author: THEIS, District Judge.

text:
    OHIO CASUALTY INSURANCE COMPANY, Plaintiff, v. STATE FARM AUTOMOBILE INSURANCE COMPANY, Defendant.
    Civ.A. No. 84-1076.
    United States District Court, D. Kansas.
    Nov. 27, 1984.
    Craig Kennedy, Wichita, Kan., for plaintiff.
    Darrell L. Warta, Foulston, Siefkin, Powers & Eberhardt, Stephen M. Kerwick, Wichita, Kan., for defendant.
   OPINION AND ORDER

THEIS, District Judge.

This is an action brought pursuant to 28 U.S.C. § 2201 for a declaration of the rights and obligations of the parties under separate insurance policies. Plaintiff, Ohio Casualty Insurance Company, and defendant, State Farm Mutual Automobile Insurance Company, have jointly moved the Court to decide the present case based upon stipulated facts. For the purposes of the parties’ joint motion for judgment on stipulated facts, the parties agree to the following facts:

First, Ohio Casualty is incorporated under the laws of the State of Ohio and is authorized to engage in the insurance business in the State of Kansas. State Farm is incorporated under the laws of the State of Illinois and is authorized to engage in the insurance business in the State of Kansas. The subject matter of this controversy exceeds the sum of $10,000.00. Because of the diversity of citizenship and the amount in controversy, this Court has jurisdiction over the parties and the subject matter of the litigation. Venue is properly laid in the District of Kansas.

Second, on or about August 21, 1981, Gayla Gill took her automobile to McDonald Motors, Inc., to have repair work done. McDonald Motors is an automobile dealership dealing in new and used automobiles and has a service shop for automobile repairs. While her car was at McDonald Motors, McDonald Motors allowed Gill to use and operate a 1976 Chevrolet Vega automobile that was owned by McDonald Motors.

Third, on August 28, 1981, Gill, while driving the 1976 Chevrolet Vega, was involved in an automobile accident in Wichita, Kansas. As a result of that accident, a lawsuit was filed in Sedgwick County district court by Emily Gamer against Gill, seeking recovery of damages for personal injuries which Gamer claims were caused by the automobile accident and Gill’s negligence.

Fourth, plaintiff, Ohio Casualty, had in effect on August 28, 1981, a garage policy of liability insurance issued to McDonald Motors. The 1976 Chevrolet Vega was listed as a covered automobile under Ohio Casualty’s policy, and there was no other policy of automobile insurance issued on that car.

Fifth, defendant, State Farm, had in effect on August 28, 1981, a policy of motor vehicle liability insurance issued to Gerald Gill, the father of Gayla Gill. Gayla Gill was an insured as defined in the insurance policy issued by State Farm to Gerald Gill, since Gayla was an unmarried and unemancipated child away at school.

Each of the insurance companies has demanded that the other insurance company assume the defense of Gayla Gill and pay any damages which Emily Gamer might recover against Gayla Gill arising out of the automobile accident on August 28, 1981. Each party’s policy provides that the other’s should cover the underlying accident and that its own provisions exclude such coverage. The Court finds the relevant provisions are as follows:

The State Farm policy contains the following general provisions on coverage for vehicles:

Coverage for the Use of Other Cars The liability coverage extends to the use, by an insured, of a newly-acquired car, a temporary substitute or a non-owned car.

Dk. no. 7, Exhibit B at 5.

Temporary Substitute Car means a car not owned by you or your spouse, if it replaces your car for a short time. Its use has to be with the consent of the owner. Your car has to be out of use due to its breakdown, repair, servicing, damage or loss. A temporary substitute car is not considered a non-owned car.

Dk. no. 7, Exhibit B at 2.

These general provisions are limited by the following exclusion:

IF THERE IS OTHER LIABILITY COVERAGE
3. Temporary Substitute Car, Non-Owned Car, Trailer.
If a temporary substitute car, a non-owned car or a trailer designed for use with a private passenger car has other vehicle liability coverages on it, then this coverage is excess. THIS COVERAGE SHALL NOT APPLY:
a. IF THE VEHICLE IS OWNED BY ANY PERSON OR ORGANIZATION IN A CAR BUSINESS: AND
b. IF THE INSURED OR THE OWNER HAS OTHER PRIMARY, EXCESS OR CONTINGENT LIABILITY COVERAGE APPLICABLE IN WHOLE OR IN PART.

Dk. no. 7, Exhibit B at 6.

Car Business means a business or job where the purpose is to sell, lease, repair, service, transport, store or park land motor vehicles or trailers.

Dk. no. 7, Exhibit B at 2.

The policy issued by plaintiff Ohio Casualty provides as follows:

PART IV — LIABILITY INSURANCE
A. We Will Pay
1. We will pay all sums the insured legally must pay as damages because of bodily injury or property damage to which this insurance applies caused by an accident and resulting from garage operations.
“Garage operations” means the ownership, maintenance or use of locations for garage business and that portion of the roads or other accesses that adjoin these locations. Garage operations includes the ownership, maintenance or use of the autos indicated in PART II as covered autos. Garage operations also includes all operations necessary or incidental to a garage business.
“Insured” means any person or organization qualifying as an insured in the WHO IS INSURED section of the applicable insurance.

Dk. no. 7, Exhibit A at 1.

The provisions that plaintiff relies on to eliminate its coverage state:

D. Who Is An Insured
1. For Covered Autos
b. Anyone else is an insured while using with your permission a covered auto except:
(3) Your Customers, if your business is shown in ITEM ONE of the declarations as an auto dealership. However, if a customer of yours:
(a) Has no other available insurance (whether primary, excess or contingent), he or she is an insured but only up to the compulsory or financial responsibility law limits where the covered auto is principally garaged.
(b) Has other available insurance (whether primary, excess or contingent) less than the compulsory or financial responsibility law limits where the covered auto is principally garaged, he or she is insured only for the amount by which the compulsory or financial responsibility law limits exceed the limits of his or her other insurance.

Dk. no. 7, Exhibit A at 2.

This Court must determine which of the policies’ limitations is valid and enforceable and which of the insurance companies has a duty to defend Gayla Gill. In other words, the question is whether the vehicle’s policy or the driver’s policy covers the underlying accident. State Farm notes that its policy provides that there is no coverage for an insured when operating a temporary substitute car that was owned by an organization in a car business if the owner had other primary, excess or contingent liability coverage applicable in whole or in part. Ohio Casualty states that its policy does not extend coverage to customers of the insured’s business unless they lack insurance of their own. The dilemma appears to be the classic situation, “After you, Alphonse; no you, Gaston.”

State Farm claims that if Ohio Casualty’s exclusion were allowed to operate, it would fall short of the statutory requirement of coverage for permissive users of vehicles, established in the Kansas Automobile Injury Reparations Act (KAIRA), K.S.A. §§ 40-3104(a) and 40-3107(b). Defendant further argues that its exclusion of coverage for temporary substitute ears owned by an organization in a car business is valid because the KAIRA does not mandate such coverage. Ohio Casualty suggests that ease law from other jurisdictions indicates that the liability insurance covering the driver should be primary and further argues that its exclusion is justified by virtue of section 40-3107(h)(2) of the KAIRA.

This opinion first examines whether section 40-3107(h)(2) allows Ohio Casualty to exclude liability coverage to customers of the insured’s business. Section 40-3107(h)(2) allows insurers to exclude coverage while an insured vehicle is “being repaired, serviced or used by any person employed or engaged in any way in the automobile business.” Ohio Casualty concludes that this exclusion covers the instant situation and claims that since there is a specific statutory exclusion for its policy, State Farm is automatically the primary carrier.

The section in question, however, was enacted by the Kansas legislature during its 1981 session and took effect on January 1, 1982. 1981 Kan.Sess.Laws 836, 840. Thus, the provision relied upon by Ohio Casualty to justify its exclusion was not in force when the plaintiffs policy was issued, nor was it in force on August 28, 1981, the date of the underlying accident.

In Kansas, the general rule of statutory construction is that a statute will operate prospectively only unless the legislature clearly expresses the intent that it operate retrospectively. Chamberlain v. Schmutz Manufacturing Co., 532 F.Supp. 588, 589 (D.Kan.1982). No language in section 40-3107(h)(2) indicates a legislative intent that the statute operate retroactively. It is particularly important to apply the above rule of statutory construction when a new statute may alter the substantive rights of the parties. Nitchals v. Williams, 225 Kan. 285, 290, 590 P.2d 582 (1979). Ohio Casualty's position is that the statute changes the rights of the parties.

The Court does not need to reach the issue of whether the language of section 40-3107(h)(2) encompasses the present situation, although defendant strongly contends that it does not. Since the statute relied upon by Ohio Casualty was not in effect until four months after the accident, the section provides no haven for plaintiff’s exclusion. The predecessor to the present section 40-3107 did not authorize such exclusions. 1974 Kan.Sess.Laws 640. Before analyzing how the law in effect at the time of the accident affects the present case, the Court first turns to Ohio Casualty’s contention that cases from other jurisdictions compel a holding that the driver’s policy applies.

