author: EDELSTEIN, District Judge:

text:
    UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee, The Chase Manhattan Bank, N.A., as Trustee, Sharon Steel Corporation, Inc., UV Industries, Inc. Liquidating Trust, and David Finkelstein, Arthur R. Gralla, Paul Kolton, Theodore W. Kheel, Edwin Jacobson and Martin Horowitz, as Trustees of the UV Industries, Inc. Liquidating Trust, Plaintiffs, v. EXECUTIVE LIFE INSURANCE CO., Occi & Co., Staniels & Co., Nest & Co., Agway Insurance Company and First Missouri Bank & Trust Co., on Behalf of themselves and as representatives of a class of former Holders of 9¼% Senior Subordinated Notes Due April 15, 1987, Mimi Shapiro, Mortimer A. Shapiro, Pacific & Co., Cede & Co. and North Star Oil Company, on Behalf of themselves and as representatives of a class of Holders of 9¼% Senior Subordinated Notes Due April 15, 1987, Butcher & Co., William W. Humphrey, Trustee, and Louis H. Spiner, Trustee, on Behalf of themselves and as representatives of a class of former Holders of 5⅜% Subordinated Debentures Due November 15, 1995, and Bear Stearns & Co., Cede & Co., Julian S. Goldberg, Mericka & Co., Mutual Shares Corp. and Mutual Qualified Income Fund, Saxon & Co., on Behalf of themselves and as representatives of a class of Holders of 5⅜% Subordinated Debentures Due November 15, 1995, Defendants.
    No. 83 Civ. 8723 (DNE).
    United States District Court, S.D. New York.
    April 18, 1985.
    See also 602 F.Supp. 942.

      Carter, Ledyard & Milburn, New York City (Louis L. Stanton, New York City, of counsel), for plaintiff U.S. Trust Co. of New York.
    Dewey, Ballantine, Bushby, Palmer & Wood, New York City (John F. Collins, New York City, of counsel), for plaintiff Chase Manhattan Bank, N.A.
    Donovan Leisure Newton & Irvine, New York City (David S. Versfelt,-New York City, of counsel), for defendant Bear Stearns & Co.
    Tenzer, Greenblatt, Fallon & Kaplan, New York City (William Klein, II, P.C., New York City, of counsel), for defendants Mutual Shares Corp. and Mutual Qualified Income Fund.
    Crystal & Driscoll, P.C., New York City (Stephen L. Crystal, New York City, of counsel), for defendants Mimi Shapiro and Mortimer A. Shapiro.
   MEMORANDUM OPINION AND ORDER

EDELSTEIN, District Judge:

This opinion involves a determination of reasonable attorneys’ fees to the representatives of the prevailing classes in an Ínter-pleader class action.

This class action was brought by the trustees and issuer of bonds under two indentures for the determination of the bondholders’ rights to certain interest payments. The facts giving rise to the inter-pleader action are set forth in this court’s Opinion and Order dated November 20, 1984, United States Trust Co. of N.Y. v. Executive Life Ins. Co., 602 F.Supp. 930 (S.D.N.Y.1984), and the court will not repeat them here. In the November 20th Opinion and Order, this court: (1) granted the motions for summary judgment of the 9V4% Holding Class and the 5%% Holding Class; (2) denied the cross motions for summary judgment of the 9V4% Selling Class and the 5%% Selling Class; (3) awarded the Holding Classes the interest installment funds held by the stakeholders, United States Trust Company of New York (“U.S. Trust”) and The Chase Manhattan Bank, N.A. (“Chase”); (4) awarded the representatives of the two Holding Classes costs, including reasonable attorneys’ fees, to be paid out of the class funds; (5) ordered the representatives of the two Holding Classes to submit fee applications; and (6) ordered the class representatives to send notice to the class members of the court’s decision.

The co-representatives of the 5%% Holding Class are Bear Stearns & Co. (“Bear Stearns”), who were represented in this action by the law firm of Donovan, Leisure, Newton & Irvine (“Donovan Leisure”), and Mutual Shares Corp. & Mutual Qualified Income Fund (“Mutual”), who were represented in this action by the law firm of Tenzer, Greenblatt, Fallon & Kaplan (“Ten-zer Greenblatt”). The representatives of the 914% Holding Class are Mimi Shapiro and Mortimer Shapiro (“the Shapiros”), who were represented in this action by the law firm of Crystal and Driscoll, P.C. (“Crystal”). The representatives of the two Holding Classes have submitted fee applications. The trustees under the indentures and the class members have been provided the opportunity to file objections to the fee applications.

DISCUSSION

1. The Application of the Co-representatives of the 5%% Holding Class.

The total amount of attorneys’ fees sought by the co-representatives of the 5%% Holding Class is $33,685.69. As of March 28, 1985, the 5%% Holding Class fund contained $983,872.28. Letter of Chase, Trustee for the 5%% debentures, dated March 25, 1985. The total attorneys’ fees requested constitutes approximately 3% of the class fund. Bear Stearns seeks $22,956.87, consisting of $19,434.00 in professional services and $3,522.87 in disbursements. Mutual seeks $10,728.82, consisting of $9,416.50 in professional services and $748.82 in disbursements. Chase, the trustee for the 5%% Holding Class, has not objected to the fee applications of the co-representatives.

On March 19, 1985, Doris S. Mermelstein and Milton E. Mermelstein (“the Mermel-steins”), pro se, filed objections to the fee applications of the 5%% Holding Class representatives. The Mermelsteins do not object to the amount requested by the Holding Class representatives, but object to the payment of any legal fees prior to satisfaction of the Mermelsteins’ claims on the 5%% debentures. The Mermelsteins contend that no dispute ever existed that they were entitled to the withheld interest installments at issue in this action, and thus they are entitled to their money, undiminished by attorneys’ fees paid to the class representatives.

The 5%% Selling Class consists of all persons or entities who held of record 5%% debentures on May 5, 1980 and/or November 5, 1980 and/or May 5, 1981, and who subsequently transferred of record 5%% debentures so held. The 5%% Holding Class consists of all persons or entities who held of record as of June 9, 1983, 5%% debentures that were transferred of record by a member of the 5%% Selling Class after May 5, 1980. This action involved a dispute between the Selling Class and the Holding Class as to the entitlement to certain withheld interest payments. The Mermelsteins, however, were not members of either the Selling or the Holding Class, because they beneficially owned their debentures before May of 1980, and did not transfer ownership before June 9, 1983. There was thus never any dispute as to their entitlement to the withheld interest payments. The Mermelsteins contend that their payments are not part of the Holding Class fund and thus should not be diminished by any attorneys’ fees awarded to the Class representatives.

At the hearing held on March 22, 1985, Chase confirmed that the Mermelsteins were beneficial owners of the 5%% debentures throughout the disputed period, and were at all times entitled to the withheld interest. Transcript of Proceedings of March 22, 1985 (“Tr.”), at 12-13. Accordingly, the Mermelsteins’ share of the interest fund is not to be diminished by any attorneys’ fees awarded to the co-representatives of the 5%% Holding Class. No other objections to the fee applications of the co-representatives of the 5%% Holding Class have been filed. The court finds the attorneys fees requested by the co-representatives of the 5%% Holding Class to be reasonable. Donovan Leisure and Tenzer Greenblatt worked together on the motions for summary judgment. This arrangement produced legal memoranda that were among the best, in terms of legal reasoning and research, of all the firms that appeared on the motions. Donovan Leisure has submitted a detailed and clearly written summary of the work performed by its attorneys and the hourly rates charged. Tenzer Greenblatt has submitted photocopies of its time records. The hourly rates charged by each firm are reasonable. The highest rate is $250.00 per hour, charged by William Klein II of Tenzer Greenblatt, a senior partner, who graduated Yale Law School in 1943. The hourly rate of $250.00 is certainly at the higher end of the range of prevailing market rates. However, Mr. Klein only billed 13 out of the 77 hours billed by his firm. Moreover, it appears from the time records submitted that the work performed by Mr. Klein deserves compensation at senior partner rates. The remaining attorneys for Donovan Leisure and Tenzer Greenblatt charged hourly rates ranging from $72.00 per hour for a first year associate, to $160.00 per hour for a first year partner. Since December of 1983, Donovan Leisure’s attorneys spent 177.5 hours on this case. Donovan Leisure also has submitted a listing of contemporaneous time records, describing the work done by each attorney. These records reflect the firm’s consciousness of the need to economize its efforts and to distribute work in accordance .with an attorney’s level of expertise. Accordingly, the application of the co-representatives of the 5%% Holding Class is granted.

