author: WILLIAM C. LEE, District Judge.

text:
    The FORT WAYNE PATROLMEN’S BENEVOLENT ASSOCIATION, INC., Plaintiff, v. The CITY OF FORT WAYNE, a Municipal Corporation; David C. Riemen; Lawrence D. Consalvos; David J. Kiester; and Cozette R. Simon, Defendants.
    Civ. No. F 85-498.
    United States District Court, N.D. Indiana, Fort Wayne Division.
    Jan. 3, 1986.

      G. Stanley Hood, Roby & Hood, Port Wayne, Ind., for plaintiff.
    Phillip A. Renz, T. Dean Swihart, Grotrian & Boxberger, Fort Wayne, Ind., for defendants.
   ORDER

WILLIAM C. LEE, District Judge.

This matter is before the court on a motion for a preliminary injunction filed by the plaintiff (“PBA”). A hearing was held on the motion on December 30, 1985, at which both the PBA and the defendants (collectively, the “City”) presented evidence and arguments. At the hearing, the City offered arguments on issues relating to the justiciability of the issues raised by the PBA’s complaint as well as the propriety of a preliminary injunction. No formal briefs have been filed by either side. For the following reasons, the motion for a preliminary injunction will be denied, and the complaint will be dismissed.

This ease arises out of a proposed change in the City’s administrative policy regarding off-duty or “outside” employment of City police officers. According to testimony at the December 30, 1985 hearing, it has long been a practice for City police officers to work part-time jobs as security personnel at various businesses in the City of Fort Wayne. A prime example of this work can be found in the approximately thirty police officers who work as security personnel at the Allen County Memorial Coliseum during concerts and sporting events. While these officers work during off-duty hours, they are nevertheless allowed to wear their Fort Wayne police uniforms and carry City-issued weapons.

Concerned that some police officers were engaging in outside employment inconsistent with their duties as police officers, and worried that the off-duty actions of officers might affect the City’s ability to maintain its liability insurance or greatly increase its insurance premiums, the City decided to issue a policy directive known as “Policy III.” This directive, originally issued on December 12, 1985 and subsequently amended on December 27 and December 30, 1985, required police officers engaging in outside employment to do several things:

1. to notify the Chief of Police of the outside employment;
2. if the outside employment was police, security or investigative in nature, to submit a written request to the Chief specifying the name of the employer, the nature of the work and the hours to be worked, with the Chief to approve or disapprove the request in writing within five days;
3. all such employment shall be conducted during off-duty hours, and if the outside employment should require the officer to testify in court during off-duty hours, the City will not compensate him for such testimony; and
4. all employers who hire officers for outside employment must provide proof that the officer will be protected by that employer’s insurance and that the employer will hold the City harmless for liability incurred because of the officers’ outside employment, or else name the City as a named insured in their liability policies.

Policy III was set to go into effect on January 1, 1986, although the City has conceded that the collective bargaining agreement between it and the PBA requires that it give five days notice before a policy change is implemented, thus making the effective date of the policy January 5, 1986.

The PBA objected to Policy III, filing this lawsuit and four grievances under the collective bargaining agreement’s' grievance procedures. The complaint here alleges five causes of action against the City. The first is that Policy III violates the first amendmént freedom of association rights of PBA members. As explained at the December 30, 1985 hearing, Policy III acts to prevent PBA-member officers from associating with private employers in the context of outside, part-time employment. The second cause of action alleged is that Policy III violates the freedom to contract of PBA members as guaranteed by article I, § 10 of the Constitution. The third claim is that Policy III violates the equal protection clause of the fourteenth amendment. As originally stated in the complaint, the violation arose from the fact that the Chief of Police had complete discretion to approve or disapprove a request for permission to engage in outside employment. At the December 30, 1985 hearing, however, the equal protection argument centered around the fact that the appeals process set up in Policy III in response to the PBA’s complaint only gave an officer a written decision by the Board of Public Safety, whereas other appeals mechanisms in the police department gave an officer a full hearing before the Board. The fourth cause of action claimed a deprivation without due process of law of police officer property interests in the expectation of working off-duty. The final claim by the PBA is that Policy III violates provisions of the collective bargaining agreement between the City and the PBA relating to the disclosure of sources of income, compensation for testifying in court, and consideration of changes by a Labor Management Committee set up under the agreement. The complaint asks for a preliminary injunction, a declaratory judgment, and compensatory . and punitive damages in the amount of $500,000.00.

At the hearing on the request for a preliminary injunction, the City raised two issues concerning the justiciability of these claims. The first is the issue of ripeness, while the second relates to the PBA’s standing to bring this suit on behalf of its members. Because those issues go directly to the ability of the court to consider the PBA’s suit at all, the court will consider them first. The court will then examine whether the PBA meets the standards for the issuance of a preliminary injunction.

I. Ripeness

The doctrine of ripeness arises out of article III of the Constitution, which requires the existence of an actual case or controversy and prohibits the rendering of advisory opinions. See Wisconsin’s Environmental Decade, Inc. v. State Bar of Wisconsin, 747 F.2d 407, 410 (7th Cir.1984), cert. denied, — U.S. -, 105 S.Ct. 2324, 85 L.Ed.2d 842 (1985). Ripeness is a prudential question, American Booksellers Ass’n, Inc. v. Hudnut, 771 F.2d 323, 327 (7th Cir.1985), and although the difference between an abstract question calling for an advisory opinion and a ripe case or controversy is not discernable by any precise test, Babbitt v. United Farm Workers National Union, 442 U.S. 289, 297, 99 S.Ct. 2301, 2308, 60 L.Ed.2d 895 (1979), the basic inquiry is whether there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality, so as to warrant judicial relief. Babbitt, 442 U.S. at 298, 99 S.Ct. at 2308; American Booksellers Ass’n., 771 F.2d at 327. A case is not considered ripe if the issues are not formed or the application of a challenged statute or regulation is not certain, Wisconsin’s Environmental Decade, 747 F.2d at 411. A plaintiff must demonstrate a “realistic danger of sustaining a direct injury” as a result of the defendant’s action, although he need not wait until the injury is consummated if it is “certainly impending.” Babbitt, 442 U.S. at 298, 99 S.Ct. at 2308; Lartnec Inv. Co. v. Fort Wayne-Alien County Convention and Tourism Auth., 603 F.Supp. 1210, 1216 (N.D.Ind.1985).

The PBA alleges that its members will suffer two types of injuries if Policy III goes into effect: they will lose outside employment income that they currently receive and certain constitutional rights will be violated. The court will analyze each of these alleged injuries in turn.

A. Loss of Outside Employment Income

The PBA believes that Policy III will prevent its members from having jobs outside of the police department. An examination of the language of Policy III does not indicate that it prohibits outside employment entirely. Lawrence Consalvos, the Director of Public Safety for the City, testified that a total ban on outside employment was considered but rejected by the City. Thus, to show an injury here, the PBA must establish that the effect of Policy Ill’s implementation will be to prevent members from continuing in their outside jobs.

At the hearing on the request for a preliminary injunction, the PBA argued that the provisions requiring an outside employer to indemnify the City for actions taken by the police officer while working in his outside job would cause some employers to fire the officers working for them because they would refuse to hold the City harmless in such a situation. The only evidence offered by the PBA concerned two employers: the Allen County Memorial Coliseum and Spiece, Inc. Two of the PBA’s witnesses testified that the Coliseum management had decided to fire the thirty officers who worked there if Policy III went into effect, but Robert TenBarge, the Coliseurn’s Manager, testified that no decision had been made as to whether a hold harmless agreement could be signed because such a matter would have to be presented to the Board of Trustees of the Coliseum first. Gerald Mongovan, a lieutenant on the police force who works at Spiece, testified that he was advised that Spiece would not hire PBA members because it will not comply with the requirement of Policy III concerning a hold harmless agreement.

What is significant to note about the PBA’s testimony concerning the reaction of management at the Coliseum and Spiece is that the reaction was to the original form of Policy III. In that version, an employer had only one choice: sign a hold harmless agreement or not employ off-duty officers. The revised form of Policy III offers a second alternative: the employer could add the City as a named insured to the employer’s liability policy. The PBA witnesses indicated that both the Coliseum and Spiece have insurance policies which cover liability created by the acts of employees. This second option is much narrower in scope, and therefore more attractive, than the first option. An amendment to an employer’s liability policy, which already covers the off-duty officer’s acts as an employee, would name the City as an insured only for acts done by officers working off-duty for the employer. This contrasts sharply with the potential liability posed by signing a blanket hold harmless agreement. Thus, the revised version of Policy III makes it much more possible that employers might accept Policy III and continue to employ off-duty officers, with no subsequent loss in outside income. The complete lack of evidence on employer reaction to- the revised version of Policy III, and the attractiveness of the second alternative under the policy, makes the likelihood of injury much less than “certainly impending.”

The court therefore finds that the alleged loss of outside employment income is too uncertain to constitute a “realistic danger of direct injury” which is “certainly impending.” Thus, this cause cannot be considered “ripe” on the basis of this alleged injury.

B. Constitutional Violations

The second type of injury alleged by the PBA is that certain constitutional rights will be violated by the implementation of Policy III. These rights include the first amendment right to freedom of association, the freedom to contract, and the due process and equal protection provisions of the fourteenth amendment. It is important to note initially that, with the possible exception of the first amendment claim, these constitutional violations do not occur until the policy is actually implemented and used against an officer. For example, the due process claim relates to the appeals process set up in Policy III. That process allows an officer whose request has been denied by the Chief to appeal to the Director of Public Safety and ultimately to the Board of Public Safety. The constitutional violation (if any) present in the use of such an appeals process will not occur until the process is actually used. For the court to rule on the adequacy of the process before it is used to some officer’s detriment is to engage in the rendering of an advisory opinion on the constitutional sufficiency of the process.

An interesting case in this regard is Vorbek v. Schnicker, 660 F.2d 1260 (8th Cir.1981), cert. denied, 455 U.S. 921, 102 S.Ct. 1278, 71 L.Ed.2d 462 (1982). There, several police officers and a police officers’ association brought an action against the police commissioners of the City of St. Louis to have certain personnel regulations declared unconstitutional. The regulations had in fact been issued and were in effect at the time of the suit, and included a provision which subjected an officer to disciplinary action if he engaged in outside employment without permission of the chief of police. One officer testified that he had refused an actual offer of outside employment because he did not want to go through the procedures required by the regulations. The Vorbeck court found that the case was not ripe for adjudication because the regulations had not yet been enforced against any of the plaintiffs. 660 F.2d at 1265-66. Vorbeck is completely consistent with the principles of the ripeness doctrine as outlined above. It requires a court to wait until a regulation is enforced before it should consider a claim based on the effect of the regulation.