Ohio Casualty's argument is that since the provision in section 40-3107(h)(2) applies, the exclusion in its insurance policy is valid and must be interpreted by general principles of insurance contract construction, citing Tilley v. Truck Insurance Exchange, 148 Cal.Rptr. 520, 84 Cal.App.3d 263 (1978), and Dairyland Insurance Co. v. Implement Dealers Insurance Co., 294 Minn. 236, 199 N.W.2d 806 (1972). Not only did this Court just hold that section 40 — 3107(h) (2) is not applicable in the present case, but in addition the cases cited by plaintiff are inapposite. In both Tilley and Dairyland the courts were involved in the internal construction of single insurance policies according to principles of insurance contract construction. Neither case involved a state statute. The cases cited have no relevance to the interpretation of the Kansas Automobile Injury Reparations Act.

State Farm contends that Ohio Casualty’s exclusion of permissive users of the insured vehicle who are customers of the named insured is void as an attempt to dilute statutorily mandated coverage. Section 40-3104(a) of the KAIRA requires owners to maintain motor vehicle liability insurance coverage for every motor vehicle owned by such person. The provisions regarding the persons required to be covered and the circumstances under which they must be covered are stated in K.S.A. § 40-3107(b):

Every policy of motor vehicle liability insurance issued by an insurer to an owner residing in this state shall:
(b) insure the person named therein and any other person, as insured, using any such vehicle with the expressed or implied consent of such named insured, against loss from the liability imposed by law for damages arising out of the ownership, maintenance or use of any such vehicle within the United States of American or the Dominion of Canada, subject to the limits stated in such policy; ...

K.S.A. § 40-3107(b) (emphasis added).

Plaintiff’s policy, which conditions coverage for permissive users on whether the permissive user is a customer, falls short of the statutory requirement of coverage for permissive users. The above statute allows no exception for customers. Ohio Casualty’s policy regarding loaned vehicles, by purporting not to extend coverage to customers of the insured’s business unless they lack insurance of their own, is in contravention of the mandate of section 40-3107(b) that insurers must insure permissive users.

In DeWitt v. Young, 229 Kan. 474, 478, 625 P.2d 478 (1981), the Kansas Supreme Court held that attempts to dilute, condition or limit the statutorily mandated liability coverages were invalid and specifically disregarded a garage shop exclusion. A number of other cases have also acknowledged that provisions which dilute statutorily required insurance coverage are unenforceable. See, e.g., Hillhouse v. Farmers Insurance Co., 226 Kan. 68, 69, 595 P.2d 1102 (1979); Simpson v. Farmers Insurance Co., 225 Kan. 508, 511-12, 592 P.2d 445 (1979).

Section 40-3107(g) of the KAIRA directs that notwithstanding any inconsistent language in the policy, an insurance policy “shall be construed to obligate the insurer to meet all the mandatory requirements and obligations of this act.” Construing Ohio Casualty’s policy in light of this statutory provision, the Court finds that the purported exclusion of permissive users must be deemed inoperative.

The next question is whether defendant’s exclusion of coverage for temporary substitute cars owned by an organization in a car business is valid under the KAIRA. Unlike Ohio Casualty’s policy with McDonald Motors, State Farm’s policy was not issued on the vehicle involved in the underlying accident. The State Farm policy covered Gerald Gill as the named insured and his daughter, Gayla Gill, who was operating the vehicle owned by McDonald Motors.

Defendant is correct in its assertion that the KAIRA contains no requirement mandating liability coverage for relatives of the named insured when they use a vehicle owned by another person with that other person’s permission. State Farm’s policy could even specifically exclude all liability coverage for a relative except as a permissive user of the insured vehicle and still meet the statutory requirements of the KAIRA. The Kansas Supreme Court has held that exclusions in excess of statutorily required limits are permissible. DeWitt, 229 Kan. at 480, 625 P.2d 478. If insurers extend supplemental coverage, they may make restrictions on that extra coverage. Simpson v. KFB Insurance Co., 209 Kan. 620, 627, 498 P.2d 71 (1972). Therefore, State Farm’s restriction on statutorily surplus coverage by excluding coverage for temporary substitute cars does not dilute or limit the insurance coverage mandated by the KAIRA.

Since defendant’s exclusion is enforceable, this Court shall construe State Farm’s policy as providing that there is no coverage for an insured when operating a temporary substitute car that was owned by an organization in a car business if the owner had other primary, excess or contingent liability coverage. At the time of her accident, Gayla Gill had such coverage under the Ohio Casualty policy with McDonald Motors, since Gill was a permissive user. The Court further finds that Ohio Casualty’s attempt to avoid statutorily mandated coverage is unenforceable. Thus, plaintiff’s exclusion of permissive users who are customers is ineffective and Gill is covered by Ohio Casualty’s policy.

IT IS THEREFORE ORDERED that State Farm has no duty to defend Gayla Gill in any action arising from the above mentioned accident on August 28, 1981, nor does it have a duty to pay any judgment or part thereof that may be entered in that litigation.

IT IS FURTHER ORDERED that Ohio Casualty has the duty to defend Gayla Gill in the above mentioned action between Emily Gamer and Gayla Gill and that Ohio Casualty has a duty under the remaining terms of its policy to pay any judgment or part thereof that may be entered in that litigation.


source: Caselaw Access Project

author: ASPEN, District Judge:

license: Public Domain

text:
    Cheryl McGOWAN, Plaintiff, v. The UNITED STATES of America and the Director of Internal Revenue Service, Defendants.
    No. 84 C 3890.
    United States District Court, N.D. Illinois, E.D.
    Nov. 29, 1984.
    Willis E. Brown, Chicago, 111., for plaintiff.
    James J. Kubik, Asst. U.S. Atty., Chicago, 111., Robert W. Kern, Dept, of Justice, Tax Div., Washington, D.C., for defendants.
   MEMORANDUM OPINION AND ORDER

ASPEN, District Judge:

Plaintiff Cheryl McGowan (“McGowan”) brings this action against the United States of America and the Director of the Internal Revenue Service (“the IRS”) to enjoin the collection of certain outstanding taxes and penalties assessed against her for the taxable year ending December 31, 1974. McGowan asserts that she is an “innocent spouse” within the meaning of 26 U.S.C. § 6013(e) and therefore is not liable for additional taxes and penalties following her ex-husband’s embezzlement conviction. Defendants have moved to dismiss McGowan’s complaint on various grounds: insufficient service of process, sovereign immunity, lack of subject matter jurisdiction, failure to state a claim upon which relief can be granted and res judicata. As explained below, defendants’ motion to dismiss is granted because this Court is without subject matter jurisdiction.

McGowan invokes three statutory jurisdictional bases for this action: 26 U.S.C. § 7402(a), 28 U.S.C. § 1346(a) and 28 U.S.C. § 1340. The first of these statutory provisions, Section 7402(a) of the Internal Revenue Code (“the Code”), clearly does not apply to this case. Section 7402(a) grants the district courts jurisdiction, inter alia, to issue injunctive orders “at the instance of the United States” to help enforce the internal revenue laws. It applies only to injunctive relief sought by the United States, not against the government, as in this case.

The second statute, 28 U.S.C. § 1346(a), provides for civil actions against the United States by taxpayers seeking a refund of taxes. However, McGowan is not seeking a refund of taxes and penalties she has already paid but is attempting to enjoin defendants from collecting certain assessments in the first place. McGowan cannot sue for a refund of taxes until the assessed income tax liability has been paid in full. See Flora v. United States, 362 U.S. 145, 80 S.Ct. 630, 4 L.Ed.2d 623 (1960). Thus, Section 1346(a) does not grant this Court jurisdiction to enjoin the government’s collection efforts.

McGowan also cites 28 U.S.C. § 1340 as a basis for jurisdiction. However, Section 1340 does no more than state generally that the district courts have original jurisdiction of civil actions brought under the internal revenue laws. Its scope is not without limits, but in fact is restricted by 26 U.S.C. § 7421(a). Section 7421(a) of the Code, commonly referred to as the Anti-Injunction Act, provides that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person____” The prohibition of Section 7421(a) has been strictly enforced by the courts and consistently upheld by the United States Supreme Court. See, e.g., Bob Jones University v. Simon, 416 U.S. 725, 94 S.Ct. 2038, 40 L.Ed.2d 496 (1974); Alexander v. “Americans United” Inc., 416 U.S. 752, 94 S.Ct. 2053, 40 L.Ed.2d 518 (1974). Section 7421(a) applies equally to attempts at enjoining the collection of tax assessments as well as penalties. E.g., Cox v. Commissioner, 51 A.F.T.R.2d 83-685, 83-686 (E.D. Mich.1983); Crouch v. United States, 447 F.Supp. 385, 386 (N.D.Cal.1978). Thus, the Anti-Injunction Act appears to bar McGowan’s suit.

Before reaching this conclusion, however, we must also consider the one judicial exception to Section 7421(a). In Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 82 S.Ct. 1125, 8 L.Ed.2d 292 (1962), the Supreme Court ruled that a taxpayer may still obtain injunctive relief by establishing that: (1) under the most liberal view of the facts and the law, the government cannot possibly prevail on the merits; and (2) the taxpayer has no adequate remedy at law. Id. at 7, 82 S.Ct. at 1129.

