author: McLAUGHLIN, District Judge.

text:
    UNITED STATES of America, Plaintiff, v. Angelo FERRUGIA, Defendant.
    No. 84 CR 624.
    United States District Court, E.D. New York.
    March 13, 1985.

      Raymond J. Dearie, U.S. Atty., E.D.N.Y., Edward A. McDonald, Attorney-In-Charge, U.S. Dept, of Justice, Organized Crime Strike Force, E.D.N.Y., Brooklyn, N.Y., for plaintiff.
    Slotnick & Cutler, P.C., New York City, for defendant; Bruce Cutler, Mark M. Baker, New York City, of counsel.
   MEMORANDUM AND ORDER

McLAUGHLIN, District Judge.

Defendant has moved to dismiss a one-count indictment. Fed.R.Crim.P. 12(b). The indictment charges him with violating 18 U.S.C. § 1513, in that he willfully and knowingly spit in the face of Assistant United States Attorney (“AUSA”) Douglas Behm, and threatened to cause him bodily injury, in retaliation for Mr. Behm’s attendance at the testimony in the trial of United States of America v. Angelo Ferrugia, 84 CR 282, before Judge Bramwell of this Court.

Facts

The undisputed facts are as follows. During a grand jury investigation of the activities of Teamster Union Locals 295 and 851 at John F. Kennedy Airport, defendant was called as a witness. He was examined before the grand jury by AUSA Behm.

Thereafter, defendant was charged in a 25-count indictment with making false declarations to the grand jury, 18 U.S.C. § 1623(a), obstruction of justice, 18 U.S.C. § 1503, and 23 violations of the tax laws. United States of America v. Angelo Ferrugia, 84 CR 282.

The matter was tried to a jury before Judge Bramwell of this Court. AUSA Behm was a witness for the government. At the close of the government’s case, the Court dismissed all the tax charges pursuant to Fed.R.Crim.P. 29. The other two counts were sent to the jury which, on September 26, 1984, returned guilty verdicts on both counts.

Having discharged the jury, Judge Bramwell set a date for sentence and ordered defendant’s bail continued. Defense counsel then renewed his Rule 29 motions, but, before he could argue, a disruption occurred in the back of the courtroom. AUSA Norman A. Bloch, who had tried the case for the government, informed Judge Bramwell that defendant had just spit in Mr. Behm’s face. Judge Bramwell immediately ordered defendant remanded, and defendant stated, “Do what you want to do. I don’t care. I am sorry, your Honor, I am sorry for the Court. I am sorry, but I had to do it.”

AUSA Behm, who had been seated in the back of the courtroom, then came forward to place on the record what defendant had said. According to Mr. Behm, defendant said, “You got what you wanted.” He then spit in Mr. Behm’s face and said, “Anytime you want to step outside, you punk bastard, we can step outside.”

Judge Bramwell refused to allow defense counsel to argue the remand order. When asked why he was remanding defendant, Judge Bramwell stated, “He spit in the prosecutor’s face. What do you think he’s being remanded for?”

The next day, Sept. 27, 1984, defendant sent Judge Bramwell a letter of apology, stating that he simply “lost [his] head” when the jury returned its verdict. On October 3, 1984, Judge Bramwell in a written order denied defendant’s motion for reconsideration. Judge Bramwell made clear beyond cavil that his remand was pursuant to the then applicable bail statutes, 18 U.S.C. §§ 3146, 3148, “because defendant spit in the face of and threatened bodily harm to” AUSA Behm in Court.

Defendant appealed that order, pursuant to the expedited appeal provision of Fed.R. App.P. 9(a). In the government’s affidavit in opposition to the appeal, AUSA Bloch stated that, besides threatening AUSA Behm with bodily harm, defendant had also uttered several profanities to Mr. Behm. On October 9, 1984, the Second Circuit affirmed Judge Bramwell’s orders revoking bail and denying the application for reconsideration. 751 F.2d 372.

On November 8, 1984, the defendant appeared for sentencing on the two counts of which he was convicted. Judge Bramwell suspended imposition of sentence and placed defendant on probation for two concurrent 5-year terms, and fined him $5,000.

The very next day, the present indictment was filed.

Discussion

Defendant makes four arguments in support of his motion to dismiss the indictment. He contends that: 1) prosecution is barred by the double jeopardy clause of the Fifth Amendment; 2) the indictment arises out of “presumptive prosecutorial vindictiveness,” thus violating defendant’s due process rights; 3) prosecution for this offense violates his First Amendment free speech rights; and 4) the indictment fails to charge an offense cognizable under 18 U.S.C. § 1513.

1. Double Jeopardy

Defendant contends that Judge Bramwell’s order of remand of September 26, 1984, was a summary adjudication of criminal contempt, amounting to former jeopardy with regard to the present indictment. See Colombo v. New York, 405 U.S. 9, 92 S.Ct. 756, 30 L.Ed.2d 762 (1972). Thus, argues defendant, further prosecution for the same conduct is unconstitutional.

According to defendant, he was remanded solely for what Judge Bramwell perceived as defendant’s threat to AUSA Behm. Defendant characterizes this as “a judicial action which Judge Bramwell later indicated was a necessary vindication of the court’s honor.” Defendant’s Memorandum of Law at J. This characterization, however, merely lumps together two distinct inferences that may be drawn from Judge Bramwell’s decision to remand defendant.

One inference is that Judge Bramwell revoked defendant’s bail, because he concluded that defendant posed a danger to the community. 18 U.S.C. § 3148. The other inference — the one defendant prefers — is that Judge Bramwell’s remand order constituted a summary punishment for criminal contempt, Fed.R.Crim.P. 42(a), the purpose of which is to vindicate the authority of the Court. Matter of Heathcock, 696 F.2d 1362 (11th Cir.1983).

Of the two inferences, only the first is reasonably drawn. Although defendant’s letter to Judge Bramwell also admits of the two interpretations, as do several statements by Judge Bramwell at sentencing, the course of the appeal to the Second Circuit dispels any lingering doubt.

Counsel first sought reconsideration from Judge Bramwell. Denying that re-' quest, he phrased his written order explicitly in terms of the bail statute. The ensuing appeal was clearly not from a contempt order, but rather from an order revoking bail. Summarily affirming Judge Bramwell’s order, the Second Circuit put the matter to rest by holding that “the order revoking bail and denying the application for reconsideration for bail” is affirmed.

Further support for this inference comes from the Federal Rules of Criminal Procedure. Rule 42(a) gives the Court power to punish summarily contempts occurring in its presence. Before imposing such punishment, however, the trial judge must certify that he saw or heard the conduct constituting the contempt and that it was committed in his presence. He must also enter an order explicitly stating the charges on which the contempt finding is based; and failure to enter such an order is ground for reversal. See In re Williams, 509 F.2d 949 (2d Cir.1975); Pietsch v. President of the United States, 434 F.2d 861 (2d Cir.1970); cert. denied, 403 U.S. 920, 91 S.Ct. 2236, 29 L.Ed.2d 698 (1971).

Judge Bramwell did not make the required findings or enter the order. It is inconceivable that so distinguished and experienced a judge would omit these steps had he intended to hold defendant summarily in contempt. Judge Bramwell’s order was merely a revocation of bail, an action well within the discretion of a district judge, given defendant's conduct. See Finetti v. Harris, 609 F.2d 594 (2d Cir.1979). There is, therefore, no former jeopardy as to which this indictment could constitute double jeopardy.

Even if Judge Bramwell’s remand somehow could be distorted into a summary punishment for criminal contempt, thereby creating a former jeopardy, see Colombo v. New York, 405 U.S. 9, 11, 92 S.Ct. 756, 757, 30 L.Ed.2d 762 (1972), the instant prosecution would still not be barred. The test for whether successive prosecutions for similar conduct is unconstitutional was enunciated in Blockburger v. United States, 284 U.S. 299, 52 S.Ct. 180, 76 L.Ed. 306 (1932):

The applicable rule is that, where the same act or transaction constitutes a violation of two distinct statutory provisions, the test to be applied to determine whether there are two offenses or only one is whether each provision requires proof of an additional fact which the other does not.

Id. at 304, 52 S.Ct. at 182. If conviction under each statute requires proof of one additional fact not required by the companion statute, successive prosecutions are not barred by the double jeopardy clause. Thus if one statute requires proof of facts A, B and C, while the other statute requires proof of facts A, B and X, the defendant may be prosecuted under both statutes. Comparison of the two statutes in question demonstrates that double jeopardy does not bar the prosecution.

18 U.S.C. § 401(1) gives the court power to punish such contempts as “[m]is-behavior of any person in its presence or so near thereto as to obstruct the administration of justice.” This power is implemented by Fed.R.Crim.P. 42, allowing the Court to punish summarily contempts occurring in its presence, id. 42(a), but requiring all other criminal contempts to be prosecuted after notice and a hearing. Id. 42(b); see United States v. Wilson, 421 U.S. 309, 315 n. 6, 95 S.Ct. 1802, 1806 n. 6, 44 L.Ed.2d 186 (1975). Accordingly, summary punishment for criminal contempt requires proof: 1) that the contemnor willfully misbehaved so as to obstruct the administration of justice; 2) that he did so in the actual presence of the Court; and 3) that the judge saw or heard the contumacious conduct. Id. at 315-16, 95 S.Ct. at 1806-07; In re Gustafson, 650 F.2d 1017, 1020-21 (9th Cir.1981) (en banc); In re Chaplain, 621 F.2d 1272, 1277 (4th Cir.1980) (en banc).

Defendant is now charged with violating 18 U.S.C. § 1513, part of the Victim and Witness Protection Act of 1982. The applicable provision of that section requires proof: (1) that defendant knowingly engaged in conduct; (2) that either caused, or threatened to cause, bodily injury to another person; (3) with the intent to retaliate against any person for, inter alia, the attendance or testimony of a witness at an official proceeding. 18 U.S.C. § 1513(a)(1); United States v. Cummiskey, 728 F.2d 200, 206 (3d Cir.1984).

Sifting these two criminal statutes through the Blockburger sieve, it is clear that conviction under each statute requires proof of additional facts that the other does not. For example, summary punishment for contempt requires that defendant have acted in the presence of the Court. It is immaterial to the present indictment where defendant engaged in the violative conduct. Additionally, conviction under § 1513 requires proof that defendant intended to retaliate for a witness’s attendance and testimony at trial. It is immaterial to the contempt conviction what the purpose of the contumacious conduct was or at whom it was directed.

Accordingly, defendant’s motion to dismiss the indictment on double jeopardy grounds must be denied.

