author: PETTINE, Senior District Judge.

text:
    In re GRAND JURY PROCEEDINGS (John DOE, Esq.).

    Misc. No. X-P.
    United States District Court, D. Rhode Island.
    Jan. 7, 1985.

      James H. Leavey, Asst. U.S. Atty., Providence, R.I., for U.S. Government.
    Norman S. Zalkind, Boston, Mass., for John Doe.

      . The matters at issue in this motion to compel testimony concern subjects currently under investigation by a grand jury sitting in this Court. The identities of the parties involved, as well as the pleadings filed in connection with the motion, have been sealed by order of the Court. To protect the secrecy of these matters, this opinion uses pseudonyms in place of true names and locations. A sealed statement keying the pseudonyms to the true names has been filed with the Clerk of Court.

   MEMORANDUM AND ORDER

PETTINE, Senior District Judge.

Before the court is a motion to compel an immunized grand jury witness, John Doe, Esq., to answer several questions propounded to him by the United States government. The witness has refused to answer the questions, claiming that various provisions of the federal Constitution, as well as the attorney-client privilege, shield him from having to do so. Having previously determined that Doe’s constitutional objections lack merit, the sole issue remaining is whether the attorney-client privilege may properly be invoked by Doe on his client’s behalf.

The facts surrounding this controversy may be briefly summarized. Doe, a practicing attorney from Boston, Massachusetts, represented one Fred Jones in a criminal trial in this district. Mr. Jones was convicted of drug offenses for his participation in a certain drug operation (hereafter, “the Operation”), and his conviction was sustained on appeal. The grand jury is continuing to hear further testimony relevant to the Operation. Among the grand jury’s current targets is one Bob Smith. The grand jury has heard testimony that Smith rented a house in Anytown, Rhode Island, which was to be utilized in distributing the drugs involved in the Operation.

The testimony linking the individual who goes or went by the name Bob Smith, to the rental house came from Dick Brown, a real estate broker. Brown has stated that when Smith sought to lease the premises, he gave the name of his attorney, John Doe, as a reference. Brown telephoned Doe in Boston and according to Brown, Doe vouched for Smith, stated that he knew Smith as an investment broker, and stated that he considered Smith a person able to meet financial obligations on a timely*'basis. The broker further testified that Doe’s reference led to Smith’s obtaining the lease.

Doe has previously appeared before the grand jury. He was called initially in 1982, while he was representing Fred Jones. In an affidavit sworn in August 1982, in support of his then-pending motion to quash the subpoena to him, he stated, inter alia, that he represented Smith for a period beginning and ending in Spring, 1982, on a “landlord tenant” matter. Doe further stated that all communications between Smith and himself “were made in confidence for the purpose of obtaining legal advice with no other persons present or listening in on said communications.” He has asserted, and continues to assert, the attorney-client privilege in refusing to respond to the following questions:

(14) Are you acquainted with a person known as Bob Smith?
(54) ... do you know or have you ever known anyone bearing the name Bob Smith or using the name Bob Smith as an alias?
(55) ... do you know anyone bearing the name Bob Smith or who uses the alias, Bob Smith ... I also asked you, Mr. Doe, if you have ever made any note of any vehicles driven by one known to you as Bob Smith, and to provide us with the description of those vehicles, and in addition, ask you if you have any knowledge of Mr. Smith’s last known address and telephone number, either his last known address and telephone number, or the address and telephone number that you utilized while you allegedly represented him as an attorney?
* * * * * *
(25) ... with respect to your purported legal services, that you provided to Mr. Smith, did you ever establish a fee schedule, or did you ever receive a retainer, — ... or did you ever maintain a ease file with respect to this purported representation of Mr. Smith?
******
(36) I now wish to ask you, sir, what was the conversation, as you recall it, between yourself and Dick Brown [the real estate broker] concerning Bob Smith?
(41) Have you ever served as a reference for Bob Smith, particularly in the late spring and summer of 1982?
(42) Do you recall having occasion to speak with a Dick Brown, a real estate broker in Anytown, Rhode Island, concerning the proposed rental of a residence on Any Road in Anytown, Rhode Island, by an individual who identified himself to Brown as being Bob Smith?
(46) In the spring and summer of 1982, were you ever advised by anyone that you may be receiving a call advising you that you were being inquiried of concerning Bob Smith’s background or his abilities to honor a lease while a tenant?
(48) ... in the spring or summer of 1982, were you ever advised by anyone that you may be receiving a call advising you that you were going to be inquiried of concerning the background and his abilities to honor a lease while a tenant?
(52) Do you agree that you, in fact, did have a conversation with Dick Brown?
(56) ... would you advise us as to where the real estate was located, which was the subject of landlord/tenant advice rendered to Bob Smith by you ... ?