2. The Application of the Representatives of the 974% Holding Class.

The Crystal firm has requested $200,000.00 in attorneys’ fees and $2,238.75 in disbursements. As of March 25, 1985, the 974% Holding Class fund contained $2,409,764.26. Thus, Crystal requests approximately 9% of the class fund in attorneys’ fees. U.S. Trust, the Trustee for the 97i% notes, has filed objections to Crystal’s fee application. The application filed February 8, 1985 is inadequate in the following respects: (1) it seeks attorneys’ fees grossly disproportionate to the fees requested by the representatives of the 5%% Holding Class; (2) it fails to provide adequate background information of the Crystal firm; (3) the time records submitted in support of the fee application are illegible, see in re Continental Illinois Securities Litig., 572 F.Supp. 931, 934 (N.D.Ill.1983) (“description of the work done should be sufficient to demonstrate that it benefitted the class or contributed to the recovery of the common fund”); and (4) the application seeks payment of the same hourly rate to an attorney regardless of the complexity of the work performed, see id. at 933 (“Senior partner rates are to be paid only for work that warrants the attention of a senior partner.”).

The amount requested by Crystal is approximately six times that requested by the co-representatives of the 5%% Holding Class. Although the 974% fund is substantially larger than the 5%% fund, Crystal has requested approximately 9% of the 97% fund, while the representatives of the 5%% class have only requested approximately 3% of their fund. Moreover, the fact that the 97% is substantially larger than the 5%% fund is not due to the legal efforts of the Crystal firm; the court finds that the services required of the representatives of the 5%% Holding Class and the 9V4% were substantially similar.

Crystal contends that it should be awarded a loadstar multiplier of 2lk because it took this case on a contingency, and thus undertook a substantial risk of nonpayment. Neither the Donovan Leisure firm, nor the Tenzer Greenblatt firm has requested any bonus, such as a loadstar multiplier. A multiplier is not warranted in this case, because plaintiffs’ attorneys were not required to take the substantial risks in prosecuting this action that have been present in actions where multipliers have been awarded. Because of the inter-pleader nature of this action, there was never a question as to the availability of the funds. Moreover, this case involved relatively simple issues of contract interpretation. Plaintiffs’ counsel did not have to build an entire case, conduct discovery, and prove damages. This was a “paper case,” which did not involve the uncertainty of a jury’s verdict. See Beazer v. New York City Transit Auth., 558 F.2d 97, 100 (2d Cir.1977) (district court’s grant of bonus reversed where legal issues involved were simple and few). While there are, of course, risks involved in the prosecution of any action, the risks involved in this case were minimal and predictable. Accordingly, the application for a bonus is denied.

The loadstar amount requested by the Shapiros is $82,684.00. U.S. Trust also objects to this amount as excessive. The amount is more than twice the combined request of Donovan Leisure and Tenzer Greenblatt. The time spent by the Crystal firm was 440.6 hours, as compared with the combined total of 260.6 hours spent by Donovan Leisure and Tenzer Greenblatt. This gross disparity is unjustifiable, particularly in view of the fact that Crystal came into this action with the advantage of being “fully familiar with all aspects of the facts underlying this action” from its prior representation in related state court litigation. Affidavit of Stephen L. Crystal, February 8, 1985, at ¶ 4. Moreover, although the papers submitted by the Crystal firm in support of the motion for summary judgment were competent, they did not reach the quality of those submitted by the co-representatives of the 5%% Holding Class.

Crystal contends that the difference in hours spent is due to the fact that only the Shapiros, the representatives of the 9V4% Holding Class, asserted a counterclaim against U.S. Trust for an accounting. This counterclaim was withdrawn- after U.S. Trust provided the Shapiros with the information sought, concerning the investments made and the interest earned on the monies withheld. The court finds that the counterclaim was unnecessary, and that its objectives could have been achieved by use of more cost-efficient measures. Any reluctance of U.S. Trust to provide this information could have been speedily resolved by a short conference with the court. Moreover, U.S. Trust eventually would have been obligated to supply the court with this information on the motion for summary judgment. In any event, because the time records submitted by the Crystal firm are, for the most part, illegible, the court cannot determine the amount of hours spent by Crystal in preparing the counterclaim. Accordingly, Crystal’s justification for the disparity in hours billed is rejected.

Crystal has not otherwise properly supported its application. Stephen Lee Crystal, a senior partner, billed for 268.4 hours of work, which is three hours more than the hours billed by Donovan Leisure and Tenzer Greenblatt combined. Mr. Crystal charged $250.00 per hour, a rate for which the court has already stated its reservations. The time records submitted in support of these hours and this rate can only be described as hieroglyphics. See Exhibits A & C to Application for Counsel Fees and Expenses of the 9V4% Holding Class.

At the hearing held on March 22, 1985, the court informed Mr. Crystal that its fee application was deficient and provided Mr. Crystal with the opportunity to submit a revised fee application' that the court “would find a little more consistent in light of my comments, ...” Tr. at 17. On April 10, 1985, Crystal submitted a “supplement” to the previous fee application, in which the firm did not change its request, but persisted that it was entitled to a $200,000.00 fee, based on a loadstar of $82,684.00. Moreover, Crystal has not taken advantage of the opportunity provided by the court to submit legible time records.

A requested loadstar amount may be reduced when the number of hours spent appears excessive. DiFilippo v. Morizio, 759 F.2d 231, 235-236 (2d Cir.1985). In view of the comparably few hours spent by the other firms in this action, Crystal’s prior familiarity with the facts of this case, and Crystal’s failure to provide legible time records to' the court after being given a second opportunity to do so, the court finds that the hours spent by Crystal were excessive and that the loadstar amount should be reduced. In reducing the loadstar amount the court is unable to arrive at a mathematically precise figure. The Court is mindful that “[wjhere a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee.” Hensley v. Eckerhart, 461 U.S. 424, 435, 103 S.Ct. 1933, 1940, 76 L.Ed.2d 40 (1983). However, the attorney bears the burden of establishing that the fee charged is reasonable. Crystal has not sustained its burden. In reducing the loadstar amount, the court notes that the Crystal firm billed 40% more hours than the attorneys for the 5%% Holding • Class. The court does not require the hours billed to be identical, but in view of the substantial similarity of the services required, they must at least be similar. Accordingly, the court finds, based on all the proceedings herein that _ Crystal’s loadstar amount should be reduced by one-third. Crystal is therefore awarded $54,571.44 in attorneys’ fees. Crystal request for $2,238.75 in disbursements is granted.

CONCLUSION

The Mermelsteins are to be paid the amounts they are entitled to as set forth in Chase’s letter to the court of March 25, 1985, and that this payment is not to be diminished by any attorneys’ fees awarded in this action. The trustees are to pay the interest installments, free of attorneys’ fees, to all persons, similarly situated to the Mermelsteins, who beneficially owned either 9V4% notes or 5%% debentures before and throughout the disputed periods and who have so notified the trustees of such status before the date of the entry of this order.