2. Prosecutorial Vindictiveness

Defendant next contends that he stands indicted in this case solely because of his counsel’s vigorous defense at the earlier trial, specifically counsel’s aggressive cross-examination of AUSA Behm, his predominantly successful argument of a Rule 29 motion, and his success in convincing Judge Bramwell to sentence defendant to probation. Filing this indictment the day after sentencing, argues defendant, constitutes “presumptive prosecutorial vindictiveness.”

That catchy phrase derives from two Supreme Court decisions, Thigpen v. Roberts, — U.S. -, 104 S.Ct. 2916, 82 L.Ed.2d 23 (1984), and Blackledge v. Perry, 417 U.S. 21, 94 S.Ct. 2098, 40 L.Ed.2d 628 (1974). In those cases, the Court ordered the dismissal of felony indictments against defendants who had successfully appealed convictions of lesser offenses. The Court held that a vindictive prosecutor could not obtain an indictment for a more serious offense solely because the defendant had exercised the procedural rights made available to him by state law. Defendant analogizes his vigorous trial defense to the conduct of the defendants in Thigpen and Blackledge, and contends the instant indictment has no legitimate prosecutorial or jurisprudential purpose.

This argument borders on the frivolous. The subsequent indictments in Thigpen and Blackledge sought enhanced penalties for the same transactions that led to the original indictments. Defendant Ferrugia, on the other hand, was indicted for an act entirely unrelated to the conduct for which he was originally indicted, and which constituted an offense wholly different from those with which he was originally charged.

To the extent that defendant argues that he has already been punished once for this conduct, the contention is also merit-less. His actions in the courtroom on September 26, 1984 demonstrated to Judge Bramwell that defendant was no longer entitled to remain free on bail. If those actions also constituted a separate offense, the government is not barred from indicting defendant merely because the Court punished that conduct by revoking bail. Revocation of bail is not a sentence.

Accordingly, the motion to dismiss the indictment on grounds of prosecutorial vindictiveness is also denied.

3. The First Amendment Claim

Defendant next claims that he cannot be prosecuted under § 1513 because his threat to AUSA Behm was constitutionally protected “emotional hyperbole.” This argument, although deserving of far more than the cavalier treatment given it by the government in its opposition papers, is also unpersuasive.

In United States v. Carrier, 672 F.2d 300 (2d Cir.), cert. denied, 457 U.S. 1139, 102 S.Ct. 2972, 73 L.Ed.2d 1359 (1982), the Second Circuit made clear that indictments based substantially on the utterance of words should rarely be dismissed. Generally the defendant’s intention in uttering the allegedly threatening words, and the circumstances surrounding their utterance, are questions best left to the jury. Id. at 304, 306. The Court did recognize, however, that there may be instances “where the factual proof is insufficient as a matter of law,” id. at 306, thus requiring dismissal of the indictment. Defendant believes he falls within the exception.

In United States v. Kelner, 534 F.2d 1020 (2d Cir.), cert. denied, 429 U.S. 1022, 97 S.Ct. 639, 50 L.Ed.2d 623 (1976), defendant was convicted of transmitting in interstate commerce “a threat to injure the person of another.” 18 U.S.C. § 875(c). The Court affirmed the conviction, holding the proof at trial satisfied the constitutional requirement for criminalizing threats:

[s]o long as the threat on its face and in the circumstances in which it is made is so unequivocal, unconditional, immediate and specific as to the person threatened, as to convey a gravity of purpose and imminent prospect of execution, the statute may properly be applied.

534 F.2d at 1027 (emphasis added). Defendant claims this indictment does not satisfy that constitutional requirement.

This indictment is facially valid. See Fed.R.Crim.P. 7(c)(1); United States v. Carrier, supra, 672 F.2d at 303. Whether the conditions discussed in Kelner are satisfied is better answered by the jury at trial, when the government adduces all its proof. As the Court emphasized in Carrier, when a statute is based on threats, “the better course is to decide each case on its facts leaving defendant’s intent as a question for the jury.” Id. at 306 (citations omitted).

Accordingly, the motion to dismiss the indictment on this ground is denied.

4. Failure to Charge a Cognizable Offense

Defendant’s final argument is that as a matter of law, the indictment fails to charge an offense that is cognizable under § 1513. The gist of the argument is that § 1513 was never intended to apply to the facts of this case.

As discussed supra, § 1513 defines an offense of causing or threatening to cause bodily injury to another person, with intent to retaliate against any person for, inter alia, the attendance or testimony of a witness at an official proceeding. “Bodily injury” is defined in five subparagraphs of 18 U.S.C. § 1515(5). Four of those are clearly inapplicable to this case; the fifth defines bodily injury as “any other injury to the body, no matter how temporary.” 18 U.S.C. § 1515(5)(E).

Defendant relies on the legislative history of the Victim and Witness Protection Act of 1982, of which § 1513 is a part. The purpose of that Act was “to strengthen existing legal protection for victims and witnesses of federal crimes,” S.Rep. No. 532, 97th Cong.2d Sess., reprinted in 1982 U.S.Code Cong. & Ad.News 2515, specifically “the victim or witness who cooperates with the prosecutor ... at his own risk.” Id., reprinted in 1982 U.S.Code Cong. & Ad.News 2516.

Defendant argues that AUSA Behm is not a cooperating victim or witness within the contemplation of the statute because he is a federal prosecutor. This argument is meritless. Defendant was indicted for retaliating against a witness who testified against him at an official proceeding. That the witness happened to be a federal prosecutor — not the prosecutor at the official proceeding — is irrelevant. Any other construction would make federal prosecutors fair game for retaliatory threats if they also happened to testify at an official proceeding.

Defendant also claims the injury he is alleged to have threatened does not come within the scope of the statute. As discussed in part 3, supra, the indictment is facially valid. Whether the allegedly threatened bodily injury comes within the scope of § 1515(5) is a fact question to be determined by the jury at trial.

Accordingly, the motion to dismiss the indictment on this ground is also denied. Defendant’s alternative request for particulars is granted. See United States v. Carrier, supra, 672 F.2d at 303 & n. 5.

SO ORDERED.

      . At oral argument on February 8, 1985, counsel agreed that the factual record upon which this motion could be decided would consist of: 1) the transcripts of the events immediately surrounding the spitting incident and of Judge Bramwell’s subsequent sentencing proceeding; 2) the affidavit of Assistant United States Attorney Norman A. Bloch, submitted to the Second Circuit in opposition to defendant’s appeal of Judge Bramwell’s remand order; and 3) the Second Circuit’s decision on that appeal.

      . At that time bail was a $150,000 personal recognizance bond, secured by the deed to defendant’s house.

      . Those bail statutes have since been repealed by the Bail Reform Act of 1984.

      . Defendant also seeks disclosure of grand jury minutes. Fed.R.Crim.P. 6(e)(3)(C)(ii). Defendant has failed to establish the "particularized need” required for disclosure. United States v. Moten, 582 F.2d 654, 662 (2d Cir.1978). In any event, the Court has reviewed the grand jury minutes in camera, and there is no evidence whatsoever of irregularity or prosecutorial misconduct.


source: Caselaw Access Project

author: EDWARD WEINFELD, District Judge.

license: Public Domain

text:
    Jose LEDESMA-VALDES, et al., Petitioners, v. Charles SAVA, District Director, New York District, U.S. Immigration and Naturalization Service, Respondent.
    No. 85 Civ. 0401 (EW).
    United States District Court, S.D. New York.
    March 13, 1985.

      Harry A. DeMell, New York City, for petitioners; Peter Hirsch, New York City, of counsel.
    Rudolph W. Giuliani, U.S. Atty., S.D. N.Y., New York City, for respondent Charles C. Sava; Michael D. Patrick, Noel Anne Ferris, Sp. Asst. U.S. Attys., New York City, of counsel.
   OPINION

EDWARD WEINFELD, District Judge.

This is an application by a group of aliens who sought to enter the United States illegally for a writ of habeas corpus to enjoin the District Director of the Immigration and Naturalization Service (“INS” or “Service”) from excluding them from the United States and for their release on parole pending a hearing and determination of their applications for political asylum pursuant to § 242(b) of the Immigration and Nationality Act (“the Act”).

Petitioners are 25 of a group of 78 Cuban natives who attempted to enter the United States from Spain at John F. Kennedy Airport on December 21, 1984. The travel documents they presented upon arrival were found to be counterfeit and fraudulent by the INS. Accordingly, because none of the group was “clearly and beyond a doubt entitled to land,” all were detained pending exclusion hearings. Of the 78 initially detained, 26 single males without family ties to the remainder of the group were taken into immediate custody and transferred to Houston, Texas. The remaining 52 consisted of family groups including adult men and women, and their children. Because there were no available facilities in New York adequate to house these family groups, they were detained in the custody of the airline carriers which brought them here. The carriers were instructed to present the aliens to the Immigration Court on December 26, 1984 at the Federal Office Building, New York City. However, sometime prior to that date, 13 of the 52 aliens had absconded under “unknown circumstances” from a hotel where the airline carriers had lodged them. Evidently, because of loose security safeguards, the abscondees just walked out of the hotel. All 13 remain at large.

Later, on December 26, 1984, the airlines presented the 39 remaining individuals in their custody to the Immigration Court in New York City. The exclusion hearings were then adjourned to afford them time to obtain counsel and to file applications for political asylum. Two juveniles were paroled into their father’s custody in Miami and their proceedings were transferred to Miami. With this parole of the children, the number of aliens remaining in custody in New York was 37. Within several days thereafter, all detainees were represented by retained counsel or by authorized pro bono publico representatives.

With respect to all pending applications for political asylum, the Immigration Court sought advisory opinions from the Department of State, Bureau of Human Rights and Humanitarian Affairs, as to the merits of the asylum claims, and pending their receipt, adjourned the exclusion hearings to various dates in late March, April, and early May, 1985. All parole requests were denied because petitioners had failed to meet the requirements as specified in the regulations.

