provisions of a trust agreement. Justice Black, speaking for the Court, stated:

“We are of the opinion that in ruling as they did the Georgia courts did no more than apply well-settled general principles of Georgia law to determine the meaning and effect of a Georgia will. 396 U.S. at 439.
* * * * * •£
“Here, however, the action of the Georgia Supreme Court declaring the Baconsfield trust terminated presents no violation of constitutionally protected rights, and any harshness that may have resulted from the state court’s decision can be attributed solely to its intention to effectuate as nearly as possible the explicit terms of Senator Bacon’s will. 396 U.S. at 444.
* * * -x- * *
“The construction of wills is essentially a state-law question, Lyeth v. Hoey, 305 U.S. 188 [59 S.Ct. 155, 83 L.Ed. 119] (1938), and in this case the Georgia Supreme Court, as we read its opinion, interpreted Senator Bacon’s will as embodying a preference for termination of the park rather than its integration. Given this, the Georgia court had no alternative under its relevant trust laws, which are long standing and neutral with regard to race, but to end the Baconsfield trust and return the property to the Senator’s heirs. Id.
■Jr ♦X-
“In the case at bar there is not the slightest indication that any of the Georgia judges involved were motivated by racial animus or discriminatory intent of any sort in construing and enforcing Senator Bacon’s will. 396 U.S. at 445.
“What remains of petitioners’ argument is the idea that the Georgia courts had a constitutional obligation in this case to resolve any doubt about the testator’s intent in favor of preserving the trust. Thus stated, we see no merit in the argument. The only choice the Georgia courts either had or exercised in this regard was their judicial judgment in construing Bacon’s will to determine his intent, and the Constitution imposes no requirement upon the Georgia courts to approach Bacon’s will any differently than they would approach any will creating any charitable trust of any kind. Surely the Fourteenth Amendment is not violated where, as here, a state court operating in its judicial capacity fairly applies its normal principles of construction to determine the testator’s true intent in establishing a charitable trust and then reaches a conclusion with regard to that intent which, because of the operation of neutral and nondiscriminatory state trust laws, effectively denies everyone, whites as well as Negroes, the benefits of the trust.” 396 U.S. at 446.

We think the above quotations from Evans, swpra, are equally applicable to the question presented in this case and reaffirm those principles set forth in Tracy and American Railway Express Co., supra. It is with these considerations in mind that we must examine the alleged constitutional deprivation asserted by the Watson family.

Apparently, it is contended that the Court of Appeals of Kentucky has an improper motive with respect to mining deeds. The Watsons, in effect, argue that the Court has given the coal mining industry a privileged position in derogation of the rights of surface owners. Reliance is placed upon Wiser Oil Co. v. Conley, 346 S.W.2d 718 (Ky.1960), wherein the Court refused to interpret an oil lease so as to authorize the surface destructive “water flooding” method of oil recovery to increase oil production. In that case the Court concluded that “it was the intention of the parties that oil be produced by drilling in the customary manner that prevailed when the lease was executed.” 346 S.W.2d at 721-722. Appellants contend that the broad form deed should be interpreted so as to prohibit strip mining because it was not the customary manner of mining at the time the deed was executed. Indeed, it may not have been known at that time. By conclusory reasoning, the Watsons allege that but for the coal mining industries’ privileged position, the deed would have been interpreted so as to exclude strip mining.

We do not find this argument to be persuasive. At least one distinction between Wiser and the strip mining cases is the deed itself. The broad form deed is a thorough denunciation of surface rights and, unlike Wiser, expressly includes a waiver of damages. Such a distinction, although the result may be considered to be harsh, does not show any improper motive on the part of the Court of Appeals of Kentucky.

Neither do we find that the Kentucky court was doing anything more than applying traditional concepts of deed construction that were neutral and of long standing. This is evidenced in Buchanan v. Watson, 290 S.W.2d 40 (Ky.1956), which was the first case significantly to interpret the broad form deed. The Court noted that the deed conveyed all of the coal in, on and under the land, did not contain any limitations or prohibitions on the method to be used to extract it, and contained an express waiver of damages. These considerations led the Court to conclude that the surface estate was subservient to the mineral estate. Applying the fundamental rule for deed construction that any ambiguity was to be construed most strongly against the grantor and in favor of the grantee, the Court held that the deed authorized strip mining and would only allow damages if the right were exercised arbitrarily, wantonly or maliciously. Id. at 42-43.