The application of Bear Stearns & Co. for $22,956.87 in attorneys’ fees and disbursements is granted. The application of Mutual Shares Corp. & Mutual Qualified Income Fund for $10,728.82 in attorneys’ fees and disbursements is granted. The application of the Crystal firm for $200,000.00 in legal fees is denied. Crystal is hereby awarded $56,810.19 in attorneys’ fees and disbursements.

All attorneys’ fees and disbursements are to be paid out of the respective class funds. Each class member is to pay a pro rata share of the fee and have that amount deducted by the trustee from his/her award. Final judgment is hereby entered in favor of the 9V4% Holding Class and the 5%% Holding Class. The trustees shall disburse the withheld interest installments in accordance with the terms of this opinion and order.

      . Chase asserts that the interest installments were not distributed to the Mermelsteins earlier because the bonds were held in street name. Although the Mermelsteins remained beneficial owners of the bonds throughout the disputed period, the record owners of the bond transferred ownership during that period. Chase states that it "made every effort prior to the commencement of the interpleader action to work with brokers and identify people in [the Mer-melstein's] category. Many were identified and paid out.” Tr. at 11. For example, on May 2, 1984, this court ordered that Massachusetts Mutual Life Insurance Company be paid its with: held interest installments because it was a beneficial owner of the bonds prior to May 5, 1980 and held continuously until the bonds were redeemed on June 10, 1983. Chase, however, was not able to locate all the beneficial owners entitled to the interest installments, such as the Mermelsteins.

      . The same order is applicable to the 9'/t% notes. However, no continuous beneficial owners of the 9VM notes have come forward to assent their status.
      At the March 22, 1985 hearing, Chase stated that it "suspect[s] that there are a few others in that category still, in addition to the Mermel-steins_” Tr. at 12. According to Chase, however, it would be very costly and time consuming to attempt to identify these beneficial owners. The interest of the class members weighs in favor of speedy distribution of the interest installments, rather than delaying distribution to identify the remaining "Memelstein”-type holders. Although there will be "Mermelstein”type holders required to pay attorneys’ fees, those fees will only constitute a miniscule proportion of the bondholders' awards. By trying to avoid this small loss, the trustees would inevitably inflict a harsher burden on the bondholders by further delaying the distribution of the withheld interest payments. Accordingly, only those bondholders who have come forward as of the date of this opinion and asserted their "Mermelstein” status will be awarded their interest installments free of their proportionate share of attorneys’ fees.

      . U.S. Trust, the Trustee, still objects to the Shapiros’ application, letter dated April 12, 1985.

      . This amount brings the proportion of attorneys’ fees to class funds for each debenture closer to equivalency.


source: Caselaw Access Project

author: CARRIGAN, District Judge.

license: Public Domain

text:
    James R. MILTON, Plaintiff, v. Robert R. WILSON, Keith Newbold, Al H. Haas and A. Bailey Potter III, Defendants.
    No. 84-C-2295.
    United States District Court, D. Colorado.
    April 18, 1985.
    James R. Milton, pro se.
    Michael McLachlan, Durango, Colo., for defendants Keith Newbold and A. Bailey Potter, III.
    William F. Eggert, Denver, Colo., for defendants Robert Wilson and Al H. Haas.
   ORDER

CARRIGAN, District Judge.

James R. Milton, pro se, seeks damages for violation of 42 U.S.C. §§ 1983, 1985 and 1986. Defendant A. Bailey Potter III is being sued by Milton in La Plata County District Court, Case No. 84 CV 138. Defendant Keith Newbold is Potter’s attorney in that action. Defendants Robert R. Wilson and Al H. Haas are Colorado District Court judges. Plaintiff has alleged that the defendants conspired to deprive him of his rights to jury trial, speedy trial, property, due process, and equal protection of the laws. Jurisdiction is founded on 28 U.S.C. § 1343. Defendants have moved to dismiss, under Fed.R.Civ.P. 12(b)(6), on the ground that Milton has failed to state a claim upon which relief can be granted.

Plaintiff’s claims under 42 U.S.C. §§ 1985 and 1986 must be dismissed. In order to state a claim under 42 U.S.C. § 1985, one must allege a “racial, or perhaps otherwise class-based, invidiously discriminatory animus behind the conspirators’ action.” Griffin v. Breckenridge, 403 U.S. 88, 102, 91 S.Ct. 1790, 1798, 29 L.Ed.2d 338 (1970). Milton has alleged no such racial animus. The claim under § 1986 is dependent on the existence of a claim under § 1985 and, therefore, it also fails. Brown v. Chaffee, 612 F.2d 497, 502 (10th Cir.1979).

Plaintiff’s claim under § 1983 must also be dismissed because the complaint is devoid of any factual allegations supporting this claim. Plaintiff merely asserts bald conclusions that the defendants have conspired to deprive him of certain constitutional rights. Although a pro se complaint must be construed as liberally as possible, White v. Commissioner of Internal Revenue, 537 F.Supp. 679 (D.Colo.1982), every § 1983 plaintiff must satisfy minimum pleading requirements. In Sooner v. McBride, 708 F.2d 510, 512 (10th Cir.1983), the Tenth Circuit stated:-

“When a plaintiff in a § 1983 action attempts to assert the necessary ‘state action’ by implicating state officials or judges in a conspiracy with private defendants, mere conclusory allegations with no supporting factual averments are insufficient; the pleadings must specifically present facts tending to show agreement and concerted action. Clulow v. Oklahoma, 700 F.2d 1291, 1303 (10th Cir.1983). The standard is even stricter where the state officials allegedly involved in the conspiracy are immune from suit, as are the state court judges here. Shaffer v. Cook, 634 F.2d 1259, 1260 (10th Cir.1980) (per curiam), cert. denied, 451 U.S. 984, 101 S.Ct. 2316, 68 L.Ed.2d 840 (1981); Norton v. Liddel, 620 F.2d 1375, 1380 (10th Cir.1980).”

Milton filed on January 10, 1985 a response to the defendants’ motions to dismiss in which he revealed the facts underlying his claims. He states that defendants Potter and Newbold filed in La Plata County District Court, Case No. 84 CV 138, a motion for continuance of trial from December 5, 1984 to April 1, 1985. Judge Wilson granted that motion. In paragraph 4 of the motion to continue, Newbold stated:

“There is currently pending in the Supreme Court of the State of Colorado a Petition for Relief in the Nature of Prohibition and/or Mandamus pursuant to Colorado Appellate Rule 21. Said petition requests that the Plaintiff not be allowed to proceed with any actions in the State Courts of Colorado without legal representation. Defendant believes it would be appropriate for the Supreme Court to issue a ruling on said Motion prior to the commencement of a jury trial in this Court.”

Milton asserts in his response that this statement is false. Assuming for purposes of the motions to dismiss that paragraph 4 is in fact untrue, Milton has not made out a claim under § 1983. Judge Wilson is immune from damages under § 1983 because the decision to continue a jury trial is clearly within the scope of his judicial responsibilities. He did not act “in the clear absence of all jurisdiction.” Stump v. Sparkman, 435 U.S. 349, 98 S.Ct. 1099, 55 L.Ed.2d 331 (1978). Plaintiff failed to allege any facts indicating that Judge Haas had anything to do with the motion to continue. As for defendants Newbold and Potter, the filing of the motion to continue in and of itself was not an action under color of state law; moreover, no facts are alleged showing that Newbold and Potter conspired with the judges so as to bring their actions under color of state law. Therefore, even if the plaintiff alleged in his complaint the facts he has asserted in his response to the motion to dismiss, all his claims would still be subject to dismissal under Rule 12(b)(6).

Accordingly,

IT IS ORDERED that the complaint and action are dismissed.