McGowan has failed to satisfy the requirements of the Williams Packing exception. She alleges that she is an “innocent spouse” within the scope of 26 U.S.C. § 6013(e) and therefore is not liable for any of the additional taxes and penalties assessed against her. However, her bare assertion of innocence is not sufficient to show conclusively that “under the most liberal view of the law and the facts, the United States cannot establish its claim.” Diehl v. United States, 373 F.Supp. 1069, 1071 (S.D.Tex.1973); see also Kirtley v. Bickerstaff, 488 F.2d 768 (10th Cir.1973), cert. denied, 419 U.S. 828, 95 S.Ct. 47, 42 L.Ed.2d 52 (1974); Rosenbaum v. United States, 346 F.Supp. 872, 874 (D.Md.1972). Similarly, although McGowan claims that she relied on some representation by the IRS that her tax obligations had been satisfied, she has fallen far short of the requisite certainty mandated by Williams Packing for avoiding the Anti-Injunction Act. See, e.g., Kaestner v. Schmidt, 473 F.2d 1294 (9th Cir.1973). Since McGowan has not established certainty of success on the merits, we need not inquire whether she has demonstrated irreparable injury. Shannon v. United States, 521 F.2d 56, 61 (9th Cir.1975), cert. denied, 424 U.S. 965, 96 S.Ct. 1458, 47 L.Ed.2d 731 (1976); Rappaport v. United States, 419 F.Supp. 1236, 1238 (N.D.Ill.1976), aff'd, 583 F.2d 298, 302 (7th Cir.1978).

Thus, McGowan’s suit does not fall under any exception to the Anti-Injunction Act, and this Court is without subject matter jurisdiction. Accordingly, defendants’ motion to dismiss is granted. It is so ordered.

      . Accordingly, we need not reach defendant's other arguments supporting dismissal of this suit.

      . Generally, a taxpayer must either petition the Tax Court for a redetermination of an assessed tax or pay the tax and then sue for a refund in federal district court. See, e.g., Flora v. United States, 362 U.S. 145, 158, 80 S.Ct. 630, 637, 4 L.Ed.2d 623 (1960); Westgate-California Corp. v. United States, 496 F.2d 839, 841 (9th Cir.1974).

      . The statute itself enumerates several exceptions, none of which apply to this case.

      . Moreover, in her memorandum opposing defendants’ motion to dismiss, McGowan does not even address all of the elements of the innocent spouse provision. She asserts that she was an innocent party who knew nothing of the activities which caused the increased tax assessment, but she is silent as to whether she benefited, either directly or indirectly, from the items omitted from gross income. See 26 U.S.C. § 6013(e)(1)(C). Thus, McGowan has failed to demonstrate that she is certain to prevail in her claim.


text:
    Raymond J. DONOVAN, Secretary of Labor, U.S. Department of Labor, Plaintiff, v. CHICAGO TRUCK DRIVERS, HELPERS AND WAREHOUSE WORKERS UNION (INDEPENDENT), Defendant.
    No. 84 C 1724.
    United States District Court, N.D. Illinois, E.D.
    Nov. 29, 1984.

      Joan Laser, Asst. U.S. Atty., Chicago, 111., for plaintiff.
    Paul L. Glover, Chicago, 111., for defendant.
   MEMORANDUM OPINION AND ORDER

ASPEN, District Judge:

The Secretary of Labor (“the Secretary”) brought this action against the defendant-union (“the Union”) under § 401(e) of the Labor-Management Reporting and Disclosure Act of 1959, 29 U.S.C. § 481(e), alleging that the Union denied its members a reasonable chance for nominating candidates in an election for Secretary of the Union. The parties agree on the material facts and have filed cross-motions for summary judgment under Ped.R.Civ.P. 56, along with excellent supporting memoranda. For the reasons stated below, the Court grants summary judgment in favor of the Union and dismisses the action.

I.

The Union scheduled an election for the office of Secretary on October 12, 1983. Article III of the Union’s constitution governed the conduct of the election. Article III, Section 2.1 sets forth the nomination procedure:

Section 2.1 Petitions for Nominations. All nominations of candidates for any office shall be by petition which shall be signed by not less than two hundred fifty nor more than one thousand members who would have been eligible to vote on June first immediately prior to the election for which said petition is filed. No member may sign more than one nominating petition for each office to be filed at any election. If a member has signed the nominating petition for more than one candidate for the same office, said signatures shall be invalid on all petitions. The nominating petition, and each sheet thereof, shall be in the form prescribed by the Board of Governors.

This nomination requirement of two hundred fifty unduplicated signatures, or 3.8% of the Union’s membership, is the focal point of this case. At the time of the election, the Union was composed of about 6,500 members who were employed by some 800 employers located primarily in Illinois, Wisconsin and Michigan. About 6,000 of these members were concentrated within a 75 mile radius of downtown Chicago.

On March 25, 1983, the Union sent a “Notice of Nomination and Election” to all of its members. The Notice told the members of the relevant requirements of the election process, including the petition requirements. On June 6, 1983, Tony Cullotta (“Cullotta”), the incumbent Secretary, and Jerry Picardi (“Picardi”), the complainant, picked up nominating petitions, a Memorandum and a copy of the Union’s constitution. The Memorandum repeated the requirement that each candidate had to submit 250 unduplicated signatures between July 5, 1983 and August 3, 1983 in order to make the ballot. Cullotta and Picardi also received a list of the Union’s stewards and a computer printout listing the names and addresses of the 800 employers of Union members. The printout did not list the number of members employed by each employer. Sometimes it listed the main office address of each office, but not the location from which drivers were dispatched or when they started or returned.

Picardi states that he and his four helpers ran into some problems obtaining signatures, mostly because some employers denied them access to terminals or dispatch areas. Cullotta had considerably less difficulty getting signatures. He was a “Field Representative” as well as Secretary, and he had four fellow Field Representatives helping him. Field Representatives regularly visit plant sites on Union business. As such, they gain easier access into plants than an ordinary member like Picardi can, and thus Cullotta and his helpers harvested more signatures than did Picardi and his men. On July 18, 1983, Cullotta submitted forty nominating petitions bearing about 1,000 signatures, the maximum under the Union’s constitution. Picardi submitted 303 signatures on August 3, 1983, the last day for submitting petitions. Of these signatures, the Union cut 47 because they were duplicated on Cullotta’s petitions, ten because they were not members in good standing as of June 1, 1983, ten because they could not be verified and two because they had signed Picardi’s petitions twice.. These cuts dropped Picardi 16 signatures below the 250 minimum. The Union’s Executive Directors, Mike Keegan (“Keegan”), notified Picardi by letter dated August 15, 1983, that the Union had disqualified him because of his failure to cross the minimum signature threshold. Because the filing deadline had passed, Picardi had no opportunity to submit additional signatures. Unopposed, Cullotta won re-election.

After being stricken from the ballot, Picardi wrote to Keegan to protest. The Union’s Board of Governors wrote back that it had denied his protest. Having thus exhausted his internal Union remedies, Picardi filed a timely protest with the Secretary of Labor. Pursuant to 29 U.S.C. § 482(b), the Secretary initially decided not to pursue the case, but after further investigation, tried unsuccessfully to negotiate a settlement. This lawsuit followed.

II.

The Secretary argues that the Union’s requirement of 250 unduplicated signatures violates Title IV of the Labor-Management Reporting and Disclosure Act of 1959 (“LMRDA”). 29 U.S.C. § 481 et seq. Specifically, the Secretary claims that the signature minimum denies Union members a “reasonable opportunity ... for the nomination of candidates,” in violation of 401(e) of the LMRDA. That section provides:

(e) In any election required by this section which is to be held by secret ballot a reasonable opportunity shall be given for the nomination of candidates and every member in good standing shall be eligible to be a candidate and to hold office (subject to section 504 and to reasonable qualifications uniformly imposed) and shall have the right to vote for or otherwise support the candidate or candidates of his choice, without being subject to penalty, discipline, or improper interference or reprisal of any kind by such organization or any member thereof____ The election shall be conducted in accordance with the constitution and bylaws of such organization insofar as they are not inconsistent with the provisions of this title.

29 U.S.C. § 481(e). Should we find that the petition process violates the “reasonableness” requirement of § 401(e), we must “declare the election ... to be void and direct the conduct of a new election____” 29 U.S.C. § 482(c)(2). This is apparently the first case challenging a Union’s signature requirement.

Deciding whether a rule or conduct is “reasonable” is not a simple task. Our survey of the Secretary’s Interpretative Regulations and Supreme Court precedent does not reveal a precise definition for us to apply. The Secretary and the Supreme Court have admitted that “whether a qualification is reasonable is a matter which is not susceptible of precise definition, and will ordinarily turn on the facts of each case.” 29 C.F.R. § 452.36(a); see Local 3489, United Steelworkers v. Usery, 429 U.S. 305, 313, 97 S.Ct. 611, 616-17, 50 L.Ed.2d 502 (1977). However, the legislative history and the Secretary’s regulations do provide some focus for our scrutiny of the petition requirement.