On January 11, 1985, the Service was informed by the airline carriers that a family of four, two adults and two children (represented by petitioners’ counsel), also somehow had managed to escape from custody and in this instance, too, the airlines’ security personnel were unable to account for the escape. At this point, the total number of absconding aliens was 17, approximately one-third of the original 52 who had been detained upon arrival in New York. Following the latest escape, the District Director’s Office determined, in the interests of security, that any remaining adult, not the parent of a child in carrier custody, should be transferred to the New York Service Processing Center (“SPC”). Two individuals were in that category and were transferred to the SPC along with a third, who volunteered to accompany his brother. Thus, 29 still remained at the hotel under the undesirable airline security supervision. On January 15, 1985, the Service was advised that accommodations adequate to take care of the remaining 29, which included adults and children, were available at El Paso, Texas. Arrangements were made to transfer the group to El Paso by plane scheduled to depart from LaGuardia Airport via Eastern Air Lines on the afternoon of January 16, 1985. Counsel for the respective departees were notified of the proposed transfer. According to the return to this application filed by the Assistant Director of Detention, the group boarded the aircraft no later than 2:30 p.m., the plane left the gate and began taxiing toward the runway between 2:40 p.m. and 2:50 p.m., and departed shortly thereafter, arriving in El Paso, Texas on the evening of January 16, 1985. Remaining behind were two of four adult aliens held in Service custody, including one of the named petitioners in this proceeding.

According to petitioners’ counsel, the petition was filed in this Court at approximately 2:15 p.m. on January 16th but was not signed by Judge Goettel until sometime between 2:35 and 2:45 p.m. by which time the plane had already taken off and was somewhere over the state of New Jersey or Pennsylvania with the petitioners still in the control and custody of representatives of respondent. However, the fact is that Judge Goettel struck a clause in the order to show cause which would have stayed the departure of the petitioners until the hearing and determination of this petition for a writ.

In any event, there are presently in custody at El Paso 31 aliens of the original group. The males, seventeen years and older, are detained at the Service Processing Center, which is owned and operated by the INS. The females and all juveniles are detained at “Alternative House,” a nearby facility accommodating family groups, which is a privately owned facility under contract to the United States Marshal’s office. “Alternative House” is a former motel that has been converted to a minimum security facility, and is accredited by the American Correctional Association. It has recreational facilities indoors and outdoors, televisions in each room, and available laundry facilities. Mothers and children in the group have not been separated. Finally, the Director’s return states that legal services, both private and pro bono publico, are and have been made available to all the detained members of the group.

An amended petition filed on behalf of petitioners by an attorney located in this district alleges that all the aliens are unlawfully detained; that they have been deprived of a right to counsel of their choice authorized by 8 U.S.C. § 1362; and that they have been denied procedural due process rights guaranteed by the Fifth Amendment to the United States Constitution.

DISCUSSION

A threshold issue raised by the District Director is whether this Court has jurisdiction to hear and determine the claims of petitioners since all (except one who is located within the Southern District of New York and as to whom respondent concedes jurisdiction) are now, and have been since the evening of January 16, 1985, in the custody of immigration officials at El Paso, Texas. In sum, respondent contends that this court lacks jurisdiction over the custodian of the El Paso petitioners and that the issues raised by them must be adjudicated in the United States District Court for the Western District of Texas, the place of their detention. The thrust of the argument is that the petitioners were aboard the plane en route to El Paso at the time of the filing of their petition for relief and the issuance of the order to show cause soon thereafter; and that prior to their transfer, they were being detained within the Eastern District of New York, either earlier in the day at Kennedy Airport or just prior to their departure at LaGuardia Airport. Accordingly, the respondent urges that all issues raised by the El Paso petitioners must be adjudicated in El Paso, the place of their present detention, and that their petitions should be dismissed or transferred to the Western District of Texas pursuant to 28 U.S.C. § 1404(a).

The issue, however, is not where respondent placed the petitioners while they were in his custody, but whether the Court had jurisdiction over respondent as petitioners’ custodian at the time the petition was filed and the order to show cause served. “The writ of habeas corpus does not act upon the prisoner who seeks relief, but upon the person who holds him in what is alleged to be unlawful custody____ So long as the custodian can be reached by service of process, the court- can issue a writ ‘within its jurisdiction/ requiring that the prisoner be brought/before the court for a hearing on his claim, or requiring that he be released outright from custody, even if the prisoner himself is confined outside the court’s territorial jurisdiction.” There can be no question here that the respondent, the District Director, had custody of the petitioners while he was within the Southern District of New York. He maintains his office here and conducts his official activities, including the detention of those who seek to enter into the United States from the airports adjacent to this District, from his office within this District. The fact that he decides to lodge detainees outside the district where he conducts his activities, or as in this case with airlines that may place them in hotels outside the district, does not deprive the District Director of control and custody over those aliens. So, too, when he decided to transfer petitioners to El Paso, Texas, they remained in his continued custody until his agents, who accompanied them throughout the airplane trip, surrendered custody to the immigration authorities at El Paso. Up to that point, the respondent was capable at all times of giving effect to the terms of any order issued under the application for the writ. In sum, as required by 28 U.S.C. § 2243, the application for the writ was properly “directed to the person having custody of the person detained.” Accordingly, the Court holds that it does have jurisdiction to pass upon the merits of the application which it now considers.

At the outset, it is noted that this action is brought by excludees, aliens seeking to enter the United States, and not by resident aliens whom the government seeks to expel. Excludees, although physically present in the United States, are “treated as if stopped at the border.” It is also important to recognize that the Service is required by statute to detain such unadmitted aliens if they are not clearly entitled to land and that release on parole is an exception to the requirement of detention. An unadmitted alien has no constitutional right to parole.

This Court may only review discretionary agency decisions with respect to aliens seeking admission into the United States to determine whether the District Director has exercised his discretion and, if so, whether that discretion has been abused. Abuse may be found where the Service or Director has acted “irrationally or in bad faith” or “invidiously against a particular race or group.” As our Court of Appeals has held, discretionary parole decisions,

must be viewed at the outset as presumptively legitimate and bona fide in the absence of strong proof to the contrary. The burden of proving that discretion was not exercised or exercised irrationally or in bad faith is a heavy one and rests at all times on the unadmitted alien challenging denial of parole.

Upon a review of this record, the Court finds that the District Director did not abuse his discretion in denying parole to any of the petitioners. A preliminary fact of significance is that not only did the petitioners seek to obtain entry into the United States by fraud — the use of fraudulent documents — but that after landing one-third of their number absconded who, to date, have not been apprehended. That circumstance alone justified concern that if the remainder were paroled, their subsequent appearance at required hearings would be doubtful. The risk of absconding in this case was not conjectural but was underscored by demonstrated experience. It was demonstrated not only by the escape of one-third of the initial group, but also by the circumstance that the entire group (including present petitioners) presented false documents which purported to establish that they were returning refugees to whom political asylum had previously been granted while in the United States and that their histories and identities had been examined and verified.

Petitioners contend that the District Director abused his discretión in denying their applications for parole which were in all cases based on the following claims: (1) that each petitioner would be a witness in pending immigration proceedings — his or her own; (2) that each petitioner’s continued detention was not in the public interest since public monies would be required for his or her support; (3) that each petitioner had close family ties in the United States. Finally, where adult aliens were accompanied by children, release of the entire family was sought in many cases based on the child’s detention.

The first two claims deserve little comment. Far from constituting an abuse of discretion to deny parole in the face of such claims, to grant parole for these reasons alone would be an abuse of discretion. Every alien is required to appear at his own exclusion hearing, and every detention requires government expenditures. There simply is no basis in the INS regulations or in logic to claim that it is an abuse of discretion to deny parole applications for these reasons.

The third claim — that petitioners had close family ties in the United States — is equally untenable. Under INS regulations, the existence of family ties within the United States may only justify parole where the family tie is a close relative. A close relative is defined by regulation as a parent, a spouse, children, or siblings. Moreover, the mere existence of family relationships is insufficient to mandate parole. The close family relative must be eligible to file and have filed a visa petition on behalf of the detainee. Finally, even if both these criteria are met, the detainee only falls within the “category of aliens for whom the granting of the parole exception would be ‘strictly in the public interest,’ ” if he or she presents neither a security risk nor a risk of absconding.

None of the petitioners presented evidence to the District Director which would satisfy the foregoing regulations. In some cases, affidavits of support were offered by relatives who did not come within the regulations’ definition of a close family tie. In other cases, petitioners alleged relatives falling within the definition, but presented no evidence that these relatives were eligible to file or had filed a visa petition on their behalf. Moreover, in denying parole, the District Director, as already noted, was justified to take into account the fact that 17 of the original group detained at the airport had absconded; and, at least with respect to some of the petitioners, that their prior applications for refugee status had already been denied overseas.

Finally, the fact that juveniles were detained with their parents does not justify, under the regulations, the parole of the entire family. If the family deemed it best to have the child removed from detention and a relative or friend in the United States could be found to sponsor the juvenile, then the regulations would support parole for the juvenile. It is only where a juvenile has been or will be held in custody for thirty days or more and apart from his family that the regulations require the District Director to consider paroling the juvenile with an accompanying adult in detention. This is not the case here. Juveniles are in custody with their parents in a facility that petitioners do not dispute was certified to accommodate such family groups and which allows the families to remain together.

Accordingly, there is no basis for this Court to find that the District Director abused his discretion in denying petitioners’ applications for parole.

In addition to release, petitioners seek, by an amended pleading, an injunction mandating their return to New York. They claim that their transfer to Texas deprived them of their statutory right to counsel and their Fifth Amendment right to due process. Having retained New York counsel, petitioners claim that the INS was precluded from transferring them from New York.

There is no question that petitioners have a statutory right to representation by counsel of their choosing. However, this does not foreclose a transfer of exclusion proceedings where neither the purpose nor the effect of the transfer deprives them of representation. There is no claim here that the INS transferred petitioners for the express purpose of undermining their representation by New York counsel. Petitioners present no facts challenging the Government’s contention that the transfer was “completely justifiable” under the circumstances due to the unexplained breakdown in carrier custody security, the nonavailability of adequate detention .facilities in this District, and the availability of secure family accommodations in Texas.

New York counsel who have represented petitioners thus far do not appear to have any special personal or professional relationship to any one of the petitioners. The hearings before the Immigration Court pending receipt of the advisory opinions from the State Department are yet to be held and no doubt will present matters which can as readily be handled by El Paso counsel as by New York counsel. No showing has been made that petitioners are unable to obtain counsel in the El Paso, Texas area if they so desire; indeed, it appears that competent counsel are available there. Moreover, if the El Paso petitioners desired New York counsel (which incidentally does not appear to be the case — it is New York counsel, not petitioners, who urge the desirability of continued representation), there is no showing that the New York attorneys could not attend the exclusion hearings when scheduled in El Paso. Indeed, the attorneys’ convenience and the fact that their offices are located in this District is of minimal significance.