The defendants have requested an order requiring the plaintiff to pay their attorneys’ fees and costs. A hearing on this request will be held in this court on May 31, 1985 at 2:00 p.m. Any party may file a brief not over 10 pages long provided it is filed at least 72 hours before the hearing.


author: FLANNERY, District Judge.

text:
    I.A.M. NATIONAL PENSION FUND, BENEFIT PLAN A, et al., Plaintiffs, v. MONAL MANUFACTURING CO., INC., Defendant.
    Civ. A. No. 84-2776.
    United States District Court, District of Columbia.
    April 18, 1985.
    Robert T. Osgood, Washington, D.C., for plaintiffs.
    No Response by defendant to Complaint — default filed.
   MEMORANDUM ORDER

FLANNERY, District Judge.

This matter comes before the court on plaintiffs’ motion to vacate, alter or amend this court’s Order and Judgment of March 6, 1985, which granted plaintiffs’ motion for judgment on default with a reduction of plaintiffs’ requested liquidated damages. After reexamination of the statutqry provision in question and its legislative history, plaintiffs’ motion will be denied.

Under 29 U.S.C. § 1132(g)(2)(C)(ii), plaintiffs are entitled to “liquidated damages provided for under the plan in an amount not in excess of 20 percent (or such higher percentage as may be permitted under Federal or State law) of the amount [of unpaid contributions] determined by the court under subparagraph (A).” The pension plan under which plaintiffs brought this claim provides for liquidated damages in an amount equal to the greater of $25 or one percent of the unpaid contribution for each full calendar month the contribution remains unpaid. At $25 per month, plaintiffs calculate that they would now be entitled to $550 in liquidated damages for the contribution due since March 1983, and $525 in liquidated damages for the contribution due since April 1983. That amount is, however, far in excess of twenty percent of the $504 in unpaid contributions to which the court found that plaintiffs were entitled. Because plaintiffs had not cited any federal or state law permitting a higher percentage of unpaid contributions as liquidated damages, the court awarded $100.80 as liquidated damages, which is equal to twenty percent of the amount of unpaid contributions.

Plaintiffs contend that under the law of the District of Columbia, liquidated damages are not limited to a percentage of the amount of actual damages found at the time of the breach. Therefore, they argue, District of Columbia law permits an award of liquidated damages in excess of twenty percent of the amount of unpaid contributions.

The state common law regarding liquidated damages is unlikely, however, to be helpful in determining whether liquidated damages in excess of twenty percent of unpaid contributions may be awarded under section 1132. Instead, the court concludes that the phrase “Federal or State law” refers not to the state common law regarding liquidated damages generally awardable under a contract, but to federal or state laws regarding remedies available for delinquent multiemployer pension plan contribu.tions. This conclusion is supported by both the statutory language and the legislative history cited by plaintiffs, as well as by the function of liquidated damages under the common law.

The limited legislative history of the enforcement provision of section 1132 provides that

in the case of a civil action by any person to collect delinquent multiemployer plan contributions, regardless of otherwise applicable law, the court before which the action is brought may award the plaintiff (1) reasonable attorneys fees, (2) court costs, and (3) liquidated damages not to exceed 20 percent of the amount of delinquent contributions as determined by the court. However, these items are to be awarded to a plaintiff only to the extent that the multiemployer plan in question provided for such an award. The bill preempts any State or other law which would prevent the award of reasonable attorneys fees, court costs or liquidated damages or which would limit liquidated damages to an amount below the 20 percent level. However, the bill does not preclude the award of liquidated damages in excess of the 20 percent level where an award of such a higher level of liquidated damages is permitted under applicable State or other law. The Committee amendment does not change any other type of remedy permitted under State or Federal law with respect to delinquent multiemployer plan contributions.

H.R.Rep. No. 869, Pt. II, 96th Cong., 2d Sess. 48-49, reprinted in 1980 U.S.Code Cong. & Ad.News 2993, 3037-3038 (emphasis added). The import of this discussion is that Congress intended to supersede any state laws or other federal laws which might be designed or construed to limit a penalty for failure to make timely contributions to a multiemployer pension plan to an amount below twenty percent of unpaid contributions. Although a twenty percent “cap” was imposed on penalties that could be imposed by a plan, Congress left the states free to raise that cap. The “State or other law” to which courts are.to look in determining whether that cap has been raised is not the state’s common law on liquidated damages, however, but instead state laws regarding remedies “with respect to delinquent multiemployer plan contributions.”

This interpretation is not only consistent with the language of the statute, but its validity is reinforced by the fact that adopting plaintiffs’ position would render the twenty percent limitation a nullity. ERISA sets up a scheme which suggests the inapplicability of the common law standard. Plaintiffs are correct, of course, that the common law of the District of Columbia does not preclude parties from agreeing to liquidate damages in an amount exceeding twenty percent of the actual damages found at the time of the breach. Under common law, liquidated damages are a substitute for actual damages, when it appears at the time the contract is made that the injury that will be caused by breach will be difficult to estimate. See, e.g., A. Corbin, Corbin on Contracts (1964) § 1060. A limitation on liquidated damages to twenty percent of the amount of actual damages would vitiate the purpose for which parties agree to liquidate damages in advance, since parties would never agree to liquidate damages at an amount less than twenty percent of the damages they would actually suffer in the event of a breach. Accepting the common law rule on liquidated damages would render the twenty percent cap imposed by Congress meaningless because the common law never will limit liquidated damages to twenty percent of actual damages—and will thus always permit liquidated damages in an amount greater than twenty percent of the amount of actual damages as determined at the time of breach.

Further, under common law liquidated damages must represent a genuine pre-estimate by the parties of the extent of injury that will be caused by a future breach, Corbin §§ 1159-60, and will not be enforced if intended by the parties to secure performance by imposing a penalty in excess of the actual loss likely to be sustained. See, e.g., L. Simpson, Contracts (1965) at 399. Under section 1132(g)(2)(C), however, liquidated damages are intended as a penalty for untimely payment of contributions due under the pension plan as a means to enforce prompt payment, since they are paid in addition to, and not instead, of, the amount of unpaid contributions. See 29 U.S.C. § 1132(g)(2)(C)(ii); 1980 U.S. Code Cong. & Ad.News 2918, 3037-3038. These two factors—the absence of any limitation on liquidated damages in relation to actual damages so long as the liquidated damages are a good-faith pre-estimate of damages that will result from a breach, and the unavailability of liquidated damages as a penalty for nonperformance— demonstrate that the availability of liquidated damages at common law is irrelevant in determining the amount of liquidated damages available under section 1132.

In sum, the court finds that plaintiffs’ position is unsupported by either logic or the legislative history of section 1132. The “liquidated damages” contemplated in section 1132 are quite unlike liquidated damages permitted, under the common law. The court holds that absent a provision in federal or state law specifically permitting a higher percentage of unpaid contributions as liquidated damages for nonpayment of required contributions under a multiemployer pension plan, liquidated damages ordered under section 1132(g) (2)(C)(ii) may not exceed twenty percent of the amount of unpaid contributions.

Therefore, upon consideration of plaintiffs’ motion to vacate, alter or amend this court’s Order and Judgment of March 6, 1985, it is, by the court this 18th day of April, 1985,

ORDERED that plaintiffs’ motion is denied.

      . Plaintiffs quote two sentences from an unidentified “Senate Committee Report” in support of their position. It appears, however, that no Senate Report was submitted with this legislation. 1980 U.S.Code Cong. & Ad.News 2918, 2918. The court assumes that plaintiffs were referring to H.R.Rep. No. 869, 96th Cong., 2d Sess., in which language identical to that quoted by plaintiffs appears.


author: McMILLAN, District Judge.

text:
    Nelda F. RUSHING, S.S. # [ XXX-XX-XXXX ], Plaintiff, v. Margaret M. HECKLER, Secretary, United States Department of Health and Human Services, Defendant.
    No. C-C-83-177-M.
    United States District Court, W.D. North Carolina, Charlotte Division.
    April 18, 1985.
    Douglas Stuart Sea, Legal Services of Southern Piedmont, Inc., Charlotte, N.C., for plaintiff.
    Richard S. Poe, Asst. U.S. Atty., Charlotte, N.C., for defendant.
   ORDER DENYING PLAINTIFF’S MOTION FOR FURTHER RELIEF

McMILLAN, District Judge.