These questions, many of which are repetitive, may be divided into three categories, grouped as I have grouped them above. The first category, consisting of questions 14, 54 and 55, concerns the identity and whereabouts of Smith (“the identity questions”). The second category, consisting of questions 36, 41, 42, 46, 48, 52 and 56, concerns whether Doe acted as a reference for Smith in a conversation with Brown, what was said in this conversation, and where the premises involved are located (“the broker conversation questions”). The third category, consisting solely of question 25, concerns any fee arrangement between Doe and Smith, as well as any case file that Doe may have opened for Smith (“the fee and case file question”). After setting forth the relevant legal principles governing the application of the attorney client privilege to testimony by an attorney-witness, I will analyze separately each of the three question categories.

The attorney-client privilege protects “[c]onfidential disclosures by a client to an attorney made in order to obtain legal assistance.” Fisher v. United States, 425 U.S. 391, 403, 96 S.Ct. 1569, 1577, 48 L.Ed.2d 39 (1976) citing 8 J. Wigmore, Evidence § 2292 (McNaughton rev. 1961). In order to retain its protected character, a communication must be intended by the client to be confidential and must not be disclosed to third parties. See, e.g., U.S. v. Bigos, 459 F.2d 639, 643 (1st Cir.), cert. den. 409 U.S. 847, 93 S.Ct. 53, 34 L.Ed.2d 88 (1972); Wigmore, supra, § 2292 at 554. The privilege operates “to encourage clients to make full disclosure to their attorneys” and, accordingly, “protects only those disclosures — necessary to obtain informed legal advice — which might not have been made absent the privilege.” Fisher, 425 U.S. at 403, 96 S.Ct. at 1577. In other words, “the privilege protects only confidential communications, not the attorney-client relationship as a whole.” In the Matter of Walsh, 623 F.2d 489 (7th Cir.), cert. den. 449 U.S. 994, 101 S.Ct. 531, 66 L.Ed.2d 291 (1980).

Special problems can arise when an attorney is called to appear as a witness before a grand jury. Such a circumstance is fraught with the tension between the broad investigatory powers of the grand jury and the solicitude traditionally accorded attorney-client confidentiality. See generally, In the Matter of Walsh, supra; Zwerling, Federal Grand Juries v. Attorney Independence and the Attorney/Client Privilege, 27 Hastings L.J. 1264 (1976). Courts must be solicitous in guarding against grand jury abuse through this practice. See, e.g., In Re Grand Jury Matters, 593 F.Supp. 103 (D.N.H.1984). The principles governing this sensitive area have been coherently set forth in several recent cases. See, e.g., United States v. Pioggia, Cr. No. 82-231-K (D.Mass. Sept. 21, 1983) (Slip Op.) (Keeton, J.); United States v. Hodge and Zweig, 548 F.2d 1347 (9th Cir.1977); In the Matter of Walsh, supra.

As a general matter, disclosure by an attorney of the identity of his or her client, and the receipt of fees from a client, are not confidential communications protected by the privilege. United States v. Strahl, 590 F.2d 10, 11 (1st Cir.1978); Hodge and Zweig, supra, 548 F.2d at 1353 (9th Cir.1977); 2 J. Weinstein and M. Berger, Weinstein’s Evidence, § 503(a)(4)[02] (1982). In certain circumstances, however, information relating to those areas of inquiry may be privileged. The initial burden rests with the attorney-witness to establish that a privilege exists, which includes establishing the fact of an attorney-client relationship. Walsh, supra, 623 F.2d at 493. Once that burden is carried, the Government must then “show a need for the information sought.” Pioggia, supra, at 2. If the Government demonstrates legitimate need, the privilege may nevertheless be asserted if the “person invoking the privilege can show that a strong probability exists that disclosure of such information would implicate [the] client in the very criminal activity for which legal advice was sought.” Pioggia at 2, quoting Hodge and Zweig, supra, at 1353; accord United States v. Strahl, 590 F.2d 10, 11-12 (1st Cir.1978) (citing Hodge and Zweig). If the attorney-witness can make this showing, then the identity and fee information are protected by the privilege. However, the Government may nevertheless defeat such a claim of privilege if it can make a prima facie showing that the “legal representation was secured in furtherance of intended, or present, continuing illegality.” Piog gia at 2, quoting Hodge and Zweig, 548 F.2d at 1354. Upon such a showing, protection is denied to otherwise privileged information, because the “privilege generally does not extend to confidences concerning present and future criminal activity.” Grieco v. Meachum, 533 F.2d 713, 714 n. 4 (1st Cir.), cert. den. 429 U.S. 858, 97 S.Ct. 158, 50 L.Ed.2d 135 (1976) (citations omitted). See generally 2 Weinstein and Berger, supra, § 503(d)(1)[01] (1982).

