author: ENSLEN, District Judge.

text:
    UNITED STATES of America, Plaintiff, v. AN ARTICLE OF DEVICE CONSISTING OF 1,217 CARDBOARD BOXES, more or less, each containing an individually packaged unit in a tube packaged in a blister-pack with an insert labeled in part as follows: (box) “ * * * Stryker * * * A0931660404261C * * * B311001c * * * ”, (tube) “stryker Shoulder 130-10 Dacron * Ligament Prosthesis * * * ”, Defendant.
    No. K 84-502.
    United States District Court, W.D. Michigan, S.D.
    April 2, 1985.

      Thomas Martin, Asst. U.S. Atty., Grand Rapids, Mich., Mark A. Heller, Assoc. Chief Counsel for Enforcement, Food & Drug Admin., Rockville, Md., for plaintiff.
    Grant Gruel, Grand Rapids, Mich., for defendant.
   OPINION

ENSLEN, District Judge.

This action was filed on November 20, 1984 against a prosthetic shoulder ligament device, manufactured by Meadox Medicals, Inc., and distributed by Stryker Corporation. The device is used in the surgical repair of third-degree, and sometimes second-degree, acromioclavicular separation, a severe dislocation of the joint which stabilizes the clavical (collarbone) and scapula (shoulder blade). See, 1A Gordy & Gray, Attorneys’ Textbook of Medicine U 5.40-5.-49 (1984). Such injuries often result from a fall with an outstretched arm, a force from above striking the shoulder, or a sudden or severe pull on the arm. Id. The Stryker device is used to pull and hold together the separated bones in the proper alignment.

The US filed the Complaint in this action pursuant to the Federal Food, Drug and Cosmetic Act (the Act) (21 U.S.C. § 301 et seq.) alleging that the Stryker device is misbranded and adulterated. On November 28, 1984, the United States Marshal seized 1,217 boxes, each containing one Stryker device, pursuant to a warrant for arrest. On December 3,1984, Stryker filed its claim as owner of the seized articles. The Complaint requests the Court to condemn the seized devices, order their disposal pursuant to the Act, and grant Plaintiff costs. This Opinion is rendered after a hearing held March 22, 1985, upon claimant Stryker’s Motion for Summary Judgment filed December 5, 1984, and the government’s cross-Motion for Summary Judgment filed March 20, 1985.

Standard of Review

To warrant the grant of summary judgment, the moving party bears the burden of establishing the non-existence of any genuine issue of fact that is material to a judgment in his favor. Adickes v. S.H. Kress & Company, 398 U.S. 144, 147, 90 S.Ct. 1598, 1603, 26 L.Ed.2d 142 (1970); United States v. Articles of Device ... Diapulse, 527 F.2d 1008, 1011 (CA 6 1976); Nunez v. Superior Oil Company, 572 F.2d 1119 (CA 6 1978); Tee-Pak, Inc. v. St. Regis Paper Company, 491 F.2d 1193 (CA 6 1974). If no genuine issue as to any material fact is established, the moving party is entitled to judgment as a matter of law. Chavez v. Noble Drilling Company, 567 F.2d 287 (CA 5 1978); Irwin v. US, 558 F.2d 249 (CA 6 1977).

In determining whether or not there are issues of fact requiring a trial, “the inferences to be drawn from the underlying facts contained in the (affidavits, attached exhibits, and depositions) must be viewed in the light most favorable to the party opposing the motion.” United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962); Bohn Aluminum & Brass Corporation v. Storm King Corporation, 303 F.2d 425 (CA 6 1962). Even if the basic facts are not disputed, summary judgment may be inappropriate when contradictory inferences may be drawn from them. United States v. Diebold, supra; EEOC v. United Association of Journeymen & Apprentices of the Plumbing & Pipefitting Industry, Local 189, 427 F.2d 1091, 1093 (CA 6 1970). In making this determination, the Court must make reference to the entire record and all well pleaded allegations are to be accepted as true. Dayco Corporation v. Goodyear Tire and Rubber Company, 523 F.2d 389 (CA 6 1975); Holmes v. Insurance Company of North America, 288 F.Supp. 325 (DC Mich.1968); Mahlar v. U.S., 196 F.Supp. 362 (DC Pa 1961). These guidelines will be adhered to as substantive issues of the motion are examined.

In 1976, Congress passed the Medical Device Amendments to the Act, PL 94-295, erecting a system for medical device classification and premarket approval. The amendments became effective May 28, 1976. These statutory provisions and their enforcing regulations are complicated. They will be dissected as each issue contained in the Motions for Summary Judgment is reviewed.

MISBRANDING

Section 502(o) of the Act, 21 U.S.C. § 352(o) provides in pertinent part that a device is misbranded if no premarket notification has been filed when required by § 510(k) of the Act, 21 U.S.C. § 360(k), or if it is not listed as required by § 510(j) of the Act, 21 U.S.C. § 360(j). The Government asserts in its Complaint, and argues in its motion, that both requirements are applicable to the Stryker device which complies with neither.

1. Premarket Notification

Section 510(k) of the Act, 21 U.S.C. 360(k), provides that each person required to register and who proposes to introduce a medical device into interstate commerce shall report to the Secretary of Health and Human Services at least 90 days before making such an introduction. (The Secretary has delegated this authority to the Commissioner of the Food and Drug Administration, 21 C.F.R. § 5.10(a)(1)). 21 C.F.R. Part 807, Subpart E implements this premarket notification requirement. The premarket notification requirement applicable to Stryker is contained in 21 C.F.R. § 807.81(a)(2). It provides that a person required to register, who introduces a device for the first time, must provide pre-market notification. Stryker has admitted that it first commercially distributed the device itself after June of 1982, well after the effective date of the amendments. (See, Govt. Exhibit C, Response 4). Stryker does not dispute that it is a person registered or required to register. It must therefore comply with this premarket notification requirement unless exempt.

21 C.F.R. § 807.85 details the exemptions from premarket notification. 21 C.F.R. § 807.85(b) provides that a distributor who places a device into commercial distribution for the first time under his own name, as Stryker did in June of 1982, is exempt from the premarket notification requirement if the device was in commercial distribution before May 28, 1976. The Government asserts that this exemption does not apply to Stryker because the device, as it is now in distribution, is so changed from that in distribution prior to the effective date, that it is an entirely new device. Though Stryker hotly disputes that the device is “new”, it does not invoke this exemption, but argues instead that 21 C.F.R. § 807.81(a)(3) provides an exemption applicable to it.. This provision states that a device which a person currently has in commercial distribution that is about to be significantly changed or modified requires a premarket notification. It defines a significant change or modification as one that could either significantly affect the safety or effectiveness of the device, or one that constitutes a major change or modification in the intended use of the device. Stryker asserts that because the changes which have occurred in the device since 1976 do not rise to this significance, the device is exempt from premarket notification.

I find that Stryker’s argument misinterprets these applicable regulations. 21 C.F.R. § 807.81(a)(3) applies only to those persons who have a device in commercial distribution at the time that the modification is about to be made. Stryker, by its own admission, did not begin distributing the device until June 1982. Numerous exhibits and affidavits submitted by both parties indicate that the modifications which occurred to this device occurred not later than 1979. Accordingly, this provision is inapplicable to Stryker. Only the premark-et notification requirement contained in 21 C.F.R. § 807.81(a)(2) applies to Stryker. Therefore, the sole exemption available to Stryker is contained in 21 C.F.R. § 807.-85(b). Only if the device were in commercial distribution before May 28, 1976, would it be exempt from the premarket notification requirement. Though Stryker has not specifically invoked this exception, because of Stryker’s assertion that the device is not “new”, and its admission that it first commercially distributed the device itself after June of 1982, the Court will consider the applicability of this exemption to the device in question. Because the Act concerns the public health, the exemption will be strictly construed and Stryker must prove each of its elements. U.S. v. Articles of Drug: 5,906 boxes, 745 F.2d 105, 113 (CA 1 1984); US v. An Article of Drug “Bentex Ulcerine”, 469 F.2d 875, 878 (CA 5 1972).

Compliance Policy Guide 7124.26 is the current expression of the Food and Drug Administration’s (FDA’s) interpretation of “commercial distribution”. (Govt. Exhibit H.) This policy guide states:

If a manufacturer can meet all of the following conditions, we consider a device to presently be in commercial distribution and also to have been in commercial distribution before May 28, 1976, even though no units of the device had been delivered to purchasers or consignees before that date:
(1) The device was displayed, advertised, or otherwise offered for sale before May 28, 1976, for a specific intended purpose or purposes, with no limitations (e.g. no limitation to research or investigational use).
(2) The manufacturer had, before May 28, 1976, accepted, or been prepared to accept, at least one order to purchase the device that resulted, or would have resulted, in a contract of sale for the device in the United States, generally with delivery to occur immediately or at a promised future date;
(3) The device was not being offered or accepted only for research or inves-tigational use;
(4) The manufacturer of the device can provide adequate documentation establishing (1) through (3) above to the satisfaction of the Food and Drug Administration.

The parties hotly debate whether the Stryker device was in commercial distribution pursuant to this interpretation prior to May 28, 1976. This debate is not new to this lawsuit. On August 10,1983, the FDA issued a Regulatory Letter to Stryker alleging that the device was not lawfully in commercial distribution. For the next 14 months, a flurry of correspondence was exchanged between FDA representatives and Claimant. See, Documents attached to Claimant’s Motion for Summary Judgment. In this correspondence, Claimant contended that the Regulatory Letter represented a reversal of previous FDA policy as set forth • in the Compliance Policy Guide. Stryker submitted documentation to FDA in support of its argument that it met the compliance policy criteria for the shoulder ligament device. Among other things, these documents asserted that Dr. James A. Arnold was using the Meadox product as early as August through October of 1975 for shoulder fixation, with the knowledge of Meadox, and that Meadox continued to sell the product to Dr. Arnold knowing of his use. The FDA rejected this documentation as inadequate and consistently found that the product had not been in commercial distribution before May 28, 1976. After repeated requests that Stryker indicate the steps it intended to take to come into compliance with the law as FDA interpreted it were met with renewed assertions by Stryker that it was already in compliance, the FDA filed this suit and perfected seizure.

Whether the device was in commercial distribution before May 28, 1976, is a factual issue. The parties have submitted voluminous affidavits and exhibits, and the government’s are particularly detailed. The contest for who shall prevail has become a battle of affidavits and exhibits.