Congress passed Title IV of the LMRDA to ensure free and democratic Union elections; the legislative history reveals that Title IV strikes a balance between correcting abuses in union elections on the one hand, and, on the other hand, not straying needlessly from the federal policy of letting unions manage their internal affairs. Wirtz v. Local 153, Glass Bottle Blowers Assn., 389 U.S. 463, 470-71, 88 S.Ct. 643, 647-48, 19 L.Ed.2d 705 (1968). Under Title IV, unions clearly may impose reasonable qualifications uniformly on their candidates. While we must carefully avoid unnecessarily telling the Union how to run its elections, we must not be overly deferential. “ ‘Congress plainly did not intend that the authorization ... of reasonable qualifications ... should be given a broad reach.’ ” Local 3489, 429 U.S. at 309, 97 S.Ct. at 614, quoting Wirtz v. Hotel Employees Union, Local 6, 391 U.S. 492, 499, 88 S.Ct. 1743, 1748, 20 L.Ed.2d 763 (1968). In analyzing the Union’s petition requirement, we use the “free and democratic” political process as a guidepost, assuming that Union voters will east their ballots wisely if given a fair chance to do so. Id. In sum, we may justifiably interfere with the Union’s conduct of its election if it has somehow sabotaged the democratic process.

The Secretary’s interpretative regulations offer some guidance in assessing the reasonableness of the signature requirement. 29 C.F.R. § 452.36 sets forth five factors to consider:

1. The relationship of the qualification to the legitimate needs and interest of the union;
2. The relationship of the qualification to the demands of union office;
3. The impact of the qualification, in the light of the Congressional purpose of fostering the broadest possible participation in union affairs;
4. A comparison of the particular qualification with the requirements for holding office generally prescribed by other labor organizations; and
5. The degree of difficulty in meeting a qualification by union members. (29 C.F.R. 452.36).

With these additional considerations in mind, we turn to the Secretary’s challenge of the petition requirement.

III.

The Secretary argues that the requirement of 250 unduplicated signatures unreasonably impairs the Union’s democratic processes. He concedes that a signature requirement in general, and a 3.8% requirement in particular, may be reasonable, but concludes that the rule barring duplicated signatures unreasonably hinders non-incumbent candidates in this Union from meeting the minimum. The Secretary reasons that the rule is unfair because candidates do not have notice of the actual number of signatures needed to get nominated. Members must obtain some vague number well over 250 in order to create a duplication “cushion.” The Secretary believes that a better rule would either eliminate the duplication requirement or allow candidates a short grace period after the filing deadline to submit more signatures. The Secretary emphasizes the factual context of his argument. Because the employers of this Union’s members are dispersed, it is difficult to garner signatures. Challengers like Picardi — unlike incumbent Field Representatives — find it hard to gain access to plants, and when they do they might not be there when drivers are coming or going. Given this factual context, argues the Secretary, the signature requirement becomes even more stringent. Despite these arguments, we do not agree that the requirement of 250 unduplicated signatures shackles the exercise of the Union’s democracy in violation of the LMRDA.

We note again that the LMRDA’s “reasonableness” requirement does not license this Court to run the Union. The question here is not whether we or the Secretary can think of better or ideal nomination processes, but whether the process this Union has created is a “reasonable” one.

As the Secretary concedes, a petition requirement in general is reasonable and serves legitimate Union needs. See 29 C.F.R. § 452.57. A petition requirement ensures that candidates can marshal minimal support, thereby eliminating fringe candidates. The duplication rule furthers this goal by ensuring that a candidate can drum up enough independent preliminary support of a small portion of the electorate to justify holding an election. Moreover, the minimum culls out a candidate who is not serious enough about his or her candidacy to put out the effort to get enough signatures.

Of course, petition requirements can become unreasonable if the minimum number of signatures is too high. Cf. Smith v. Bd. of Election Commissioners For The City of Chicago, 587 F.Supp. 1136 (N.D.Ill. 1984). But we believe that the requirement of preliminary support from 3.8% of the membership is not unreasonably burdensome, even if it cannot be the same 3.8% (or even about 15%, as in this case) which supports another candidate. The dispersion of the 6,500 members among 800 employers does not render the 3.8% minimum unreasonable. Each candidate receives the addresses of the employers, the vast majority of whom are concentrated in the Chicago area. While some of these addresses were of central offices, no evidence suggests there were so many as to lead candidates on a wild goose chase to find the locations from which drivers come and go. We recognize that meeting the minimum is not easy, but neither is it unreasonably hard. We find especially persuasive the historical and uncontested fact that fourteen out of the last sixteen elections were contested, including two this year. In five of these elections, more than two candidates made the ballot. In sum, we do not believe that the petition requirement unreasonably impairs broad membership participation in Union affairs.

The petition requirement is far less restrictive than the Supreme Court cases invalidating Union elections. In Hotel Employees, supra, a Union bylaw on its face rendered 93% of Union members ineligible to run for office. In Local 3489, supra, the Union allowed a candidate to run only if he or she attended 75% of the Local’s meetings during the three years before the election. Unlike Hotel Employees’ bylaw, the Local 3489 bylaw excluded no categories of members, but merely erected a fairly high procedural hurdle, one that could have been viewed as furthering legitimate Union interests. Yet because the bylaw had the effect of excluding 96.5% of the rank and file from candidacy, the Supreme Court held that it “hardly seems to be a ‘reasonable qualification’ consistent with the goal of free and democratic elections.” 429 U.S. at 310, 97 S.Ct. at 615. From these two cases we see that Union bylaws which exclude most Union members from candidacy violate the LMRDA. However, the signature requirement at issue here does not present so egregious a case. The requirement excludes no one by class; nor have we been presented with evidence that the requirement has a significant de facto chilling effect on candidates, as was the case in Local 3489. As noted above, most of the Union’s elections are contested. In sum, the Supreme Court cases do not suggest that the petition requirement in this case is unreasonable.

We disagree with the Secretary’s argument that candidates do not have actual notice of the number of signatures since they do not know in advance how many signatures are duplicated. The Secretary admits that candidates have adequate notice of the 250 signature minimum and of the requirement that these signatures must be unduplicated. His complaint can be made of all signature requirements, including the other requirements in this case which the Secretary does not challenge. For example, ten signatures were removed because they were not those of members in good standing, and ten because they could not be verified. While Picardi could not have known how many of these kinds would be stricken, the Secretary does not raise a notice argument as to these requirements. Similarly, looking for guidance from our rough model, the political context, we see that signatures are commonly stricken for various reasons, yet this does not render a political signature minimum vague or illusory. A signature “cushion” is necessary for all petition requirements, no matter how reasonable.

We also reject the Secretary’s argument that the current system is subject to serious abuse. He suggests that an unscrupulous incumbent can follow a challenger from plant to plant, secure duplicated signatures, and still have enough of a cushion to meet the minimum himself. We observe first that no evidence suggests that this type of skullduggery happened in this case. In any event, the Union’s constitution protects against abuses of this type. In addition to laying a floor of 250 signatures, it erects a ceiling of 1,000 signatures. Where, as here, a candidate secures 1,000 signatures, an opposing candidate still has 5,500 signatures available to him. While this safeguard does not fully prevent the devious incumbent from snooping around after the challenger, it does prevent one candidate from cornering the market. Evidence of foul play could very well invalidate an election in which it occurs, but the unlikely possibility of this kind of mischief does not, we believe, render the whole signature requirement unreasonable.

IV.

The Union’s signature requirement does not unreasonably deprive members of an opportunity to nominate candidates for Union office. Accordingly, the Secretary’s motion for summary judgment is denied, the Union’s is allowed, and the case is dismissed. It is so ordered.

      . The Secretary's interpretative regulations are not binding on the courts, but they are entitled to some weight when deciding what qualifications are reasonable in the gray areas of the LMRDA. Usery v. Local Div. 1205, Amalgamated Transit Union, 545 F.2d 1300, 1304 (1st Cir. 1976).

      . The political process provides only a rough model, not a blueprint for the conduct of Union elections. See Donovan v. Dist. Lodge 100, 666 F.2d 883, 889 (5th Cir.1982).

      . We do not mean to imply that the Supreme Court cases set the lower bounds of what is reasonable. Less restrictive requirements may still violate the LMRDA. See, e.g., Donovan v. Local Union No. 120, Laborers, 683 F.2d 1095 (7th Cir.1982) ("competency" requirement void for vagueness); Usery v. District 22, United Mine Workers of America, 543 F.2d 744 (10th Cir. 1976) (requirement that candidate be nominated by five locals was unreasonable); generally Annot. 24 A.L.R.Fed. 651 (1975).


author: SCHATZ, District Judge.

text:
    The CENTRAL NATIONAL INSURANCE COMPANY OF AMERICA, a corporation, Plaintiff, v. The INSURANCE CORPORATION OF IRELAND, LIMITED, a corporation, Defendant.
    No. CV. 84-0-30.
    United States District Court, D. Nebraska.
    Nov. 30, 1984.

      John R. Douglas, Omaha, Neb., for plaintiff.
    Francis P. Matthews, Omaha, Neb., for defendant.
   MEMORANDUM OPINION

SCHATZ, District Judge.

This matter comes on for determination with reference to defendant’s motion for change of venue (Filing No. 6) and motion to dismiss (Filing No. 7). After a hearing and careful consideration of the briefs filed in support of and in opposition to said motions, together with the affidavits and exhibits presented in regard thereto, the Court finds that it lacks personal jurisdiction over the defendant and that the complaint should be dismissed.