Vorbeck is clearly applicable in this case. There, the regulations were promulgated and in effect, while here the regulations have not yet even gone into effect. In Vorbeck, there was evidence that an officer had actually turned down an offer of employment, while here it is speculative that any police officers will lose their jobs, given the second alternative available to outside employers discussed above. If the claims in Vorbeck were not ripe, then clearly this action is premature and not ready for adjudication.

The first amendment claim asserted here is the right to associate with outside employers in the context of part-time employment. The court seriously doubts that the first amendment right to freedom of association is designed to protect employer-employee relationships; if it did, every firing of an at will employee, every breach or tortious interference with an employment contract, and every aspect of employer-employee relations would have constitutional dimensions, and no court has adopted such a proposition. From the seminal case of NAACP v. Alabama, 357 U.S. 449, 78 S.Ct. 1163, 2 L.Ed.2d 1488 (1958), case law concerning the freedom of association has involved association for the purpose of expression and belief. This “speech-related” aspect of the freedom of association is clearly absent in the case of a police officer who works part-time for an outside employer. The employer-employee relationship in this context is simply a contractual arrangement whereby employer and employee exchange mutually beneficial resources. To imbue that relationship with constitutional dimensions is to go far beyond the limits of constitutional construction.

Even if some kind of associational right existed, there has been no showing of any kind of chilling of this right, nor any substantial threat to the right posed by the implementation of Policy III. No showing has been made that any employer or employee has altered his conduct in response to the policy; the only evidence offered was the evidence concerning the Coliseum and Spiece. As noted before, none of this evidence addressed the issue of the revised Policy III, with the alternative of including the City as a named insured. Thus, employers may find Policy III acceptable in its now present form, in which case Policy III would not affect outside employment activities at all. Chief Rieman indicated that his concern about outside employment was limited to employment inconsistent with official duties. Perhaps he will not disapprove of any requests concerning outside employment, in which case the associational rights (as well as the other constitutional rights and the economic concerns) of the police officers will not be affected. This court simply does not have sufficient information before it to predict what will occur under Policy III precisely because the outcome of implementation of the policy is pure speculation at this point. This speculative nature of the injuries which might occur under the policy mandate that this court dismiss this case for a lack of justiciability because the controversy implicated in it is not ripe for adjudication.

II, Standing

The City argues that the PBA, the only named plaintiff in this case, does not have standing to bring this action. The question of standing to bring a suit is “whether the plaintiff has alleged such a personal stake in' the outcome of the controversy as to warrant his invocation of federal court jurisdiction and to justify exercise of the court’s remedial power on his behalf.” Warth v. Seldin, 422 U.S. 490, 498-99, 95 S.Ct. 2197, 2205, 45 L.Ed.2d 343 (1975) (emphasis in original); Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663 (1962). Standing involves the constitutional limitation on federal court jurisdiction requiring an “injury in fact”— the requirement that a plaintiff show that “he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant.” Gladstone Realtors v. Village of Bellwood, 441 U.S. 91, 99 S.Ct. 1601, 1607, 60 L.Ed.2d 66 (1979). The injury must be “real, not imaginary; concrete, not abstract; apparent, not illusory; and demonstrable, not speculative.” J.N.S., Inc. v. State of Indiana, 712 F.2d 303, 305 (7th Cir.1983); Myron v. Chicoine, 678 F.2d 727, 730 (7th Cir.1982). The standing of PBA is derivative of its members’ standing, see Sierra Club v. Morton, 405 U.S. 727, 739, 92 S.Ct. 1361, 1368, 31 L.Ed.2d 636 (1972); United Beverage Co. v. Indiana Alcoholic Beverage Commission, 760 F.2d 155, 156-57 (7th Cir.1985). In order for the PBA to have standing to bring a suit on behalf of its members, three requirements must be met: (1) its members would otherwise have standing to sue in their own right; (2) the interests it seeks to protect are germane to the organization’s purpose; and (3) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit. Hunt v. Washington State Apple Advertising Comm., 432 U.S. 333, 343, 97 S.Ct. 2434, 2441, 53 L.Ed.2d 383 (1977).

The problem for the PBA is in the requirement that its members have standing to sue in their own right. Individual PBA members would have to show an “injury in fact,” which the analysis above concerning ripeness indicates would be impossible. The injuries alleged here are speculative and not concrete, because Policy III has not yet gone into effect and the actual effects of operation are unclear at this time. Because PBA members have no standing to sue at this time, the PBA has no standing as well. The case must therefore be dismissed.

III. Request for Preliminary Injunction

Even if the PBA could overcome the problems of ripeness and standing, its request for preliminary injunction would fail. The Seventh Circuit has recognized that a party requesting a preliminary injunction must establish the following elements: (1) that he has no adequate remedy at law or will suffer irreparable harm if the injunction is denied; (2) that the harm he will suffer is greater than the harm the defendant will suffer if the injunction is granted; (3) that the plaintiff has a reasonable likelihood of success on the merits; and (4) that the injunction will not harm the public interest. ON/TV of Chicago v. Julien, 763 F.2d 839, 842 (7th Cir.1985); Palmer v. City of Chicago, 755 F.2d 560, 576 (7th Cir.1985). A plaintiff has the burden of proving each of these factors. Palmer, 755 F.2d at 577; Godinez v. Lane, 733 F.2d 1250, 1257 (7th Cir.1984). An examination of the PBA’s claims reveals that the PBA fails to establish any of these elements.

A. Adequate Remedy at Law/Irreparable Harm

Although the Seventh Circuit speaks of this first element in the disjunctive (no adequate remedy at law or irreparable harm), there is authority to the effect that both parts of this element must be present in order to satisfy this first element. See Roland Machinery Co. v. Dresser Industries, Inc., 749 F.2d 380, 386 (7th Cir.1984). To determine whether this first element is satisfied, the court will analyze each injury claimed here to determine whether PBA members will suffer irreparable harm and have no adequate remedy at law.

1. Freedom of Association

As noted before, the PBA argues that Policy III acts to abridge its members’ rights to freely associate with outside employers through part-time work. There was no mention made of any association for the purpose of expressing or advancing any beliefs or opinions. As characterized by the PBA, the claimed right exists in police officers working for the outside employers, which can only mean that the PBA is asserting a right to freedom of association in the very fact of an employer-employee relationship. As the court found above, there is no recognized freedom of association between employer and employee in the context of their employment relationship. Thus, there can be no irreparable harm here because there is no violation of any first amendment right. The first element is therefore absent as to this claim.

2. Freedom to Contract

The PBA’s second claim is that Policy III will violate the freedom to contract which its members currently enjoy with respect to outside employers. The PBA argues that this freedom is recognized in article I, § 10 of the Constitution, which states in pertinent part: “No state shall ... pass any ... Law impairing the Obligation of Contracts.”

An examination of the language of article I, § 10 clearly reveals that the specific clause relating to contracts does not recognize any freedom to contract. In fact, there are many laws, both civil and criminal, which may restrict one’s ability to enter into a contract, and those laws are not subject to constitutional questions. Rather, article I, § 10 is clearly designed to restrict states from passing laws which affect existing contractual obligations. The Supreme Court has stated that in analyzing a claimed violation of the impairment of contracts clause of article I, § 10, “the threshold inquiry is whether the state law has, in fact, operated as a substantial impairment of a contractual relationship.” Energy Reserves Group, Inc. v. Kansas Power & Light Co., 459 U.S. 400, 411, 103 S.Ct. 697, 704-05, 74 L.Ed.2d 569 (1983), quoting Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 244, 98 S.Ct. 2716, 2722, 57 L.Ed.2d 727 (1978). Thus, to the extent that the PBA is claiming a constitutional right to the freedom to contract, that right does not exist by virtue of article I, § 10, and thus no irreparable harm could occur.

If the court interprets the PBA’s claim as asserting that Policy III impairs the obligations set out in the contracts between police officers and outside employers, then it must examine the nature of those contracts so as to determine whether there is a “substantial impairment.” There was no evidence offered that any police officers are employed under any particular types of contracts. Under Indiana law, if an employment contract is not for an express period of time it is considered to be a contract for employment at will, and may be terminated at any time for any reason by either party. Pepsi-Cola Bottlers, Inc. v. Woods, 440 N.E.2d 696, 697 (Ind.App.1982); Campbell v. Eli Lilly and Co., 413 N.E.2d 1054 (Ind.App.1980). Thus, the police officers do not have any great expectation of employment because they could be fired at any time and for any reason.

Policy III does not change those at will contracts at all. It does, however, act to change the conditions surrounding the outside jobs that police officers work. An outside employer may consider those changes to be worth enduring because he likes the advantages gained by employing police officers, in which case the at will contracts will continue. Or the employer may decide that the changes make employing off-duty officers too expensive or risky, in which case he would fire the officer, which is clearly within his power as an at will employer. In either case, the contract remains the same — an at will employment contract. Thus, Policy III does not substantially impair the obligations of the outside employment contracts, and therefore the PBA fails to make out a claim under article I, § 10, and therefore there is no irreparable harm in this claim which would satisfy the first element here.

3. Equal Protection and Due Process

The PBA’s third claim is that the review process set out in revised Policy III violates equal protection because it does not give a full hearing before the Board of Safety as is available for some other reviews, but allows only a written review of a decision not to approve an officer’s outside employment. The fourth claim also focuses on the review process, claiming that the property rights in having outside employment currently enjoyed by officers will be taken away without due process because two of the reviewers (the Chief of Police and the Director of Public Safety) are the authors of Policy III.