In one of the letters exchanged during the pre-suit correspondence between FDA representatives and the Claimant, Joseph P. Hile stated in a letter dated May 25, 1984, to Stryker’s then attorney, Michael F. Cole, the FDA’s interpretation of the Compliance Policy Guide. Mr. Hile indicated that the agency views “commercial distribution” to mean, in its popular sense, “on the market”, pursuant to H.R. 94-853, 94th Cong. 2d Sess. 36 (1976). He further stated that:

FDA interprets the phrase “displayed, advertised, or otherwise offered for sale ... for a specific intended purpose” to mean that the device is labeled for that purpose, or, if it was not so labeled, that it was actively promoted for that purpose.
FDA requires documentation that before [May 28, 1976], the device was labeled for, or promoted for, that intended use. In this case, adequate documentation of separate, specially labeled packaging, and at least one sale prior to May 28, 1976 would satisfy the requirements of the advisory opinion. Adequate documentation must consist of copies of the separately labeled packaging or other contemporaneous documentation of its existence.
In the absence of adequate documentation of labeling, a person seeking to show commercial distribution for a specific indication must provide evidence that the device was actively promoted for that use. (Govt. Exhibit I at 2-3.)

This explanation, together with the agency’s compliance policy guide 7124.26, is a reasonable interpretation of the phrase “commercial distribution”. Considering the Act’s purpose to protect the public health, it will be accorded substantial deference by this Court. U.S. v. Rutherford, 442 U.S. 544, 553-554, 99 S.Ct. 2470, 2475-2476, 61 L.Ed.2d 68 (1979); Scott v. FDA, 728 F.2d 322, 324 (CA 6 1984); Upjohn v. Schweiker, 520 F.Supp. 58, 62 (WD Mich. 1981), aff'd, 681 F.2d 480 (CA 6 1982).

Stryker relies upon the FDA’s definition of “commercial distribution”, and asserts that it complies with the stated criteria. The Government argues that the FDA’s definition of “commercial distribution” has only minor relevance to this action. It asserts that since the device in question did not exist prior to enactment of the amendments, the device necessarily meets none of the criteria set forth in the Compliance Policy Guide.

I find myself in agreement with the Government that the device which it has seized is not the same device manufactured by Meadox prior to enactment of the amendments. The affidavits submitted by the Claimant, and the deposition excerpts which it quotes in its briefs, do not create any material issue of fact concerning the identity of the devices. Instead, they fully support the government’s position. These affidavits and deposition excerpts include the following information.

Sometime in 1974, Dr. James A. Arnold, an orthopedic surgeon, began using a Mea-dox Dacron vascular graft for the shoulder repair of acromioclavicular separations. (Affidavit of Thomas White, 1Í 3.) In 1975, Thomas White discussed with Dr. Arnold the use of Meadox’s new product, Microvel, for use in surgical repair of shoulder separations. (Affidavit of Thomas White, ¶ 5.) (Microvel is the Meadox tradename for the Double Velour Dacron vascular graft. See, Stryker Corporation’s response to FDA memorandum at page 10.) The warp knit construction, double velour surfaces, and tubular construction, were very well suited for shoulder separation repair. (Affidavit of Richard J. Turner, ¶ 2.) Warp knit permitted smooth and uninterrupted fibrous tissue ingrowth following surgical repair, the outer velour surface prevented a “sawing” effect into the clavicle bone, and the inner velour surface continued to act as an anchor for the desired fibrous tissue ingrowth. (Affidavit of Dr. Richard Turner, 112.)

Dr. Arnold requested in 1976 that Mea-dox make the vascular graft less elastic and smaller in diameter. (Affidavit of Dr. Richard Turner, ¶ 4.) (Affidavit of Harmon Hoffman, if 3.) These changes were accomplished by Harmon Hoffman, then Manager of New Products at Meadox Medicals. (Affidavit of Dr. Richard Turner, II4; Affidavit of Harmon Hoffman, ¶ 3.) (Hoffman Deposition, quoted in Stryker Corporation’s response to FDA memorandum at 13-18.) Mr. Hoffman increased the tension in the yarn during the manufacturing compacting process, and added what is known as the “H-Beam” longitudinal sewing. (Affidavit of Harmon Hoffman, II 3.) (Hoffman Deposition, quoted in Stryker Corporation’s response to FDA memorandum at 13-18.) The longitudinal sewing and the increased tension during compacting reduced the elasticity of this Microvel product. (Hoffman deposition, quoted in Stryker Corporation’s response to FDA memorandum at 16-17.) In addition, the “H-Beam” configuration kept the interior of the vascular graft, the lumen, open. (Hoffman Deposition, quoted in Stryker Corporation’s response to FDA memorandum at 15-16.) The “Stryker Shoulder 130-10 Dacron Ligament Prosthesis” seized by the Government is the “H-Beam” device which incorporates the shrinking and longitudinal sewing Mr. Hoffman described in his deposition as the “H-Beam” . construction. (Hoffman Deposition, quoted in Stryker Corporation’s response to FDA memorandum at 13-18.)

While Mr. Hoffman’s affidavit initially appears to indicate that Dr. Arnold promoted the “H-Beam” construction device at a meeting of the Society of Biomaterials in April, 1976, Mr. Hoffman clarified that it was not yet in existence in April, 1976, in his deposition. (Govt. Exhibit M, at 43, 46.) Dr. Arnold confirmed in his deposition that no “H-Beam” configuration of the device existed in April 1976. Finally, Stryker states in its Response to FDA Memorandum that the “H-Beam” constructed double velour dacron graft was not in an “H-Beam” configuration routinely before May 28, 1976, at page 3.

The affidavits, deposition testimony, and brief submitted in support of Stryker’s Motion for Summary Judgment support, rather than contest, the government’s assertion that the device it seized-the “H-Beam” device-was undergoing research and development for two and one-half to three years ending in 1978 or 1979. Because there is no factual dispute concerning whether the device as it is presently manufactured existed in 1976, and because the Claimant’s own affidavits indicate that no such dispute exists, it is unnecessary to examine in detail the exhibits offered by the Government in support of its position. It is sufficient to note those which the Court finds persuasive, and to observe that in reviewing the extensive exhibits which the Government submitted, the Court found nothing which would indicate the “H-Beam” device existed prior to enactment of the amendments.

The Court finds persuasive: Dr. Arnold’s description of the stitching changes Mr. Harmon made subsequent to 1976 as the double velour vascular graft evolved from no beam, to one beam, to three beams, to the “H-beam”, (Govt. Exhibit Q, at 46, 56); a communication from Meadox Medicals, Inc., dated November 25, 1981, to the Food and Drug Administration which states that Dr. Arnold began to use the new “H-Beam” construction for acromiocluvicular separations in 1977, (Govt. Exhibit N, at 2); a reference by Dr. Richard Turner in a letter to the FDA dated August 6, 1982, to “commercialization of the product precursor prior to legislative enactment in May of 1976”, (Govt. Exhibit 0 at 1); the list of patients that received a Microvel device, indicating that the “H-Beam”, otherwise known as the “star beam”, was not surgically used until May 25, 1977 (Government Exhibit 0, attachment; see also Govt. Exhibit G); the agreement entered into on March 22, 1978, between Dr. Arnold, Mea-dox Medicals, and Orthopedic Research Institute describing the rights of the parties in the device, including the right of Dr. Arnold to receive development costs during the period prior to the non-investigational offering for sale of the device, and payment of royalties upon commercialization of the device, (Govt. Exhibit R); the late 1978 and early 1979 communications between Dr. Arnold and Maurice Delibes, of Meadox’s Marketing Department, concerning the art work for marketing the shoulder graft, (Govt. Exhibit T); the Meadox Medicals’ interoffice memorandum from Harmon Hoffman to Dr. Richard Turner stating that Mr. Hoffman had clarified to Dr. Arnold the position of Meadox Medicals as a potential producer of the device (Govt. Exhibit S); the records of the Mea-dox Medicals’ Product Action Group meetings which occurred throughout 1978 and 1979 detailing the progress of the device’s promotional campaign (Govt. Exhibit V); and finally, the existence of US Patent 4,209,859, issued to Harmon Hoffman on July 1, 1980 for the device, (Govt. Exhibit Y).

Stryker’s assertion that in spite of the modifications in, the device which occurred from 1976 to the present, the device is enough like that marketed in 1976 that it should be considered the same is misplaced. The only exemption available to Stryker from the premarket notification requirement is that allowed by 21 C.F.R. § 807.-85(b). This exemption requires that the device be in commercial distribution before May 28, 1976. There is no provision in this exemption for a device which is substantially equivalent to one in commercial distribution before May 28, 1976. For this reason, the affidavit and testimony at hearing of David M. Link, Director of the predecessor organization to the present Center for Devices and Radiological Health from 1974 to 1980, concerning the equivalence of the seized device to the pre-amendments device is irrelevant. Mr. Link’s testimony and affidavit are additionally irrelevant because they represent the opinion of one who is no longer in a position with the FDA to effect policy or decisionmaking. Accordingly, Mr. Links’ testimony and affidavit do not raise any genuine issue of material fact.

I find that there is no genuine issue of material fact concerning whether the Stryker device is exempt from premarket notification. The seized device did not exist before 1978, and necessarily does not meet the Compliance Police Guide criteria. Stryker has failed to prove even one element of the “commercial distribution” exemption. Accordingly, the Government’s Motion for Summary Judgment on this issue shall be granted, and the Claimant’s denied.

2. Listing

Section 510© of the Act, 21 U.S.C. § 360©, requires that medical devices manufactured for commercial distribution be listed with the Secretary. The Government asserts that the Stryker device it has seized is not listed, and supports this assertion with the declaration of Walter E. Gundaker. (Govt’s Exhibit D.) Stryker asserts that the listing for Meadox’s vascular graft products {See, Govt.’s Exhibit F) is a sufficient listing for the present device until the FDA finalizes the regulations concerning the classification name of the present device. Stryker observes that 21 C.F.R. § 807.25(f)(1) requires devices to be listed by their classification names, and argues that since none yet exists for the present device, no listing can yet be made. Stryker raised this argument for the first time in its submission filed March 20, 1985.