The facts are these. Plaintiff is a corporation organized and existing under the laws of Nebraska and having its principal place of business in Omaha, Nebraska. Defendant is a corporation organized and existing under the laws of Ireland and doing business worldwide. On or about March 26, 1982, defendant entered into a “blood stock/livestock binding authority” with two individuals identified as cover-holders, namely Peter Meredew and John Harris. Such agreement allegedly authorized those individuals to bind reinsurance contracts on behalf of the defendant. Meredew acted through an entity called R.T.C., Ltd., and Harris acted through an entity called Blood Stock International (Bermuda), Ltd. Plaintiff alleges that pursuant to such authority, Meredew and Harris caused to be issued certain “cover notes” and delivered them to plaintiff’s general agent, Frelinghuysen Livestock Managers, Inc. It is alleged that the cover notes provided that defendant agreed to reinsure plaintiff as to certain described risks regarding race horses. Relying on the existence of reinsurance contracts underlying the cover notes, plaintiff’s agent wrote insurance on blood stock and livestock in substantial sums with plaintiff. Thereafter, plaintiff submitted claims for losses under the reinsurance contracts and defendant refused to pay such claims.

The present action was subsequently brought under the theory of breach of contract.

Defendant’s motion to dismiss states four grounds in support thereof, namely, lack of personal jurisdiction over the defendant, insufficiency of process, insufficiency of service of process, and failure to join a party under Fed.R.Civ.P. 19. The first ground is dispositive of this case. Plaintiff attempted service of process on defendant by certified mail pursuant to the Nebraska Long-Arm Statute, Neb.Rev. Stat. § 25-536 (Supp.1984). That statute provides in pertinent part:

A court may exercise personal jurisdiction over a person:
(1) who acts directly or by an agent, as to a cause of action arising from the person:
(a) transacting any business in this state;
(b) contracting to supply services or things in this state;
******
(f) contracting to insure any person, property or risk located within this state at the time of contracting; or
(2) who has any other contact with or maintains any other relation to this state to afford a basis for exercise of personal jurisdiction consistent with the Constitution of the United States.

The reach of a state long-arm statute is a question of state law, and federal courts are required to accept the interpretation given the statute by the State Supreme Court. Institutional Food Marketing Associates, Ltd. v. Golden State Strawberries, Inc., 747 F.2d 448 (8th Cir.1984). However, the extent to which the reach of a long-arm statute is limited by due process is a question of federal law. Sales Service, Inc. v. Daewoo International (Am) Corp., 719 F.2d 971, 972 (8th Cir.1983); Mountaire Feeds, Inc. v. Agro Impex, S.A., 677 F.2d 651, 653 (8th Cir.1982). With regard to the reach of the long-arm statute, the Nebraska Supreme Court clearly recognizes that the objective behind the statute is to extend the jurisdiction of Nebraska courts over non-resident defendants to the extent permissible under the due process clause of the Fourteenth Amendment. Stucky v. Stucky, 186 Neb. 636, 641-42, 185 N.W.2d 656, 659 (1971). Subsection (l)(f) clearly contemplates assertion of jurisdiction over a defendant who contracts to insure a risk located within the State of Nebraska. Defendant’s agents did in fact insure its risk of loss with agents of the Nebraska resident plaintiff. However, due process considerations govern whether it is appropriate to require this non-resident defendant to defend the present lawsuit in this forum.

The limits of due process are tested by applying the familiar minimum contacts standard, i.e., non-resident defendants must have certain minimum contacts with the forum state “such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” Land-O-Nod Co. v. Bassett Furniture Industries, Inc., 708 F.2d 1338, 1340 (8th Cir.1983), quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). In this circuit, the standard has developed into a consideration of five factors:

(1) the nature and quality of the contacts with the forum state; (2) the quantity of the contacts with the forum state; (3) the relation of the cause of action to the contacts; (4) the interest of the forum state in providing a forum for its residents; and (5) the convenience of the parties.
Aaron Ferer & Sons Co. v. Diversified Metal Corp., 564 F.2d 1211, 1215 (8th Cir.1977).

See also, Piper Acceptance Corp. v. Roudybush, 748 F.2d 471 at 472 (8th Cir.1984); Institutional Food Marketing Associates, Ltd. v. Golden State Strawberries, Inc., supra, 747 F.2d at 455-456; Land-O-Nod Co. v. Bassett Furniture Industries, Inc., supra, 708 F.2d at 1340; Mountaire Feeds, Inc. v. Agro Impex, S.A., supra, 677 F.2d at 654. Such factors, however, do not provide “a slide rule by which fundamental fairness can be ascertained with mathematical precision.” Toro Co. v. Ballas Liquidating Co., 572 F.2d 1267, 1270 (8th Cir. 1978). It is well settled, for example, that the last two factors assume a secondary importance and are not determinative. Aaron Ferer & Sons Co. v. American Compressed Steel Co., 564 F.2d 1206, 1210 n. 5 (8th Cir.1977). Nevertheless, the central focus of the inquiry must be upon the relationship between the defendant, the forum and the litigation. Helicopteros Nacionales de Colombia, S.A. v. Hall, — U.S. -,-, 104 S.Ct. 1868, 1872, 80 L.Ed.2d 404 (1984), quoting Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2579, 53 L.Ed.2d 683 (1977).

In this connection, “it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws.” Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958). Therefore, it is a defendant’s contacts with the forum state that are relevant in determining the existence of personal jurisdiction, not its contacts with a resident of that forum. Institutional Food Marketing Associates, Ltd. v. Golden State Strawberries, Inc., supra, 747 F.2d at 456.

Since personal jurisdiction of this Court over defendant has been controverted, the plaintiff, as the party seeking to invoke the jurisdiction of this Court, “has the burden of establishing that jurisdiction exists and the burden may not be shifted to the party challenging the jurisdiction.” Scullin Steel Co. v. National Railway Utilization Corp., 676 F.2d 309, 311 (8th Cir.1982), quoting Product Promotions, Inc. v. Cousteau, 495 F.2d 483, 490 (5th Cir.1974). Plaintiff herein is unable to meet its burden. First, defendant has had no contact with the State of Nebraska. Specifically, defendant is not authorized to do business in Nebraska, has no office or personnel in this state, owns no real property in the state, and does not have an agent for service of process or for any other purpose in this state. In addition, plaintiff has failed to show that defendant has entered into any other contracts with Nebraska residents. Furthermore, the cover notes at issue herein were executed in Bermuda and issued to plaintiffs New Jersey agent.

In support of jurisdiction, plaintiff relies on McGee v. International Life Insurance Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957). In McGee, plaintiff, a California resident, was the beneficiary of a life insurance policy originally issued by an Arizona corporation. That policy was subsequently assumed by a Texas insurer. Following the death of the insured, plaintiff obtained a judgment in a California state court and, thereafter, filed suit on that judgment in a Texas court. However, the Texas court refused to enforce the judgment, holding it was void under the Fourteenth Amendment because service of process outside California did not give the California court jurisdiction over defendant. The United States Supreme Court reversed, holding that the due process clause did not preclude the California court from entering a judgment binding on defendant based upon a single contact with that forum. In McGee, defendant, although it did not engage in business in the State of California, actively solicited the insured’s business. In addition, the contract of insurance was delivered in California, the premiums were mailed from that state, and the insured was a resident of that state when he died.

While in the instant action plaintiff is a resident of the State of Nebraska, and the reinsurance premiums were apparently sent from this state, defendant did not solicit business in this state. Furthermore, the relevant contracts herein were executed and delivered in New Jersey and Bermuda. There is no evidence that defendant contemplated dealing with a Nebraska resident to such an extent that a finding could be made that defendant purposefully availed itself of the privilege of conducting activities within the State of Nebraska. It would be fundamentally unfair to require defendant to defend against the present lawsuit in this forum. See generally, Piper Acceptance Corp. v. Roudybush, supra, 748 F.2d at 473.

Accordingly, defendant’s motion to dismiss for lack of personal jurisdiction is well taken and a separate order granting the same and dismissing the case is entered this date.


text:
    HORN ABBOT LTD., Plaintiff, v. SARSAPARILLA LTD., Joseph A. DeBartolo and Various John Does, Defendants.
    No. 84 C 10138.
    United States District Court, N.D. Illinois, E.D.
    Dec. 3, 1984.

      Clarence J. Fleming, James P. Ryther, Thomas C. Elliott, Jr., McDougall, Hersh, Scott, Chicago, 111., for plaintiff.
    Francis E. Sabato, Arnette R. Hubbard, Chicago, 111., for defendants.
   MEMORANDUM OPINION AND ORDER

ASPEN, District Judge:

The plaintiff Horn Abbot, Ltd. (“Horn Abbot”) has sued defendants Sarsaparilla, Ltd. (“Sarsaparilla”) and its president Joseph DeBartolo (“DeBartolo”), alleging trademark and copyright infringement. The dispute centers about Horn Abbot’s enormously popular board game “Trivial Pursuit.” Sarsaparilla has recently published, in time for the Christmas selling season, what it terms a “reference book” or “supplement” to Trivial Pursuit. Titled “In Further Pursuit of Trivial Pursuit," Sarsaparilla’s book reproduces verbatim all 6,000 questions and answers of the “Genus Edition” of Trivial Pursuit. Horn Abbot has moved the Court to enter a temporary restraining order, prohibiting Sarsaparilla from further distribution and sale of In Further Pursuit pending a hearing on possible preliminary injunctive relief. For the reasons stated below, we hold that Horn Abbot has satisfied the prerequisites for extraordinary temporary injunctive relief, and we accordingly grant its motion for a temporary restraining order.