Assuming that some reviews by the Board of Safety are conducted with full hearings (and the court must assume, as the PBA has offered no evidence to establish this fact), it is possible to say that the written review provided under Policy III creates a “class” of review different from these full hearing reviews so as to raise equal protection concerns. Because this “classification scheme” is based on the type of review received, and not upon some suspect class like race or the exercise of some fundamental personal right, the court must review the PBA’s equal protection claim under the “rational relationship” test. Plyler v. Doe, 457 U.S. 202, 216-17, 102 S.Ct. 2382, 2394-95, 72 L.Ed.2d 786 (1982); Peterson v. Lindner, 765 F.2d 698, 705 (7th Cir.1985); Sklar v. Byrne, 727 F.2d 633, 636 (7th Cir.1984). This test upholds a classification if it is rationally related to a legitimate state interest, or, as the Plyler Court put it, if it “bears some fair relationship to a legitimate public purpose.” 457 U.S. at 216, 102 S.Ct. at 2394; Peterson, 765 F.2d at 705. The classification is presumed rational, and the plaintiff bears the “heavy burden” of demonstrating that “the varying treatment of different groups of persons is so unrelated to the achievement of any combination of legitimate purposes that [a court] can only conclude that the legislature’s actions were irrational.” Hodel v. Indiana, 452 U.S. 314, 322, 101 S.Ct. 2376, 2382, 69 L.Ed.2d 40 (1980).

The “legitimate state purpose” behind Policy III is the protection of the City from loss of insurance coverage (which could have the effect of curtailing municipal services should the City decide that the best way to protect itself from uninsured liability is to reduce the opportunities for liability to arise by performing fewer services) as well as preventing the damage to the reputation and effectiveness of the police force through police officers engaging in off-duty jobs inconsistent with official duties. Both of these concerns relate directly to the administration of the City’s law enforcement responsibilities, and therefore are clearly “legitimate.” While the written review provisions of Policy III were added to address the PBA’s due process concerns, this review mechanism could assist the City in pursuing its policies by providing a further layer of review as to whether an officer’s outside employment will conflict with these legitimate objectives. The fact that the review is not a full hearing type of review is immaterial; an officer’s written request for review by the Board can include the facts which will bring the question of conflict with City objectives into sharper focus, thereby assisting the Board in providing its beneficial review. Viewed in this context, the provision of written review is rationally related to the legitimate interest in effective law enforcement, and therefore the PBA’s claim of an equal protection violation would not suggest any irreparable harm because no violation would be present here.

The PBA’s due process claim contends that the three-tier review process of requests for approval of outside employment is constitutionally flawed because all three levels are tainted by the presence of the authors of Policy III (the Chief of Police and the Director of Public Safety). As an initial matter, the court notes that the mere fact of authorship does not establish any prejudice on the part of either the Chief or the Director. The PBA has presented absolutely no evidence that either person is somehow prejudiced against officers requesting approval for outside employment; in fact, the testimony of Chief Rieman and Director Consalvos indicated that both are not opposed to outside employment provided the insurance and conflict of duties concerns behind Policy III are satisfactorily met. Thus, the factual premise behind the due process claim is simply untrue.

Assuming, however, that some prejudice could be shown, the PBA would have to establish some right to due process greater than the review provided in Policy III. The Supreme Court has stated:

The requirements of procedural due process apply only to the deprivation of interests emcompassed by the Fourteenth Amendment’s protection of liberty and property. When protected interests are implicated, the. right to some kind of hearing is paramount. But the range of interests protected by procedural due process is not infinite.

Board of Regents v. Roth, 408 U.S. 564, 569-70, 92 S.Ct. 2701, 2705, 33 L.Ed.2d 548 (1972). In order to claim a right to due process, the PBA must show that some property right protected by the fourteenth amendment is deprived by Policy III.

To the extent that the property interest is alleged to be the outside jobs themselves, that interest is not encompassed by the fourteenth amendment so as to justify procedural due process protections. Property interests are “created and their dimensions are defined by existing rules or understandings ... that secure certain benefits and that support claims of entitlement to those benefits.” Roth, 408 U.S. at 577, 92 S.Ct. at 2709. For a job to constitute a benefit worthy of being considered a property interest, “a person must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it.” Id.; Hadley v. County of DuPage, 715 F.2d 1238, 1241 (7th Cir.1983), cert. denied, 465 U.S. 1006, 104 S.Ct. 1000, 79 L.Ed.2d 232 (1984). The jobs at issue here, however, are at will — the police officers could be fired at any time for any reason by their outside employers. Thus, the officers have no legitimate claim to continued employment. In such a situation, it is difficult to see how the outside jobs can be a property right.

Perhaps the PBA could argue that Policy III nevertheless changes the outside employment by denying officers the opportunity to work for a particular outside employer. The alleged property right would be the opportunity to pursue outside employment, which is much more of a liberty interest than a property right. The Roth Court recognized that a liberty interest can be implicated when a state imposes a stigma or other disability on an individual which forecloses his freedom to take advantage of other employment opportunities. Id., 408 U.S. at 573-74, 92 S.Ct. at 2707. See Perry v. FBI, 759 F.2d 1271, 1277 (7th Cir.1985). Yet Policy III does not “foreclose” employment opportunities— there has been no evidence to suggest that police officers will not be able to find off duty employment once the revised form of Policy III goes into effect, especially in light of the fact that Policy III requires approval only for security and investigative outside employment. In short,' Policy III does not amount to a deprivation of the liberty interest in being able to seek outside employment.

Finally, the fact that the City may have allowed outside employment for several years does not necessarily create any expectation in continued toleration on the City's part. The Seventh Circuit has clearly stated that “longevity alone does not create a property interest.” Hadley v. County of DuPage, 715 F.2d at 1244, quoting Bollow v. Federal Reserve Bank of San Francisco, 650 F.2d 1093, 1099 (9th Cir.1981), cert. denied, 455 U.S. 948, 102 S.Ct. 1449, 71 L.Ed.2d 662 (1982).

Thus, the PBA has failed to identify any liberty or property interest which would justify procedural due process. Therefore, no irreparable harm can exist here because no constitutional violation of due process can occur.

4. Violation of the Collective Bargaining Agreement

The fifth and final claim of the PBA is that Policy III violates the collective bargaining agreement between the PBA and the City made and entered on May 23,1985. Three violations are alleged. The first relates to the promulgation of Policy III itself. The PBA claims that Policy III should have been referred to a Labor Management Committee which the collective bargaining agreement mandated should be established, and all parties agree that the Committee did not review Policy III. The remaining two violations involve specific provisions in Policy III relating to notification to the Chief of Police as to where an officer is working and to compensation for testifying in court. The court considers each of these alleged violations in turn.

Article V, § 2 of the agreement provides that

The Union recognizes that the Employer reserves the right to establish rules, and/or change existing rules affecting work conditions. It is agreed that all such rules shall be reasonable in content and application. Disputes arising therefrom shall be subject to the grievance procedure ... Within sixty (60) days from the date of this Agreement, the parties shall create a Labor-Management Committee consisting of three (3) representatives from each party. This Committee shall meet at least monthly for purposes of reviewing standard operating procedures and corresponding rules and regulations of the Department.

From this language, it is clear that the City is not required to present rules to the Labor Management Committee for approval prior to implementation of those rules. In fact, the first sentence of the quoted language indicates that the City retains the right to issue new rules and regulations. This section of the collective bargaining agreement merely assigns a review or advisory role to the Committee, as is implicit in the fact that the Committee is required to meet on a monthly basis and not whenever new rules are proposed. Thus, no violation of this provision occurred in the failure of the City to present Policy III to the Committee prior to its promulgation.

The PBA claims that the requirement of Policy III that an officer notify the Chief of Police where and when he is working violates the Police Officers’ Bill of Rights set forth in Article XII of the collective bargaining agreement, which provides in pertinent part:

No police officer shall be required or requested for purposes of job assignment or other personnel action to disclose any item of his property, income, assets, source of income, debts or other personal or domestic expenditures (including those of any member of his family or household) unless:
(a) such information is obtained under proper legal procedure, or
(b) there is probable cause to believe that bribes or other improper inducements may have been given to such police officers.

According to the PBA, telling the Chief of Police where an officer works and when he works in the context of a. request for approval under Policy III constitutes a requirement to reveal sources of income.

The important limiting language in this section of the Police Officers’ Bill of Rights is that the disclosure is requested or required “for purposes of job assignment or other personnel action.” Because Policy III only applies to time when an officer is off duty, it is clear that the disclosure of where the officer is working cannot be for purposes of job assignment. Thus, the notification requirement must fall under the “other personnel action” provision for this part of the collective bargaining agreement to apply at all.

There has been no evidence offered on what the drafters of this provision meant. David Becher, the president of the PBA, testified that he interprets “other personnel action” to mean “anything which affects me as a police officer.” However, such an interpretation is far too broad. There are many actions taken by a police department which affect an officer but which would not generally be considered “personnel actions” — for example, a change in squad room procedure. A more likely and reasonable interpretation of this language is “actions which affect an officer’s status or position as an officer” — discipline, promotions, pay increases and the like. Under this interpretation, a request for notification of where and when an officer works when off duty has absolutely no effect on or involvement in his status as an officer. The court concludes that this provision of the collective bargaining agreement is not implicated in the operation of Policy III.

The last provision of the collective bargaining agreement allegedly violated by Policy III relates to compensation for testifying in court. The revised version of Policy III provides:

Required court appearances in connection with part-time employment which are scheduled during the officer’s normal working hours may be attended as part of the officer’s normal tour of duty. Required court appearances in connection with part-time employment which are scheduled during the officer’s scheduled or elected days (or time) off shall not be compensated by the Department or the city, and are the sole expense of the officer and/or part-time employer.

The provision of the agreement allegedly violated by this section of Policy III is Article XLIV, § 1, which provides:

Officers who are required to attend court on off-duty hours shall be compensated in the following manner:
(a) Officer receives pay for one and one-half the actual time spent in court.
(b) Officer receives one hour travel time at his/her straight time hourly rate.

The language of Article XLIV appears to be absolute — that is, if an officer is subpoenaed to appear in court for any reason during his or her off duty hours, the contract apparently requires the City to pay for so appearing under the formula set out in § 1. Perhaps that is not what the City intended; it seems like unusual largesse on the City’s part to pay for court appearances by police officers in cases unrelated to their work as police officers, but § 1 does not make that distinction, and thus the City appears to have contractually agreed to pay for any off duty testimony. Under this interpretation of Article XLIV, Policy III does appear to violate the collective bargaining agreement.