The essence of petitioners’ argument appears to be that once they obtained counsel, the INS could not remove them from counsel’s vicinity, thereby placing a burden on representation by that particular attorney. To accept petitioners’ argument would in effect require this Court to grant unadmitted aliens rights which United States citizens do not have. Unadmitted aliens have no Sixth Amendment right to the effective assistance of counsel in exclusion proceedings. If the INS is precluded from transferring unadmitted aliens once they have obtained counsel, but where other counsel are available in the transferee forum, then, those aliens have gained an unqualified right to representation by particular counsel. However, the Sixth Amendment does not provide that absolute right in criminal proceedings against United States citizens. Such an incongruous result is compelled neither by the immigration laws, nor by the Fifth Amendment’s guarantee of fundamental fairness in adjudicative processes.

Accordingly, petitioners’ applications for release from custody and for injunctive relief are denied.

So ordered.

      . See 8 U.S.C. § 1105a(a)(9) (1982).

      . Each alien presented a refugee travel document purporting to have been issued by the INS pursuant to 8 C.F.R. § 223(a) (1984).

      . 8 U.S.C. § 1225(b) (1982).

      . Id. § 1227(b); 8 C.F.R. § 235.3(b), (c) (1984).

      . 8 C.F.R. § 212.5(a)(2)(ii) (1984).

      . See id. § 208.10(b).

      . See id. § 212.5.

      . One other adult had been transferred earlier, upon a determination that he should have originally been separated because he was unrelated to any other aliens in the group.

      . Affidavit of Harry DeMell, Esq., ¶ 2, Feb. 17, 1985; Affidavit of Harry DeMell, Esq., ¶ 12, Feb. 11, 1985.

      . Braden v. 30th Judicial Circuit Court, 410 U.S. 484, 494-95, 93 S.Ct. 1123, 1129, 35 L.Ed.2d 443 (1973) (overruling Ahrens v. Clark, 335 U.S. 188, 68 S.Ct. 1443, 92 L.Ed. 1898 (1948) to the extent it required presence of the petitioner in the district); see Strait v. Laird, 406 U.S. 341, 343, 92 S.Ct. 1693, 1694, 32 L.Ed.2d 141 (1972); Jones v. Cunningham, 371 U.S. 236, 243-44, 83 S.Ct. 373, 377, 9 L.Ed.2d 285 (1963).

      . 28 U.S.C. § 2243 (1982); see Ex Parte Endo, 323 U.S. 283, 304-07, 65 S.Ct. 208, 219-20, 89 L.Ed. 243 (1944) (once jurisdiction attaches, it is not ousted by subsequent transfer of petitioner); see also Strait v. Laird, 406 U.S. 341, 343, 92 S.Ct. 1693, 1694, 32 L.Ed.2d 141 (1972); McCoy v. United States Bd. of Parole, 537 F.2d 962 (8th Cir.1976); Smith v. Campbell, 450 F.2d 829, 831-32 (9th Cir.1971).

      . The motion made by the District Director to transfer this action to the Western District of Texas pursuant to 28 U.S.C. § 1404(a) must be denied, since it is clear that' prior to the delivery of the detainees to the immigration authorities at El Paso, the action could not have been brought there. See Van Dusen v. Barrack, 376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964); Hoffman v. Blaski, 363 U.S. 335, 344, 80 S.Ct. 1084, 1090, 4 L.Ed.2d 1254 (1960); Shutte v. Armco Steel Corp., 431 F.2d 22 (3rd Cir.1970), cert. denied, 401 U.S. 910, 91 S.Ct. 871, 27 L.Ed.2d 808 (1971); Bashir v. United States Attorney General, 508 F.Supp. 1108, 1109 (E.D.Va.1981) (habeas context); see generally 15 C. Wright, A. Miller & E. Cooper, Federal Practice & Procedure § 3845 (1976).

      . Shaughnessy v. United States ex rel. Mezei, 345 U.S. 206, 215, 73 S.Ct. 625, 630, 97 L.Ed. 956 (1953).

      . 8 U.S.C. § 1225(b) (1982).

      . 8 C.F.R. § 212.5(a) (1984).

      . See London v. Plasencia, 459 U.S. 21, 32, 103 S.Ct. 321, 329, 74 L.Ed.2d 21 (1982).

      . Bertrand v. Sava, 684 F.2d 204, 212, 213 (2d Cir.1982).

      . Id. at 212-13.

      . See id. at 216.

      . 8 C.F.R. § 212.5(a)(2) (1984); id. § 212.-5(a)(2)(iii). Aliens who seek entry based on fraudulent documents may only be paroled pursuant to 8 C.F.R. § 212.5(a). See id. § 235.3(b); cf. id. § 212.5(b).

      . Id. § 212.5(a)(2)(iii). While petitioners emphasize the regulations’ provision that “where it is impossible to accommodate a child of tender years accompanied by an adult or juvenile who will or has remained in detention for periods of over 30 days, consideration should be given to paroling the juvenile with the accompanying adult to a responsible agency, relative, or friend,” the context in which this language appears makes it clear that it applies to cases where detention of the juvenile separately from his parents is contemplated. Thus, the regulation begins: "Aliens who are defined as juveniles should only be placed in a juvenile facility or with an appropriate responsible agency or institution, recognized or licensed to accommo
        date juveniles by the laws of that State.” Id. (emphasis added).

      . 8 U.S.C. § 1362 (1982).

      . Cf. Louis v. Meissner, 530 F.Supp. 924 (S.D.Fla.1981) (transfer of Haitian aliens to remote areas with no legal support and few interpreters).

      . Cf. Leasing Service Corp. v. Rich Industrial Supply Corp., 456 F.Supp. 782, 784 (S.D.N.Y.1978) (convenience of counsel is entitled to little weight on transfer of venue motion); Faigenbaum Machinery, Inc. v. Scott & Williams, Inc., 344 F.Supp. 1267, 1272 (S.D.N.Y.1972) (same).

      . See Ramirez v. INS, 550 F.2d 560, 563 (9th Cir.1977); Barthold v. United States Immigration and Naturalization Service, 517 F.2d 689, 691 (5th Cir.1975) and cases cited therein.

      . See Morris v. Slappy, 461 U.S. 1, 12-14, 103 S.Ct. 1610, 1616-17, 75 L.Ed.2d 610 (1983); id. at 25, 103 S.Ct. at 1623 (Brennan, J., concurring).

      . "Constitutional due process requirements under the Fifth Amendment are satisfied by a full ant! fair heaing.” Ramirez v. INS, 550 F.2d 560, 563 (9th Cir.1977). "To render a hearing unfair ... the practice must have been such as might have led to a denial of justice.” United States ex rel. Bilokumsky v. Tod, 263 U.S. 149, 157, 44 S.Ct. 54, 57, 68 L.Ed. 221 (1923) (Brandeis, J.)


author: HADEN, Chief Judge.

text:
    Diana Suzette FERRELL, Plaintiff, v. HECK’S, INC., Defendant.
    Civ. A. No. 84-2153.
    United States District Court, S.D. West Virginia, Charleston Division.
    March 13, 1985.
    James M. Cagle, Charles R. Garten, Charleston, W.V., for plaintiff.
    Fred F. Holroyd, Holroyd & Hamrick, Charleston, W.V., for defendant.
   MEMORANDUM OPINION AND ORDER

HADEN, Chief Judge.

This action was originally filed in the Circuit Court of Kanawha County, alleging breach of contract and violations of the West Virginia Human Rights Act, W. Va. Code, § 5-11-1, et seq. The Defendant filed a timely petition and removed the case to this Court pursuant to 28 U.S.C. § 1446(a). The basis for removal cited by Defendant was that Plaintiffs action was brought pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq. See Petition for Removal at ¶ 2. This action is now before the Court on Plaintiffs motion to remand and for judgment against the Defendant on the entire amount of the removal bond posted by Defendant ($500). See 28 U.S.C. § 1447(e).

In support of her motion to remand Plaintiff asserts that the removal petition is erroneous on its face in that it cites a cause of action (Title VII) not alleged in the complaint. Plaintiff also points out that she has not sought, or received, a right to sue letter from the Equal Employment Opportunity Commission. The Plaintiffs position is well taken. Plaintiff has alleged only state law-based causes of action: breach of contract and violations of W. Va. Code, § 5-11-1, et seq. The fact that Plaintiff could have pursued her sex discrimination claim via Title VII is irrelevant. The Plaintiff is the architect of her own lawsuit and “is entitled to allege only non-federal claims, even though [she] could have relied also on federal law.” See Freeman v. Colonial Liquors, Inc., 502 F.Supp. 367, 369 (D.Md.1980). Further, it is apparent that Plaintiff has not complied with the filing requirements of Title VII which are jurisdictional prerequisites for a suit under that statute. See 42 U.S.C. §§ 2000e-5(e); (f)(1); Mickel v. South Carolina State Employment Service, 377 F.2d 239 (4th Cir.1967) cert. denied 389 U.S. 877, 88 S.Ct. 177, 19 L.Ed.2d 166 (1967). Therefore, there is no jurisdictional basis for this Court to entertain this action even if Plaintiff desired to pursue Title VII remedies.

“It is a well-settled rule of law that the removal statutes are to be strictly construed against permitting removal.” Continental Resources and Mineral Corp. v. Continental Ins. Co., 546 F.Supp. 850, 852 (S.D.W.Va.1982). See also Shamrock Oil Corp. v. Sheets, 313 U.S. 100, 107, 61 S.Ct. 868, 871, 85 L.Ed. 1214 (1941); W. Va. State Bar v. Bostic, 351 F.Supp. 1118, 1120 (S.D.W.Va.1972). The Court must also be wary of removal jurisdiction inasmuch as the Supreme Court has stated that

“The regard for the rightful independence of state governments, which should actuate federal courts, requires that they scrupulously confine their own jurisdiction to the precise limits which the [removal] statute has defined.”

Healy v. Ratta, 292 U.S. 263, 270, 54 S.Ct. 700, 703, 78 L.Ed. 1248 (1934). In recognition of these principles of statutory construction, and the fact that Plaintiffs causes of action are unequivocally based entirely on state law, the Court must decline to exercise jurisdiction over this case and must remand it to the Circuit Court of Kanawha County for further proceedings.

Inasmuch as this action was improvidently removed by the Defendant, the Court will award Plaintiff her costs and attorney’s fees incurred incident to the removal. The Court will take under advisement the amount of fees and costs to be awarded pending Plaintiff’s counsel’s submission to the Court of the appropriate documentation and itemization of these costs and fees. In documenting the amount of costs and attorney’s fees incurred by Plaintiff incident to the removal of this action, counsel shall include the hourly compensation rate specified in counsel’s employment contract with the Plaintiff. Plaintiff’s counsel’s itemization of these costs and fees is to be submitted to the Court within fifteen days of the date this Order is entered, accompanied by an affidavit stating that the costs and fees listed therein are accurate to the best of counsel’s knowledge.