Facts

Horn Abbot filed this suit and the pending motion on November 26, 1984. Sarsaparilla responded to the motion late on November 29, 1984, and on November 30, 1984, the Court held a hearing on the motion and heard arguments and examined evidence submitted by both sides. Based upon careful consideration of the averments of counsel, the various affidavits, exhibits, and the other evidentiary offerings, we make the following interim findings of fact.

Trivial Pursuit is a board game which contains a playing board, a die, player tokens and scoring wedges. The heart of the game is 1,000 cards, each of which contains six trivia questions on one side and the corresponding six answers on the other. The questions for the basic, or “Genus Edition” of the game, are broken into six topical categories, and each card poses one question from each category. Players of the game move their respective tokens around the board, trying to answer as many questions as possible. Without detailing how players score points and win, we can fairly say the winner will usually be the player who knows the most answers and/or enjoys the luckiest rolls of the die.

The game is packaged in a square blue box. The top of the box is trimmed with a thin line of orange-gold which forms a border near the edge. The words “Trivial Pursuit” appear in script at the center of the top of the box. Above and below these words, a fine-lined scroll design is displayed. These markings, too, are orange-gold.

The game was developed by two Canadian citizens, who later sold their rights to Horn Abbot and who are now shareholders of Horn Abbot. After marketing the game in Canada in 1982, Horn Abbot licensed Selchow & Righter Co. to manufacture and distribute the game in the United States. The sales of the game have been extraordinary. In 1983, 2V5s million were sold in Canada and IV2 million in the United States. During the first three quarters of 1984, United States sales reached 13 million, with several million more sales anticipated during the present Christmas buying season. The game now retails in the neighborhood of $25 — $30.

In March of 1984, DeBartolo contacted Horn Abbot seeking a license to publish a book based on Trivial Pursuit. The idea of the book was to reproduce the 6,000 questions and answers of the game, along with additional explanatory material for each answer. There is some dispute as to what transpired between the Spring and July of 1984. DeBartolo asserts that he had hired a team of researchers to develop the explanatory material and spent a good deal of his own funds writing the book. He also asserts that Horn Abbot led him to believe that it would license the book and encouraged him to spend the money researching and writing it. Horn Abbot’s affidavits do not detail the pre-July 1984 occurrences. In any event, this much is clear. As of late July 1984, the book had not been published. On July 2, 1984, John Hozack of Horn Abbot wrote DeBartolo that, as far as Horn Abbot was concerned, the manuscript of the book had not yet been approved by Horn Abbot’s directors, and that DeBartolo was not an agent of Horn Abbot. On July 23, 1984, Canadian counsel for Horn Abbot wrote Sarsaparilla that Horn Abbot had recently seen a flyer which advertised the forthcoming availability in In Further Pursuit of Trivial Pursuit. The letter advised Sarsaparilla that it and Horn Abbot as yet had no license or agreement, and that Sarsaparilla’s activities infringed Horn Abbot’s rights. Finally, on July 25,1984, Horn Abbot notified Sarsaparilla by letter that Horn Abbot’s directors had voted against licensing the book. The letter indicated that Horn Abbot expected Sarsaparilla to comply fully with Horn Abbot’s letter of July 23,1984.

On July 25, 1984, DeBartolo wrote a letter to Horn Abbot, expressing disappointment that he and Horn Abbot would no longer be working together to develop the book. The letter also demanded that Horn Abbot compensate Sarsaparilla for its expenses to date, and that Horn Abbot return DeBartolo’s manuscript and other materials he had sent. The letter concludes with a complaint that Horn Abbot had treated Sarsaparilla shabbily. However, the letter does not state that DeBartolo was planning to publish the book. On July 26, 1984, counsel for Sarsaparilla in further response to Horn Abbot’s letter of July 23, wrote Horn Abbot that Sarsaparilla disagreed with some of the statements in the July 23rd letter, and that counsel were studying the matter to advise Sarsaparilla. The letter did not state that Sarsaparilla planned to publish the book despite Horn Abbot’s recent actions.

Sometime in October, DeBartolo and Sarsaparilla did publish and market the book. Listing for $13.95, the book admittedly reproduces, verbatim, all 6,000 questions and answers of the Genus Edition of Trivial Pursuit. Upon examining a copy of the book, the Court finds that the questions and answers are divided into the same topical categories as those in the game. Within each category, the question-answer pairs are arranged alphabetically by answer. The matching question follows, and that in turn is followed by additional, relevant factual information researched by the book’s authors. The front cover of the book is colored a shade of blue similar to that of the game. The cover also has a thin orange-gold line running around the edge. In orange-gold print, the title, “In Further Pursuit of Trivial Pursuit,” appears, surrounded by an ornamental scroll design which is not identical, but is not dissimilar, to that found on the game’s box. The words “Trivial Pursuit” appear on a separate line from the rest of the title and are larger and bolder than the rest of the title. The following disclaimer appears in small, orange-gold print near the bottom of the front cover:

TRIVIAL PURSUIT ® is a Registered TRADEMARK OF HORN ABBOTT [sic] LTD., Downsview, Ontario, Canada for its Board Game and equipment including a playing board, die, rules of play, question and answer cards, card boxes, player tokens and scoring materials. This book does not emanate from and is neither sponsored nor authorized by Horn Abbott Ltd.

Horn Abbot apparently learned of the actual publication of the book in early November. It filed this suit on November 26th. The seven count complaint alleges: (a) common law trademark infringement; (b) infringement of a United States trademark registration, as provided for by 15 U.S.C. §§ 1114 et seq.; (c) unfair competition under the laws of the United States, as provided for by 15 U.S.C. §§ 1121 and 1125(a); (d) infringement of a United States copyright, as provided for by 17 U.S.C. §§ 501 et seq.; (e) common law unfair competition; (f) dilution of trademarks as provided for by IlI.Rev.Stat., ch. 140 §§ 22 et seq. (1983); and (g) deceptive trade practices, as provided for by IlI.Rev.Stat. ch. 121V2, §§ 311 et seq. (1983).

Discussion

We turn now to the merits of Horn Abbot’s motion for a temporary restraining order. The parties do not dispute that the traditional four part standard applies to this request for emergency injunctive relief. In particular, we may grant Horn Abbot’s motion only if we find that (1) Horn Abbot has some likelihood of success on the merits; (2) Horn Abbot will have no adequate remedy at law and will suffer irreparable harm if we do not grant its motion; (3) granting the injunction will not disserve the public interest; and (4) the balance of hardships as between Horn Abbot and Sarsaparilla does not tilt significantly in favor of the latter. See Roland Machinery Co. v. Dresser Industries, Inc., 749 F.2d 380 at 386-388 (7th Cir.1984); Hyatt Corp. v. Hyatt Legal Services, 736 F.2d 1153, 1157-59 (7th Cir.1984). We will consider each of these factors in turn.

A. Likelihood of Success on the Merits

Horn Abbot has shown clear trademark and copyright infringements and has a substantial likelihood of success on at least these counts of the complaint. The common law and statutory claims for trademark infringement are quite powerful. For example, under § 32(1) of the Lanham Act, 15 U.S.C. § 1114(1), the crucial test for trademark infringement is whether the alleged infringer is using the same or similar mark in a way which is likely to confuse or deceive the public. See James Burrough Ltd. v. Sign of Beefeater, Inc., 540 F.2d 266, 274 (7th Cir.1976); Union Carbide Corp. v. Ever-Ready, Inc., 531 F.2d 366, 281-82 (7th Cir.1976), cert. denied, 429 U.S. 830, 97 S.Ct. 91, 50 L.Ed.2d 94 (1976). “In determining whether likelihood of confusion exists, courts consider such factors as the type of trademark in issue, the similarity of design, the similarity of products, identity of retail outlets and purchasers, identity of advertising media utilized, defendant’s intent, and actual confusion.” Union Carbide, 531 F.2d at 381-82. Most of these factors tip strongly in Horn Abbot’s favor. The trademarks of the covers of the two products are very similar, indeed, nearly identical. The colors of the book and game are a close match, and the scrollwork is similar. The class of purchasers of the products will undoubtedly overlap substantially. The products are very similar — both contain the 6,000 identical questions and answers which form the heart of Trivial Pursuit. The book cover and game cover are so strikingly alike that DeBartolo and Sarsaparilla cannot have intended anything other than to mimic the game’s distinctive trade dress. “An obvious attempt to cash in on a senior user’s reputation and advertising leads invariably to a conclusion that likelihood of confusion not only exists, but was intended by the newcomer.” Menley & James Laboratories, Ltd. v. Approved Pharmaceutical Corp., 438 F.Supp. 1061, 1067 (N.D.N.Y. 1977). In a case like this, where Sarsaparilla so plainly aped the color and design of Horn Abbot’s distinctive trade dress, and where the goods are so closely related, the public is likely to be confused.