However, a violation of the collective bargaining agreement does not necessarily mean that the PBA has shown the requisite irreparable harm. In the language of the agreement quoted above concerning the Labor Management Committee, the agreement makes clear that rules changes are subject to grievance under the contract. In addition, Article IX of the agreement defines a grievance as “any dispute concerning the interpretation or application of this Agreement,” so that a refusal to pay compensation for off duty testifying would be a grievable issue. Thus, an officer would have a remedy available to him. Further, the harm to the officer would be purely monetary — the lost compensation. Thus, the harm can be repaired by an award on monetary damages. Article IX allows for the commencement of a lawsuit in an appropriate court to enforce an arbitrator’s ruling on the grievance. Such an action would be for breach of contract, a proper and adequate remedy at law. In short, although Policy III may violate the collective bargaining agreement, there is no irreparable harm and there is an adequate remedy at law available. Therefore, the first element for injunctive relief is not present for these contract claims.

In summary, the PBA has failed to show that any of its claims pose threats of irreparable harm without an adequate remedy at law so as to justify injunctive relief. The first element of the four part test is therefore clearly absent here.

B. Balancing of Harm to the Parties

The second element of the four part test requires that a plaintiff show that the harm he will suffer absent injunctive relief is greater than the harm the defendant will suffer if an injunction is granted. As noted in the previous section of this order, the PBA has alleged no competent harm. By contrast, the Director of Public Safety for the City testified that the City’s liability insurance underwriter has indicated that the City’s policy might not be renewed unless the City undertakes administrative policy changes designed to reduce the City’s potential liability. Even if the insurance is not cancelled, the premium will probably increase dramatically, perhaps by 200%. Testimony established that the implementation of policy changes such as Policy III might help to slow the increase in the premium. Thus, the City faces serious problems in maintaining its insurance coverage, slated for renewal in January, 1986. To grant an injunction would prevent the City from instituting the policy changes that might lessen those financial problems. Compared against the negligible harm identified by the PBA, the balance clearly tips in favor of the City. Thus, the second element is absent here.

C. Likelihood of Success on the Merits

The third element measures a plaintiff’s likelihood of succeeding once the case goes to trial. The analysis of the claims above indicates that none of the PBA’s claims have any merit except the claim that the compensation provision for off duty testifying in court may violate the collective bargaining agreement. However, no member of the PBA has yet been denied compensation under that provision, and the presence of the grievance mechanism in the collective bargaining agreement might subject a suit to dismissal for failure to exhaust contractual remedies. In short, the likelihood of success on the merits is not great.

D. Public Interest

The final element examines the harm to the public’s interest caused by granting the injunction. Here, the potential harm is great. The injunction would prevent the City from adopting policies to limit liability exposure, which could lead to a loss of liability insurance, or at least greatly increased insurance costs. The citizenry would be subject having to pay the increased costs of government in the latter case, and possibly be subject to reduced and less effective governmental services as the City scrambles to reduce its potential liabilities without insurance. This poses a threat to the public interest, and therefore the fourth element of the four part test for injunctive relief mandates that no injunction issue.

Thus, the PBA has failed to show that all four elements of the test for injunctive relief have been satisfied, and therefore the request for a preliminary injunction would be denied if the PBA was able to overcome its ripeness and standing problems.

Conclusion

For the reasons set forth above, the request for a preliminary injunction is hereby DENIED. The court also hereby DISMISSES this cause on its own motion because this controversy is not ripe and the plaintiff has no standing to bring it.

      . The PBA has also expressed fear that the implementation of Policy III by the Chief of Police will result in arbitrary and capricious decisions on approval and disapproval of requests filed with the Chief. However, Chief of Police David Rieman testified that his concern is over outside employment which is inconsistent with duties as an officer. The revised form of Policy III specifically provides that the-Chief must find that the outside employment "conflicts with the officer’s duties as a police officer or is not commensurate with the officer’s special identification by the public as an upholder of the law____” The policy therefore limits the Chiefs discretion, and thus the fact that the policy gives the Chief approval authority will not cause officers to suffer injury. Therefore, the court focuses on the effect of the policy on outside employers.

      . Admittedly, the accelerated timetable of this case has limited the ability of the PBA to gather evidence concerning the impact of Policy III on outside employers. However, the ripeness doctrine does not excuse a plaintiff from its burden to show a "realistic danger of sustaining a direct injury" in order to remain in court. The PBA apparently believed that the revised Policy III was susceptible to the same analysis as the old version of the policy when it came to employer reactions to the policy, and therefore presented evidence relating only to the old version. The significant changes made in the revised version dilute the certainty of injury suggested by that evidence, and the PBA did not attempt to show how employers would react to those changes. The court must judge the probabilities of injury on the evidence before it.

      . In • the context of a claim under the first amendment, it is possible for a law or regulation to force an individual to alter his conduct even though the law or regulation has not yet been enforced against him. Such an effect would constitute a "chilling” of his first amendment right (if the conduct is protected by the first amendment). See Wisconsin’s Environmental Decade, 747 F.2d at 411 and n. 5. The court will therefore consider the first amendment claim here separately.


source: Caselaw Access Project

author: McNAUGHT, District Judge.

license: Public Domain

text:
    UNITED STATES of America v. Alan B. HERSHON, Lynnwood P. Rumley.
    Crim. No. 85-317 Mc.
    United States District Court, D. Massachusetts.
    Jan. 3, 1986.
    Thomas Dwyer, Boston, Mass., for Alan B. Hershon.

      James F. Connors, Fitchburg, Mass., for Lynnwood P. Rumley.
    Daniel Small, U.S. Atty., for U.S.
   MEMORANDUM AND ORDERS

McNAUGHT, District Judge.

This case came on to be heard on motions filed by the defendants. Lynnwood P. Rumley, in a document bearing docket number 44, moved for the suppression of “all statements ... before the Grand Jury”. Defendant Alan Hershon moved (Document 29) “to sever defendants and counts”, and in Document 31 “to compel election of counts”.

The Rumley motion to suppress (# 44) is denied. Movant argued that when he appeared before the Grand Jury he said that he was unemployed; “that counsel should have been made available to him at that time, since through his unemployment he was unable to procure any counsel to represent him at the Grand Jury hearing.” He continues on that “the government failed at any time to inform Mr. Rumley that if he was unable to afford his own counsel, the government would provide him with counsel”. The short answer, of course, is that Rumley had no constitutional right to appointment of counsel while he was before the grand jury. As Chief Justice Burger wrote in United States v. Mandujano, 425 U.S. 564, 581, 96 S.Ct. 1768, 1778, 48 L.Ed.2d 212 (1976): “... No criminal proceedings had been instituted against respondent, hence the Sixth Amendment right to counsel had not come into play. Kirby v. Illinois, 406 U.S. 682, 92 S.Ct. 1877, 32 L.Ed.2d 411 (1972). A witness 'before a grand jury cannot insist, as a matter of constitutional right, on being represented by his counsel____’ In re Groban, supra, [352 U.S. 350] at 333 [77 S.Ct. 510 at 513, 1 L.Ed.2d 376 at 380 (1957)]. ...” Incidentally, it appears also that when Mr. Rumley was served with a subpoena to appear before the grand jury on January 4, 1985, he received an “advice of rights” page along with it and that when he appeared on subsequent occasions he was advised of his “rights”. Under the circumstances the truth or falsity of the claim of indigency need not be passed upon or considered.

Defendant Alan Hershon's motion (Document 29) to sever defendants and counts is likewise denied. As for the request to have the defendants tried separately, despite defense counsel’s excellent argument, there is more here than simply similarity in nature of the offenses alleged to have been committed by the two defendants. There is alleged commonality in the source of large sums of money received by defendants, common employment of defendants, alleged “overlapping” false versions of the reason for payments being made (which in itself will be offered as evidence of the falsity of each version). It appears that much of the evidence to be offered against one defendant will be offered against the other. The defendants here are properly joined. F.R.Crim.P. 8. Defendant Hershon has-not demonstrated such prejudice that severance calls for. The occurrences here bear a strong logical relationship to one another, and will require much evidentiary overlap. Similarly, there appears to be no reason to sever the counts. They too are logically related to one another, and there will be overlapping of evidence.

The motion of Alan Hershon to require the government to elect between counts 5 and 6 is denied. It does not appear to me that the counts are multiplicitous. A difference in proof between the two is certainly imaginable. If, in fact, on the evidence, it eventuates that there is but a single act involved, the defendant then will not be without remedy or protection.


author: BROTMAN, District Judge.

text:
    Daniel GARSHMAN and Donald Frank, as General Partners for Tarbell I, a Limited Partnership, et al., on their own behalf and as representatives of all private persons and business entities throughout the United States who are gas producer/investors who have funded gas well exploration in New York and Pennsylvania for resale to the pipeline services of Columbia Gas Transmission Corporation, Plaintiffs, v. UNIVERSAL RESOURCES HOLDING, INC., a Pennsylvania Corporation; U.S. Energy Development Corporation, A New York Corporation; Chautauqua Energy, Inc., a New York Corporation; Columbia Gas Transmission Corporation, a Delaware Corporation; and the Columbia Gas System, Inc., a Delaware Corporation, Defendants.
    Civ. A. No. 85-2369 (SSB).
    United States District Court, D. New Jersey.
    Jan. 3, 1986.

      Valore, McAllister, Westmoreland, Gould, Vesper & Schwartz, P.C. by Robert N. McAllister, Northfield, N.J., for plaintiffs.
    McCarter & English by James F. Ham-mill, Cherry Hill, N.J., Cravath, Swaine & Moore by John E. Beerbower, New York City, for defendants Columbia Gas Transmission Corp. and The Columbia Gas System, Inc.
    Tomar, Parks, Seliger, Simonoff & Adourian by William Tomar, Haddonfield, N.J., for defendants Universal Resources Holding, Inc., and Chautauqua Energy, Inc.

      Capehart & Scatchard, P.A. by William B. Scatchard, Moorestown, N.J., for Defendant U.S. Energy Development Corp.
   OPINION

BROTMAN, District Judge.