I must now apply the foregoing principles to the questions at issue here.

A. The Broker Conversations Questions . (Questions 36, 41, 42, 46, 48, 52 and 56)

These questions seek information from Doe about his conversation with Brown, the broker. I conclude that these questions are not privileged in the first instance because they plainly concern a non-confidential communication. According to Brown’s testimony, the conversation took place at the client Smith’s instigation. The very purpose of the conversation was, by the client’s design, to have attorney Doe discuss with a third party the client’s worthiness as a tenant. And Doe was expressly identified to Brown as Smith’s attorney. Accordingly, such a conversation is a far cry from the “Confidential disclosures by a client to an attorney,” Fisher v. United States, supra, 425 U.S. at 403, 96 S.Ct. at 1577, which are at the heart of the privilege, and Smith, through Doe, may not now attempt to shroud that conversation in a false veil of secrecy.

There being no attorney-client privilege protecting this conversation, attorney-witness Doe must answer questions about the conversation, just as any lay witness would be required to do. He must testify to the Grand Jury about the location of the premises, if it was mentioned, and about the circumstances surrounding the conversation. Questions 36, 41, 42, 46, 48, 52 and 56 are not privileged.

B. The Identity and Whereabouts Questions (Questions 14, 54 and 55)

These questions ask Doe whether he is acquainted with Smith, whether he knows if the name Bob Smith is an alias, and whether he has other identifying information about Smith, i.e., address, phone number or motor vehicle type.

At least insofar as these questions query Doe as to whether he knows Smith and whether Smith is an alias, any claim of confidentiality would now be hollow, indeed, for the reasons just discussed. Because Smith volunteered Doe to a third party as a reference, he can hardly now claim that his acquaintance with Doe and his real name were intended to be confidential matters between his attorney and himself.

Even absent this lack of confidentiality, however, the privilege would not protect the identity and whereabouts information sought here. In my judgment, the Government has met its burden to make a prima facie showing that Smith retained Doe with respect to the Any Town lease, to further “intended, or present, continuing illegality.” Pioggia, supra, at 2, quoting Hodge and Zweig, 548 F.2d at 1354. In exhibits attached to prior memoranda addressing Doe’s testimony, the Government has set forth the evidence which is before the grand jury connecting the leased premises to the drug operation. See Government’s Memorandum in Support of Motion to Compel (Sept. 10, 1982). Doe challenges neither the sufficiency of that evidence to make this prima facie showing, nor the sufficiency of the broker’s testimony to link Smith to those premises. Nor could Doe credibly make such a challenge, for the information before- the grand jury is clearly sufficient to satisfy the court that the Government has made the requisite showing that any legal assistance secured by Smith with respect to the lease was secured in furtherance of the Operation. Further, even if Doe was not aware that his client sought advice in furtherance of a crime — and there has been no allegation that Doe was aware of his client’s intent— this exception to the privilege would nevertheless apply, for only the client need have had the illegal purpose in mind. See U.S. v. Friedman, 445 F.2d 1076, 1086 (9th Cir.1971); U.S. v. Calvert, 523 F.2d 895, 909 (8th Cir.1975) cert. den. 424 U.S. 911, 96 S.Ct. 1106, 47 L.Ed.2d 314 (1976).

So strong is the insistence, “accepted by all courts today ... that a client’s communication to his attorney in pursuit of a criminal or fraudulent act yet to be performed ... not [be] privileged in any judicial proceeding,” 2 Weinstein and Berger, supra, § 503(d)(l)[01], at 503-68, quoting In Re Sawyer’s Petition, 229 F.2d 805, 809 (7th Cir.1956), that not even the whereabouts information sought from Doe may be withheld under color of the privilege. For where a client “abuse[s] the confidential relation by using it to further a ... criminal scheme,” Hodge and Zweig, supra, at 1355, the purposes underlying the privilege are not served by frustrating disclosure of even potentially incriminating information. Id; Pioggia, supra, at 2, 4.

Accordingly, for all of the foregoing reasons, I rule that the privilege does not apply to questions 14, 54 and 55.

C. The Fee and Case File Questions (Question 25)

1. Fee

This question may be seen as seeking information as to the fee paid by Smith for legal services rendered in connection with the Any Town lease. Because I have found that the Government has made a prima facie showing that these services were secured in furtherance of a crime, to the extent that the question is asking about fees in connection with the lease, it is unprivileged because of the fraud-crime exception.