At the hearing, and in its Response filed March 29, 1985, the Government responded to Stryker’s argument. It noted that section 510© of the Act, 21 U.S.C. § 360©, requires “all” devices to be listed. The Government offered as Plaintiff’s Exhibit 2 the declaration of Leighton W. Hansel. Mr. Hansel attests that the instructions which accompanied the listing forms require those listing devices to place the word “none” in the space on the listing form for the classification name when no final classification name yet exists for the device. Attached to Mr. Hansel’s declaration are three true and correct copies, kept pursuant to the Food, Drug and Cosmetic Act, which Stryker Corporation submitted for three devices for which no final classification name exists. On each of the three forms, Stryker Corporation, itself, placed the word “none” in the space for the classification name.

It is apparent from section 510© of the Act, 21 C.F.R. § 807.25(f)(1), and the instructions, that all medical devices must be listed even though no final classification name yet exists for a device. It is also apparent that the FDA instructs those listing devices to place the word “none” in the space for the classification name when no classification name has been finally promulgated. Finally, it is apparent that Stryker Corporation understands this instruction, for it has correctly followed it in the past concerning other devices. This device is not listed as required and there is no genuine dispute concerning any material fact on this issue. Accordingly, the Government’s Motion for Summary Judgment on this issue shall be granted, and the Claimant’s Motion for Summary Judgment on this issue shall be denied.

ADULTERATION

The Medical Device Amendments establish three device classes. Class III devices are subject to premarket approval before release for commercial distribution. Section 513 of the Act, 21 U.S.C. § 360c. The amendments also divide devices into preamendment and postamendment devices (“old devices” and “new devices”) and provide that “old devices” may continue their preamendment status until the FDA requires a premarket approval application to be filed for a given device. Section 513(c) of the Act, 21 U.S.C. § 360c(c); Section 515(b)(1) of the Act, 21 U.S.C. § 360e(b)(l). A “new device”, however, is automatically placed in the class III category, and immediately triggers the requirement for pre-market approval. Section 513(f)(1) of the Act, 21 U.S.C. § 360c(f)(l).

The appropriate person may petition the FDA for reclassification of a class III device into a class I or II device, or obtain a FDA decision that the “new device” is “substantially equivalent” to an “old device” or a reclassified “new device”. Section 513(f)(1) of the Act, 21 U.S.C. 360c(f)(l). Either result removes the “new device” from class III and obviates the need for class III premarket approval.

The Government asserts that the Stryker device is adulterated pursuant to section 501(f)(1)(B) of the Act, 21 U.S.C. 351(f)(1)(B) because it:

1. Is a “new device” automatically placed in class III (section 513(f) of the Act, 21 U.S.C. § 360(c)(f)); '
2. Is required to have an “approved application for premarket approval” in effect (section 515(a) of the Act, 21 U.S.C. § 360e(a));
3. Is not exempt from premarket approval as a device for investigational use (section 520(g) of the Act, 21 U.S.C. § 360e(a)); and
■4. Does not have any approved pre-market application in effect.

It is undisputed that the device is not exempt for investigational use, and that there is no FDA approval of the device. {See, Govt. Exhibit C, Responses 8 and 9; and Govt. Exhibit D.)

Because I have found that the device in question did not exist before May 28, 1976, it was necessarily “new” upon its introduction to the market in 1978 or 1979. It therefore was automatically placed in the class III device category and required an approved application for premarket approval before being marketed. It necessarily follows that the device is adulterated within the meaning of the Act. Stryker’s argument that the modifications of the device were not so substantial that they rendered it a new device may be relevant to the issue concerning whether the device may be reclassified as “substantially equivalent” to an “old device”. However, such a determination is, in the first instance, the FDA’s to make. Section 513(f)(2)(A) of the Act, 360c(f)(2)(A). No petition for reclassification has been filed with the FDA for the Stryker device. No provision in the Act allows a Court to bypass the FDA’s reclassification procedures and make the determination itself. (Govt. Exhibit D.) Accordingly, the Government’s Motion for Summary Judgment on this issue is granted, and the Claimant’s motion on this issue is denied.

RELIEF

In addition to condemnation of the seized devices pursuant to section 304(d) of the Act, 21 U.S.C. § 334(d), the Government requested at oral argument and provides in its proposed Judgment and Decree of Condemnation and Injunction that it be granted an injunction against Stryker Corporation to prevent the commercial distribution of any dacron orthopedic device in an “H-Beam” configuration unless it first receives specifically requested regulatory approval. Such an injunction would sweep within its prohibition “H-Beam” devices that Stryker distributes for application to the knee and ankle. Stryker asserted at oral argument that this is an action against the seized devices and not against Stryker Corporation. It argued that, accordingly, the requested injunctive relief is beyond the scope of this action.

In support of its request for injunctive relief, the Government cites US v. An Article of Drug * * * 4,680 Pails, 725 F.2d 976 (CA 5 1984). The Government asserts that once Stryker has entered a general appearance before this Court, the Court has jurisdiction to enter a decree against Stryker concerning other of its products not seized by the FDA. The Court disagrees with the government’s reading of 4,680 Pails. In that case, the drug manufacturer, after release of the res (the seized drug), voluntarily appeared before the district court to renew a motion for dismissal after the trial court granted a motion for new trial. The Court of Appeals held, essentially, that the drug manufacturer had waived its objection to in personam jurisdiction by failing to earlier assert lack of jurisdiction through release of the res while continuing to respond to the opposition party’s court submissions. The Court found that the district court therefore had “in personam jurisdiction over the parties, thus rendering the res’s arrest nonessential to the court’s jurisdiction.” 720 F.2d at 984.

Here, Stryker does not seek to dismiss the action on the basis of lack of jurisdiction, but rather asserts that the Government has no authority to reach out to other Stryker products merely because it has seized one. I agree. Unlike the situation in 4,680 Pails, Stryker has limited its involvement in this action to a defense as the sole owner of the seized articles as it stated it would in its claim filed December 4,1984. No situation has been created, as it was in 4,680 Pails, to allow the inference that Stryker has waived any objection to the Court’s assertion of in personam jurisdiction. The articles seized have remained under the control of the FDA and all of Stryker’s involvement in this action has been limited to procurring their release. Under these circumstances, the Court finds that neither it, nor the FDA, can order Stryker to refrain from commercially distributing any devices other than those which are the subject of this action. Accordingly, the government’s request for injunctive relief concerning other of Stryker’s “H-Beam” devices is denied.


source: Caselaw Access Project

author: LASKER, District Judge.

license: Public Domain

text:
    GRIFFITH LABORATORIES U.S.A., INC., a Delaware corporation, and Griffith Laboratories, Inc., an Illinois corporation, Plaintiffs, v. Richard POMPER, an individual, and Fresco Food Products, Inc., a New York corporation, Defendants.
    No. 83 Civ. 3934(MEL).
    United States District Court, S.D. New York.
    April 3, 1985.

      Bell, Boyd & Lloyd, Chicago, Ill., and Cleary, Gottlieb, Steen & Hamilton, New York City, for plaintiffs; Evan A. Davis, Douglas H. Meal, New York City, and John P.- Scotellaro, Charles G. Albert, Chicago, Ill., of counsel.
    Hall, Dickler, Lawler, Kent & Friedman, New York City, for defendants; Paul Sar-no, New York City, of counsel.
   LASKER, District Judge.

In an earlier opinion, we found defendants Richard Pomper and Presco Products, Inc. (“Presco”) liable to plaintiff Griffith Laboratories U.S.A., Inc. (“Griffith”) for violating a customer non-solicitation clause in a salesman-employment contract between Griffith and Pomper. See Griffith Laboratories U.S.A., Inc. v. Pomper, 577 F.Supp. 903 (S.D.N.Y.), aff'd mem., 740 F.2d 954 (2d Cir.1984). Griffith now moves pursuant to Federal Rule of Civil Procedure 54(c) for an order awarding it punitive damages in an amount to be determined at the forthcoming damages trial.

Defendants argue that Griffith is not eligible to recover punitive damages because actual malice or ill-will which a defendant directs against a plaintiff without justification must be shown. Defendants assert that the facts brought out at the liability trial do not reveal Presco’s ill-will toward Griffith and they point out that Presco acted in good faith when it hired Pomper because it acted on the advice of counsel.

Illinois law, which provides the substantive rules of law for this case, does not condition an award of punitive damages upon a finding of actual malice but “may be awarded when torts are committed with fraud, actual malice, deliberate violence or oppression, or when the defendant acts willfully-” Kelsay v. Motorola, Inc., 74 Ill.2d 172, 23 Ill.Dec. 559, 565, 384 N.E.2d 353, 359 (1978) (emphasis added). Accordingly, a grant of punitive damages is not confined to the question of whether the defendant acted with ill-will directed at the plaintiff but includes the issue of whether the defendant’s acts were willful.

Punitive damages have been awarded for tortuously inducing a breach of a non-solicitation provision in a salesman’s employment contract, see Tower Oil and Technology Co. v. Buckley, 99 Ill.App.3d 637, 54 Ill.Dec. 843, 852, 425 N.E.2d 1060, 1069 (1981). In the case at hand evidence at the liability trial establish that before it hired Pomper, Presco knew about the customer non-solicitation clause in Griffith’s salesmen’s contracts because it had hired a Griffith salesman one year earlier. Nonetheless Presco hired Pomper as a salesman to solicit his Griffith customers, and Pom-per proceeded to sell those customers although both he and Presco had been notified by Griffith that it intended to enforce the non-solicitation provision in Pomper’s contract. In the absence of mitigating circumstances, these facts would satisfy the threshold showing of willfulness necessary to support a punitive damage award.

However, there exists an issue as to Presco’s good faith belief regarding the enforceability of the non-solicitation clause in Pomper’s contract which affects definitive findings as to whether punitive damages should be awarded and, if awarded, the appropriate measure of these damages. The question of Presco’s good faith hinges upon the advice which it received from counsel as to the enforceability of the non-solicitation provision in Pomper’s contract with Griffith. We consider counsel’s views regarding the provision of particular significance to this issue in light of the fact that Pomper was apparently hired by Presco to service the same territory he had covered as a Griffith salesman. Accordingly, decision on whether Griffith is entitled to a punitive damage award is reserved in order to allow the parties to submit evidence at the damages trial on the good faith issue, with specific focus upon the extent and quality of the advice which Presco obtained from its counsel.