Plaintiffs David Garshman and Donald Frank, general partners for Tarbell I (“Tarbell”), a Pennsylvania limited partnership which invests in oil and gas exploration, bring this proposed class action alleging antitrust violations and breach of contract against several companies which finance their drilling operations with investors’ funds and against the pipeline company which services those wells and purchases most of the fuel produced. Defendant Columbia Gas Transmission Corporation (“Columbia”) now moves to dismiss the complaint for failure to state a claim for which relief can be granted. Fed.R.Civ.P. 12(b)(6). Columbia also challenges plaintiffs’ standing to bring claims under the Sherman and the Clayton Antitrust Acts, 15 U.S.C. §§ 1, 2, 15 and 26. Columbia’s motion is joined by defendant U.S. Energy Development Corporation (“U.S. Energy”). Plaintiffs oppose Columbia’s motion and move for leave to file an amended complaint. Jurisdiction is based on 28 U.S.C. § 1337, 15 U.S.C. § 4, and theories of pendent jurisdiction.

I. FACTUAL BACKGROUND

The complaint alleges causes of action under Sections 1 and 2 of the Sherman Antitrust Act, 15 U.S.C. §§ 1, 2; Sections 4 and 16 of the Clayton Antitrust Act, 15 U.S.C. §§ 15, 26; and the doctrine of pendent jurisdiction over state law claims for breach of contract. and civil conspiracy. Briefly stated, plaintiffs’ claim is that all defendants conspired to fix the prices which Columbia would pay for natural gas produced by the wells in which plaintiffs held a significant financial interest at lower levels than provided for in existing contracts.

The complaint’s legal sufficiency must be examined in light of the facts it pleads, and all factual allegations in the complaint must be accepted as true for purposes of this motion to dismiss. Associated Gen. Contractors of Cal., Inc. v. California State Council of Carpenters, 459 U.S. 519, 526, 103 S.Ct. 897, 902, 74 L.Ed.2d 723 (1983).

According to the complaint, Columbia contracts for new supplies of natural gas and transmits the gas through its pipeline system for later sale to residential and commercial users in several states. Columbia is a wholly owned subsidiary of defendant The Columbia Gas System, Inc; (“Columbia System”), which is in the business of finding, producing, purchasing, transmitting, storing and delivering natural gas. Defendant Universal Resources Holding, Inc. (“Universal”), provides the material and personnel required to drill gas wells and transmit the extracted gas to a pipeline for eventual distribution. Defendants Universal, U.S. Energy and Chautauqua Energy, Inc., are known in the industry as producers. Like other producers, Universal generally sells the rights to the expected production of gas to investors, normally limited partnerships like Tarbell, who pay the producers fees for exploration, fees for successfully bringing the wells into production, and periodic payments based on the value of the production realized over the life of the wells.

Columbia and Universal entered into a contract on November 23, 1981, under which Universal agreed to produce and Columbia agreed to purchase natural gas from certain wells in western New York State through 1986 at the maximum lawful price applicable. That agreement sprang from and reflected a complex mix of market and regulatory forces, the crucial elements of which were a severe undersupply of natural gas during the mid-1970s and the enactment of the Natural Gas Policy Act of 1978 (“NGPA”), 15 U.S.C. §§ 3301 et seq., which sought to ameliorate the shortage through partial decontrol of prices.

Between 1972 and 1978, Columbia could not satisfy its customers’ demands for natural gas. NGPA’s drilling incentives enabled Columbia to meet 100 percent of that demand in 1979. That success apparently prompted Columbia to secure adequate supply contracts, like that with Universal, for estimated future demand. As it turned out, Columbia seriously misjudged that future demand.

Under the contract with Universal, Columbia leased to Universal a tract of land in Chautauqua County, New York, on the condition that Universal deliver all of the natural gas produced on the land to Columbia. Columbia, in turn, obligated itself in any given year to take or pay for at least 75 percent of the wells’ estimated yearly output of gas. Such an agreement is referred to as a “take or pay” contract and is standard in the natural gas industry. The price to be paid was the “maximum lawful price applicable” under federal statutory and regulatory authority. Columbia, or its parent company, operates the only pipeline in the western New York/northwestern Pennsylvania region which is the subject of this lawsuit.

On June 21, 1983, Universal entered into an agreement assigning all of its rights and duties under the “take or pay” contract to Garshman, the managing general partner of Tarbell. However, Universal retained a financial interest in the wells that varied with the volume and price of gas sold to Columbia and with the number of wells that were drilled. The assignment was to take effect after Universal completed work on the wells and Garshman made obligatory payments.

Subsequently, the market for the production and sale of natural gas changed significantly. Falling oil prices enhanced that fuel’s attractiveness and successful conservation efforts coupled with a decline in industrial activity led to a drop in usage and demand for natural gas. On the supply side, the higher prices imposed by the NGPA’s regulatory scheme prompted new exploration and development. As exploration under the form of contract drawn between Universal and Columbia became increasingly productive, Columbia’s liability to “pay” for gas produced but not “taken” began to approach $2 billion or more.

Faced with this dramatic shift in the market, and saddled with overwhelming contractual obligations through 1986, Columbia sought to renegotiate the prices it paid to producers like Universal in order to bring those prices in line with market levels. Columbia allegedly coerced producers into renegotiating price terms by threatening that it would not assign leases for future exploration to producers who did not renegotiate existing contracts. Columbia also allegedly threatened to curtail the amount of gas it took from those producers by cutting production allocation and manipulating pressure in the pipeline. In other words, Columbia allegedly threatened to refuse to deal in the future with producers who failed to comply with its present demands.

Universal eventually capitulated and a new price clause was incorporated into its contract with Columbia by an agreement dated August 29, 1984. Columbia has purchased gas under that contract pursuant to its terms since that time. Plaintiffs claim that they were never notified of this renegotiation and that because of the assignment of that contract, Universal had no authority to renegotiate on their behalf. Plaintiffs further claim economic injury as a result of the renegotiated price clause.

II. PLAINTIFFS’ MOTION TO AMEND THE COMPLAINT

Plaintiffs seek to amend their complaint under Fed.R.Civ.P. 15(a) to add allegations of facts which came to their attention after they filed the original complaint. Rule 15(a) provides that leave to amend “shall be freely given when justice so requires.” Additionally, federal courts have generally recognized that a liberal amendment policy enables controversies to be decided on their merits. Forman v. Davis, 371 U.S. 178, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962); United States v. E.B. Houghan, 364 U.S. 310, 81 S.Ct. 13, 5 L.Ed.2d 8 (1960). Accordingly, the court will allow plaintiffs to amend the complaint. All references to the “complaint” in this Opinion shall be to the amended complaint.

III. DEFENDANT COLUMBIA’S MOTION TO DISMISS THE COMPLAINT

A. The Rule 12(b)(6) Standard

A Rule 12(b)(6) motion addresses the legal sufficiency of the complaint. Under Fed.R.Civ.P. 8(a)(2), the complaint must include only a “short and plain statement of the claim” whose purpose is to give defendant fair notice of the nature and substance of the claim. See Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). The Third Circuit has held specifically that neither evidence nor an exhaustive array of facts must be pleaded. Bogosian v. Gulf Oil Corp., 561 F.2d 434, 446 (3d Cir.1977). As a general rule, courts must construe pleadings liberally; this is especially true of antitrust complaints. Capital City Pub. Co. v. Trenton Times Corp., 575 F.Supp. 1339, 1342 (D.N.J.1983) (Ackerman, J.). Justice Marshall has noted that “in antitrust cases where the proof is largely in the hands of the alleged conspirators, ... dismissals should be granted sparingly.” Hospital Building Co. v. Trustees of Rex Hospital, 425 U.S. 738, 746, 96 S.Ct. 1848, 1853, 48 L.Ed.2d 338 (1976).

Recently, however, courts have focused on “the heavy costs of modern federal litigation, especially antitrust litigation, and the mounting caseload pressure on the federal courts,” and made clear that some minimal and reasonable particularity in pleading is required to sustain a claim of violation of the Sherman Act. Sutliff, Inc. v. Donovan Co., 727 F.2d 648, 654 (7th Cir.1984); see In Re Plywood Antitrust Litigation, 655 F.2d 627, 641-42 (5th Cir.1981), cert. dismissed, 462 U.S. 1125, 103 S.Ct. 3100, 77 L.Ed.2d 1358 (1983). As the Sutliff court explained:

The pleader will not be allowed to evade this requirement by attaching a bare legal conclusion to the facts that he narrates: if he claims an antitrust violation, but the facts he narrates do not at least outline or adumbrate such a violation, he will get nowhere merely by dressing them up in the language of antitrust.

727 F.2d at 654.

With these standards firmly in mind, the court concludes that plaintiffs in the case at bar could prove no set of facts in support of their claim that would entitle them to relief.

B. The Antitrust Claims

Count I alleges antitrust violations under Sections 1 and 2 of the Sherman Act, specifically price fixing and monopolization. To overcome defendant’s motion to dismiss, plaintiffs must allege the existence of a conspiracy with a unity of purpose, identify its parties and the time during which it operated, and cite actions allegedly taken to effectuate it. Capital City Pub. Co., supra; see also Leeward Petroleum Ltd. v. Mene Grande Oil Co., 415 F.Supp. 158 (D.Del.1976); McKnight v. Southeastern Pennsylvania Transit Authority, 583 F.2d 1229, 1235-36 (3d Cir.1978).

Preliminarily, the court notes that the circumstances of this case are unusual in several respects. In a conventional antitrust case, consumers or distributors attack the allegedly anticompetitive conduct of one or several sellers who possess monopoly power in a certain market. In this case, the reverse is true: Columbia is an allegedly monopsonistic buyer, regulated as a monopoly because its pipeline is the only transportation network in the region, and the producer defendants like Universal are intermediaries between Columbia and plaintiffs, the ultimate sellers of the natural gas. New reported cases involve analogous fact patterns. Compare Venture Technology, Inc. v. National Fuel Gas Co., et al., 1980-81 Trade Cas. (CCH) 11 63,780 (W.D.N.Y.1981).

1. Section 1 of the Sherman Act
Section 1 of the Sherman Act provides: Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.