The Watsons contend that a broad form deed could not authorize strip mining because “it is inconceivable that the surface owners would have authorized the destruction of their land.” Additionally, much emphasis is placed upon the fact that, apparently, no other jurisdiction has interpreted a broad form deed so as to permit strip mining.

We do not find it helpful to the position of the Watsons that no other state court has interpreted a broad form deed to allow strip mining. Property law is, and must be, a creature of state law, with peculiar nuances in each jurisdiction. The rule in these strip mining cases evolved through custom and usage that were peculiar to Kentucky law and history. It is only when these rules are arbitrary or capricious or in clear conflict with fundamental principles of jurisprudence that a federal court may act. American Railway Express Co., supra, 273 U.S. at 273; Tracy, supra, 205 U.S. at 178. We are unwilling so to characterize the decisions of the Court of Appeals of Kentucky.

The recent case of Martin v. Kentucky Oak Mining Co., 429 S.W.2d 395 (1968), shows the great extent to which the Court of Appeals of Kentucky has relied on historical data to interpret a broad form deed and fathom the intent of the parties. The deed in Martin was also executed in 1905 and dealt with land in Knott County, a county contiguous with Magoffin. The Court stated: “Of course in endeavoring to find the intent of the parties we must consider the situation and circumstances existing when the deeds were made.” 429 S.W.2d at 397.

This court, in Peabody Coal Co. v. Pasco, 452 F.2d 1126, 1132 (6th Cir. 1971), said with reference to the decision of the Kentucky Court in Martin:

“The court then considered some of the circumstances attending the execution of the ‘broad form’ deed involved. It was noted that in 1900 only 17 per cent of the land in Knott County, where the subject property was located, was improved agricultural land. Much of the Martin tract was hillside land and of no productive value. The court weighed these facts against the argument that no farmer would intend that his fields be destroyed by mining operations. Also considered was the fact that in 1900 the average value per acre of land in Knott County was $2.90 while in 1905 only the minerals rights to the Martin tract were purchased for $3.00 per acre. The court apparently considered the evidence that the full value of the land had been paid to the grantor in evaluating the possibility that the original grant- or in fact intended to convey the complete use of the surface and to retain bare title for whatever value it may have. Another circumstance mentioned was the fact that even in 1905 there were potential sources of damage to the land from customary deep mining methods. A final consideration examined by the court was that under a ‘broad form’ deed the surface owner reserved use of the land for agricultural purposes only to the extent that such use was consistent with the rights of the mineral owner. The court considered this factor as evidence that agricultural values were subordinated to mineral values. After considering the particular circumstances surrounding the execution of the Martin deed and the particular language of that deed the court held that ‘the mineral owner bought and paid for the right to destroy the surface in a good faith exercise of the right to remove the minerals.’ 429 S. W.2d at 399.”

We hold that the Court of Appeals of Kentucky did nothing more than apply well settled general principles of Kentucky law to interpret a Kentucky deed. This law is neutral and there is not the slightest indication that the Court was motivated by any improper motive or that broad form deeds were treated in a manner different from other deeds. Nor has the Court of Appeals of Kentucky exercised its power arbitrarily or capriciously or in a manner that would offend fundamental principles of jurisprudence.

The second prerequisite for federal jurisdiction is that the alleged deprivation be committed under color of law. The Watsons contend that Kentucky’s environmental laws and regulations are sufficient to constitute the necessary degree of state involvement. In the alternative, they argue that the decisions of the Court of Appeals of Kentucky interpreting the broad form deed in unrelated cases are state action.