       Neither does this Court have diversity of citizenship jurisdiction to consider Plaintiffs breach of contract cause of action inasmuch as both parties are West Virginia citizens. See 28 U.S.C. § 1332; Complaint at ¶¶ 2 and 3; Answer at ¶¶ 2 and 3.


author: ERWIN, District Judge.

text:
    Carlos T. COOPER, Jr., D.P.M., and E. Joseph Daniels, D.P.M., Plaintiffs, v. FORSYTH COUNTY HOSPITAL AUTHORITY, INC., Jack P. Barrier, Marian F. Brower, Harley P. Graves, J. Clifton Harper, Kap H. Halverson, Kenneth A. Johnson, Eugene Rossitch, G. Dee Smith, Ann Spencer, Raymond D. Thomas, Martha J. Young, Individually and as Trustees of Forsyth County Hospital Authority, Inc., and William F. Folds, M.D., David Nelson, M.D., William F. Sayers, M.D., Louis Shaffner, M.D., Individually and as Trustees of Forsyth County Hospital Authority, Inc., and George Podgorny, M.D., Robert Means, M.D., Jeff B. Helms, M.D., and Frank E. Pollock, M.D., Kenneth G. Tomberlin, M.D., John T. Hayes, M.D., Richard P. Rose, M.D., Robert G. Underdal, M.D., Isabel Bittinger, M.D., and Jerome E. Jennings, M.D., Defendants, and The Medical Society of the State of North Carolina and the North Carolina Orthopedic Association, Additional Defendants.
    No. C-83-75-WS.
    United States District Court, M.D. North Carolina, Winston-Salem Division.
    March 14, 1985.

      T. Paul Hendrick and Hamilton C. Horton, Jr., Winston-Salem, N.C., for plaintiffs.
    Thomas E. Harris, New Bern, N.C., Roddey M. Ligón, Jr., Winston-Salem, N.C., Samuel G. Thompson and John H. Anderson, Raleigh, N.C., J. Robert Elster, George L. Little, Jr., and F. Joseph Treacy, Jr., Winston-Salem, N.C., for defendants.
   MEMORANDUM OPINION

ERWIN, District Judge.

Statement of the Case

This cause came on for hearing on December 21, 1984 at the United States Courthouse in Greensboro upon motions filed by all parties in the case. Plaintiffs are licensed podiatrists who are doing business in Forsyth County. In their amended complaint, plaintiffs allege that the defendants combined and conspired to restrain trade and commerce in violation of Sections 1 and 2 of the Sherman Act in that plaintiffs were denied hospital privileges. 15 U.S.C. §§ 1 and 2. Plaintiffs contend that defendants’ actions constitute a group boycott and an illegal tying arrangement. Plaintiffs further allege that defendants have violated N.C.Gen.Stat. §§ 75-1 and 75-2, and N.C.Gen.Stat. § 131-126.11A. All parties have filed cross-motions for summary judgment with supporting briefs, affidavits, and exhibits.

The court finds that there is no genuine dispute as to any material facts and that this action may be disposed of by summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. After careful review of the extensive record compiled in this case and for the reasons stated herein, the court denies plaintiffs’ partial motion for summary judgment and grants the summary judgment motions of defendants Forsyth County Hospital Authority, Inc. (Forsyth Memorial Hospital), its Trustees and Bylaws Committee, the individual defendants Pollock, Tomberlin, Hayes, Rose, Underdal, Bittinger, and Jennings, and defendant North Carolina Orthopedic Association, Inc.

Facts

Forsyth Memorial Hospital, a public general hospital with approximately 724 beds, is accredited by the Joint Commission on the Accreditation of Hospitals. The bylaws of the Medical-Dental Staff of Forsyth Memorial Hospital (Forsyth Memorial) provides: “Membership on the Medical-Dental Staff of Forsyth Memorial Hospital is a privilege which shall be extended only to professionally competent physicians and dentists who continuously meet the qualifications, standards, and requirements set forth in these Bylaws.” (Article III, Section 1.) On April 21, 1980, plaintiffs applied for staff privileges at Forsyth Memorial.

After conducting hearings with respect to the question of whether or not the bylaws should be amended to allow plaintiffs to have surgical privileges, the Bylaws Committee made a report dated August 5, 1980 in which it recommended against a change in the bylaws. Thereafter, the Executive Committee of the Medical-Dental Staff voted unanimously to adopt the Bylaws Committee’s recommendation. On October 14, 1980, the Board of Trustees also voted unanimously to adopt the Bylaws Committee recommendation. Additionally, the Board of Trustees referred the matter to the Joint Conference Committee which also recommended unanimously that the bylaws not be amended. The matter was returned to the Board of Trustees which renewed its recommendation.

Plaintiffs again applied for staff privileges in September 1981. On January 5, 1982, the Executive Committee and the Credentials Committee of the Medical-Dental Staff recommended the denial of plaintiffs application for clinical privileges. Hearings were held by an Ad Hoc Hearing Committee concerning plaintiffs’ applications, and the Board of Trustees approved the recommendation of the Executive and Credentials Committee on February 9, 1982.

Defendants Forsyth County Hospital Authority Inc. Board of Trustees, and Bylaws Committee

Section 1 Violation — Group Boycott

Plaintiffs contend that defendants’ illegal concerted actions resulting in a group boycott were the refusal to amend the bylaws to allow podiatrists to have staff privileges at Forsyth Memorial and the denial of the plaintiffs’ individual applications for staff privileges at Forsyth Memorial. Defendants, on the other hand, contend that their actions were based on the good faith judgment that high quality care requires that surgery performed at Forsyth Memorial only be performed by physicians educated and trained to treat the whole person.

The standard of review for a determination of alleged antitrust violations arising out of a denial of hospital staff privileges is the “rule of reason.” See Hospital Building Company v. Trustees of Rex Hospital, 691 F.2d 678 (4th Cir.1988), cert. denied, — U.S. -, 104 S.Ct. 231, 78 L.Ed.2d 224 (1983) (No. 82-1762). Thus, plaintiffs must prove that defendants’ actions violated Section 1 of the Sherman Act; such violation will not be presumed. The court has carefully reviewed the transcript of the meeting of the Board of Trustees on February 9, 1982, the transcript of the meeting of the Bylaws Committee on July 9,1980, and the transcript of the Bylaws Committee meeting on June 3, 1980, and concludes that defendants’ actions were taken in good faith and were not an unreasonable restraint on trade under the circumstances.

North Carolina General Statute § 90-202.2 defines podiatry as follows: “The surgical or medical or mechanical treatment of all ailments of the human foot, except the amputation of the foot or toes or the administration of an anesthetic other than local and except the correction of clubfoot deformity and triple arthrodesis.” The bylaws of Forsyth Memorial permit only allopathic physicians and dentist to become members of the Medical-Dental Staff, and only members of the Medical-Dental Staff have clinical privileges at Forsyth Memorial. After plaintiff’s first application for staff privileges at Forsyth Memorial in 1980, the president of the Medical-Dental Staff appointed a Bylaws Committee. The Bylaws Committee conducted three public hearings before issuing a report recommending against a change in the bylaws.

After plaintiffs’ second application for staff privileges at Forsyth Memorial in late 1981, the Credentials Committee of the Medical-Dental Staff reviewed the plaintiffs’ applications individually and with particular emphasis on their education and training. The Credentials Committee recommended to the Executive Committee that plaintiffs’ application for surgical and admitting privileges at Forsyth Memorial be denied. The committee advised plaintiffs, however, that the Credentials Committee would consider plaintiffs’ application for non-surgical allied health privileges if plaintiffs desired to apply for such privileges. (Plaintiffs’ Exhibit 15, Deposition of William F. Folds, Chairman of the Credentials Committee.) The court finds that, as the governing body of Forsyth Memorial, the Board of Trustees and its delegated committees had a duty to insure that the hospital provide quality patient care and that the actions by the Board and the Bylaws Committee were in response to this duty.

Section 1 Violation — Illegal Tying Arrangement

Plaintiffs contend that defendants have engaged in an illegal typing arrangement which is a per se violation of Section 1 of the Sherman Act. Like the group boycott claim, plaintiffs fail to provide a factual basis for such a finding. Plaintiffs contend that the tying product is foot care at Forsyth Memorial and that the tied product is medical care rendered by orthopedists at the hospital. The United States Supreme Court in Jefferson Parish Hospital v. Hyde, — U.S. -, 104 S.Ct. 1551, 1558, 80 L.Ed.2d 2 (1984), states that “the essential characteristic of an invalid tying arrangement lies in the seller’s exploitation of its control over the tying product to force the buyer into the purchase of a tied product that the buyer either did not want at all, or might have preferred to purchase elsewhere on different terms.” The record is void of any evidence that defendants force patients to receive foot care only by orthopedists at Forsyth Memorial or that denying podiatrists staff privileges at Forsyth Memorial unreasonably restrained competition for foot care in any defined geographic market.

State Statutory Violations — N. C. Gen. Stat. §§ 75-1 and 75-2 and N.C.Gen.Stat. § 131-126.11A

Plaintiffs also allege that defendants’ actions constitute violations of North Carolina “antitrust” statutes as well as the clear mandate of N.C.Gen.Stat. § 131-126.11A. For the reasons stated above as to why defendants are entitled to summary judgment on plaintiffs’ claim under Sections 1 and 2 of the Sherman Act, defendants are also entitled to summary judgment under N.C.Gen.Stat. §§ 75-1 and 75-2.

Plaintiffs claim under N.C.Gen.Stat. § 131-126.11A may also be summarily dismissed. This statute, which outlines factors a governing body should consider in determining whether licensed physicians and practitioners are granted staff privileges at a hospital, also includes the proviso: “Nothing in this article shall be deemed to mandate hospitals to grant or deny to any parties privileges to practice in said hospitals.” Plaintiffs have failed to demonstrate in any manner that defendants disregarded the factors to be considered in denying plaintiffs staff privileges at Forsyth Memorial. Without such a showing, no violation of N.C.Gen.Stat. § 131-126.11A exists.