15 U.S.C. § L. Initially, the court must consider whether plaintiffs allege sufficient facts to support the conclusion that a contract, combination or conspiracy exists or existed among defendants Columbia, Universal and the other producers. If so, then the court must decide whether such contract, combination or conspiracy is an unreasonable restraint of trade. See Sitkin Smelting & Ref. Co. v. FMC Corp., 575 F.2d 440, 445 (3d Cir.), cert. denied, 439 U.S. 866, 99, S.Ct. 191, 58 L.Ed.2d 176 (1978). 1

a. Conspiracy

Paragraph 43 of the complaint alleges that since at least as early as 1979, Columbia and the other defendants have engaged in a combination and conspiracy among themselves to fix, depress or stabilize the price of “take or pay” natural gas that is resold in interstate commerce. However, every anticompetitive act allegedly committed to effectuate the purported combination and conspiracy is attributable to Columbia alone. The complaint alleges that Columbia, inter alia, (a) coerced compliance with its renegotiation demands by threatening to or carrying out its threat to cut the minimum take allocation from gas wells, cut the price paid for take or pay gas, or “shut in” (i.e. close down) gas wells altogether; (b) threatened producers/investors with a future refusal to deal; (c) threatened producers/investors with denial of access to Columbia’s pipeline; (d) induced producers/investors to invest in the industry by offering and then reneging on promises of high prices; and (e) manipulated the pipeline to slow the volume of gas produced in order to reduce its contractual “take or pay” liability.

According to the allegations, Universal and the other producers were victims of Columbia’s allegedly aggressive, coercive tactics. Nothing in the complaint suggests that absent alleged threats of future refusals to deal and manipulation of pressure in the pipeline, the producers would voluntarily have reduced the price to which' they, and by assignment the plaintiffs, were contractually entitled. Economic coercion is not a viable defense to a charge of horizontal price fixing. Duplan Corp. v. Deering Milliken, 594 F.2d 979, 982 (4th Cir.1979) (per curiam), cert. denied, 444 U.S. 1015, 100 S.Ct. 666, 62 L.Ed.2d 645 (1980) (no defense for knowing participation in horizontal patent restraint regardless or reluctance, coercion, or motives conflicting with other conspirators); Commonwealth Edison Co. v. Allis Chalmers Mfg. Co., 245 F.Supp. 889, 892 (N.D.Ill.1965) (economic coercion no defense to participation in horizontal price fixing). The instant case, however, alleges a vertical conspiracy among all defendants. Professor Areeda has identified several relevant factors which a court should consider in' deciding whether the victim of alleged coercion may be deemed a co-conspirator. See P. Areeda & D.F. Turner, Antitrust Law, ¶ 1408b (1978, 1986).

The typical vertical coercion case arises when an unwilling dealer who is threatened by his supplier with termination promises to buy a second commodity, to deal exclusively, or to restrict resales. E.g. Perma Life Mufflers v. International Parts Corp., 392 U.S. 134, 88 S.Ct. 1981, 20 L.Ed.2d 982 (1968); Albrecht v. Herald Co., 390 U.S, 145, 88 S.Ct. 869, 19 L.Ed.2d 998 (1968). Where, as in Perma Life, supra, the manufacturer’s coercion results in an express contract, it is the contract and not the coercion that creates the anticompetitive agreement. See generally Areeda, ¶[ 1452b. The dealer’s reluctant compliance, however justified, is ordinarily no defense. See United States v. Paramount Pictures, 334 U.S. 131, 160-61, 68 S.Ct. 915, 930-31, 92 L.Ed. 1260 (1948) (contract with unlawfully restraining term violates Section 1 notwithstanding claim that one of the parties was forced into it by other party’s bargaining power). However, as Areeda observes, this type of conspiracy “is usually found for the purpose of giving an antitrust remedy against the person making the improper demand, and, typically, in favor of the coerced ‘conspirator.’ ” Areeda, 111408d.

Areeda suggests that a court should also consider whether the coerced behavior is actionable under another section of the antitrust laws and whether the coerced party will be protected or punished by a finding that the coercion created a conspiracy. Id. ¶ 1408b.

In this case, the court is reluctant to find the existence of conspiracy when doing so might subject Universal, a possible victim of coercion, to liability for treble damages. However, as the court’s later analysis makes clear, this issue is a red herring. Even if the court were to find that the complaint alleged facts sufficient to support a conspiracy theory, its other deficiencies are fatal.

b. Price Fixing

The prevailing standard by which alleged Section 1 conspiracies are judged is the so-called “rule of reason”. Continental T. V., Inc. v. G.T.E. Sylvania, Inc., 433 U.S. 36, 97 S.Ct. 2549, 53 L.Ed.2d 568 (1977). The essential principle behind the rule of reason is that “contractual restraints fall within the prohibition of Section 1 only when their purpose and effect is found to have imposed an undue restraint on commerce.” Sitkin Smelting, supra, 575 F.2d at 447. Some restraints on commerce, however, are per se violations of the antitrust laws. Northern Pacific Ry. v. United States, 356 U.S. 1, 78 S.Ct. 514, 2 L.Ed.2d 545 (1958).

The Supreme Court has held that “any combination formed for the purpose and with the effect of raising, depressing, fixing, pegging or stabilizing the price of a commodity in interstate or foreign commerce is illegal per se under § 1 of the Sherman Act.” United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129 (1940). The Court has specifically condemned horizontal agreements among competitors to fix prices and vertical resale price maintenance agreements. See Pa. Dental Assn. v. Medical Serv. Assn. of Pa., 745 F.2d 248, 256 (1984) (citing cases).

There is an important factual distinction between the case at bar and the typical vertical price fixing case: the prices allegedly fixed by the defendants are the price of the gas produced by Universal and the other producers and sold to Columbia, not the resale price charged to third parties. “The price fixing within the scope of the per se prohibition of § 1, however, is an agreement to fix the price to be charged in transactions with third parties, not between the contracting parties themselves.” Sitkin Smelting, supra, 575 F.2d at 446, citing United States v. Parke, Davis & Co., 362 U.S. 29, 80 S.Ct. 503, 4 L.Ed.2d 505 (1960). As the Third Circuit Court of Appeals has noted, where the facts “differ greatly from the vertical arrangements to restrict resale prices invalidated in Albrecht and [Kiefer-Stewart Co., v. Joseph Seagram & Sons, 340 U.S. 211, 71 S.Ct. 259, 95 L.Ed. 219 (1951)], we should be hesitant to condemn them under the per se rule.” Pa. Dental, supra at 259.

The court concludes that the alleged acts taken to fix prices in the natural gas industry do not make out a per se violation of Section 1 of the Sherman Act. If the price fixing is not per se, the rule of reason applies. Chicago Board of Trade v. United States, 246 U.S. 231, 238, 38 S.Ct. 242, 243-44, 62 L.Ed. 683 (1918). “Essential to a finding of a § 1 violation is concerted action; unilateral action is not proscribed.” Pa. Dental, supra at 255, citing Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 104 S.Ct. 1464, 1468, 79 L.Ed.2d 775 (1984).

The complaint alleges unilateral actions by Columbia which were taken to coerce the other defendants into accepting a lower price for their gas. Even if plaintiffs were able to prove every allegation, and even if the facts showed the existence of a coerced conspiracy, the court does not believe that the complaint states an actionable price fixing claim under Section 1. The alleged price fixing took the form of bilateral agreements, allegedly coerced by unilateral action. Furthermore, the purpose of the Sherman Act is to promote competition and facilitate the workings of a free market. Nothing in the complaint suggests that Columbia attempted to extort a below-market price through renegotiation. Indeed, the maximum lawful price allowable under the existing regulatory scheme was significantly in excess of the market price, given the tremendous oversupply stimulated by the enactment of the NGPA.

Accordingly, the court finds that the complaint does not allege facts sufficient to support a cause of action against Columbia under Section 1 of the Sherman Act.

2. Section 2 of the Sherman Act: Monopolization

Section 2 of the Sherman Act makes it unlawful to:

monopolize or attempt to monopolize or combine or conspire with any other person or persons to monopolize any part of the trade or commerce among the several States or with foreign nations____

15 U.S.C. § 2. Plaintiffs contend that defendants’ alleged conduct, as described above, constitutes a willful acquisition or maintenance of monopoly power. Because the factual allegations refer solely to Columbia, the court will consider the Section 2 monopolization claim as running only against Columbia and not against the producer defendants.

Columbia and its parent company, Columbia System, are regulated as monopolies under the Natural Gas Act, 15 U.S.C. § 717 et seq. Government regulation does not automatically exempt an industry from the ambit of the antitrust laws. Woods Exploration and Pro. Co. v. Aluminum Co. of America, 438 F.2d 1286, 1302 (5th Cir.1971). Indeed, the Supreme Court has said that “immunity from antitrust laws ‘is not lightly implied.’ ” United States v. First City National Bank, 386 U.S. 361, 368, 87 S.Ct. 1088, 1093, 18 L.Ed.2d 151 (1967), quoting California v. FPC, 369 U.S. 482, 485, 82 S.Ct. 901, 903, 8 L.Ed.2d 54 (1962).

To succeed under Section 2, a plaintiff must show that a regulated monopolist exercised power “to exclude competitors from ... trade or commerce among the several states....” American Tobacco Co. v. United States, 328 U.S. 781, 809, 66 S.Ct. 1125, 1138, 90 L.Ed. 1575 (1946). See also Mid-Texas Comm. Sys., Inc. v. AT & T, 615 F.2d 1372, 1387 (5th Cir.), cert. denied, 449 U.S. 912, 101 S.Ct. 286, 66 L.Ed.2d 140 (1980) (regulated monopoly liable under Section 2 only if exclusionary conduct towards competitors shown).

To state an adequate claim of monopolization under Section 2, plaintiffs must allege (1) possession of monopoly power in the relevant geographic and product market, and (2) willful acquisition or maintenance of that power as distinguished from a justifiable business decision. United States v. Grinnell Corp., 384 U.S. 563, 570-71, 86 S.Ct. 1698, 1703-04, 16 L.Ed.2d 778 (1966). Plaintiffs contend that the relevant market is the natural gas field and the relevant product is the available production of natural gas at the well site. For purposes of this motion to dismiss, the court finds that market description adequate. Compare Woods Exploration, supra.