Defendants further argue that Griffith is precluded from recovering punitive damages under Federal Rule of Civil Procedure 54(c) because the complaint made no such demand. They assert that to allow Griffith to recover punitive damages would be substantially prejudicial to them because, if the complaint had been pleaded, the defendants would have put in evidence on the issue of their actual malice during the liability trial.

Griffith’s failure to plead punitive damages does not bar such an award. Rule 54(c) provides in relevant part that “every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in his pleadings.” FED.R.CIY.P. 54(c). The Rule has been construed to permit the award of punitive damages when a complaint did not separately plead for them but did allege facts sufficient to support a punitive damages award. See Guillen v. Kuykendall, 470 F.2d 745, 748 (5th Cir.1972). The added award of punitive damages turns on whether the defendant acted willfully. In this case, the complaint alleges that “Presco ... knowingly, intentionally, wrongfully, unlawfully and without justification interfered with and induced Pomper to breach his Contract with Griffith....” Complaint ¶ 22, reprinted in, Plaintiff’s Notice of Motion, Filed Oct. 31, 1984, at Exhibit A.

An exception does exist to awarding damages under Rule 54(c) where the failure to plead the relief requested prejudices the opposing party. See International Harvester Credit Corp. v. East Coast Truck, 547 F.2d 888, 891 (5th Cir.1977); see also Evans Products Co. v. West American Insurance Co., 736 F.2d 920, 924 (3d Cir.1984); Bernard v. Florida East Coast Railway Co., 624 F.2d 552, 555 (5th Cir.1980); 6 J. MOORE, MOORE’S FEDERAL PRACTICE ¶ 54.62 (1983-84 Supp. at 65 & n. 34). However, any prejudice to the defendants in this case resulting from their failure to introduce additional evidence showing their lack of willful conduct will be remedied by the fact that they will have another opportunity to introduce evidence showing the basis for Presco’s good faith beliefs.

In sum, a decision on plaintiff’s request for punitive damages is reserved pending proof at the trial on damages as to defendants’ good faith. Discovery relating to the measurement of the specific amount of punitive damages to which Griffith may be entitled is stayed pending the introduction at the damages trial of the evidence pertaining to Preseo’s good faith beliefs and conduct.

It is so ordered.


author: MOTLEY, Chief Judge.

text:
    In re GRAND JURY PROCEEDINGS (SEALED).
    No. M-11-188(CBM).
    United States District Court, S.D. New York.
    April 4, 1985.
    John J. Momet, Las Vegas, Nev., for movant.
    Rudolph W. Giuliani, U.S. Atty., S.D. N.Y., by Roanne L. Mann, Asst. U.S. Atty., New York City, for the U.S.
   MEMORANDUM OPINION

MOTLEY, Chief Judge.

This matter is before this court on mov-ant’s motion to quash a subpeona ad testi-ficandum. The movant-witness’s brother is under investigation by the Grand Jury. The movant seeks to quash the subpeona and avoid testifying before the Grand Jury on the ground that he is entitled to exercise a “sibling privilege.” The issue presented by this motion is one of first impression in the Second Circuit.

Facts

The movant was subpoenaed to appear and testify before a federal grand jury empanelled in the Southern District of New York on February 26, 1985. Counsel for movant, John J. Momet, Esq., notified the Assistant United States Attorney, Roanne L. Mann, that the movant would invoke his Fifth Amendment privilege and refuse to testify before the Grand Jury. Movant was excused from appearing before the Grand Jury pending the Government’s application for use immunity, pursuant to 18 U.S.C. sections 6002-6003.

On March 13, 1985, the government was granted an immunity order requiring mov-ant to testify. As a result, the movant’s appearance before the Grand Jury was scheduled for Wednesday, March 20, 1985, at 10:00 a.m.

Movant has now moved to quash the subpeona and vacate the order to compel testimony and requested an evidentiary hearing.

Subsequently, this court granted mov-ant’s motion to stay the Grand Jury proceeding at least until March 25, 1985, in an order dated March 20, 1985. The Court further granted movant’s motion to seal all papers. Movant’s motion to quash the subpoena and vacate the order to compel testimony without an evidentiary hearing was denied by an order dated March 25, 1985, with an opinion to follow.

Movant contends that if he is required to testify against his brother his emotional, psychological and physical health will suffer. According to movant, if he were compelled to testify against his brother, he would be forced to breach the confidence of this sibling relationship. Movant further contends that his family life, more particularly his relationship with his brother, will be irreparably harmed. Finally, movant asserts that society’s interest in protecting the family unit, in light of the breakdown of family cohesiveness prevalent in modern society, is greater than the government’s interest and should be afforded greater protection.

For the reasons set forth below, the court denies movant’s motion to quash the subpoena and vacate the order to compel testimony on the ground of a testimonial sibling privilege.

Discussion

Federal Rules of Evidence, Rule 501, provides that in the absence of federal statute or rule, “the privilege of a witness, person, government, State or political subdivision thereof shall be governed by the principles of the common law as they may be interpreted by the courts of the United States in the light of reason and experience.”

The Second Circuit has declined to expand recognized testimonial privileges to include parent-child or familial or sibling privileges. In In re Cueto, 554 F.2d 14, 15 (2d Cir.1977), the court declined to recognize a privilege for lay ministers stating:

It is a fundamental rule of law that the public has a right to every person’s evidence. There are a small number of constitutional, common-law and statutory exceptions to that general rule, but they have been neither “lightly created nor expansively construed, for they are in derogation of the search for truth.” United States v. Nixon, 418 U.S. 683, 710, 94 S.Ct. 3090, 41 L.Ed.2d 1039 (1974).

Movant requests this court to follow the trend of other district courts in expanding testimonial privileges. He relies on the decisions of other courts which recognized the existence of a parent-child privilege. See, e.g., In re Grand Jury Proceedings (Agosto), 553 F.Supp. 1298 (D.Nev.1983).

In a recent decision, the Second Circuit declined to create an “in-law” privilege. Although recognizing other judicial decisions upholding a parent-child privilege, the court stated that “[t]hese rulings ... are departures from the traditional rule in federal courts that, other than the spousal privilege, there is no privilege that permits a person not to testify against family members.” In Re Matthews, 714 F.2d 223, 224 (2d Cir.1983).

Similarly, the district court in In re Kinoy, 326 F.Supp. 400, 406 (S.D.N.Y.1970) denied a parent-child privilege stating that “there is no such thing [as a parent-child privilege]. All of us, whether as parents or children, may empathize over the imaginable prospect of being asked to incriminate those close to us.”

Other courts have also refused to expand the traditional list of recognized privileges to include a parent-child privilege or familial privilege. In re O’Brien, 728 F.2d 1172, 1174 (8th Cir.1984) (rejecting witness’ argument that compelled testimony before the grand jury would violate First Amendment right to freedom of association by “compromising his social and family relationships”); Rockwell International Corp. v. H. Wolfe Iron & Metal Co., 576 F.Supp. 511, 515 (W.D.Pa.1983) (deposition witnesses ordered to answer questions concerning third parties including family members); United States v. Penn, 647 F.2d 876, 885 (9th Cir.1980) (en banc) (parent-child privilege, rejected because “there is no judicially or legislatively recognized general ‘family’ privilege”).

The Eleventh Circuit, in In re Grand Jury Subpeona of Santarelli, 740 F.2d 816, 817 (1984), denied appellant’s motion to quash a grand jury subpeona where appellant asserted a parent-child privilege. The appellant attempted to distinguish the Fifth Circuit’s decision in In re Grand Jury Proceedings (Starr), 647 F.2d 511 (5th Cir.1981), wherein the court rejected the appellant’s parent-child privilege claim. The Eleventh Circuit stated:

The holding in Starr is consistent with that of every court of appeals that has had occasion to address questions of family privilege outside the context of interspousal communications. In re Matthews, 714 F.2d 223 (2d Cir.1983) (rejecting a privilege not to testify against one’s in-laws); United States v. Jones, 683 F.2d 817 (4th Cir.1982); United States v. (Under Seal), 714 F.2d 347, 349 n. 4 (4th Cir.1983) (rejecting parent-child privilege); United States v. Penn, 647 F.2d 876 (9th Cir.1980) (“there is no judicially or legislatively recognized general ‘family’ privilege”).... As previously noted, the Second, Fourth, and Ninth Circuits have uniformly declined to acknowledge the existence of a family privilege.

740 F.2d at 817.

The movant relies on People v. Fitzgerald, 101 Misc.2d 712, 422 N.Y.S.2d 309 (Westchester County Ct.1979), as support for its contention that Rule 501 of the Federal Rules of Evidence requires this court’s recognition of new testimonial privileges. In Fitzgerald, the state court although acknowledging judicial reluctance in creating new classes of privileges recognized a parent-child privilege. It noted that:

“courts cannot shield themselves behind such a ‘tendency’ and disregard all such situations where the foundation of certain basic relationships, such as those between family members may be threatened.”

Id. at 311.

Movant also relies on In re Agosto, 553 F.Supp. 1298 (D.Nev.1983), wherein the court extended a testimonial privilege to parent-child relationships, in support for the argument that this court, as have others, is free to extend the present privileges to situations requiring constitutional protection i.e., the constitutional right of familial privacy.

In In re Matthews, supra, the Second Circuit considered and refused to follow the cases relied upon by movant.

Moreover, movant’s attempt to distinguish Matthews, supra, by limiting its holding to only “in-law” privileges is untenable. The Second Circuit’s decision should be read broadly as evidenced from the subsequent cases in which Matthews was relied upon. See, e.g., In re Grand Jury Subpeona of Santarelli, supra, at 817, (rejecting recognition of a parent-child privilege and general family privilege).

This court is bound to follow Matthews, supra, and therefore declines to extend the traditional testimonial privileges to include a sibling or family privilege. Movant’s motion to quash the Grand Jury subpeona is therefore denied.

      . Movant's contention that the sibling relationship is closer than that of parent and child appears to be without merit. History and literature is replete with instances of sibling rivalries such as the difficult relationship between Cain and Abel, and Jacob and Esau. Genesis 4:1-16; 27:1-45.


author: STANLEY S. HARRIS, District Judge.

text:
    Hardy C. SVENSON, Plaintiff, v. Clarence THOMAS, Chairman, Equal Employment Opportunity Commission, Raymond J. Donovan, Secretary, United States Department of Labor, and Donald T. Regan, Secretary, United States Department of the Treasury, Defendants.
    Civ. A. No. 84-2632.
    United States District Court, District of Columbia.
    April 4, 1985.