Plaintiff Nelda F. Rushing initially was determined by the Social Security Administration to have become disabled on July 14, 1978, and payment of benefits was commenced. By letter dated November 20, 1981, she was informed that her disability was determined to have ceased in October, 1981, and her payments were discontinued. She appealed the termination of disability benefits and, on August 5, 1982, appeared at a hearing before an administrative law judge (AU) who on August 24, 1982, found that plaintiff has sufficient residual functional capacity to do at least light work and upheld the termination of benefits. Following Appeals Council action upholding the AU’s determination, plaintiff filed this action pursuant to 42 U.S.C. § 405(g) for review of the Secretary’s decision to terminate benefits.

On September 14, 1983, this court remanded the case to the Secretary for the following reasons: (1) The Secretary’s decision was not supported by substantial evidence because the AU incorrectly discounted the evidence from the plaintiff’s treating physician that plaintiff “is obviously, totally disabled”; and (2) the Secretary failed to consider the effects of plaintiff’s chest pains on her ability to do substantial gainful activity. The case was remanded with instructions to conduct proceedings consistent with the order and to allow plaintiff to present additional evidence, including testimony before the AU.

On January 9, 1985, over a year and four months after remand, plaintiff filed a “motion for further relief” in which she stated that after the court’s remand in September, 1983, the Appeals Council did not remand the case to an AU for over six months, until March 22, 1984. On July 2, 1984, the AU issued a recommended decision fully favorable to the plaintiff. The AU apparently found that plaintiff’s psychiatric impairment meets or equals a listing in the regulations.

As of January 9,1985, the Appeals Council had not acted either to adopt or to reject the AU’s recommended decision. Instead, on November 21, 1984, defendant sent plaintiff a notice that her case would once again be reviewed pursuant to the Social Security Disability Benefits Reform Act of 1984 and gave her the option of electing receipt of interim benefits. Plaintiff has not elected interim benefits because she objects to defendant’s failure to act immediately on her case in accordance with this court's remand order of September, 1983.

The Social Security Disability Reform Act of 1984 (“the 1984 Act”) was drafted and passed for the explicit purpose of providing “for necessary reforms in the administration of the social security disability insurance program.” Congress directed its attention to the program “primarily because of the numbers of beneficiaries whose benefits have been terminated.” House Report No. 98-618, “Purpose and Scope” reprinted in U.S. Code Congressional and Administrative News, 3038 at 3039 (December, 1984). The purpose of the new legislation was to benefit disability claimants by insuring “that no beneficiary loses eligibility for benefits as a result of careless or arbitrary decision-making by the Federal government” and by providing “a more humane and understandable application and appeal process for disability applicants and beneficiaries appealing termination of their benefits.” Id. A “more humane and understandable” appeals process would produce prompt decisions.

The 1984 Act instituted new standards for termination of benefits by the Secretary. Section 2(d)(2)(C) of the 1984 Act provided that the amendments setting out these standards shall apply to (and require remand of)

determinations with respect to which a request for judicial review was pending on September 19,1984, and which involve an individual litigant....

and which were “actions relating to medical improvement.”

Additionally, Section 2(d)(4) of the 1984 Act requires that whatever decision is made by the Secretary on a case remanded pursuant to the 1984 Act is to be regarded as a “new decision” on the claim for benefits. Any review of that new decision in this court may be sought only after conformance with the administrative requirements of the Social Security Act and regulations and by filing a new complaint pursuant to the requirements of 42 U.S.C. § 405(g).

What Congress meant by “determinations with respect to which a request for judicial review was pending on September 19, 1984” is not explained in the act itself or in the legislative history. However, case law of this circuit on a related question and the broad nature of the 1984 Act itself lead this court to the conclusion that this case was “pending” under the meaning of Section 2(d)(2)(C) on September 19, 1984.

Under decisions of this Circuit, “remand orders in Social Security cases are not final, appealable orders.” Guthrie v. Schweiker, 718 F.2d 104, 106 (4th Cir.1983). Though Guthrie dealt specifically with the finality requirement for application for attorney fees under the Equal Access to Justice Act, the reasoning of the case indicates that cases which have only been remanded remain “pending” on the district court docket, awaiting the subsequent filings required of the Secretary under 42 U.S.C. § 405(g). Those filings not having been made as of September 19,1984, the original request for judicial review was still “pending” in the administrative-judicial bureaucracy on that date.

Given the Secretary’s extended delays in acting on this court’s September, 1983, remand order, this may appear to be an unjust result in this particular case. However, the broad nature of the categories covered by the statutory requirement of remand appear to mandate such a result. Judge DuPree and Judge Richard Ervin, two well respected district judges of this Circuit, have already so ruled. Gaskins v. Heckler, No. 83-44-CIV-7 (E.D.N.C., January 10, 1985); Nelson v. Heckler, No. C-83-362-R (M.D.N.C., January 14, 1985).

In addition, this case meets the second requirement because it is an action “relating to medical improvement.” Although the court’s 1983 remand and the filings prior to that remand did not explicitly address the issue of “medical improvement,” the AU whose decision was being reviewed made findings that the plaintiff’s disability had “ceased.” Such a finding requires an evaluation of “medical improvement.”

In summary, the court finds reluctantly that this case is one which must be remanded according to the dictates of the Social Security Disability Benefits Reform Act of 1984, because the case is one as to which “a request for judicial review was pending on- September 19, 1984,” and is an action relating to medical improvement.

The court points out, however, that it has been over three years since plaintiff’s benefits were terminated; a year and a half since this court found that the plaintiff’s treating physician’s opinion that plaintiff is “obviously, totally disabled” was supported by clinical and laboratory findings throughout the record; and over six months since the Secretary’s own AU found that plaintiff’s impairment meets or equals a listed impairment and recommended that her disability benefits be reinstituted.

The court reminds plaintiff that some of the harm to plaintiff may be allayed by immediate acceptance of the Secretary’s offer of interim benefits. However, the court urges the Secretary to act with deliberation and speed in reaching a final decision.

IT IS THEREFORE ORDERED that plaintiff’s motion for further relief is DENIED.


author: BELLONI, District Judge:

text:
    Israel FRAGA and Patricia Fraga, By and Through their legal Guardian, and next Friend, Carmen FRAGA, Jose Fraga, and Dionisio Carrasco, By and Through his mother and next friend, Magdalena Carrasco, Maria Reyna and Joaquin Gutierrez, individually and on Behalf of all others similarly situated, Plaintiffs, v. William F. SMITH, Alan C. Nelson, and Robert Krueger, each in his official capacity as officers of the United States, Defendants.
    Civ. No. 82-1148-BE.
    United States District Court, D. Oregon.
    April 19, 1985.

      D. Michael Dale, Oregon Legal Services Corp., Ontario, Or., Ira R. Zarov, Oregon Legal Services Corp., Portland, Or., Richard Ginsburg, Ginsburg, Gomez & Neal, Hillsboro, Or., for plaintiffs.
    Charles H. Turner, U.S. Atty., Craig J. Casey, Asst. U.S. Atty., Portland, Or., for defendants.
   OPINION

BELLONI, District Judge:

This case is currently before me on cross-motions for summary judgment. Upon review of the record, I find that the plaintiff class should be decertified as to some issues, but that partial summary judgment in favor of plaintiffs is appropriate on certain other issues.

Background

Plaintiffs brought this class action seeking declaratory and injunctive relief for delays in processing N-600 applications for certificates of citizenship. Plaintiffs claim they are foreign-born children of United States citizens. If certain residence and familial relationship requirements are met, plaintiffs are legally citizens of this country. To obtain proof of their citizenship, plaintiffs must apply to the United States Immigration and Naturalization Service (“INS”) for a certificate of citizenship on an N-600 application form. The plaintiff class consists of those persons whose N-600 applications have been pending for more than 90 days. The defendants are officers of the United States Department of Justice and the United States Immigration and Naturalization Service.