The complaint also alleges intentional predatory conduct which constitutes “a refusal to deal in order to extend or abuse monopoly power.” In particular, the complaint alleges that Columbia threatened Universal and other producers with future refusals to deal if they did not comply with Columbia’s renegotiation demands. Absent the purpose or intent to create or maintain a monopoly, the courts will not “restrict the long recognized right of a trader or manufacturer engaged in an entirely private business freely to exercise his own independent judgment as to parties with whom he will deal.” United States v. Colgate & Co., 250 U.S. 300, 307, 39 S.Ct. 465, 468, 63 L.Ed. 992 (1919). However, Columbia’s intentions are a question for the finder of fact. Accordingly, the court finds that the complaint alleges facts sufficient to state a cause of action under Section 2 of the Sherman Act.

3. Standing

a. Section 4 of the Clayton Act

Although the complaint’s factual allegations are adequate to state a monopolization claim, plaintiffs are not the proper parties to maintain this antitrust action. Standing to bring a private antitrust action is conferred by Section 4 of the Clayton Act, which provides that “any person injured in his business or his property by reason of anything forbidden in the antitrust laws” may sue for treble damages. 15 U.S.C. § 15(a). Plaintiffs allege that they lost expected revenue as a result of Columbia’s allegedly monopolistic practices. Despite the sweeping language of the statute, courts have not developed a strictly literal interpretation.

In articulating the requirements for standing, the Third Circuit has stated that courts must analyze such factors as “the causal connection between an antitrust violation and the injured party, the nature of the plaintiff’s alleged injury, and the directness or indirectness of the asserted injury.” Merican, Inc. v. Caterpillar Tractor Co., 713 F.2d 958, 964-65 (3d Cir.1983). Even if Columbia’s alleged conduct did cause some injury to plaintiffs’ business or property, plaintiffs nonetheless lack standing to sue because the alleged injury is too remote and does not result from an adverse impact of Columbia’s conduct on competition. Id., see also Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 484-89, 97 S.Ct. 690, 695-97, 50 L.Ed.2d 701 (1977).

In Associated General Contractors, supra, the Supreme Court held that a labor union had no standing to sue for injuries sustained as a result of an allegedly coerced boycott among general contractors of nonunion contractors and subcontractors because its injuries were too remote. 459 U.S. at 539-43, 103 S.Ct. at 909-911. The Court observed that certain contractors and subcontractors were the principal victims of any improper conspiracy, stating that:

[if] either these firms, or the immediate victims of coercion by defendants, have been injured by an antitrust violation, their injuries would be direct and ... they would have a right to maintain their own treble damages actions against the defendants. An action on their behalf would encounter none of the conceptual difficulties that encumber the Union’s claim. The existence of an identifiable class of persons whose self-interest would normally motivate them to vindicate the public interest in antitrust enforcement diminishes the justification for allowing a more remote party ... to perform the office of a private attorney general.

Id. at 541-42, 103 S.Ct. at 910-11 (emphasis added).

Here, Universal originally contracted to supply gas to Columbia. Plaintiffs were investors and their interest in the contracts arose by assignment. In addition, Universal itself renegotiated the contract. Universal was the immediate target and apparent victim of any actions by Columbia growing out of or relating to the price reduction. Any adverse impact on plaintiffs derived from whatever direct injury might have been suffered by Universal. Moreover, under the contract and assignment, Universal retains an identifiable and significant interest in the performance of the contract by Columbia and in the price paid for the gas. Additionally, the threats of future refusals to deal, if carried out, would have hurt Universal’s business and reputation and would likely not have affected plaintiffs’ interest in the present contracts. Certainly, Universal is part of that “identifiable class of persons whose self-interest would normally motivate them ...” to sue for relief. Id.

In addition to showing that the injury to business or property is direct, a plaintiff must show that the injury allegedly suffered is of the type that “the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful.” Brunswick Corp., supra, 429 U.S. at 489, 97 S.Ct. at 697.

The court does not believe that the injury allegedly suffered by plaintiffs is an antitrust injury in any sense of the term. Because Universal caved in to Columbia’s alleged demands for a lower sale price, plaintiffs were deprived of the difference between what they expected to receive under the assigned contract and what they actually did receive. In essence, they suffered a loss because Universal breached the terms of the assignment agreement and renegotiated the contract without plaintiffs’ knowledge or consent.

The antitrust laws were enacted to promote economic competition, not prohibit it. As the complaint itself makes clear, Columbia’s conduct arose directly from a rapid and complex shift in market trends, complicated and to some extent caused by Government regulation. In other words, if the market price for natural gas had not plummeted after the NGPA stimulated exploration and production and Columbia arranged supply contracts to avert the severe shortages it experienced in the 1970’s, Columbia would probably never have sought to extract a lower price from producers.

Plaintiffs made savvy investment decisions by financing drilling operations in the immediate wake of NGPA’s enactment. Similarly, Universal and other producers found themselves on the right end of the deal once the market shifted. Columbia, however, made a serious error in estimating future supply and demand requirements when it entered into its numerous “take or pay” contracts in the early 1980’s. When the market shifted, the deal soured and Columbia was saddled with billions of dollars of liabilities under the take or pay contracts. Its efforts to ameliorate that considerable liability may, as alleged, have violated the antitrust laws. But the probable victims of the allegedly predatory practices are the producers of natural gas who depend on Columbia's pipeline for transportation out of the gas field and on Columbia as a primary purchaser of natural gas, not the investors.

Plaintiffs would have an incentive to sue either Columbia or Universal or both to recover damages for the expected profits they never received regardless of how Columbia acted or why Universal decided to renegotiate. Once plaintiffs recover those damages, if indeed they are entitled to them, they will be made whole. They will not suffer in the future even if Columbia did or continues to violate the antitrust laws.

b. Section 16 of the Clayton Act: Injunctive Relief

Plaintiffs also lack standing to sue for injunctive relief under Section 16 of the Clayton Act, 15 U.S.C. § 26. The requirements for standing under Section 16 are “(1) a threatened loss or injury cognizable in equity that is (2) proximately caused by an alleged antitrust violation.” Nationwide Mutual Ins. Co. v. Automotive Serv. Council of Del., Inc., 490 F.Supp. 282, 284 (D.Del.1980). Plaintiffs meet neither of these requirements. First, plaintiffs’ loss is not cognizable in equity. If they continue to be injured, as they allege, from an improper or ineffective renegotiation of the price of the gas, they have adequate legal remedies in other courts. Second, plaintiffs’ alleged injury is not proximately caused by Columbia’s conduct because there was an “independent factor” — Universal — which was capable of “rationally affect[ing] the amount of money flowing from plaintiffs to defendant____” Id. at 285. Therefore, as under Section 4, plaintiffs’ injuries are too remote. See Callahan v. Scott Paper Co., 541 F.Supp. 550, 561 n. 2 (E.D.Pa.1982) (denying injunctive relief and treble damages when alleged antitrust violation too remote).

C. The State Law Claims

The complaint states claims for breach of contract and civil conspiracy under state law. Because the court finds that plaintiffs lack standing to pursue their federal antitrust claims, the court cannot exercise its pendent jurisdiction over the state claims. Absent an independent jurisdictional basis, the court must dismiss the state law claims. United Mine Workers of America v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966).

IV. CONCLUSION

For all the foregoing reasons, the court will grant defendant Columbia’s motion to dismiss the complaint pursuant to Fed.R. Civ.P. 12(b)(6). Since defendant U.S. Energy joined Columbia’s motion, the complaint will also be dismissed against it. The court will also grant plaintiffs’ motion to amend the complaint. An appropriate order will be entered.


author: THOMAS F. HOGAN, District Judge.

text:
    TICOR TITLE INSURANCE COMPANY, et al., Plaintiffs, v. FEDERAL TRADE COMMISSION, et al., Defendants.
    Civ. A. No. 85-3089.
    United States District Court, District of Columbia.
    Jan. 3, 1986.

      Gibson, Dunn & Crutcher, Washington, D.C., for plaintiffs.
    Richard K. Willard, Asst. U.S. Atty. Gen., Justice Dept. Civ. Div., Washington, D.C., for defendants.

      . The enforcement action initiated against plaintiffs, In the Matter of Ticor Title Insurance Co., et al., FTC Docket No. 9190, is scheduled for a hearing before an Administrative Law Judge in February, 1986. The present action does not involve a review of the merits of the action brought by the FTC, and the Court accordingly intimates no view as to the substantive or procedural propriety of the administrative action.

   MEMORANDUM OPINION

THOMAS F. HOGAN, District Judge.

On January 7,1985, the defendant Federal Trade Commission (“FTC”) initiated proceedings against plaintiffs, six title insurance companies, pursuant to its enforcement authority in 15 U.S.C. § 45(b). Plaintiffs subsequently brought this action, seeking a declaration that the delegation of law enforcement powers to the FTC is unconstitutional because the Commissioners are given the exclusive power to initiate enforcement proceedings, and are not subject to the President’s supervisory control. Plaintiffs also seek permanent injunctive relief against all future prosecutions by the FTC, and against the proceeding presently pending against them.

Defendants have moved to transfer this case, claiming that the Court of Appeals has exclusive jurisdiction under the rule announced in Telecommunications Research and Action v. Federal Communications Commission, 750 F.2d 70 (D.C.Cir.1984) (“TRAC”). In the alternative, defendant contends that plaintiffs’ claim is not ripe, and must be dismissed. The Court heard oral argument on the motion on December 18, 1985, and concludes that although the case is within the District Court’s jurisdiction, it is not ripe for review and must be dismissed.

I. 'Applicability of TRAC

This Circuit held in TRAC that “where a statute commits final agency action to review by the Court of Appeals, the appellate court has exclusive jurisdiction to hear suits seeking relief that might affect its future statutory power of review.” 750 F.2d at 72. Review of cease and desist orders issued by the FTC is committed by statute to the Court of Appeals, 15 U.S.C. § 45(c), and defendant accordingly concludes that an action challenging the FTC’s power to initiate proceedings that could result in entry of a cease and desist order must be brought in the appellate court. Plaintiffs assert that TRAC is limited to claims seeking review of agency process, and does not encompass constitutional challenges to the agency’s enabling statute. The Court agrees.