Defendant North Carolina Orthopedic Association

Defendant North Carolina Orthopedic Association, Inc. (Association) is a statewide, non-profit corporation which meets twice a year. In October 1975, the Association adopted a resolution opposing the practice of podiatry in a hospital setting in response to a report on podiatry legislation. In 1984, the Association formally adopted the position that the hospital practice of podiatry be determined at the local level. Plaintiffs contend that the Association combined and conspired with the other defendants to commit a violation of Sections 1 and 2 of the Sherman Act, Sections 75-1 and 75-2 of the North Carolina General Statutes, and the clear mandate of North Carolina General Statute § 131-126.11 A. Thus, defendant North Carolina Orthopedic Association’s presence in this lawsuit is purely on the basis of its alleged conspiratorial activities. The court finds, however, that although plaintiffs attempt to show that the Association met on several occasions and discussed the issue of podiatrists gaining hospital staff privileges, this evidence in itself is insufficient to support a reasonable inference of any conspiracy.

The individual orthopedic defendants have filed affidavits denying that they engaged in any conspiratorial conduct with the Board of Trustees of Forsyth Memorial Hospital or any other defendant. In their affidavits, these defendants explain why they opposed a change in the hospital’s bylaws and that they were not representing the Association in their opposition to a change in the bylaws. As the United States Supreme Court in Monsanto Co. v. Spray-Rite Service Corp., — U.S. -, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984), noted, there is a basic distinction between concerted and independent action; independent action is not proscribed under Section 1 of the Sherman Act. In order to prevail on a conspiracy claim, plaintiffs must present evidence that “excludes the possibility that [defendants] were acting independently.” — U.S. at-, 104 S.Ct. at 1471. The court finds that plaintiffs have failed to establish any evidence of a conspiracy on the part of the Association with any other defendants and that defendant North Carolina Orthopedic Association is entitled to summary judgment on all claims as a matter of law.

Defendants Pollock, Tomberlin, Hayes, Rose, Underdal, Bittinger, and Jennings

Plaintiffs allege that these individual defendants are allopathic physicians who specialize in orthopedics and who compete with plaintiffs in the treatment of the feet. Also, these defendants have staff privileges at Forsyth Memorial. The court has found that no conspiracy existed against plaintiffs to deny them staff privileges at Forsyth Memorial. Accordingly, these defendants are also entitled to summary judgment on all plaintiffs’ claims as a matter of law.

Based on the foregoing, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the summary judgment motions of defendants Forsyth County Hospital Authority, Inc., its Trustees and Bylaws Committee; individual defendants Pollock, Tomberlin, Hayes, Rose, Underdal, Bittinger, and Jennings; and defendant North Carolina Orthopedic Association, Inc. are GRANTED.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that plaintiffs’ motion for partial summary judgment is DENIED. In view of the court’s rulings, defendants’ motion to strike is denied as moot. A judgment will be entered contemporaneously with this Memorandum Opinion dismissing this action with prejudice as to all defendants. All parties are to bear their own costs.


author: ROVNER, District Judge.

text:
    A. Verbena DANIELS, Liquidator of Northern Financial and Guaranty Company, Limited, Plaintiff, v. William L. POWELL, an individual, William Powell and Company, an Illinois Corporation, Westgate Properties, Incorporated, a Kentucky Corporation, and William Powell and Company, a Kentucky Corporation, Defendants.
    No. 84 C 1889.
    United States District Court, N.D. Illinois, E.D.
    March 14, 1985.

      Robert N. Hermes, Gerald A. Saltarelli, Butler, Rubin, Newcomer, Saltarelli & Boyd, Michael J. Murphy, Lord, Day & Lord, Chicago, 111., for plaintiff.
    Daniel J. Pierce, John A. Dienner, III, Pierce, Lydon, Griffin & Montana, Chicago, 111., for defendants.
   MEMORANDUM OPINION AND ORDER

ROVNER, District Judge.

A. Verbena Daniels (“Daniels”) filed a complaint against defendant William L. Powell (“Powell”), William Powell and Company, an Illinois corporation (“Powell & Co.”), Westgate Properties, Incorporated, a Kentucky corporation (“Westgate”), and William Powell and Company, a Kentucky corporation (“Powell Kentucky”) for conversion (Count I), for fraud (Count II), for the imposition of a constructive trust (Count III), and for violation of the Racketeer Influenced and Corrupt Organization Act, 18 U.S.C. § 1961 et seq. (Count IV) (“RICO”). On August 20, 1984, Judge Paul Plunkett of the United States District Court for the Northern District of Illinois entered an order denying defendants’ motion to dismiss plaintiff’s original complaint. That order was subsequently modified on November 20, 1984 to grant the motion to dismiss Powell & Co. only from Count IV of the complaint.

On August 31, 1984, Daniels filed a motion pursuant to Fed.R.Civ.P. (“Rule”) 56 for partial summary judgment on Count I. On November 1, 1984, this case was transferred to Judge Rovner. For the reasons stated below, partial summary judgment is granted in favor of Daniels against defendants Powell and Powell & Co.

In order to prevail on a motion for summary judgment, a party has the burden of establishing that there is no genuine issue of material fact. Korf v. Ball State University, 726 F.2d 1222 (7th Cir.1984). Any inferences to be drawn from the underlying facts must be viewed in the light most favorable to the non-moving party. Hermes v. Hein, 742 F.2d 350 (7th Cir.1984). The existence of a factual dispute, however, only precludes summary judgment if the disputed fact is outcome-determinative. Big O Tire Dealers, Inc. v. Big O Warehouse, 741 F.2d 160, 163 (7th Cir.1984). “ ‘A material issue of fact is one that affects the outcome of the litigation and requires a trial to resolve the parties’ differing versions of the truth.’ ” Korf, 726 F.2d at 1226, quoting Admiralty Fund v. Hugh Johnson & Co., 677 F.2d 1301, 1306 (9th Cir.1982). In this case, the defendants have not set forth a single fact that disputes the facts propounded by the plaintiff. Thus, the facts set forth below are the facts as presented by the plaintiff.

Origin and Nature of Daniels’ Claim

Defendant Powell is the president, controlling stockholder, and a director of Powell & Co., which is engaged in various aspects of the insurance business. Northern Financial ■ & Guaranty Company, Limited (“Northern”) is a wholly-owned subsidiary of Powell & Co. Northern was incorporated in Bermuda with Powell as its president. Powell & Co. has two other subsidiaries named as defendants here: (i) Powell Kentucky and (ii) Westgate..

On June 3, 1983, the Supreme Court of Bermuda, on petition of a judgment creditor, Island Reinsurance Company Limited (“Island Re”), placed Northern in involuntary liquidation by the issuance of a Winding-Up Order (“Order”). The Order ended the authority of Powell and other Northern directors and officers to manage the company and vested all such power and authority, as well as title to the property owned by Northern, in Daniels. Daniels’ formal title is the Official Receiver and Registrar of Company of the Government of Bermuda.

Powell was advised of the liquidation Order by telegram on June 10, 1983 and replied by letter that he would act on instructions of plaintiff’s Bermuda counsel. Thus, defendants knew that title to all of Northern’s property had vested in Daniels and that Powell no longer had any legal authority or power to control Northern’s affairs or to sell assets belonging to Northern.

In defiance of the Order of the Bermuda Supreme Court, Powell determined that he would sell three parcels of land that had been owned by Northern prior to its liquidation. When Daniels requested deeds to the pieces of realty, Powell falsely represented to her that he was attempting, through negotiations with Northern’s creditors, to remove Northern from liquidation. He also assured her that he would not dispose of any of Northern’s property. Powell requested that Daniels take no action pending completion of his negotiations, and she acquiesced in that request.

Despite these promises to Daniels, Powell promptly proceeded to negotiate a sale of four adjacent parcels of property he and his corporations owned in Kentucky. Three of these parcels were owned solely by Northern. At a closing in November of 1983, over five months after the Order vested title in Daniels, Powell delivered to a third party buyer, Eaglestone, Inc. (“Eaglestone”), a resolution of the defunct Board of Directors of Northern. The resolution purportedly authorized Powell to convey title to the property. He also delivered to Eaglestone, along with instruments purportedly transferring title to the buyer, a sworn affidavit stating that Powell was authorized to act on behalf of Northern. At no time did Powell advise the directors of Eaglestone that Northern had been placed in liquidation by the Order of the Bermuda Supreme Court. In return for the property, Eaglestone delivered a check to Powell in the amount of $361,219.44 written to the order of Northern.

Powell endorsed the check as president of Northern and deposited the check in a Northern account. Powell then caused the funds to be transferred from Northern’s account to a Westgate account in the same bank. After the payment of some disbursements, the remaining funds were transferred by Powell to a Powell & Co. account at a bank in Chicago, Illinois. The remaining funds were used for the benefit of Powell and Powell & Co., including the payment of ah alleged loan from Powell’s father to Powell & Co. in the sum of $50,-000, as well as the payment of a loan in the amount of $170,000 plus interest to Powell & Co. from the Chicago bank.

In her complaint, which invokes both diversity and federal question jurisdiction, Daniels alleges that the defendants converted the check for $361,219.44 belonging to the estate of Northern in definance of the Order of the Bermuda Supreme Court (Count I) and that they engaged in fraudulent activities to the detriment of the estate (Count II). Daniels also asks this Court to impose a constructive trust on the defendants for their breach of fiduciary duty (Count III). Finally, Daniels alleges that the defendants engaged in a scheme of racketeering and fraud in violation of the federal RICO statute (Count IV).

Presently pending before this Court is Daniels’ motion for partial summary judgment on the conversion count (Count I). Daniels’ sole right to partial summary judgment for conversion of the check belonging to Northern’s estate derives from the Order of the Bermuda Supreme Court. Accordingly, Daniels’ claim for conversion depends on whether this Court should grant comity to that Order.

Comity

Comity is to be accorded an act of a foreign court as long as that court is of competent jurisdiction and as long as the laws and the public policy of the forum state are not violated. Hilton v. Guyot, 159 U.S. 113, 202-03, 16 S.Ct. 139, 158-59, 40 L.Ed. 95 (1895); Clarkson Co. v. Shaheen, 544 F.2d 624, 629 (2d Cir.1976). When federal jurisdiction is founded on diversity, a federal court must look to the law of the state in which it sits to determine whether to accord comity to the act of a foreign jurisdiction. American Optical Co. v. Curtiss, 56 F.R.D. 26, 29 (S.D.N.Y.1971). Illinois courts have granted comity to the law of a foreign jurisdiction in the absence of evidence that such recognition would be repugnant to its policy or prejudicial to its interest. Hall v. Woods, 325 Ill. 114, 156 N.E. 258 (1927). Illinois traditionally has favored recognizing and enforcing foreign law, and thus the mere fact that the foreign law is not identical to Illinois law is generally not sufficient to preclude comity. Coleman v. American Sheet & Tin Plate Co., 285 Ill.App. 542, 2 N.E.2d 349 (1st Dist.1936).