      Hardy C. Svenson, pro se.
    Charles F. Flynn, Asst. U.S. Atty., Washington, D.C., for defendants.
   MEMORANDUM OPINION AND ORDER

STANLEY S. HARRIS, District Judge.

This case now is before the Court on defendant Thomas’ motion to dismiss him as a defendant. On consideration thereof, and on consideration of plaintiff’s opposition and the entire record, the motion is granted.

The plaintiff seeks relief for alleged employment discrimination pursuant to Title VII of the Civil Rights Act, as amended, 42 U.S.C. § 2000e-16, and the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 633a.

On September 23, 1982, the plaintiff, an employee of the Department of Labor (hereinafter Agency), filed a formal administrative complaint alleging discrimination by the Agency based on age and national origin. That complaint alleged continuous discrimination dating back to a work-related injury which occurred on December 10, 1980. The Agency’s Office of Civil Rights handed down its final decision on March 7, 1983. The decision accepted certain allegations as having merit and rejected others as untimely. The plaintiff appealed that decision to the Equal Employment Opportunity Commission (EEOC). The EEOC affirmed.

On February 14, 1984, during the pend-ency of the appeal, plaintiff filed a formal administrative complaint alleging that the EEO coordinator handling the case “coerc[ed], interfer[ed] and restrain[ed]” the plaintiff from pursuing his original complaint. He further contended that such action was in reprisal for his having filed the original complaint. Those allegations stemmed from plaintiff’s dissatisfaction with the EEO coordinator’s handling of the complaint. On April 13, 1984, the Agency issued a decision which, relying on EEO management bulletin 107 (EEO-MB-107), rejected the February 14, 1984, reprisal complaint. The effect of this was to incorporate the reprisal complaint into the original complaint. The plaintiff appealed that decision to the EEOC, arguing that the original complaint and the reprisal complaint should have been considered separately. The EEOC found that the reprisal complaint was a spinoff of the original complaint and, in reliance on EEO-MB-107, upheld the joint processing.

The complaint in this case alleges in part that defendant Thomas, the Chairman of the EEOC, failed to appoint a complaint examiner, denied the plaintiff a hearing, and failed to provide findings or develop a record, thus violating Title VII and ADEA. Basically, the portion of plaintiffs complaint leveled at defendant Thomas arises from plaintiffs disagreement with the two EEOC decisions as well as the EEOC’s reliance on EEO-MB-107.

The question is whether the Chairman of the EEOC is amenable to suit under either Title VII of the Civil Rights Act, as amended, 42 U.S.C. § 2000e-16, or the Age Discrimination in Employment Act, 29 U.S.C. § 633a, by a federal employee who is not in the employ of the EEOC. The Court concludes that he is not.

It is clear “that Title VII does not provide either an express or implied cause of action against the EEOC to challenge its investigation and processing of a charge.” McCottrell v. EEOC, 726 F.2d 350, 351 (7th Cir.1984) (citations omitted). A plaintiff may vindicate his rights by filing a complaint against the party allegedly engaged in the discrimination. Id. at 352. Mr. Svenson has done this. The plaintiffs Title VII claim against defendant Thomas fails to state a claim upon which relief can be granted and therefore must be dismissed. See Fed.R.Civ.P. 12(b)(6).

Section 15 of the ADEA, 29 U.S.C. § 633a, was modeled after Title VII. Lehman v. Nakshian, 453 U.S. 156, 163, 101 S.Ct. 2698, 2703, 69 L.Ed.2d 548 (1981). Whenever possible, the two statutes are to be construed consistently. Oscar Mayer and Co. v. Evans, 441 U.S. 750, 756, 99 S.Ct. 2066, 2071, 60 L.Ed.2d 609 (1979). The plaintiffs claim against defendant Thomas under the ADEA, not being against the head of the employing agency, also must fail. The plaintiffs sole remedy under Title VII and ADEA lies against the head of the employing agency allegedly perpetrating the discrimination. Accordingly, it hereby is.

ORDERED, that defendant Thomas’ motion to dismiss as to him is granted with prejudice.

SO ORDERED.

      . EEO-MB-107 directs that complaints filed alleging discrimination in the actual handling and processing of a previously filed discrimination claim are to be addressed in connection with the original complaints. They are not to be separately considered. This policy recognizes the staggering case load handled by the agencies and attempts to minimize its growth by incorporating these offshoot complaints into the original complaints.


author: CHARLES SCHWARTZ, Jr., District Judge.

text:
    UNITED STATES of America v. Roselia Y. FAJARDO.
    Crim. No. 85-124.
    United States District Court, E.D. Louisiana.
    April 8, 1985.

      Robert Hamilton, Asst. U.S. Atty., New Orleans, La., for U.S.A.
    James Wysocki, Robert Drouant, Bonnie Zakotnik, New Orleans, La., for defendant.
   ORDER AND REASONS

CHARLES SCHWARTZ, Jr., District Judge.

This matter is before the court pursuant to the provisions of 18 U.S.C. § 3145 on motion of defendant to review a detention order issued by United States Magistrate Ronald Fonseca on April 2, 1985. Considering the evidence adduced at prior proceedings in this matter, as well as the testimony adduced at the Court’s April 4, 1985 hearing in this matter, the memoran-da filed by the parties, and the applicable law, this CoueLaffirms the Magistrate’s Order and denys (defendant’s motion.

Defendant objects to the conditions imposed by the Magistrate on the grounds that the conditions so imposed are “penal in nature” in that the charged offense (31 U.S.C. § 5316) constitutes a misdemeanor punishable by a maximum term of imprisonment of one year and a fine of $1000 or both. Defendant is mistaken, the penalty provisions of 31 U.S.C. § 5322 were recently amended and the maximum penalties authorized for violations of 31 U.S.C. §5316 now categorize that offense as a felony with maximum possible penalties of five years imprisonment and/or a fine of up to $250,000. See Comprehensive Crime Control Act of 1984, Public Law 98-473, Chapter IX, Section 901(b) (Oct. 12, 1984).

Defendant also contends that the Magistrate erred by not accepting the evidence that was offered by the defendant in support of defendant’s argument that the sources of the $100,000 collateral would reasonably assure defendant’s appearance at trial.

Pursuant to law, this Court reviewed this matter applying a de novo standard of review. And, according to stipulation of the parties, the Court listened to tapes of all prior proceedings in this matter. The Court also conducted its own hearing to determine whether any condition or combination of conditions set forth in 18 U.S.C. § 3142(c) would reasonably assure the appearance of the defendant as required.

After reviewing tapes of the prior proceedings, and the evidence adduced at the Court’s Hearing, the court concludes as follows: “

1. Defendant, Rosalia Farjardo, is a non-resident of this country.

2. She was temporarily in this country visiting friends at the time of her arrest.

3. Defendant has no ties to this country. She has no family in this district, is not employed here, and neither owns nor operates a business in this district, and owns no property in this district.

4. Additionally, defendant is the mother of two minor children residing in Belize, Central America, and it is natural to assume that she would not desire to be separated from them for an extended period of time.

5. She is a resident and citizen of Belize, Central America, charged with a violation of 31 U.S.C. § 5316, an offense that is not subject to extradition under the treaty presently in force between the United States and Belize. In sum, defendant poses a serious flight risk.

6. The Magistrate initially set bond at $100,000 cash, surety or property, together with conditions that she submit to PSA supervision and that a third party assume custody of her pending completion of these proceedings. Within a few days after the amount of bond was set, a $10,000 check was given to a local bondsman as his fee for underwriting defendant’s bond and $100,000 cash was transferred from a Panamanian Bank to a local bank in Jefferson Parish, which was to represent collateral to the bondsman for writing the bond.

7. The Magistrate conducted a hearing pursuant to 18 U.S.C. § 3142(g)(4) to determine the source of these funds. After failing to satisfactorily establish the source of these funds at the initial hearing, the Magistrate continued the hearing to allow defendant further opportunity tojprove the source of the funds. fl

8. At the subsequent hearing the defendant presented the affidavit Ms. Myrtle Sheran, the supposed source of the $100,-000, as well as unsworn letters from persons that claimed to be aquainted with the affiant, and knew her to be a person of good character. The defendant also introduced a “balance sheet” and will which defendant contends established the net worth of affiant and the source of the money used as collateral. See Defendant’s Exhibits 1-11.

9. Mrs. Hunt, a local resident, initially agreed when speaking to the probation officer conducting a background investigation on defendant that she would be willing to serve as a third party custodian of the defendant and to place a mortgage on her residence to insure the performance of her obligation as a third party custodian. The probation officer has advised the Court that Mrs. Hunt is no longer willing to serve as third party custodian or to mortgage her home in connection with these proceedings.

10. At the bond proceedings conducted in connection with defendant’s initial appearance before the court defendant refused to advise the court as to how much cash she had either on hand or in a bank or savings institution.

Assuming arguendo that the documents submitted by defendant to show the source of the funds which comprised the $100,000 are credible, they likewise demonstrate that Ms. Sheran has considerable net worth and is a wealthy woman and could therefore provide a more substantial bond for her daughter-in-law. This is borne out by the apparent ease and the expeditious manner in which the $100,000 collateral and the $10,000 fee were furnished to the bondsman. Furthermore, the indicted offense carries a potential fine of $250,000 and setting a bond less than this amount under the circumstances of the case would create yet another incentive for the defendant to flee prior to the completion of these proceedings if she were in fact guilty.

The Court has also taken into consideration that both Magistrate Fonseca, and Mr. Tom Mallia, the Probation Officer assigned to this case, are of the opinion that a $100,-000 bond in this case is not sufficient to assure defendant’s appearance in court. Magistrate Fonseca is a former United States Attorney with considerable experience in cases of this type, and Mr. Tom Mallia has had considerable experience both as a probation officer in this country, and in Panama, Canal Zone, and the Court knows him to be a fair minded person, well versed in these matters.