Kentucky has regulated extensively the environmental aspects of strip mining. Kentucky Revised Statutes, Ch. 350. The Department of Environmental Protection and its Division of Reclamation are charged with the responsibility of enforcing these laws. K.R.S. 350.020. The purpose of these laws is best shown in the “Declaration of legislative policy and finding of fact,” K.R.S. 350.020, which states:

“The general assembly finds that the unregulated strip mining of coal causes soil erosion, damage from rolling stones and overburden, landslides, stream pollution, the accumulation of stagnant water and the seepage of contaminated water, increases the likelihood of floods, destroys the value of land for agricultural purposes, destroys asthetic values, counteracts efforts for the conservation of soil, water and other natural resources, destroys or impairs the property rights of citizens, creates fire hazards, and in general creates hazards dangerous to life and property, so as to constitute an imminent and inordinate peril to the welfare of the commonwealth. The general assembly further finds that lands that have been subjected to strip mining and have not been reclaimed and rehabilitated in accordance with modern standards constitute the aforementioned perils to the welfare of the commonwealth. The general assembly further finds that there are wide variations in the circumstances and conditions surrounding and arising out of the strip mining of coal due primarily to difference in topographical and geological conditions, and by reason thereof it is necessary, in order to provide the most effective, beneficial and equitable solution to the problem, that a broad discretion be vested in the authority designated to administer and enforce the regulatory provisions enacted by the general assembly. Therefore, it is the purpose of this chapter to provide such regulation and control of the strip mining of coal as to minimize or prevent its injurious effects on the people and resources of the commonwealth. To that end, the division and the department are directed to rigidly enforce this chapter and to adopt whatever regulations are found necessary to accomplish the purpose of this chapter.”

Pursuant to statutory authorization, K.R.S. § 350.060, strip miners are required to obtain permits to mine. In order to obtain a permit, the miners are required to submit, inter alia, plans or proposals showing the method of operation, the manner, time and distance for backfilling, grading work and a reclamation plan for the affected area. These plans must meet the minimum requirements of the laws and regulations. Moreover, Chapter 350 provides a full spectrum of mechanisms so as to insure compliance with its provisions.

Apparently conceding that the state action cannot, in this case, be premised on a partnership, governmental function or entwinement theory, the Watson family seeks to rely on an “encouragement” theory and contends that the state’s issuance of permits to strip mine is sufficient state action to support federal jurisdiction. Principal reliance is placed on Moose Lodge No. 107 v. Irvis, 407 U.S. 163, 92 S.Ct. 1965, 32 L.Ed.2d 627 (1972), and Public Utilities Commission v. Pollak, 343 U.S. 451, 72 S.Ct. 813, 96 L.Ed. 1068 (1952). The Watsons contend that when state regulations are aimed directly at the harm complained of, and not peripheral aspects, there is significant state action. Thus, it is argued that the strip mining regulations are directed at the destructive aspects of strip mining and have the effect of encouraging and approving these practices. We find this argument to be without merit.

Moose Lodge, supra, was a case wherein the policy of a private club was to discriminate against blacks. The plaintiff in that ease had alleged that such discrimination was under color of state law because the state of Pennsylvania licensed Moose Lodge to serve liquor. After reviewing the concept of “state action” and admitting that it “frequently admits of no easy answer,” the Court went on to analyze the degree of involvement of Pennsylvania with the Moose Lodge. 407 U.S. at 172, 175-177. The Court noted that Moose Lodge was a private club situated on private property and was not publicly funded. Id. at 171. The state licensing board could require the club to make physical alterations, required the club to file a list of the names and addresses of its members and employees and also required the keeping of extensive financial records. Finally, the board was granted the right to inspect the premises. Id. at 176. With this pervasive scheme of regulations, the Supreme Court found no state action because the regulations, regardless of how detailed they might be, did not in any way foster or encourage discrimination, nor was the state a partner or joint venturer in the enterprise. Id. at 176-177. Certain regulations, however, were found to constitute state action because they required the club to adhere to discriminatory provisions in its constitution and bylaws. The distinction that emerges from the case is that where regulations give impetus to private conduct so as to foster or encourage it, state action will arise.

Similarly, in Pollak, supra, the Public Utilities Commission of the District of Columbia approved the practice of piping radio service into buses that were regulated by the commission. Plaintiffs complained that the piping of radio service into the buses violated their constitutional rights. Relying particularly on the fact that the Commission approved of the practice, the Supreme Court found a sufficiently close relationship between the federal government and the radio service to make it necessary to consider the alleged constitutional deprivation. 343 U.S. at 462.