The key inquiry is whether the Bermuda liquidation procedure offends the laws and public policy of Illinois. Defendants have not challenged the jurisdiction of the Bermuda Supreme Court over the liquidation of Northern. Nor have they alleged insufficient procedural due process protections in the application of Bermuda law. Recognizing that this Court may properly grant comity under these circumstances, and without citing any authority to the contrary, defendants nonetheless propose two reasons that this Court should deny comity to the Order of the Bermuda Supreme Court. Neither is persuasive.

Finality of the Judgment

First, defendants suggest that since the Order is not a final judgment, this Court should not grant comity to it. An examination of the case law, however, clearly indicates that American courts have granted comity to foreign liquidation proceedings regardless of whether a final judgment has been entered. Particularly where the foreign proceeding is a sister common law jurisdiction with procedures akin to our own, exceptions to the doctrine of comity are narrowly construed. Clarkson Co., Ltd. v. Shaheen, 544 F.2d 624, 630 (2d Cir.1976).

Over 100 years ago, the Supreme Court granted comity to a Canadian statutory reorganization that required United States bondholders who had not assented to the reorganization to accept the substituted bonds of the Canadian corporation. Canada Southern Railway Co. v. Gebhard, 109 U.S. 527, 3 S.Ct. 363, 27 L.Ed. 1020 (1883). In granting comity, the Court stated:

A corporation of one country may be excluded from business in another country ... but, if admitted, it must, in the absence of legislation equivalent to making it a corporation of the latter country, be taken, both by the government and those who deal with it, as a creature of the law of its own country, and subject to all the legislative control and direction that may be properly exercised over it at the place of its creation. Such being the law, it follows that every person who deals with a foreign corporation impliedly subjects himself to such laws of the foreign government, affecting the powers and obligations of the corporation with which he voluntarily contracts, as the known and established policy of that government authorizes____ He is conclusively presumed to have contracted with a view to such laws of that government, because the corporation must of necessity be controlled by them, and that it has no power to contract with a view to any other laws with which they are not in entire harmony.

Id. at 537-8, 3 S.Ct. at 370 (citation omitted) (emphasis added). Defendants in this case voluntarily invoked the protection of the laws of Bermuda when Powell and Powell & Co. chose to incorporate Northern in Bermuda. They cannot be heard to argue now that they should not be subjected to the burdens imposed by the Bermuda liquidations procedures simply because the liquidation Order is not a “final judgment.”

Conflict of Interest

Second, defendants argue that Daniels’ alleged conflict of interest requires this Court to deny comity to the Order. Defendants assert that Daniels’ potential conflict of interest, which derives from the substantial fees she may earn in her court appointed capacity as liquidator, is detrimental to Northern’s creditors and shareholders. That same argument was considered and rejected in Clarkson Co., Ltd. v. Shaheen, 544 F.2d 624, 630 (2d Cir.1976), in which the court concluded that the numerous vague and conclusory charges of fraud by the liquidator were insufficient to deny comity to a Canadian liquidation proceeding. Even if the allegations of fraud and conflict of interest made here were true and properly substantiated, the proper forum to challenge such a conflict of interest by Daniels is the Bermuda Supreme Court. Defendants have not challenged the appointment of Daniels in the Bermuda Supreme Court. Nor have they set forth any specific instance of excessive or unreasonable fees or self-dealing by Daniels, either before this Court or the Bermuda Supreme Court.

Obviously, all liquidators of a bankruptcy corporation are potentially in a conflict of interest with its creditors and shareholders. Defendants’ thesis blurs the distinction between a potential and an actual conflict of interest. Defendants’ logic would require this Court to deny comity to a foreign liquidation order on the mere speculation that this potential conflict will ripen into an actual conflict, even though the defendants have not availed themselves of the adequate procedures available under Bermuda law to rectify any such actual conflicts.

In essence, defendant’s request, if granted, would permit United States citizens to find haven in foreign countries for purposes of favorable incorporation and tax laws, and yet would immunize them from that same foreign law whenever it is burdensome or inures to their disadvantage. This Court cannot support such a result. Absent specific, verifiable charges of fraud or self-dealing by Daniels, this Court will not deny comity to the Order of the Bermuda Supreme Court on the basis that Daniels is allegedly in a conflict of interest because she will receive fees from the estate for doing what she has been appointed to do, “wind up” the affairs of Northern.

Defendants’ argument is also invalid because it asks this Court to ignore their own improper conduct. Defendants do not dispute that they violated the Order when they permitted funds of Northern to be used to satisfy the alleged debts of Powell & Co. and Westgate, thereby treating those alleged debts as preferences over Northern’s creditors. At no time did defendants follow the orderly procedure laid down by Bermuda to establish that Powell & Co., Westgate, or Powell’s father are authentic creditors of Powell & Co.

It is an elementary rule of law that once a company goes into liquidation, a creditor’s source of relief is to look to the liquidation proceeding. Tidewater Plumbing Supply Co. v. Schimmel, 296 Fed. 459 (4th Cir.1924). Under United States bankruptcy law, once the bankruptcy proceeding has begun, title and freedom to dispose of property formerly belonging to the bankrupt is relinquished. Commercial Credit Business Loans, Inc. v. Northbrook Lumber Co., 22 B.R. 992 (N.D.Ill.1982). The bankrupt party is without authority to continue to deal with his estate as before by creating new obligations and paying off old ones. In re Richter, 40 F.Supp. 758 (S.D.N.Y.1941); In re Potteiger, 181 Fed. 640 (E.D.Pa.1910).

An examination of the provisions of the Bermuda law relating to liquidation proceedings, reveals that they are in substantial conformity with our own law, because Bermuda is a common law country. The Bermudian liquidation process is closely and fully supervised by the Bermuda Supreme Court. Bermuda law provides a comprehensive and orderly procedure for liquidation that includes a procedure for appeal by any creditor rejected by the liquidator to the Bermuda Supreme Court. English Act §§ 243(3), 246(5) and Winding-Up Rule 108. The Winding-Up Order precludes creditors from seeing the debtor except with the prior consent of the court. English Act § 231. Compare, e.g., 11 U.S.C. § 362. No act or decision of a liquidator can be directly challenged by any creditor, stockholder, or person aggrieved by applying to the Bermuda Supreme Court. English Act §§ 245(3), 246(5). Compare, e.g., 11 U.S.C. § 1109. Further, the liquidator is required to account to the Bermuda Supreme Court and to render a final accounting in order to obtain his or her release. English Act as amended by §§ 245(3), 249, 273, and 342(1) of the Act, and Winding-Up Rules 171, 174. Compare, e.g., 11 U.S.C. § 704. Under Bermuda law no preference is given to the claims of Bermuda citizens. See the Act and Winding-Up Rules passim. Compare, e.g., 11 U.S.C. § 547. Preferences and fraudulent conveyances are subject to avoidance. Id. Compare, e.g., 11 U.S.C. § 549.

Once the Bermuda Supreme Court has issued a Winding-Up Order, the court may direct that all property of the company in liquidation be .vested in a court appointed liquidator. English Act § 244. Compare, e.g., 11 U.S.C. §§ 541, 451. Pursuant to Bermuda liquidation law only the liquidator, not a former officer of the company, has the power to compromise claims of creditors. English Act § 245(a)(e). Compare, e.g., 11 U.S.C. § 544.

Based upon an analysis of Bermuda liquidation laws and their similarity with the revised Bankruptcy Act of 1978, and absent any claims by defendants that the Bermuda Supreme Court is not a court of competent jurisdiction to conduct the winding up of Northern, this Court finds that affording comity to the Bermuda liquidation proceeding does not violate the law or public policy of Illinois or of the United States. Conversion

A federal court sitting in diversity must look to the choice of law rules of the state in which it sits to determine what substantive law to apply. American Optical Co. v. Curtiss, 56 F.R.D. 26, 29 (S.D.N.Y.1971). The conversion of the check at issue in this case began in Kentucky and ended in Illinois. An examination of the relevant case law of both states indicates that the law of both Kentucky and Illinois regarding the tort of conversion is in substantial agreement. Thus, no conflict exists and citation to the law of both states is appropriate where available.

The essence of the tort of conversion is that the tortfeasor wrongfully exercises dominion and control over the personal property owned by another. Illinois Central Railroad Co. v. Fontaine, 217 Ky. 211, 289 S.W. 263, 267 (1926); National Acceptance Co. v. Pintura Corp., 94 Ill.App.3d 703, 707, 50 Ill.Dec. 120, 123, 418 N.E.2d 1114, 1117 (2d Dist.1981); Mansbach v. Prescott, Ball & Turben, 598 F.2d 1017 (6th Cir.1979) (applying Kentucky law). In order to prevail in an action for conversion, the plaintiff must allege his immediate right of possession at the time of the conversion as well as the defendant’s interference with the right to possession. Kramer v. McDonald’s System, Inc., 61 Ill.App.3d 947, 19 Ill.Dec. 21, 378 N.E.2d 522 (1978), aff'd, 77 Ill.2d 323, 33 Ill.Dec. 115, 396 N.E.2d 504 (1st Dist.1979). It is not essential that the defendant personally benefit from the conversion, because the essence of conversion is the deprivation to the owner. National Acceptance, 94 Ill.App.3d at 706, 50 Ill.Dec. at 123, 418 N.E.2d at 1117. Once there is a finding that conversion has occurred, the proper measure of damages is the value of the property at the time and place of conversion plus interest. Amlung v. Bankers Bond Co., 411 S.W.2d 689 (Ky.1967); Henkel v. Pontiac Farmers Grain Co., 55 Ill.App.3d 898, 13 Ill.Dec. 635, 371 N.E.2d 352 (4th Dist.1977).

Although Illinois follows the common law rule which does not recognize an action for conversion of intangible rights, Illinois does “recognize a cause of action for conversion of commercial paper, such as a check, on the theory that the intangible right is merged into a specific document.” In re Oxford Marketing, Ltd. v. Kallen, 444 F.Supp. 399, 404 (N.D.Ill.1978); People v. Roth, Inc., 412 Ill. 446, 107 N.E.2d 692 (1952).

Where a corporate officer or director actively participates in the conversion on behalf of a corporation, he is personally liable, even if he does not personally benefit. National Acceptance, 94 Ill.App.3d at 706, 50 Ill.Dec. at 123, 418 N.E.2d at 1117; United Society of Shakers v. Underwood, 72 Ky. 609 (9 Bush) (1873). In National Acceptance, both a corporation and its officer were held liable for conversion where the officer endorsed several checks and deposited them in the corporate bank account. National Acceptance, 94 Ill.App.3d at 707, 50 Ill.Dec. at 123, 418 N.E.2d at 1117. The corporate officer held liable was the sole shareholder. Id.