To understand the issues raised in this case, it is necessary to briefly review the procedure used by INS in evaluating N-600 applications. The parties agree that an N-600 applicant has the burden of establishing his entitlement to a certificate of citizenship by a preponderance of the evidence. The parties also agree on the basic procedure followed by INS in reviewing an N-600 application. When an N-600 application is filed in Portland, it is routed to the file room, and then on to an applications clerk in the Adjudications Section. The clerk checks to assure that the fee is paid and that all required documents are included with the application. This preliminary screening process takes approximately 20-30 minutes.

If the applications clerk determines that all documents are present, the application is filed for scheduling and examination. If further documentation is required, the applicant is requested to furnish those documents. If the applicant is requested to submit a document and does not do so, the case may be closed administratively for failure to prosecute. If the missing document may be found in another existing file, INS will attempt to obtain the file itself. In rare instances, INS may request an investigation into one or more elements of the applicant’s eligibility. Delays of 6 months to a year are common when a file has been requested from another office of INS, and in some cases even longer delays are experienced.

Once the applications clerk determines that the application is complete, the next step in adjudicating the application is an examination by an INS officer. The examination takes between 45 minutes and an hour. The purpose of the examination is to question the applicant to assure that he is the person named in the application and that his oral testimony is consistent with the documentary evidence submitted.

If the application is ready for a final recommendation at the conclusion of the examination, the examiner recommends approval or denial. The application is then submitted to the District Director who will usually concur with the examiner’s recommendation. If an N-600 application is formally denied, the applicant may appeal administratively to the Associate Commissioner for Examinations. If the administrative appeal is unsuccessful, an applicant may file an action in the United States District Court.

At Portland INS, the examiner will usually not deny the application; instead, if the examiner feels that the applicant has not met the burden of showing entitlement to the certificate, the examiner will request the applicant to submit additional proof. If the additional proof is not submitted, the application may then be administratively closed, without prejudice. Portland INS administratively closes cases vjdien applicants fail to provide “primary” evidence of facts necessary to prove citizenship, without ever advising applicants that other “secondary” evidence is also admissible. (Primary evidence includes e.g. birth certificates and marriage certificates; secondary evidence includes baptismal records, school records, employment records, etc.). During the fiscal years 1978 through 1983, 87.3% (1594) of the applications for certificates of citizenship received in the Portland INS office were approved,'' 0.4% (7) were denied, and 12.3%- (224) were closed administratively.

Plaintiffs contend INS has unreasonably delayed action on their applications. Plaintiffs also contend that the manner in which INS processes N-600 applications has denied plaintiffs adequate procedural safeguards. Plaintiffs claim that the procedures used by INS and the lengthy delays in issuing decisions on N-600 applications violate the requirements of the Administrative Procedure Act, 5 U.S.C. § 551 et seq. (“APA”), the Immigration and Nationality Act of 1952, 8 U.S.C. § 1101 et seq. (“INA”), and regulations issued under the INA, as well as the Due Process Clause of the Fifth Amendment.

Plaintiffs contend that because they have not been granted certificates of citizenship, and thus are unable to prove their citizenship, they have been denied public benefits such as unemployment compensation and food stamps, and they have been denied opportunities to work. In addition, plaintiffs claim they have been denied many of the rights of U.S. citizenship, such as the right to vote, to sit on juries, and to petition for immigration benefits for their relatives. Plaintiffs have requested the following relief:

1. Within 30 days of receiving an N-600 application, INS should screen the application for completeness and notify the applicant either of any deficiencies in the application and steps needed to complete it, including acceptable sources of secondary evidence, or of a scheduled appointment for examination for the application (which need not be held within the 30-day period).
2. INS should grant, deny, or close 80% of all N-600 applications within 180 days of receipt of the applications. In cases which remain open more than 180 days after filing, INS should within the 180-day period, advise each applicant in writing of the grounds upon which the application cannot yet be approved, or of the steps needed to complete adjudication of the application, and of the applicant’s right to request a final appealable decision based on the evidence currently before INS. Within 60 days of the applicant’s request for a final decision, INS should issue an appealable decision in such cases.
3. Closure of a case should be regarded as an appealable, final decision. The decision to close a case administratively should be reached by the District Director in the same manner as a decision denying an application.
4. Whenever the examiner reaches a decision to recommend denial or closure of an application, the examiner should prepare a written proposed decision with the findings of fact based upon the evidence in the applicant’s file, and conclusions of law. This recommendation and any adverse evidence should be shared with the applicant, and the applicant afforded an opportunity for rebuttal, prior to the District Director’s final decision in the case.

Unreasonable Delay

The INA provides that upon presentation of adequate proof, an applicant “shall be furnished by the Attorney General with a certificate of citizenship ...” 8 U.S.C. § 1462 (emphasis added). This language implicitly requires INS to process N-600 applications with reasonable promptness. In addition, APA § 566(b) provides in relevant part:

“With due regard for the convenience and necessity of the parties or their representatives and within a reasonable time, each agency shall proceed to conclude a matter presented to it.”

Similar statutory provisions have been held to require the Social Security Administration to provide hearings and Appeals Council reviews within a reasonable time. See Wright v. Califano, 587 F.2d 345 (7th Cir.1978); White v. Mathews, 559 F.2d 852 (2nd Cir.1977), cert. denied 435 U.S. 908, 98 S.Ct. 1458, 55 L.Ed.2d 500; Caswell v. Califano, 583 F.2d 9 (1st Cir.1978). The INA and APA provisions cited above require INS to decide N-600 applications within a reasonable time.

Many members of the plaintiff class waited several years to obtain a final decision on their N-600 applications. However, the fact that there were delays in processing N-600 applications does not necessarily mean the delays were unreasonable. As the Seventh Circuit noted in Wright v. Califano, 587 F.2d at 353, the reasonableness of administrative delays must be judged in light of the resources that Congress has supplied to the agency for the exercise of its functions, as well as the impact of the delays on the applicants’ interests. The passage of time alone is rarely enough to justify a court’s intervention in the administrative process, especially since “administrative efficiency is not a subject particularly suited to judicial evaluation ...” Id.; F.T.C. v. J. Weingarten, Inc., 336 F.2d 687, 691-692 (5th Cir.1964).

The defendants maintain that delays in adjudicating N-600 applications were caused by staffing problems beyond Portland INS’s control. The defendants also note that some of the delays resulted when applicants did not submit the proper documents or did not notify INS of a change in their address. These problems may explain some of the delay in processing some N-600 applications. Individual N-600 applications were affected to varying degrees by the staffing problems and by applicants’ failure to supply INS with proper information.

Defendants note other differences among individual N-600 applications. Individual N-600 applications are subject to different legal requirements. An N-600 application may be used to establish two different claims to citizenship: (1) citizenship derived after birth through marriage or naturalization of a parent; (2) citizenship acquired at birth through descent from a citizen parent or parents. Each type of claim to citizenship is evaluated according to different legal standards. In addition, different legal requirements apply to applicants claiming citizenship derived after birth depending on the date when citizenship was derived. Similarly, the requirements for citizenship acquired at birth vary depending on the date of birth, whether citizenship is claimed through one or both parents, and whether the applicant is a legitimate or illegitimate child.

In general, an N-600 applicant must establish: (1) proof of birth; (2) proof of the legal relationship between the citizen and his parents; (3) proof of citizenship of his parent or parents; (4) proof of satisfaction of any other conditions, such as prior residence in the United States of the parent or parents, or required periods of residence in the United States of the citizen. The quality and completeness of supporting evidence further affects the amount of time required to process an N-600 application.