We conclude that these cases do not support the contention of the Watson family. The alleged wrong in this case is that the appellees have been permitted to strip mine the Watsons’ land. The right to strip mine and the waiver of damages do not originate with the state licensing authority. They have their origin in the “broad form” deed. Thus, Kentucky’s environmentally oriented laws and regulations are not aimed at the alleged wrong. Nor do they encourage strip mining. The effect of these laws and regulations is to narrow and restrict appellees’ rights under the deed, and, thus, inure to the benefit of the land owner.

The instant ease is also readily distinguishable from our decision in Palmer v. Columbia Gas of Ohio, Inc., 479 F.2d 153 (6th Cir. 1973). In Palmer, the defendant was a utility company to which the state granted powers not usually possessed by private corporations. Additionally, the operations of the company were circumscribed fully by an all encompassing system of regulations and statutes, both state, local and administrative. Virtually every one of the company’s activities, including the specific activity complained of, were regulated. In view of these factors, we held that the state had injected itself into a position of interdependence with the company so that it was a joint participant. Id. at 165. On the contrary, the state in the present case has not even approached joint participation with the coal companies.

We do not find a sufficiently close relationship between the alleged wrong in this case and Kentucky’s environmental laws. Accordingly, we hold that the issuance of a permit to strip mine to a private coal company for the purpose of enforcing that state’s environmental policy is not such state action as would support a claim under 42 U.S.C. § 1983.

In the alternative, appellants argue that the line of Kentucky decisions interpreting a broad form deed so as to authorize strip mining is state action.

Since the decision in Shelley v. Kraemer, 334 U.S. 1, 14-18, 68 S.Ct. 836, 92 L.Ed. 1161 (1948), it has been established that a state’s judicial proceedings can be a form of actionable state action. See also New York Times Co. v. Sullivan, 376 U.S. 254, 265, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964) (First Amendment deprivation). This principle has been recognized explicitly in recent Supreme Court decisions. See, e. g., Moose Lodge, supra, 407 U.S. at 179.

The distinguishing feature of all of these state action cases, however, is the fact that the aggrieved party was a party to the state court proceedings. In this case, the Watsons were never a party to any state court proceedings wherein the interpretation of their broad form deed was at issue. They have proceeded upon the theory that it would have been futile to litigate the deed in the Kentucky courts because “in case after case the Kentucky Court has upheld the right of the mineral estate owner to engage in strip mining.” We have found no case that even intimates that state action can be premised on a state’s common law as applied to different parties and different issues. Were we to accept appellants’ argument, we would be, in effect, predicting the outcome in a case where the intent of the parties governed. It may be possible that the factors considered by the Court in Martin, supra, 429 S.W.2d at 397-398, which were critical to that decision are not present in this case. We decline to second guess the Court of Appeals of Kentucky.

We think the case at bar is analogous to the recent line of pre-judgment, self help remedy cases. See, e. g., Bond v. Dentzer, 494 F.2d 302 (2nd Cir. 1974) (self help attachment of wages); Adams v. Southern California First National Bank, 492 F.2d 324 (9th Cir. 1974) (self help repossession of car); Bichel Optical Laboratories, Inc. v. Marquette Nat. Bank of Minneapolis, 487 F.2d 906 (8th Cir. 1973) (self help seizure of funds). In each of these cases the seizure of property involved only private actions arising out of written agreements between the parties. The actions were, however, authorized under state law. The courts refused to find state action based on the mere passage of laws by state legislatures authorizing the agreements. ' In none of these cases were the parties involved in judicial proceedings. Analogously, in the case at bar the right to strip mine and the waiver of damages are derived from a private agreement, and the Watsons have not been a party to any state proceedings.

We decline to expand the state action concept to embrace a line of state court decisions in transactions unrelated to the one at bar.

We are cognizant of the environmental problems associated with strip mining and are sympathetic with the plight of the Watson family. However, this court is not a super legislature and has no power to act in the absence of jurisdiction. The remedy lies with the legislature and the courts of Kentucky. Two justices of the Court of Appeals of Kentucky have expressed strong views to the effect that the decisions of that court construing the 1905 broad form deed should be overruled. See dissenting opinion of Mr. Justice Edward P. Hill, concurred in by Mr. Justice James B. Milliken, in Martin v. Kentucky Oak Mining Co., supra, 429 S.W.2d at 400.

Affirmed.