In this case Daniels, by the Order, had a right to immediate possession of all of Northern’s “property.” That Order was still in effect when Powell, without the permission of either Daniels or of the Bermuda Supreme Court, endorsed and deposited the check. Although it is unnecessary to show that defendants benefited from the conversion, the defendants admit that the funds were used to pay off debts of West-gate and of Powell & Co. In fact, defendants repeatedly justify their unorthodox conduct because their acts purportedly benefited the shareholders and creditors of Northern. Accordingly, this Court holds that Powell and Powell & Co. converted the check.

Defendants assert four arguments to demonstrate that summary judgment for conversion is inappropriate. First, defendants suggest that their actions were necessary to protect Northern’s creditors and shareholder due to Daniels’ alleged conflict of interest. Thus, they contend, this Court should not treat the removal of the proceeds of the check from Northern’s account to Powell & Co., and the subsequent disbursements, as conversion.

Defendants do not bother to cite any authority for this novel limitation of responsibility, and rightly so, for there is none. Essentially, defendants ask this Court to sanction their refusal to recognize and conform their conduct with the Order of the Bermuda Supreme Court, although they admit that they were fully cognizant of the limits imposed by that Order. Instead, they argue that the ends justify the means. Admitting that the sale of the properties was “unorthodox,” they justify their actions as “unquestionably in the best interests of the creditors” because, they contend, those creditors “have already been paid 100 cents on the dollar for their claims.” Yet elsewhere in their briefs defendants admit that the claim of at least one of Northern’s creditors, Island Re, has yet to be satisfied. Defendants thus justify ignoring the Order of the Bermuda Supreme Court on the speculative assertion that Daniels would have looted the assets of Northern by running up excessive fees in her role as liquidator.

Under defendants’ logic, a sole shareholder and officer of a bankrupt corporation is justified in taking the law into his own hands by seizing all assets belonging to the bankrupt’s estate if he believes that a court-appointed and supervised liquidator might loot the estate by charging outrageous or excessive fees. Defendants, in essence, ask that this Court recognize “necessity,” as an affirmative defense to conversion. Any alleged “necessity,” however, could have been addressed by the Bermuda Supreme Court. The defendants’ failure to seek relief in the appropriate forum precludes them from raising “necessity” as a defense here.

Second, defendants argue that the motion for partial summary judgment must fail because one cannot convert real estate as a matter of law. Defendants further claim that Powell was incapable of transferring title to the real estate to Eagle-stone, and, therefore, Daniels still has title. In the alternative, defendants assert that the Order of the Bermuda Supreme Court had no extraterritorial effect, and, therefore, Powell had every right to convey the properties. These arguments must fail because this action is not for conversion of real estate, but for conversion of the check made payable to Northern and eventually deposited in a Powell & Co. account by Powell. Moreover, Daniels is not required to treat the sale as a nullity. Wilson v. Moore, 7 Ky.Opin. 510 (1873). Nor is Daniels limited to one cause of action. Fed.R. Civ.P. 8(a).

Third, defendants argue that the unanimous consent doctrine bars recovery on a theory of conversion by one standing in the shoes of a corporation for acts undertaken with the unanimous consent of the shareholders and officers. This argument presupposes that the actions of the corporation involve property that the corporation owns. The defendants’ citation to Hotel v. Wade, 7 Otto 13, 97 U.S. 13, 24 L.Ed. 917 (1878), is, therefore, inapposite because in Wade the corporation was not in liquidation and was acting within its powers. By contrast, here the Order divested Powell of all authority to sell any assets belonging to Northern’s estate.

Similarly, the fact that a sole shareholder may give away corporate assets, ignoring the corporate entity, is simply irrelevant once the corporation is in liquidation and title has passed to the liquidator. Miller & Lux, Inc. v. Anderson, 318 F.2d 831, 838 (9th Cir.1963), cert. denied, 375 U.S. 986, 84 S.Ct. 517, 11 L.Ed.2d 473 (1964). Also irrelevant to this motion are cases dealing with transactions occurring before the corporation was in liquidation. See, e.g., Field v. Lew, 184 F.Supp. 23 (E.D.N.Y.1960), aff'd sub nom. Field v. Bankers Trust Co., 296 F.2d 109 (2d Cir.1961) cert. denied, 369 U.S. 859, 82 S.Ct. 948, 8 L.Ed.2d 17 (1962).

Finally, defendants argue that partial summary judgment for conversion should be denied because the monies were used merely to satisfy claims of Northern’s creditors. This argument is unavailing for several reasons. First, regardless of the ultimate disposition of the monies, Daniels, not Powell was vested with authority to settle claims against Northern. Second, by paying claims of “creditors” who had not applied to the Bermuda Supreme Court, Powell gave them preference over legitimate claims in violation of the Order and Bermuda law. Thus, claims of Northern’s legitimate creditors may yet remain unsatisfied. Indeed, Island Re’s claims have yet to be satisfied.

Conclusion

This Court finds abhorrent the notion, advanced in essence by the defendants, that it should sanction conduct that is in defiance of an order entered by a foreign court having jurisdiction over the parties and of the subject matter. Any challenge to the handling of Northern’s estate by Daniels should have been brought in the Bermuda Supreme Court. Because there is no genuine issue of material fact as to Count I, Daniels is entitled to judgment on that Count as a matter of law against defendants Powell and Powell & Co. in the amount of $361,219.44 plus interest.

      . On September 21, 1984 defendants Westgate and Powell Kentucky moved to quash service of summons alleging this Court’s lack of personal jurisdiction. Judge Plunkett held ruling on that motion in abeyance.

      . This Court fully agrees with Judge Plunkett's rulings on the motion to dismiss. The decision on the liability of Westgate and Powell Kentucky to Daniels for conversion of the check will be determined after briefing on the motion to quash service of summons.

      . In addition to defendant Powell, the directors of Powell & Co., Northern, and Westgate are his brother, Charles Powell, and his wife, Mary Powell.

      . Powell’s attorney in Chicago resigned when he learned of the sale of the properties to Eagle-stone. Defendants' Bermuda counsel soon followed suit.

      . Powell’s father has not returned the note evidencing the loan to Powell & Co.

      . Defendant Powell & Co. has been dismissed from Count IV.

      . Cornfeld v. Investors Overseas Services, Ltd., 471 F.Supp. 1255 (S.D.N.Y.1979), aff'd, 614 F.2d 1286 (2d Cir.1979) (comity requires deferral to pending Canadian litigation proceeding); Clarkson Co., Ltd. v. Shaheen, 544 F.2d 624 (2d Cir.1976) (comity given Newfoundland court’s designation of trustee even though the bankruptcy proceeding was still pending); In re Colorado Corp., 531 F.2d 463 (10th Cir.1976) (court of appeals held that the bankruptcy court abused its discretion in not granting comity to decrees of Luxembourg and Netherlands Antilles courts allowing foreign creditors’ claims for purpose of voting for bankruptcy trustee); IIT v. Cornfeld, 462 F.Supp. 209 (S.D.N.Y.1978), aff'd in part and rev’d in part, 619 F.2d 909 (2d Cir.1980) (court recognized capacity of liquidators to represent the' fund as explicitly authorized by a Luxembourg court); Kenner Products Co. v. Societe Fonciere et Financiere Aqache-Willot, 532 F.Supp. 478 (S.D.N.Y.1982) (court deferred to French bankruptcy court pending termination of bankruptcy proceeding in France).

      . See also Cornfeld v. Investors Overseas Services, 471 F.Supp. 1255 (S.D.N.Y.1979), aff'd, 614 F.2d 1286 (2d Cir.1979), in which the court granted comity to a Canadian liquidation proceeding. The court held that where the party challenging the granting of comity had originally incorporated the bankrupt corporation in Canada, he would be required to bring any challenges to the liquidator in the Canadian proceeding. Id. at 1261.

      . Defendants argue that any "fraudulent" acts of Powell should be ignored because Powell is the equivalent of Northern’s estate. This ignores the general rule that once a person creates a corporation, he may not ignore the existence of the corporation in order to avoid the disadvantages of the corporate structure, Terry v. Yancey, 344 F.2d 789 (4th Cir.1965).

      . All references and citations to Bermuda law were provided by an affidavit of Daniels’ Bermuda counsel. Defendants have not challenged the accuracy of Daniels’ exposition of Bermuda law.

      . Daniels’ affidavit states: "The liquidation of Bermudian companies commenced prior to July 1, 1983 is governed by The Companies (Winding-Up) Act 1977 (the "Act”) and accompanying Winding-Up Rules. Section 2 of the Act applies the laws in force in England on July 27, 1962, in relation to the winding-up of companies to Bermuda. The principal English statute incorporated in Bermuda law by Section 2 of the Act is the Companies Act 1948 (the "English Act”).”

      . In their memorandum in support of their motion to dismiss, defendants suggest that the state claims must be dismissed because the federal RICO claim is insufficient and therefore cannot support pendant state claims. Defendants' motion to dismiss has been denied. Even if it had been granted, however, this Court would have diversity jurisdiction over the state claims under 28 U.S.C. § 1332.

      . Apparently, Kentucky has not ruled on the availability of a cause of action for conversion of a check. All jurisdictions that have examined the issue, however, appear to have recognized such an action. See Prosser, Law of Torts 82 (4th Ed.1971).

      . The defendants do not dispute, however, that they have not satisfied the claims of at least one of Northern’s creditors, Island Re.

      . Typical of defendants’ vague and unsubstantiated allegations is the following: "Her intention is obvious. It is not to marshal the assets of the corporation for the benefit of the creditors. Her intention is to gain control of a fund which she can then consume to the disadvantage of the estate’s beneficiary.”

      . In justifying their actions, defendants state that "Powell did for free what Daniels would have charged the estate to do. The only 'damage' or ‘loss suffered’ was Daniels inability to generate fees____ Powell could even be said to have been acting for Daniels in a representative capacity. He did her job thereby entitling him to fees....”

      . Defendants' reliance on In re REA Express, Inc., 412 F.Supp. 1239 (E.D.Pa.1976), is equally misplaced. That case dealt with the liability under federal antitrust law and Delaware corporate law of a holding company to its wholly-owned subsidiary for breach of fiduciary duty. The company was not in liquidation and no creditor interest needed to be vindicated.

      . The defendants’ argument that Daniels’ conversion claim is barred because the underlying claim has been compromised and settled is simply false. Island Re is still an unpaid creditor.