In addition to probably succeeding on its federal trade dress claims, Horn Abbot has a powerful pendent claim of trademark dilution under Ill.Rev.Stat. eh. 140, § 22 (1983). This “Anti-Dilution Act” provides in pertinent part:

[e]very person ... adopting and using a mark [or] trade name, ... may proceed by suit, and the circuit court shall grant injunctions, to enjoin subsequent use by another of the same or any similar mark [or] trade name ... if there exists a likelihood of injury to business reputation or of dilution of the distinctive quality of the mark [or] trade name ... of the prior user notwithstanding the absence of competition between the parties or of confusion as to the source of goods or services.

Under this act, “an injunction must be granted if the prior user can show that the mark is distinctive and that the subsequent user’s use dilutes that distinctiveness; neither competition between the users nor confusion need be shown.” Hyatt Corp., 736 F.2d at 1157 (footnote omitted). Given the striking and unique design of the game’s cover, and the great popularity of the game, we think it likely that Horn Abbot can show that its mark is distinctive; similarly, it is likely that Sarsaparilla’s use of the mark dilutes the distinctiveness. “Important factors in this determination are the similarity between the marks used by the parties and the extent of the marketing effort by the second user.” Id. at 1158. As noted above, the marks are nearly identical. While the book has just been marketed, there is no dispute that Sarsaparilla advertised the book at a bookseller’s convention over the summer, and that its advertising flyers copied the exact trade dress of the Trivial Pursuit game. The record contains no other evidence of advertising. But given the remarkable similarity of the marks, we think that Horn Abbot has clearly shown a likelihood of success on the issue of dilution and, consequentially, on its claim under the Anti-Dilution Act.

Sarsaparilla’s main reply to the trademark claims is that its cover merely identifies the game by name, and that it admits on the book’s cover that Trivial Pursuit is a registered trademark of Horn Abbot and that Horn Abbot has nothing to do with the book. These arguments lack merit. Even if identifying the book by name is proper, Sarsaparilla makes no attempt to defend its use of the distinctive colors and scroll markings of the Trivial Pursuit game. Moreover, the name, “Trivial Pursuit,” is set off and highlighted on a separate line in bolder print than is the rest of the title. While Sarsaparilla has provided us with a few other trivia books which also use the Trivial Pursuit name in bold print, this fact is irrelevant to whether this book infringes Horn Abbot’s trademark. The existence of these other books is arguably relevant to Horn Abbot’s need for extraordinary relief (which we discuss below), but not to whether its rights have been infringed. We also do not think that placing the fine print disclaimer on the book’s cover excuses Sarsaparilla’s plain trademark infringement or otherwise provides a defense. First, given the small print and the otherwise strong similarity between the two products, the consumer is still likely to be confused or deceived. Moreover, such disclaimers would seem to be irrelevant. In Selchow & Righter v. McGraw-Hill Book Co., 580 F.2d 25 (2d Cir.1978), the plaintiff owned the rights to and manufactured the “Scrabble” board game. McGraw-Hill published a book called “The Complete Scrabble Dictionary.” McGraw-Hill proposed to insert in its book a disclaimer which mirrored the one in this case. The Second Circuit ignored this disclaimer in affirming the district court’s grant of a preliminary injunction, apparently believing the disclaimer to be irrelevant where the plaintiff had otherwise established its right to preliminary injunctive relief. 480 F.2d at 26 n. 1. In sum, Sarsaparilla’s arguments that Horn Abbot is unlikely to succeed on its trademark claims are unpersuasive.

Turning to the likelihood of success on the copyright claim, we find that Horn Abbot has a strong case there as well. Sarsaparilla does not dispute that it copied, verbatim, every question an answer from the Genus Edition of Trivial Pursuit, which is subject to Copyright Registration No. TX846-925. Indeed, the fact that every question appears in its book is one of its primary marketing appeals. Moreover, Sarsaparilla has arranged the questions under the same six categories used in the game. It may be true that Sarsaparilla performed substantial, additional research in expanding on the answers, but that is relevant only to a possible counterclaim it might assert, as we discuss below. The simple, uncontroverted fact is that the game’s 6,000 questions and answers, the essence of Trivial Pursuit, have been lifted from the game and reproduced in the book, without the permission of Horn Abbot.

We think it quite unlikely that Sarsaparilla can establish that it made “fair use” of Horn Abbot’s copyrighted work, as allowed by 17 U.S.C. § 107. That section states:

Notwithstanding the provisions of section 106, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted work.

Sarsaparilla plainly did not copy every single question and answer “for purposes such as criticism, comment, news reporting, teaching ... scholarship, or research.” Although Sarsaparilla did further “research” the 6,000 answers, and did “comment” on them, the four factors in § 107 dispel any possible doubt about fair use: (1) The predominant purpose of the book is commercial, although it does have ancillary educational benefits. As the Supreme Court recently stated in the “Betamax” case, “every commercial use of copyrighted material is presumptively an unfair exploitation of the monopoly privilege that belongs to the owner of the copyright.” Sony Corp. v. Universal City Studios, 464 U.S. 417, -, 104 S.Ct. 774, 793, 78 L.Ed.2d 574 (1984). (2) Trivial Pursuit is, by nature, a contest to see which player knows the most trivia, regardless of whether the cards are used with the game board. The book captures the essence of that game. (3) The book copies more than a substantial part of the “copyrighted work as a whole.” It copies the whole work. (4) The parties disagree over how the book will affect “the potential market for or value of the copyrighted work.” Sarsaparilla speculates that the book will enhance interest in and sales of the game. Horn Abbot points out that the book allows people to play the Trivial Pursuit game because it has stolen the essence of the game, all of the questions and answers. Because it can be bought at approximately half the price, the book cuts deeply into the potential market and value of the game, concludes Horn Abbot. We agree with Horn Abbot that people can essentially play a form of Trivial Pursuit from the book alone. Whether this will decrease or enhance future sales is unclear now. Nevertheless, we think that a real possibility exists that the book will cut into the game’s market and value. This realization, combined with our findings with respect to the other three factors of 17 U.S.C. § 107, leads us to conclude that Sarsaparilla is unlikely to succeed on any “fair use” defense.

In sum, Horn Abbot is likely to succeed on several theories of recovery. Recognizing this, we need not now consider its likelihood of success on the remaining theories alleged in the complaint.

B. Adequacy of Legal Remedy and Irreparable Injury

Horn Abbot has no adequate remedy at law and will suffer irreparable injury if Sarsaparilla is not enjoined from selling the book at least until a full hearing on preliminary injunctive relief is held.

The extent of damage from trademark infringement is impossible to ascertain and cannot be repaired with monetary relief. For example, considering the issue of trademark dilution under the Illinois Anti-Dilution Act, the Seventh Circuit said, “[w]e note it is the very nature of dilution to gnaw away insidiously at the value of a mark. [Citation omitted.] Such an injury would be remarkably difficult to convert into damages.” Hyatt, 736 F.2d at 1158. Similarly, turning to the Federal Trademark claims, the virtual identity of the book and game covers is likely to confuse or deceive the public each day the book remains on the shelves. This likely confusion, and the resulting injury to Horn Abbot, is most intense now, as we near the climax of the Christmas shopping season. As for the copyright claim, the possibility of unidentifiable numbers of people playing the game with the book would injure Horn Abbot irreparably.

Sarsaparilla and DeBartolo focused their attention on the irreparable injury claim, making an argument in the nature of laches. They assert that there is no need for emergency relief, since Horn Abbot has waited since July to bring this lawsuit. Moreover, they showed the Court copies of several books on the market which contain “Trivial Pursuit” in the title — some in bold letters — and which list some of the game’s questions. Horn Abbot’s apparent acquiescense in the distribution of these books shows there is no need for emergency relief, assert defendants. Let the lawsuit proceed in its normal course, they conclude. We disagree.

First, we find that Horn Abbot has not slept on its rights since July. As of the end of July, the book was in manuscript form, but had not been published. When Horn Abbot denied DeBartolo and Sarsaparilla a license on July 25, it had no inkling that they would go ahead and publish the book on their own. The written responses of Sarsaparilla and its counsel did not state that the book would be published. In fact, DeBartolo’s letter of July 25, 1984, merely expressed disappointment and anger, and demanded monetary compensation and return of the manuscript. The letter does not even hint that DeBartolo would publish the book; its tone suggests otherwise. Finally, counsel for Horn Abbot avers that it only discovered the book by accident in a bookstore in early November. In sum, there is no evidence that Horn Abbot has been dilatory.

Second, the publication of “other” Trivia Books does not suggest that Horn Abbot is not suffering irreparable harm. Unlike defendants’ book, none of the other books removed the guts of the game, all 6,000 questions and answers. Most of them outline strategies for winning at Trivial Pursuit. One of them lists several new questions, but does not parrot questions from the game. Another book does list a small percentage of the game’s questions, but does so mostly for the purpose of commentary. It lists questions with wrong or ambiguous answers, or picks out some questions that the authors consider interesting or funny. Still another book does appear more similar to In Pursuit of.... Recently published, it alphabetizes several answers and gives information about them, but it does not appear to lift all 6,000 answers from the game, and it does not list all 6,000 questions. In short, none of these books does what Sarsaparilla’s does: take the guts of the game and make it possible for people to, in effect, play it without using the game itself.