Defendants point to the differences between individual N-600 applications and request that the plaintiff class be decerti-fied. Fed.R.Civ.P. 23(a) provides that a suit may only be maintained as a class action if certain conditions are met. One of these conditions is that “there are questions of law and fact common to the class.” As stated previously, whether delays were reasonable or not depends on more than the amount of time INS needed to process an N-600 application. In this case, the reasonableness of delays depends on the facts of individual N-600 applications. Both plaintiffs and defendants seem to realize this, as most of their arguments focus on what caused delays in processing individual N-600 applications. Because the issue of whether defendants unreasonably delayed processing N-600 applications cannot be resolved without considering questions of law and fact peculiar to individual N-600 applications, the plaintiff class must be decertified as to the unreasonable delay issue.

Procedural Protections

Plaintiffs request relief from INS practices which are claimed to have violated plaintiffs’ procedural rights. Plaintiffs contend that INS has on several occasions not followed the regulations issued under the INA. See 8 C.F.R. § 341. Specifically, some plaintiffs were not given an opportunity to review their files and to rebut adverse evidence before Portland INS decided their applications. Some members of the plaintiff class also were not given notice when INS administratively closed their N-600 applications. Portland INS concedes that in a few cases it did not follow INS regulations and procedures.

Whether defendants violated their own regulations, and what effect this may have had on individual N-600 applications, are again questions which depend on the facts of individual applications. There being no common questions of law and fact, the plaintiff class must be decertified as to this issue also.

Plaintiffs also strenuously object to Portland INS’s practice of administratively closing N-600 applications without issuing a final appealable decision. Defendants admit that Portland INS often administratively closes N-600 applications rather than formally deny them. Defendants contend that this practice is authorized by INS procedures and conforms with statutory requirements.

Administratively closing cases may sometimes benefit applicants. See Defendants’ Summary Judgment Memorandum at 27-30. However, applicants have a right to a final decision on the merits of their application, and to the procedural protections which accompany a final decision. See e.g. 8 C.F.R. § 341.6.

The APA, 5 U.S.C. § 555(e) requires INS to issue a final written decision. A final decision by INS serves as a basis for later judicial review. It also insures that the decision not to grant a certificate is subject to internal INS review. Defendants may not circumvent this process of review by administratively closing N-600 applications instead of denying them.

Plaintiffs contend that Portland INS has in several cases closed applications without a valid reason. See e.g. N-600 applications of Orkney Bell, Peter Friesen, Herminia Guerrero, and Cecil Lewis. Defendants have not contested this. See Fed.R.Civ.P. 56(e). Defendants state that if an applicant requests an appealable decision, one will be issued. Defendants’ Summary Judgment Memorandum at 29. Defendants also maintain that it is INS's policy and practice to give notice when an applicant’s case is closed. Defendants’ Reply Memorandum at 2.

Defendants’ practice of administratively closing cases affects all plaintiffs. Plaintiffs’ objections to this practice are based on issues of law and fact common to the plaintiff class. In addition, the plaintiff class, including individuals whose applications have been closed, is large enough to satisfy the numerosity requirement of Fed. R.Civ.P. 23(a). Finally, there are no genuine issues as to any material fact, so summary judgment is appropriate.

The uncontested facts of this case show that plaintiffs’ rights to a final decision on their N-600 applications are sometimes frustrated by defendants’ practice of administratively closing their applications. To protect applicants’ right to internal INS review and to later judicial review, INS must include a brief statement informing applicants of their right to a final appeala-ble decision when INS notifies applicants that their N-600 applications are being administratively closed. The statement should mention an applicant’s right to internal INS review and the applicant’s right to eventually seek judicial review.

Plaintiffs also contend that INS must give applicants notice of the acceptable sources of proof N-600 applicants will be required to provide. According to plaintiffs, INS should give notice of what is necessary to prove any period of required presence in the United States. Plaintiffs also claim INS should notify applicants of when they may submit secondary evidence, and of what type of secondary evidence is acceptable.

Section 552(a) of the APA provides that rules of procedure and substantive rules of general applicability should be published in the Federal Register. A person may not be adversely affected by a rule required to be published if the rule is not published and the person does not have actual knowledge of the rule.

The INS has formulated rules about the standards of proof and acceptable sources of proof for N-600 applications. These rules are contained in the Naturalization Examiner’s Guide. The rules have not been published in the Federal Register. Instructions printed on the N-600 application forms are not sufficiently clear or detailed to give applicants actual notice of these rules. For instance, the instructions on the N-600 application form contain only a partial list of the secondary evidence INS considers acceptable according to the Naturalization Examiner’s Guide.

This issue is appropriate for summary judgment and for classwide relief. Defendants must comply with 5 U.S.C. § 552(a). Rules setting forth the standards of proof and acceptable sources of proof for N-600 applications are “of such a nature that knowledge of [them are] needed to keep the outside interests informed of the agency’s requirements in respect to any subject within its competence,” and are therefore within the publication requirement. Appalachian Power Co. v. Train, 566 F.2d 451, 455 (4th Cir.1977), quoting United States v. Hayes, 325 F.2d 307, 309 (4th Cir.1963). Defendants may comply with 5 U.S.C. § 552(a) either by publishing in the Federal Register the relevant sections of the Naturalization Examiner’s Guide, or by notifying applicants of the particular standards of proof which apply to their case when a problem arises.

Conclusion

Because there are no common questions of law or fact, the plaintiff class is decerti-fied as to the claim that INS unreasonably delayed action on plaintiffs’ N-600 applications. The plaintiff class is entitled to summary judgment on two claims that defendants used improper procedures to process N-600 applications. When defendants notify an applicant that the applicants’ case has been administratively closed, defendants must include a brief statement informing applicant of his or her right to a final appeal-able decision. Defendants are also required to comply with 5 U.S.C. § 552(a) and give notice of the standards of proof and acceptable sources of proof for N-600 applications. Because of the disposition of this case, it was not necessary to consider plaintiffs’ Due Process claims.

IT IS SO ORDERED.


author: SILER, Chief Judge.

text:
    EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. CITY OF BOWLING GREEN, KENTUCKY, Defendant.
    Civ. A. No. C85-56BG(S).
    United States District Court, W.D. Kentucky.
    April 19, 1985.

      Jerry F. Safford, Safford, Satterfield & Lanphear, Bowling Green, Ky., for defendant.
    Carolyn Howard and Katharine W. Kores, Sr. Trial Attys., argued, Johnny J. Butler, Acting Gen. Counsel, Philip Sklo-ver, Associate Gen. Counsel, Joseph Ray Terry, Regional Atty., Lawrence J. Kamen-etzky, Supervisory Trial Atty., for plaintiff.
   MEMORANDUM

SILER, Chief Judge.

After a hearing on the motion for a preliminary injunction, this Court makes these Findings of Facts and Conclusions of Law and has granted the injunction as requested by the plaintiff.

The Equal Employment Opportunity Commission (EEOC) brought this action on behalf of employees of the Bowling Green Police and Fire Departments under the Age Discrimination in Employment Act of 1967, 29 U.S.C. §§ 621-634 (ADEA). The specific employee involved in the motion for preliminary relief is Major Elster Willoughby, a veteran of twenty-four (24) years’ service with the Police Department. Because his fifty-seventh (57) birthday occurred on March 27, 1985, preliminary relief was sought to prevent the City of Bowling Green from mandatorily retiring him because of his age. A temporary restraining order was entered earlier, due to the fact that his birthday came up before the Court could hold a hearing on the preliminary injunction.

Major Willoughby’s present job is primarily in administration of grants, budgeting and purchasing. However, from time to time, he is required to be available for usual police work, such as arrests, pursuits on foot, and subduing drunks. He is in top physical shape for his age, as he works out regularly, jogs, walks, has lost eighty (80) pounds in weight, and has passed a physical examination with his physician. He has good performance ratings and is well educated, holding both M.A. and B.S. degrees. The only reason he is being asked to retire is due to his age, as the City of Bowling Green requires all police officers to retire by age fifty-seven (57), unless they have not completed twenty (20) years of service, in which case they may serve until they complete the necessary twenty (20) years for retirement, if able to perform their assigned duties.