Subsection (c) of 18 U.S.C. § 3142 permits the court to cope with the problem of the increasing incidence of defendants in highly lucrative criminal activities who are able to meet high money bonds, posting bail and then fleeing the country. During the hearings on the Bail Reform Act of 1984 it was brought to the attention of Congress that there was a growing practice of those engaged in lucrative criminal activities allocating a portion of their criminal income to cover the costs of avoiding prosecution. It is obvious that Congress intended to grant courts greater flexibility in fixing the amount of a bond high enough so as to deter those charged with crimes from surrendering a rather inconsequential sum, insofar as they were concerned, in an effort to place themselves beyond the jurisdiction of the court and thereby avoid standing trial.

This Court, in calling upon its experience of almost nine years in dealing with matters of this sort, is of the opinion under the circumstances of this case, that accepting a $100,000 bond with no third party custody other than a paid bondsman who has been fully collateralized and given $10,000 in addition, would be tantamount to suggesting that the Court accept $100,000 in lieu of proceeding with the criminal prosecution of this defendant.

Accordingly, the Court, in considering the above factors, finds that a bond in the amount of $500,000, together with the added conditions that (1) defendant submit to PSA supervision, and (2) remain in the custody of an acceptable (by this Court) third party, with the third party custodian furnishing a $50,000 mortgage to this Court to insure the faithful performance of his or her undertaking, will adequately assure defendant’s appearance in court in connection with these proceedings.

The defendant has already advised that she is unable to meet the conditions of this release. Accordingly, the Court finding there are no conditions which can be imposed to assure defendant’s appearance other than those set forth above, denies defendant’s motion and orders the defendant detained.

      . See, United States v. Beesley, 601 F.Supp. 82 (N.D.Ga.1984).

      . See Tapes Nos. 85-15, -18, -22, -23, -24 (Courtroom #2) (over 41/2 hours of proceedings).

        .See Extradition Treaty Between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland, June 8, 1972 & Oct. 21, 1976, 28 U.S.T. 229, T.I.A.S. No. 8468.

      . At this hearing defendant presented the testimony of Mr. Said Musa,'a former attorney general of Belize, and the attorney for Ms. Sheran, the alleged source of the $100,000 collateral. On cross examination Mr. Musa declined to take third-party custody of the defendant and also admitted that he did not actually know what the source of the $100,000 collateral was, other than the fact that it was wired from Panama to the United States per Ms. Sheran’s instructions.

      . Ms. Hunt never testified. In fact, at no stage of the proceedings did the defendant present the testimony of any person willing to take third-party custody of the defendant, other than the testimony of the fully collateralized bondsman.

      . The Government’s motion for detention without bond is denied.


author: EISELE, Chief Judge.

text:
    UNITED STATES of America, Plaintiff, v. Larry R. KILLOUGH, Defendant.
    No. LR-CR-84-97.
    United States District Court, E.D. Arkansas, W.D.
    April 8, 1985.
    On Request for Evidentiary Hearing April 8, 1985.

      Dale Price, Little Rock, Ark., Comer Boy-ette, Searcy, Ark., for plaintiff.
    Robert J. Govar, Asst. U.S. Atty., Little Rock, Ark., for defendant.
   ORDER

EISELE, Chief Judge.

The government has filed a motion to quash the subpoenas directed to the Assistant United States Attorney Robert J. Go-var. The defendant subpoenaed Mr. Govar to appear at a hearing previously scheduled by the Court for March 28, 1985, and also to appear as a witness for the trial on May 6, 1985. Since the defendant has made no showing that the testimony of Mr. Govar is necessary or that he possesses information vital to the defense, the government’s motion to quash said subpoena will be granted. See discussion in order entered this date on the defendant’s request for a pretrial evidentiary hearing.

In the light of the above ruling, the Court.feels it necessary to make known to the parties its views on the issues to be tried to the jury. Only issues related to the guilt or innocence of the defendant to the crimes charged will be tried out to the jury. The defendant will not be permitted to explore the motives or actions of government agents “behind the scenes” unless they can be shown to bear in some way upon the guilt or innocence of the defendant of the crimes charged. The motives and the behind the scenes actions of government agents might possibly bear upon the defendant’s official conduct entrapment theory, but if this issue is to be tried out at all, it must be before the Court and not the jury since it does not bear upon the defendant’s guilt or innocence. The official misconduct entrapment theory assumes the guilt of the defendant under the ordinary entrapment defense but, in effect, states that, for due process reasons, the government should be deprived of the benefits of the conviction and the indictment must be dismissed because of the outrageous conduct of the government in the prosecution of the case. As indicated in the Court’s order denying a pretrial hearing, the Court may or may not look further into defendant’s official conduct entrapment theory depending upon how it views the evidence received during the jury trial. But the Court wants to make it clear to the parties that it does not intend to permit this issue to be tried out before the jury.

It is therefore Ordered that the motion of the United States to quash be, and it is hereby, granted.

ON REQUEST FOR EVIDENTIARY HEARING

Pending before the Court is defendant’s response to the Court’s order of March 27, 1985. In the March 27 order, the Court denied defendant’s request for an eviden-tiary hearing on defendant’s motion to dismiss. Defendant believes that both the defenses of conventional entrapment and of government conduct entrapment warrant dismissal of the indictment. Defendant also believes that he is entitled to a hearing to bring forward his evidence of entrapment. In its March 27 order, the Court determined that the defense of entrapment is properly resolved at trial and not at a pretrial evidentiary hearing. The Court found that a pretrial hearing would not conserve the resources of the Court and parties, and could well waste those resources.

In its March 27 order, the Court permitted defendant to specifically identify by affidavit or otherwise any evidence relevant to entrapment which could not be brought forward at trial. Defendant was given this opportunity because certain allegations concerning behind-the-scenes activities of Assistant United States Attorney Bob Govar could not be examined during the trial. Because Mr. Govar is the prosecuting attorney, he could not also be a witness at trial.

Defendant has taken the opportunity to respond to the Court’s order. In that response, defendant again argues that he is entitled to dismissal under the conventional defense of entrapment. Defendant states, “When there is a total lack of predisposition proof or where reasonable men could not find such proof, entrapment is a question of Law for the Court and the defendant should not be put to trial on the charges.”

As stated in its prior order, the conventional concept of entrapment is that a criminal intent is deliberately implanted in the mind of an innocent person by government agents. United States v. Quinn, 543 F.2d 640 (8th Cir.1976). Conventional entrapment centers on the defendant’s predisposition to commit the crime. Where the evidence of entrapment is conflicting, the question is one of fact for the jury, with the burden on the government to prove absence of entrapment. Id. Also as stated in its prior order, the defendant has not cited any case and the Court knows of no case where the defense of entrapment was resolved other than at trial.

Defendant nonetheless continues to argue, without authority, that the defense of entrapment should be resolved at a pretrial evidentiary hearing. The Court continues to reject the notion. If the defense of entrapment, generally a fact question, had to be first considered by the Court in the context of a motion to dismiss and pretrial hearing, the result would be, in effect, to hold two trials. And, assuming a fact question did exist, it would be an invasion of the jury’s prerogatives for the Court to substitute its factual finding for those that a jury might make. The Court would be most reluctant to establish such a precedent. When the government contends that a factual issue will be made on the issue of entrapment, the Court should accept that contention in good faith. Of course, if it turns out that the defendant is right and that there is no factual issue, the Court can handle that at the trial. Further, in the instant case, the government has done more than merely contend that a factual issue exists. It has attempted to demonstrate that a factual question does exist. For instance, the government states that it was told by Tommy Williams that the defendant was, at an earlier date, selling him prescriptions (not for medical purposes). The Court is convinced that it should not attempt to resolve this issue at a pretrial evidentiary hearing.

The Court is also not willing to hear the issue of government conduct (or, better, “misconduct”) entrapment at a 'pretrial hearing. Government conduct entrapment occurs where governmental participation is so outrageous or fundamentally unfair as to deprive the defendant of due process or as to move the courts to exercise their supervisory jurisdiction over the administration of criminal justice. Because government conduct entrapment is a question for the Court, the notion of a pretrial evidentiary hearing is not as far fetched as it is in the context of conventional entrapment. The Court, however, is still convinced the notion is flawed and that the better practice will usually be to resolve the factual issues concerning governmental abuse at or after the trial. Obviously, much of the evidence relevant to government conduct entrapment will be substantially the same evidence which would be brought forward at trial. Thus, even if a pretrial hearing would obviate the need for a trial, no appreciable resources are conserved.

As previously mentioned, the instant case is somewhat unusual in that some of defendant’s government conduct allegations are directed at Assistant United States Attorney Bob Govar, the trial attorney in charge of this case. Such allegations, assuming for the moment that they raise jury issues, could not appropriately be explored or addressed at trial unless Mr. Govar was required to step aside. But do those allegations raise any issue with which the jury is, or should be, concerned?

In response to the defendant’s motion to dismiss, Mr. Govar has submitted a seven-page affidavit which details his involve: ment in the case and in which he denies that he acted improperly. In its March 27 order, the Court directed the defendant to submit its evidence that Mr. Govar’s affidavit is incorrect. Defendant has attempted to do so.

In its response, defendant first disputes Mr. Govar’s characterization of his behind-the-scenes involvement as being “minimal.” Defendant believes the characterization is disputed by five criminal investigation reports made by state police investigator Chris Anderson. These reports indicate that Mr. Govar met with state police and that he played a role in directing the investigation of defendant. However, that is precisely what assistant U.S. attorneys do on a daily basis in the discharge of their responsibilities.

One report states that after reviewing the case, Mr. Govar asked that the government informant, Tommy Williams, be sent back to the defendant’s office at least two more times. Another report states that activities were planned at a meeting between Mr. Govar and three state police investigators. Another report states that Tommy Williams called the defendant and arranged for the transfer of money “as per instructions of Mr. Govar.” The Court believes that none of these reports reflect any improper conduct on the part of Mr. Govar.

Defendant also submits in its response various affidavits to show that Mr. Govar acted improperly. The affidavit of the defendant states that on September 27, 1984, he was contacted by the government informant, Tommy Williams. Mr. Williams then informed him for the first time that Assistant U.S. Attorney Govar and state officers had “entrapped” him into writing prescriptions. Mr. Williams told the defendant that Mr. Govar was mad at him because of the defendant’s testimony in a prior case. Mr. Williams also is alleged to have told the defendant that Mr. Govar wished “to nail [the defendant’s] ass to the wall” and further, that Mr. Govar wished to “make an example of [the defendant] which would tighten the asshole of every doctor in the state, regardless of whether [the defendant] was convicted or not.” While the Court understands that the defendant may feel abused, his affidavit creates no factual basis for a finding of outrageous prosecu-torial conduct even if Mr. Williams would testify that Mr. Govar himself made such statements directly to, or in the presence of, Mr. Williams.