Similarly, none of the other books’ covers reveals so bold an attempt as Sarsaparilla’s to copy the Trivial Pursuit trademark and trade dress. While some of them use the words “Trivial Pursuit” in relatively bold letters, none uses the blue background, the orange-gold writing and the distinctive scrollwork. None are nearly as likely to confuse the public or have as significant a diluting effect. In sum, the existence of the other books do not demonstrate that Horn Abbot does not need extraordinary relief.

C. Public Interest

The public has an interest in protecting the integrity of trademarks and trade dress. See, e.g., Hyatt Corp., 736 F.2d at 1159. Moreover, the public plainly has an interest in preventing people from copying for commercial use the entire contents of a copyrighted work. While the public might have an interest in access to the additional information in the book, this interest does not, we believe, outweigh the other interests noted above.

D. Balance of Hardships

We have already described the serious harm Horn Abbot is suffering. Sarsaparilla responds that a temporary restraining order will work a far greater hardship on it: it will likely go out of business. Its raison d’etre is the book, and if the book goes under, so does it. Even though equitable relief will probably put it out of business, we disagree that its hardship outweighs that of Horn Abbot.

The record clearly shows that DeBartolo and Sarsaparilla fully knew about Horn Abbot’s various intellectual property rights before they published the book. Moreover, they knew, before publication, that Horn Abbot had denied them a license or other approval. To go ahead and publish the book anyhow, virtually copy Horn Abbot’s distinctive trade dress, and then claim that an injunction will put them out of business, is to pervert the meaning of the balance of hardships test. Under Sarsaparilla’s logic, a blatant copyright and trademark infringer would be encouraged to go into an infringing business because it can later argue to a court that enjoining the blatant infringement would sink the business. We cannot accept such reasoning.

We do not mean to suggest that we are wholly unsympathetic to DeBartolo’s plight. If his affidavit is correct, Horn Abbot led him to believe it would license the book, and it induced him to pour a good deal of time and money into developing the book. We do not think, however, these facts, even if true, warrant a defense of estoppel or “unclean hands.” DeBartolo clearly published the book after being told the deal with Horn Abbot was off. Even if DeBartolo had a legitimate grievance with Horn Abbot, the claimed misconduct of Horn Abbot does not justify DeBartolo’s flagrant violation of the trademark and copyright laws. If DeBartolo felt aggrieved by Horn Abbot’s conduct in refusing to proceed with publication in July, his relief should have been sought in the courts. He chose instead to publish on his own and misappropriate Horn Abbot’s trademark and copyright. The law does not condone “self-help” for the victim of one wrong in the form of his commission of another legal violation of his own.

In sum, we conclude that Horn Abbot has demonstrated its need for temporary extraordinary relief. Accordingly, it is ordered that Sarsaparilla Ltd., its officers, agents, servants, employees and attorneys, and defendant Joseph A. DeBartolo, his agents, servants, employees and attorneys, and all persons in active concert or participation with any of the foregoing, including distributors and retailers, who receive actual notice of this Order by personal service or otherwise be, and they hereby are, temporarily restrained from:

1. Making, publishing, reproducing, distributing, selling, offering for sale, advertising or using for commercial purposes, the book entitled “In Further Pursuit of Trivial Pursuit”;

2. Destroying, mutilating, defacing or altering in any way, the documents and things referred to in Plaintiff’s First Request to Defendants, Sarsaparilla Ltd. and Joseph A. DeBartolo, for Production of Documents and Things.

Pursuant to Fed.R.Civ.P. 65(c), plaintiff shall post security in the sum of $500,-000.00 on or before December 5, 1984. A hearing for a preliminary injunction is hereby set for December 17, 1984, at 10:00 a.m. The parties may submit cross-briefs, affidavits and/or other relevant filings on or before December 10, 1984. Reply filings may be filed on or before December 13, 1984. This temporary restraining order shall remain in force for twenty days, unless a preliminary injunction is entered before that time. It is so ordered.

      . The six categories of the Genus Game are Geography, Entertainment, History, Arts and Literature, Science and Nature, and Sports and Leisure.

      . The flyer, which is attached to the complaint, clearly uses the Trivial Pursuit mark along with the ornamental scroll design.

      . Here is one example, taken from page 179 of In Further Pursuit

      A: Elephant Man, The
      Q: What's the better known identity of John Merrick, the noble ogre of Victorian England?
      W: John Merrick lived in England from 1863 to 1890. He was found on exhibition at a freak show by Sir Fredrick Treves, a lecturer on anatomy at a medical college. The British public provided funds to set up a home for the Elephant Man in the back of the hospital. He attracted much attention and was even visited by the Queen. He died in his sleep in his hospital home in 1890, when one night the weight of his head, while in a prone position, crushed his neck.
      This example illustrates that DeBartolo and Sarsaparilla no doubt performed additional research in writing the book.

      . 15 U.S.C. § 1114(1) provides:
      (1) Any person who shall, without the consent of the registrant—
      (a) use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; or
      (b) reproduce, counterfeit, copy, or color-ably imitate a registered mark and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive. shall be liable in a civil action by the registrant for the remedies hereinafter provided. Under subsection (b) of this section, the registrant shall not be entitled to recover profits or damages unless the acts have been committed with knowledge that such imitation is intended to be used to cause confusion, or to cause mistake, or to deceive.

      . We note that Horn Abbot is the owner of the trademark "Trivial Pursuit” and design, Reg. No. 1,236,504 (May 3, 1983), for the playing board, die, rules, question and answer cards, tokens and scoring wedges, sold as a unit for the game. Horn Abbot also has applied for registration of the word mark "Trivial Pursuit.” The valid registration is prima facie evidence of exclusive rights to use the registered mark. 15 U.S.C. § 1115(a). This other prerequisite to relief under § 1114 does not appear to be disputed.

      . For example, as Horn Abbot suggested at oral argument, the game can be “played" with the cards only. A family on a trip might just use the cards and have a contest in the car. A group at a party could simply read from the cards for awhile, without going through the formal board game process. The key point is that the book captures the essence of the game, such that it can be played in numerous other ways, without purchasing the game.

      . J. Ravin, Winning at Trivial Pursuit (1984).

      . A. Bicknell & J. Dentinger, The Boardside Companion to Trivial Pursuit (1984).

      . L. Merkin & E. Frankel, Trivial Conquest: The Smart Reference Source for Trivial Pursuit, The Board Game (1984).

      . Horn Abbot has sued at least one of the books’ publishers, obtaining a settlement in which the publisher agrees to reduce the size of the words “Trivial Pursuit" and change the title. Under the settlement in that case, the offending book's title, see n. 7, supra, will be changed to "Winning at Trivial Pursuit and Other Trivial Games." The distribution of the current edition will end on December 31, 1984. Sarsaparilla argues that this agreement by Horn Abbot demonstrates it does not need emergency relief, since the book there will be distributed until the end of the year. We disagree. The book in that case, as noted above, does not copy the questions and answers of the game. Moreover, its infringement consists only in its magnification of the mark "Trivial Pursuit.” That book did not mimic the colors or trade dress of the game and was far less likely to confuse or deceive the public.

      . With one exception, the other books do not closely resemble the game’s color and dress. Some of the books use the colors of the game's categories, and one, see n. 9, supra, reverses the colors of the game’s background and print. These are a far cry from the book at issue. One book, F.L. Worth, The Trivia Encyclopedia (2d printing, November 1984), does mimic the game’s dress as well as, perhaps even better than, defendants’ book does. Even so, this book does not use the trade name Trivial Pursuit in its title. In any event, the parties tell us that the author of this book has himself sued the creators of Trivial Pursuit for alleged infringement of the copyrighted trivia in that book, originally published in 1974. Counsel for Horn Abbot have informed us that the cover to the book just appeared in the 1984 printing and will likely be the subject of a counterclaim in the other lawsuit. We do not think these facts are relevant to our determination of the issues in this case.

      . Fed.R.Civ.P. 65(b) provides in relevant part:
      Every temporary restraining order granted without notice ... shall expire by its terms within such time after entry, not to exceed ten days, as the court fixes, unless within the time so fixed the order, for good cause shown, is extended for a like period or unless the party against whom the order is directed consents that it may be extended for a longer period— In case a temporary restraining order is granted without notice, the motion for a preliminary injunction shall be set down for hearing at the earliest possible time and takes precedence of all matters except older matters of the same character.
      (Emphasis added). Rule 65(b) does not speak to the situation in this case: the appropriate duration of a temporary restraining order granted with notice and a hearing. A court may not extend a ‘'TRO" indefinitely, even upon notice and a hearing. See Pan Am World Airways, Inc. v. Flight Engineers Int'l Ass'n., 306 F.2d 840 (2d Cir. 1962); 11 C. Wright & A. Miller, Federal Practice & Procedure, § 2853 (1973), at 518. But where, as here, notice has been given and a hearing has been held, the court may in its discretion impose the order for twenty days initially, pending a prompt hearing on a preliminary injunction within that time. See generally Wright & Miller, supra, § 2953 at 520. We note that we have scheduled the preliminary injunction hearing "at the earliest possible time,” since we are presently presiding over a trial that may be in progress until the time of the hearing. Of course, if both parties agree to the further extension of the temporary restraining order, a later hearing date for the preliminary injunction hearing, or perhaps a permanent injunction hearing, will be rescheduled for a date mutually convenient to them.