The language in TRAC admittedly is broad, but it must be read within the context of the Court’s discussion of the nature of their exclusive jurisdiction. In concluding that District Courts have no jurisdiction over requests to compel FCC action, the Court of Appeals emphasized that Congress, in its statutory allocation of review, intended the “class of claims covered by the statutory grant of review power” to be solely in the appellate courts. TRAC, 750 F.2d at 77. A constitutional challenge to the FTC’s enabling statute would not appear to be within the ‘class of claims’ contemplated by § 45(c), which only determines the forum in which FTC cease and desist orders shall be reviewed. Had Congress also allocated review of constitutional claims to the Court of Appeals, the holding of TRAC would compel transfer of this case. See, e.g., Public Utilities Commission of Oregon v. Bonneville Power Administration, 767 F.2d 622 (9th Cir.1985) (constitutional challenge to ongoing agency proceedings held to be within Circuit Court’s exclusive jurisdiction under TRAC when judicial review provision of relevant statute allocated review of suits challenging constitutionality of statute or actions thereunder to Court of Appeals).

Further, cases which have been transferred to appellate courts under TRAC have only presented claims challenging the manner in which agency process was implemented. E.g., Oil, Chemical and Atomic Workers Int’l v. Zegeer, 768 F.2d 1480 (D.C.Cir.1985) (claim of unreasonably delayed agency action); Zantop International Airlines, Inc. v. Engen, 601 F.Supp. 667 (D.D.C.1985) (challenge to agency’s allegedly improper amendment of operating certificate). See also Independent Bankers Association of America v. Conover, 603 F.Supp. 948, 956-57 (D.D.C.1985) (denial of motion for Order of Referral to agency for decision on merits). This limitation is entirely consistent with the intended scope of TRAC: in an effort to clarify the law of this Circuit, the Court of Appeals catalogued a series of cases intended to fall within TRAC’s holding. 750 F.2d at 75 n. 23. All of the cases involve challenges to agency process. It would strain credulity to deduce from the generalized terms of TRAC’s holding that it was meant to preclude District Court review in all circumstances of any ease involving an agency which would have “an effect” on appellate jurisdiction. Otherwise, because of the necessary overlap of federal claims and federal agencies, TRAC would cut a swath through this Court’s jurisdiction akin to Sherman’s march through Georgia. TRAC accordingly does not apply to remove the present matter from this Court’s jurisdiction. Defendant’s motion to transfer must-be denied.

II. Ripeness

The issue next presented is whether plaintiffs’ constitutional claim is ripe for review by this Court prior to completion of ongoing administrative proceedings on the underlying wow-constitutional claims. To determine whether plaintiffs’ constitutional claim is ripe for review, the Court must look at two factors: the fitness of the claim for judicial review, and the hardship to the parties from the timing of review. Abbott Laboratories v. Gardner, 387 U.S. 136, 149, 87 S.Ct. 1507, 1515, 18 L.Ed.2d 681 (1967). The constitutional claim plaintiffs present meets the first prong of the ripeness test. Although the issuance of a complaint is not final, reviewable agency action, Federal Trade Commission v. Standard Oil, 449 U.S. 232, 237, 101 S.Ct. 488, 491, 66 L.Ed.2d 416 (1980), it does satisfy the finality requirement of the ripeness doctrine in a case which challenges the agency’s authority to act, rather than the merits of the action taken. Athlone Industries, Inc. v. Consumer Products Safety Commission, 707 F.2d 1485, 1489 n. 30 (D.C.Cir.1983). Thus, for purposes of this prong of the ripeness test, the FTC’s issuance of a complaint against plaintiffs was “final” action. In addition, the issue plaintiffs present is purely legal and no further action at the agency level will either flesh out or resolve the claim.

At oral argument, defendant conceded that plaintiffs’ claim was adequately framed for review, satisfying the Article III component of the ripeness doctrine. The second prong of the test, however, implicates prudential concerns, which require the Court to explore the posture of plaintiffs’ case and the extra-judicial framework in which this case arose and where the impact of a ruling on the merits will be felt. E.g., Atlantic Richfield Co. v. Department of Energy, 769 F.2d 771, 783 (D.C.Cir.1984) (“ARCO”). Because of the particular sensitivity of this, and any constitutional issue, the Court is also under a duty to ensure that the merits will not be reached prematurely. E.g., Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 346-348, 56 S.Ct. 466, 482-483, 80 L.Ed. 688 (1936) (Brandéis, J., concurring).

The obstacle to judicial review in this case is the pendency of the FTC action against plaintiffs. The general rule is that judicial review will not be granted when there are pending administrative proceedings, unless the plaintiff will otherwise suffer irreparable injury. E.g., Abbott Laboratories, 387 U.S. at 153, 87 S.Ct. at 1517. While this rule is clearly appropriate when the challenge is to the conduct or merits of agency proceedings, the same result is not as clearly dictated when the claim presented for review does not depend for its legal or factual development on the administrative process. This Circuit’s most recent pronouncement on the issue, however, forecloses such a distinction. See Hastings v. Judicial Conference of the United States, 770 F.2d 1093 (D.C.Cir.1985). In Hastings, the Court of Appeals sua sponte raised the issue of ripeness to preclude review of plaintiff’s challenge to the constitutionality of a statute when administrative proceedings levied against plaintiff pursuant to the statute had not concluded. Id. at 1102. Absent “serious and irremediable injury,” the court concluded, ongoing proceedings would not be interrupted by judicial review of their propriety. Id.

Plaintiffs allege that the litigation expenses they will be forced to incur in the defense of allegedly unconstitutional administrative proceedings produce sufficient injury to overcome the ripeness restraint. Such expenses alone do not provide a compelling reason to decide a constitutional question which it might not be necessary to reach. Standard Oil, 449 U.S. at 244, 101 S.Ct. at 495. Plaintiffs assert, however, that the injury reaches beyond the pocketbook to implicate more fundamental rights to be free from the unconstitutional exercise of power. Although the Court does not see such a right vested in plaintiffs in this context, there is no doubt that plaintiffs raise a serious and substantial issue of considerable public importance. The constitutionality of independent federal agencies has never been fully adjudicated; as the Assistant Attorney General for the United States candidly admitted, the issue has been avoided for years. Plaintiffs correctly state that questions of similar gravity as to an agency’s authority to act have led this Circuit to grant immediate review, even though administrative proceedings were pending. ARCO, 769 F.2d at 783-84. ARCO, however, involved a challenge only to an agency’s authority under statute to act, and did not present a constitutional issue. Because plaintiffs’ challenge in this case raises a constitutional issue, under Hastings, application of the ripeness doctrine must reflect prudential concerns.

The Court is convinced of the gravity of plaintiffs’ claim. However, the injury asserted by Judge Hastings in his challenge to the legality of the Judicial Conference’s proceedings was also substantial. Exposure of a federal judge to a probing investigation of immediate and devastating personal impact, by a possibly unconstitutionally constituted administrative body appears to be a compelling circumstance for exercising judicial review. Judge Hastings’ petition for rehearing on this ground was denied. Although plaintiffs’ constitutional challenge stands at the same level of severity as that presented in Hastings, the injury they assert is not of comparable magnitude. Plaintiffs, six corporations, have not pointed to any present effect of the investigation, other than litigation expenses. They would not be required to change any of their business operations— even those challenged by the FTC — until the Court of Appeals has placed its injprimatur on any cease and desist order that may issue. The lack of immediacy thus makes the posture of plaintiffs’ claim less compelling than that in Hastings. The injury plaintiffs assert is not “serious and irremediable,” and thus cannot overcome the ripeness bar erected in Hastings.

Furthermore, were the Court to exercise jurisdiction over this case, the operations of the FTC would be suspended. Plaintiffs’ claim of hardship pales by comparison. While this alone does not require the Court to stay its hand, it is a factor in the balance of prudential considerations. No “substantial and irremediable injury” will result if plaintiffs’ claim is held in abeyance until the administrative process is completed. Should plaintiffs prevail at the agency level, the constitutional question need never be addressed. If a cease and desist order issues against any one of the present plaintiffs, the constitutionality of the delegation of power to the FTC may be raised on appeal. Principles of comity, adhered to in Hastings, and judicial restraint articulated in Ashwander, lead the Court to conclude, reluctantly, that it cannot exercise its powers of review over plaintiffs’ claim. Defendants’ motion to dismiss must be granted.

      . Plaintiffs Motion for Summary Judgment, filed on October 21, 1985, was held in abeyance by the Court pending resolution of threshold questions of jurisdiction and justiciability. Because the Court has determined that this action is premature, and must be dismissed, this Motion is mooted.

      . The Court is required to address this threshold issue of jurisdiction under TRAC, even though it ultimately determines that the merits of the claim are not ripe for decision. See Public Utilities Commission of Oregon, 767 F.2d at 630 (District Court lacked jurisdiction under TRAC to dismiss on ripeness grounds a constitutional challenge to statute).

      . The Court of Appeals dismissed most of Judge Hastings’ constitutional challenge because many provisions of the statute had not yet been invoked. However, the Court also withheld review of that portion of the statute which had been employed to initiate investigation of Judge Hastings. Id. at 1102. The concerns the Court expressed with potentially premature review of this part of Judge Hastings' claim are applicable to the case at bar, and are not restricted to the circumstances of Hastings, where the plaintiff sought to air a largely untested statute for constitutional review.

      . Earlier indications from the Court of Appeals lent credence to plaintiffs’ position that judicial review of a constitutional claim need not await the termination of companion administrative proceedings. See Andrade v. Lauer, 729 F.2d 1475 (D.C.Cir.1984). In Andrade, plaintiffs had been discharged pursuant to a reduction-in-force ("RIF”), which was implemented by officials allegedly holding office in violation of the Appointments Clause. No agency proceedings were pending, and the Court of Appeals concluded that none of the purposes of exhaustion would be served by withholding decision on the constitutional claim and requiring initial redress at the agency level. While the immediate effect on the litigants of dismissing a constitutional claim for failure to exhaust administrative remedies, and dismissing the claim after finding it would not be ripe until administrative proceedings conclude is the same, the doctrines serve different purposes and necessarily demand different analysis. The exhaustion requirement reflects the need for agency expertise in the Congressionally-mandated process for the development of claims. E.g., Atlantic Richfield, 769 F.2d at 771. Ripeness, on the other hand, gives closer scrutiny to the manifold prudential considerations implicated in the exercise of judicial review. E.g., Eagle-Picker Industries v. Environmental Protection Agency, 759 F.2d 905, 915 (D.C.Cir.1985). Because these concerns were addressed in Hastings, and are presented here, Hastings and not Andrade controls the outcome of this case.