Although the City has a physical fitness test for police officers before being hired, it does not have a physical testing program thereafter. When officers become sick or injured, they are allowed to remain on the force until they can resume their regular duties, or are allowed to retire.

Before issuing preliminary relief in a case of this sort, under Mason County Medical Ass’n v. Knebel, 563 F.2d 256, 261 (6th Cir.1977), the following must be determined:

1. Whether plaintiffs have shown a strong or substantial likelihood or probability of success on the merits.
2. Whether the plaintiffs have shown irreparable injury;
3. Whether the issuance of a preliminary injunction would cause substantial harm to others; and
4. Whether the public interest would be served by issuing a preliminary injunction.

Moreover, where retirement has not already occurred, preliminary relief is appropriate to maintain the status quo and obviate the irreparable injury of the involuntary retirement. EEOC v. Chrysler Corp., 546 F.Supp. 54, 69 (E.D.Mich.1982), aff'd, 733 F.2d 1183 (6th Cir.1984).

I. LIKELIHOOD OF SUCCESS ON THE MERITS

This is the primary issue initially, for if the plaintiff has little likelihood of success on the merits, this . Court would feel irresponsible in granting, a preliminary injunction, even when the other criteria have been met.

Major Willoughby is a person protected by the ADEA, as he is between the age of forty (40) and seventy (70). 29 U.S.C. § 631(a). Moreover, age is a determinative factor in the City’s decision to forcibly retire Major Willoughby.

Where it is undisputed that the employee was terminated solely because of age, the burden shifts to the City to prove that the termination falls within one of the exceptions to the ADEA’s prohibitions. EEOC v. County of Santa Barbara, 666 F.2d 373, 375 (9th Cir.1982). In this case, the City has attempted to prove the exception under 29 U.S.C. § 623(f)(1), where age is a bona fide occupational qualification (BFOQ) reasonably necessary to the normal operation of the particular business.

In order to prevail on the BFOQ defense, the City must show that the challenged age qualification is “reasonably related to the ‘essential operation’ of its business and must demonstrate either that there is a factual basis for believing that all or substantially all persons above the age limit would be unable to effectively perform the duties of the job, or that it is impossible or impracticable to determine job fitness on an individualized basis.” Orzel v. City of Wauwatosa Fire Dept., 697 F.2d 743, 753 (7th Cir.), cert. denied, — U.S. -, 104 S.Ct. 484, 78 L.Ed.2d 680 (1983). See Tuohy v. Ford Motor Co., 675 F.2d 842 (6th Cir.1982).

In this case, the City presented two excellent expert witnesses who both stated that it was reasonable to require that police officers in the City of Bowling Green retire on or before the age of fifty-seven (57). However, they did not say it was reasonably necessary. Nevertheless, the Court does not find that to be fatal. Each of those witnesses also went on to state that there was a factual basis for believing that all or substantially all persons above fifty-seven (57) would be unable to effectively perform the duties as a police officer in Bowling Green and also that it was impossible or impracticable to determine job fitness on an individualized basis.

On the other hand, the plaintiff produced an excellent expert witness, Dr. Arthur Leon, a professor at the Minnesota Medical School and a cardiologist. The Court finds his testimony to be more persuasive. According to Dr. Leon, Major Willoughby or others in his condition are able to carry out the physical and strenuous demands of the job as a police officer.

It is appropriate for the Police Department to keep statistics on certain factors present in their officers indicating a likelihood for heart disease, and those who possess a number of those factors should be tested further. At age fifty-seven (57), if a police officer did not smoke, exercised regularly and kept his weight within certain limitations, ninety percent (90%) of the officers could perform the duties of the job. All officers in the police department could be screened periodically with physical fitness and medical tests, and those who are determined to be high risks could'be given a stress test. A stress test is not necessary for all officers unless they possess certain of these high risk factors. The cost for setting up such tests to determine job fitness would be $5,000.00 initially for the City and $5,000.00 per year to administer.

Therefore, this Court finds that the likelihood for success on the merits is great.

The Court is aware of the case of Johnson v. Mayor and City of Baltimore, 731 F.2d 209 (4th Cir.1984), cert. granted, — U.S. -, 105 S.Ct. 901, 83 L.Ed.2d 917 (1985). In that case, the Court held that where Congress has deemed age to be a BFOQ for federal law enforcement officers, that establishes a BFOQ for the City of Baltimore fire fighters. Although that is certainly a well-reasoned decision, in view of the rejection by the Sixth Circuit of FAA criteria for pilots as a requirement for private industry in Tuohy v. Ford Motor Co., supra, and the rejection of the Johnson decision in numerous other cases, see, e.g., Heiar v. Crawford County, 746 F.2d 1190 (7th Cir.1984), this Court does not follow the Johnson decision.

II. LIKELIHOOD OF IRREPARABLE INJURY

Although Major Willoughby could collect damages and be reinstated at a later time, nevertheless, he would suffer from his inability to keep up with current matters in the Police Department and would suffer from anxiety and emotional problems due to compulsory retirement. See Massachusetts Board of Retirement v. Murgia, 427 U.S. 307, 96 S.Ct. 2562, 49 L.Ed.2d 520 (1976).

III. SUBSTANTIAL HARM TO OTHERS

There would be no substantial harm to others. Although some of Major Willough-by’s assignments have been reassigned, no other officer has been promoted to take his place yet. The City would not be harmed, and there is no indication that Major Wil-loughby could not perform the same duties a few days after his fifty-seventh (57) birthday that he was carrying out a few days before.

IV. PUBLIC INTEREST

The fact that Congress passed the ADEA shows that there is a public interest in keeping persons on the job until age seventy (70). The Court sees no public interest which could be served by removing Major Willoughby from the force while this case is pending on the docket.

CONCLUSION

Although preliminary relief has been granted for Major Willoughby, this Court feels that it should comment briefly on the problems which are inherent in such a situation. The Court does not blame the City of Bowling Green for setting up such an age limitation, as the federal government has set up its own mandatory retirement age at an earlier age. See Johnson v. Mayor and City of Baltimore, supra. Moreover, there is ample evidence for either side, on the issue of a BFOQ, resulting in a factual dispute left for the Court to determine. Thus, there could be a patchwork quilt of varying age qualifications from one municipality to another and from one state to another. Compare Mahoney v. Trabucco, 738 F.2d 35 (1st Cir.), cert. denied, — U.S. -, 105 S.Ct. 513, 83 L.Ed.2d 403 (1984) (approved mandatory retirement age of 50); and EEOC v. Pennsylvania, 596 F.Supp. 1333 (M.D.Pa.1984) (approved mandatory retirement age of 60); with Heiar v. Crawford County, supra (disapproved mandatory retirement age of 55).

Nevertheless, unless Congress amends the Act, it will be up to the Courts to determine whether employers have shown a BFOQ. It may be unfair for officers in one jurisdiction to be required to retire at age fifty-five (55), while others may work until a later age, just as it is unfair today for federal police and fire fighters to retire at age fifty-five (55) while officers carrying out similar duties for state or municipal governments may be able to retire at a later age. Nevertheless, it is not up to this Court to resolve those problems, unless the constitutionality of the Act is brought into issue. As it is not an issue in this case, it is up to the Court to decide from the facts of each particular situation whether a BFOQ has been established. Here, it has not.

      . Neither party has suggested that there should be subclasses or separate requirements for administrative positions vice patrolmen on the force, so both sides have agreed that the BFOQ standards for patrolmen apply equally to Major Willoughby. See Mahoney v. Trabucco, 738 F.2d 35 (1st Cir.1984), cert. denied, - U.S. -, 105 S.Ct. 513, 83 L.Ed.2d 403 (1984).