Another affidavit is submitted by William Trice, a member of the law firm representing the defendant. Mr. Trice states that during interviews with Mr. Williams, Mr. Williams told him that he believed Mr. Govar had it in for the defendant because of a previous trial. Mr. Williams also told Mr. Trice that Mr. Govar approved the activities in the investigation. Regarding the September 27, 1984, conversation between the defendant and Mr. Williams, Mr. Williams told Mr. Trice that he told the defendant on September 27, “Now this is not a quote because I heard, this is hearsay, but was told that Larry Killough was in a trial testifying for the defense of a drug company and that he lied during the conversation.” Mr. Williams also told Mr. Trice that he heard the above statement from state police investigator Chris Anderson. Mr. Williams further told Mr. Trice that he had told the defendant that Mr. Govar was prosecuting this action because he believed it would stop a lot of other doctors from doing the same thing.

Mr. Williams himself has also submitted an affidavit. In his affidavit, Mr. Williams states that on September 27, 1984, he told the defendant that Mr. Govar was after him because Mr. Govar thought he [the defendant] had lied in a previous trial. The Court views it as significant that Mr. Williams does not state that Mr. Govar himself told Mr. Williams anything about the defendant.

The third major area treated in defendant’s response to the Court’s order concerns the defendant’s lack of predisposition. Because the Court views the issue concerning defendant’s predisposition an issue for trial, the Court will not review defendant’s evidence in this respect.

The defendant has summarized its argument concerning why Mr. Govar is needed as a witness at trial by stating that “his testimony is necessary to defendant’s case to establish the nature and extent of Government Agent’s participation and their motivation, the actual entrapment and the lack of investigation by the United States Attorney or any other law enforcement agent involved concerning whether Dr. Kil-lough was predisposed to prescribe drugs for non-medical purposes prior to obtaining the indictment, or to bribe witnesses.” Most of this information will probably not be admissible at the jury trial because it will be irrelevant to the issue of the guilt or innocence of the defendant. See discussion in the order entered this date upon the government’s motion to quash subpoenas.

After considering defendant’s response, the Court continues to believe that a pretrial evidentiary hearing would be inappropriate and is unnecessary. While the documents concerning Mr. Govar’s involvement in directing the investigation may indicate that Mr. Govar’s participation was more than minimal, they do not indicate that Mr. Govar acted improperly. As stated by the court in Quinn, supra,

[I]nvestigative officers and agents may go a long way in concert with the individual in question without being deemed to have acted so outrageously as to violate due process or evoke the exercise by the courts of their supervisory powers so as to deny to the officers the fruits of their misconduct. 648.

The Court has examined defendant’s fifteen exhibits and his arguments. It concludes that the defendant has not made a showing which would warrant holding a pretrial evidentiary hearing on defendant’s official conduct entrapment theory. If, after appraising the evidence introduced at the trial concerning the conventional entrapment defense, the Court changes its mind it can schedule a post-trial hearing on the issue.

It is therefore Ordered that defendant’s request for a pretrial evidentiary hearing be, and it is hereby, denied.


author: HOBBS, Chief Judge.

text:
    Kenny WILDER, Plaintiff, v. COMMISSIONER OF INTERNAL REVENUE SERVICE, Defendant.
    Civ. A. No. 84-H-1168-N.
    United States District Court, M.D. Alabama, N.D.
    April 9, 1985.

      Kenny Wilder, pro se.
    Edward J. Snyder, J. Brian Ferrell, Jefferson K. Fox, U.S. Dept, of Justice, Tax Div., Washington, D.C., John Bell, U.S. Atty. and Kenneth E. Vines, Asst. U.S. Atty., Montgomery, Ala., for defendant.
   MEMORANDUM OPINION

HOBBS, Chief Judge.

This cause is now before the Court on defendant’s motion for summary judgment, filed January 7, 1985.

Plaintiff brought this action under the Freedom of Information Act (FOIA), 5 U.S.C. § 552, seeking the disclosure of certain information from the Internal Revenue Service. Prior to filing this action plaintiff submitted requests under the FOIA to the appropriate disclosure officer for said information (Exs. A and B to complaint). In response to said requests, over two hundred pages of materials were released to plaintiff while a number of other documents were withheld (Ex. C to complaint).

Contemporaneously with the filing of his complaint, plaintiff filed a motion to compel preparation of a Vaughn index. On November 29, 1984, a hearing was held on said motion. During the hearing defendant advised the Court that he intended to file a motion for summary judgment with supporting affidavits which would summarize each of the withheld documents which remain at issue, and the Court ordered defendant to file such a summary (Order entered Nov. 29, 1984).

On January 7, 1985, defendant filed its motion for summary judgment with a supporting affidavit from an attorney who is responsible for the defense of this action. Said affidavit summarizes each document at issue. Contemporaneously with the filing of said motion, defendant released a number of other documents to plaintiff.

At the time the instant motion was filed, there remained at issue five groups of documents. In plaintiffs opposition to said motion, filed February 8, 1985, he withdrew his request for documents which comprise two of these five groups. (Portions of Documents 13, 20, 21, 22, and 9, 11, 12, 17, 18, 19, 22, 24, and 26) Plaintiff confirmed his withdrawal of said request at the hearing held on the instant motion February 12, 1985. Accordingly, there remain at issue three groups of documents requested. Group One is comprised of documents 4 and 10. Group two is comprised of documents 14, 15, and 16. Group three is comprised of documents 9 and 17.

Group One (Documents b and 10)

The portions of documents 4 and 10 which are being withheld from plaintiff are those portions which identify his Discriminant Function Score (DIF). (See Affidavit to Motion par. 4) A DIF score is a standard used by the IRS to select returns for examination. Defendant contends that if such scores were released taxpayers might well be able to determine the scoring system and thereby circumvent the agency’s law enforcement efforts by filing returns which are fraudulent yet within the range on- the DIF Scoring System of those returns which will not be examined. Defendant asserts that such scores are exempt from the Act’s disclosure requirements pursuant to 5 U.S.C. § 552(b)(7)(E) and subsection (b)(2). These Sections exempt from disclosure those investigatory records compiled for law enforcement purposes the production of which would “disclose investigative techniques and procedures” (§ (b)(7)(E)) and matters that are “related solely to the internal personnel rules and practices of an agency” (§ (b)(2)).

Without addressing the § (b)(7)(E) exemption, this Court is satisfied from the record that the disclosure of such specific DIF scores could well result in the circumvention of the law and undermine legitimate enforcement or agency regulatory procedures. The (b)(2) exemption has been held to apply to such matters. See Crooker v. Bureau of Alcohol, Tobacco & Firearms, 670 F.2d 1051 (D.C.Cir.1981) and Captan v. Bureau of Alcohol, Tobacco & Firearms, 587 F.2d 544 (2d Cir.1978). The Court finds the subsection (b)(2) exemption to be applicable to documents 4 and 10.

Group Two (Documents If 15, and 16)

Pursuant to this Court’s order dated February 28, 1985, defendant has provided the Court with the documents in this group for an in camera inspection. Having made such an inspection and carefully considered this matter the Court is of the opinion that these documents are due to be exempt from disclosure pursuant to 5 U.S.C. § 552(b)(5). These documents are clearly confidential communications from attorney to client based on prior confidential communications from client to attorney and as such clearly fall within the attorney-client privilege recognized in Brinton v. Department of State, 636 F.2d 600, 605 (D.C.Cir.1980). It is well settled that such documents as these which come within the ambit of the attorney-client privilege are, as defendant has correctly indicated, included within the subsection (b)(5) exemption. See NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 95 S.Ct. 1504, 44 L.Ed.2d 29 (1975).

Group Three (Documents 9 and 17)

These documents also have been inspected by the Court in camera pursuant to the aforementioned order. The defendant has represented to the Court by duly executed affidavit that documents 9 and 17 are identical documents and that each has been released to plaintiff in its entirety with the deletion of two sentences. The Court, having examined these documents with said deletions, concludes that the deleted portions of these documents are exempt from disclosure.

The first deleted sentence in documents 9 and 17 is exempt from disclosure pursuant to 5 U.S.C. § 552(b)(3) for it reflects “tax return information” of third parties. The deleted sentence relates only to IRS action taken with respect to the tax liability of a person other than plaintiff and as such is clearly subject to this well recognized exemption. While the Court is satisfied that this material falls within 26 U.S.C. § 6103’s mandate of confidentiality, in light of its decision under subsection (b)(3) of the FOIA, it need not consider whether that section also exempts this sentence from disclosure. The Court further notes that plaintiff has specifically advised the Court that he has no desire to obtain information which relates to action taken with respect to third parties.

The second deleted sentence of documents 9 and 17 is exempt from disclosure pursuant to 5 U.S.C. § 552(b)(2). It is clearly a statement which reflects law enforcement policies the disclosure of which this Court is satisfied would enable taxpayers to violate the law and avoid prosecution. See Crooker, supra, and Caplan, supra.

It is the conclusion of this Court, therefore, that there remains no genuine issue as to any material fact in this case and that defendant’s motion for summary judgment is due to be granted.

A separate judgment will be entered in accordance with this memorandum opinion.

      . Certain numbered documents appear in several groups because portions of said document are sought for different purposes and relate to different information.


author: HUNGATE, District Judge.

text:
    McDonnell DOUGLAS CORPORATION, Plaintiff, v. The KINGDOM OF DENMARK, et al., Defendants.
    No. 84-2336-C(3).
    United States District Court, E.D. Missouri, E.D.
    April 9, 1985.

      Bryan, Cave, McPheeters & McRoberts, John J. Hennelly, Jr., Kevin F. O’Malley, Curtis M. Dombek, Mark Edelman, St. Louis, Mo., for plaintiff.
    G. Keith Phoenix, Shepherd, Sandberg & Phoenix, St. Louis, Mo., Randal R. Craft, Jr., Haight, Gardner, Poor & Havens, New York City, for defendants.
   MEMORANDUM

HUNGATE, District Judge.

This matter is before the Court on the motion of defendants, The Kingdom of Denmark, The Royal Danish Navy, and The Royal Danish Naval Material Command, to dismiss the complaint for lack of subject matter jurisdiction, pursuant to 9 U.S.C. § 201, et seq., and in the alternative to stay these proceedings and to compel arbitration, pursuant to 9 U.S.C. §§ 3 and 4.

Plaintiff commenced this action seeking declaratory judgment exonerating it from all liability for damages arising out of the inadvertent launch of a Harpoon missile from a Danish frigate on September 6, 1982.

Plaintiff engages in the manufacture of weapons systems for sale to the United States and foreign governments. Among the weapons systems produced by plaintiff is the Harpoon system, which includes a sixteen-foot-long Harpoon missile and the Harpoon Shipboard Command — Launch Control Set (launch subsystem) to control the missile. The Harpoon is an anti-ship missile that can be launched from naval surface ships, aircraft, or submarines. The missile skims above the water at low altitude, locates the intended target, flies to it, and, by means of an exploding warhead, destroys or disables the ship.

On or about December 1, 1975, defendants entered into a foreign military sales contract with the government of the United States for the purchase of the Harpoon weapon system. This contract covered the sale of the missiles themselves.

On December 4, 1975, plaintiff, with the permission of the United States Navy, entered into a contract with the defendants for the sale of launch subsystems to be used by the Danish Navy in connection with the operation of the missiles. That contract contained a commercial arbitration clause which provides, in pertinent part, as follows:

13.0 Arbitration — Any dispute or difference arising between the parties, relating to the terms of the present contract and which cannot be settled in a friendly manner, shall be finally settled by an arbitral tribunal.... This contract shall be interpreted in accordance with and be governed by the laws of the State of New York.

A second contract between plaintiff and the Danish Naval Material Command regarding the launch subsystem was entered into on December 7, 1979. The arbitration clause in this agreement is identical to that quoted above, with the exception of the following sentence which was added:

5.0 ARBITRATION.... The tribunal will have full liberty to determine procedure, but the award must be based on the wording of this Contract....

This contract was established for a period of fifteen years and requires plaintiff to provide, inter alia, the following: (1) a data base for the system and its components; (2) a spare parts stockpile; (3) support services; and (4) direct requisition and repair of parts.

One of the launch subsystems was eventually installed on the Danish frigate Peder Skram in 1979. On September 6, 1982, the defendants were operating the Peder Skram in Danish waters near the island of Kattegat in preparation for upcoming NATO exercises. At approximately noon, Captain Henning G. Olsen, an officer of defendant Royal Danish Navy, attempted to conduct a test of the Harpoon subsystem. During the performance of the test on the launch relay assembly of missile number 3, missile number 4 was inadvertently launched. The missile skimmed along the surface of the water and exploded on Sjaelland, a Danish island, causing great damage to property, and no loss of life or personal injury.

Defendants claim the launch subsystem was supposedly designed to preclude such an accident. It employs several fail-safe systems to prevent unintended and unauthorized launch. The fail-safe devices were all used on that occasion. Defendants claim that, because of plaintiffs faulty design of the system and plaintiffs failure to warn defendants of this potential hazard, a Harpoon missile was inadvertently launched in spite of the fail-safe devices.

Plaintiff argues that the person responsible for the launch was a Danish sailor who violated plaintiffs and defendants’ procedures, ignored training he received from plaintiff and Danish personnel, and disregarded warnings from both plaintiff and the United States Navy.' As a result, claims the plaintiff, a Harpoon missile was inadvertently launched and eventually exploded on the Danish island.

On August 30, 1984, defendants served upon the plaintiff a demand to arbitrate defendants’ claims pursuant to the arbitration clause. These claims are based, inter alia, on breach of contract, breach of express warranty, breach of implied warranties of merchantability and of fitness for intended use in the design, manufacture, testing, maintenance, service, and modification of the Harpoon weapon system, including the instructions, directions, and warnings relating to operating, maintaining, and testing the launch subsystem.

The thrust of the Danish claims is that the mishap occurred due to defects in the Harpoon weapon system and deficiencies in the manuals and instructions provided by plaintiff concerning the operation of the system. Defendants seek recovery for the replacement value of the Harpoon missile and for amounts paid to compensate owners of the property damaged on Sjaelland. The defendants estimate their damages to be approximately three million dollars.

Pursuant to the arbitration provisions of the contracts, each party is to select one member of a three-man panel. Defendants have selected Mr. Alan Philip, an attorney in private practice in Copenhagen, Denmark. Plaintiff has designated Mr. R.E. Keaney, an attorney in private practice in St. Louis, Missouri. Although the third member of the panel has yet to be selected, out of concern to avoid any taint of national bias, these two arbitrators have agreed that the president and third member of the arbitration panel shall not be a national of either the United States or Denmark.

Plaintiff argues that defendants’ demand for arbitration represents an ill-considered attempt to convert an arbitration clause intended to provide a method of resolving commercial disputes into a vehicle by which to litigate a tort claim for indemnity and contribution for third-party property damage involving a sensitive U.S. weapons system.

The parties agree that the question whether the proper forum for the resolution of their dispute is controlled by the arbitration clause of their contract, is controlled by federal law. The Convention on the Recognition and Enforcement of Foreign Arbitration Awards (the Convention), 9 U.S.C. § 202, and the United States Arbitration Act (the Act), 9 U.S.C. § 2, set forth the relevant federal statutory law governing the applicability and validity of arbitration clauses in international commercial contracts. Both the Convention and the Act reflect a policy of the United States favoring the enforcement of agreements to arbitration international commercial disputes. Scherk v. Alberto-Culver Co., 417 U.S. 506, 520 n. 15, 94 S.Ct. 2449, 2457 n. 15, 41 L.Ed.2d 270 (1974); S.A. A. Mineracao da Trindade-Samitri v. Utah Intern., Inc., 745 F.2d 190 (2d Cir.1984); Moses H. Cone Memorial Hosp. v. Mercury Const. Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983); Southland Corp. v. Keating, 465 U.S. 1, 104 S.Ct. 852, 79 L.Ed.2d 1 (1984). According to the Supreme Court:

A contractual provision specifying in advance the forum in which disputes shall be litigated and the law to be applied is, therefore, an almost indispensable precondition to achievement of the orderliness and predictability essential to any international business transaction. Furthermore, such a provision obviates the danger that a dispute under the agreement might be submitted to a forum hostile to the interests of one of the parties or unfamiliar with the problem area involved.

Scherk, supra, 417 U.S., at 515-16, 94 S.Ct. at 2455-56. The Convention is a commitment by Congress to eliminate the vestiges of judicial reluctance to enforce international arbitration agreements. McCreary Tire & Rubber Co. v. CEAT S.p.A., 501 F.2d 1032 (3d Cir.1974).

When a party seeks to enforce an arbitration provision of a contract, the court shall limit its review to two issues:

(1) whether an express written agreement to arbitrate the subject matter of the present dispute exists between the parties, and (2) if so, whether the agreement to arbitrate has been breached.

Johnson Controls, Inc. v. City of Cedar Rapids, Iowa, 713 F.2d 370, 373 (8th Cir.1983); see also Contracting Northwest, Inc. v. City of Fredericksburg, Iowa, 713 F.2d 382 (8th Cir.1983). The court shall be guided by the liberal federal policy favoring arbitration and any doubts about the construction of the arbitration provision must be resolved in favor of ordering arbitration. Johnson Controls, supra at 373.

The language of the arbitration clause in this case provides that “[a]hy dispute or difference arising between the parties, relating to the terms of the present contract ...” shall be arbitrated, (emphasis added.) Plaintiff argues the words “relating to” should be construed as narrowing the scope of the arbitration clause and thereby exclude defendants’ claims which, according to plaintiff, sound in tort and are not “related to” the contract. This Court finds that the weight of authority supports the defendants’ position that “relating to” is generally regarded as broad rather than narrow language. See, e.g., Cone, supra; Southland Corp., supra; Prima Paint Corp. v. Flood & Conklin Manufacturing Co., 388 U.S. 395, 398, 87 S.Ct. 1801, 1803, 18 L.Ed.2d 1270 (1967); Michele Amoruso Figli v. Fisheries Development Corp., 499 F.Supp. 1074 (S.D.N.Y.1980); Creson v. Quickprint of America, Inc., 558 F.Supp. 984 (W.D.Mo.1983). Accordingly, the Court finds that defendants’ claims arising out of an alleged failure of plaintiff’s fail-safe system are sufficiently related to the contract governing the supplying, maintaining, and support servicing of that same system so as to be subject to the arbitration clause of the contract.

Plaintiff further argues that the dispute is not subject to arbitration because the Convention and the Act do not apply where a public policy renders the question an inappropriate subject for arbitration or incapable of arbitration. Plaintiff contends that much of the information necessary to its defense of defendants’ claims is classified by the U.S. Government and would be available to this Court under certain circumstances, but will not be available to the panel of arbitrators under the same circumstances.

It is true that under some narrow circumstances public policy may be grounds for denying the enforcement of an arbitration agreement. See, e.g., Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953). In this case, however, the arbitrators will not be asked to rule on matters of national security in contravention of a policy of the United States. The more likely result is that availability of plaintiffs evidence may be restricted by national security measures imposed on it by the U.S. Government. It does not appear that plaintiff was unaware of the nature of national security restrictions or the secrecy requirements of the government when it contracted with the defendants. Plaintiffs eviden-tiary concerns are premature and it would not be appropriate for this Court to speculate as to the various merits of the underlying dispute. Accordingly, the Court will refer the parties to arbitration.

The ordinary practice once the Court has referred the parties to arbitration pursuant to the Act is for the Court to stay proceedings pending the arbitration. 9 U.S.C. § 3. Defendants make a persuasive argument that the precise terms of Article 11(3) of the Convention require the action be dismissed for lack of subject matter jurisdiction in the case of international commercial agreements. See McCreary Tire & Rubber Co. v. CEAT S.p.A., supra at 1038; Siderius, Inc. v. Compania de Acero del Pacifico, S.A., 453 F.Supp. 22 (S.D.N.Y.1978); Ledee v. Ceramiche Ragno, 528 F.Supp. 243 (D.P.R.1981), aff'd, 684 F.2d 184 (1st Cir.1982). Accordingly, defendants’ motion to dismiss will be granted.