The government, however, states in its memorandum that the purpose of this question is to determine whether Smith paid the legal fees of convicted conspirator Fred Jones, whom John Doe represented. Because the inquiry, thus viewed, asks about legal fees paid in connection with a potentially-protected consultation about a past crime — and not an unprotected continuing crime — I will undertake the scrutiny required of fee questions generally.

At the threshold, it is unclear that Smith can meet his burden to establish that he had an attorney-client relationship with Doe with respect to the past drug crime, see In the Matter of Walsh, supra. Absent such a relationship, Smith would not be entitled to invoke the privilege in the first instance with respect to this fees question. Compare Pioggia, supra, at 4 (preliminary determination that attorney is privileged not to disclose whether one client paid fees for representation of another criminal defendant, where alleged paying client had engaged attorney for advice on same criminal matter). But even assuming arguendo that Smith’s attorney-client relationship with Doe on separate matters is sufficient to call the privilege into play with respect to this fees question, the circumstances here do not justify an exception to the normal rule that fee information is not privileged. The Government has plainly articulated need for the information: if Smith did, in fact, pay Fred Jones’ legal fees, he could be further linked to the Operation. The somewhat more difficult question is whether Doe has met his burden to show that “disclosure of [the fee paid by] the client would implicate that client in the very criminal activity for which legal advice was sought.” United States v. Strahl, 590 F.2d 10, 11 (1st Cir.1978) quoting Hodge and Zweig, supra, 548 F.2d at 1353. This exception to the rule of disclosure of fee information is a narrow one, to be applied “only where revealing [the] information probably would incriminate a client on the same charges for which the client sought legal assistance.” In Re Grand Jury Witness (Waxman), 695 F.2d 359, 361 (9th Cir.1982) (emphasis added).

On close scrutiny of the facts, it is apparent that Smith, through Doe, may not properly seek refuge from disclosure in this doctrine. It is true that he might be incriminated in the drug operation by a disclosure that he paid Fred Jones’ fees. But, according to Doe’s affidavit, Smith sought legal advice from him only on “landlord tenant matters.” There is no contention that Smith sought legal advice in connection with the drug investigation conducted by the Grand Jury. Thus, like the client in U.S. v. Strahl, supra, Smith cannot rely on a risk of incrimination on charges about which he never consulted his attorney — even if he established an attorney-client relationship with regard to other matters. Accord In Re Grand Jury Proceedings (Pavlick), 680 F.2d 1026, 1029 (5th Cir.1982) (Rubin, J., concurring).

In sum, then, the fee question is not privileged — because of the crime-fraud exception, to the extent that it inquires about fees for services rendered on the lease, and because of Doe’s failure to fit within the narrow “incrimination” exception to the general rule holding fee information unprivileged, to the extent that it inquires about who paid Fred Jones’ fees.

2. The Case File

I believe this question, in contrast to all of the others, raises a danger of potential overreaching. Because I cannot know what would be in any case file kept by Doe for Smith, I likewise cannot say with certainty that none of the materials inside of such a file would be privileged. If, for example, Smith consulted Doe on legitimate real estate matters, independent of the Any Town lease, then information relating to such separate consultations might be in the same folder and might be protected by the privilege. Similarly, it is impossible to know whether there would be in such a file any material relevant to separate litigation, which might be protected as Doe’s work product. See In Re September 1978 Grand Jury, 640 F.2d 49 (7th Cir.1980) (if prerequisites of work product doctrine are otherwise met, it may be invoked by attorney to protect attorney’s impressions, conclusions and theories, even where continuing crime or fraud vitiates client’s attorney-client privilege, so long as attorney was without knowledge of that crime or fraud). If the file contained solely non-work product-protected materials, relevant only to the continuing crime, the existence of which the Government has made a prima facie showing, the file would be unprivileged. Id. While nothing in the record indicates that Doe did, in fact, represent Smith on such separate matters, the risk of overreaching is sufficient to suggest caution in ruling on this question. Accordingly, I rule that Doe must state whether or not he kept a case file for Smith. If the answer is in the affirmative, I will make an in camera inspection of that file before ruling on whether or not Doe must testify as to its contents.

So Ordered.

        . It is noteworthy that many courts have held that identifying information, such as address, phone number or physical appearance, is generally unprivileged, either because it is considered part of the client's "identity,” see, e.g., Burden v. Church of Scientology, 526 F.Supp. 44, 45 (M.D.Fla.1981), citing J. McCormick, Evidence, § 90 at 185-7 (1972), or because, absent special circumstances, such information is not confidential, see In The Matter of Walsh, supra, 623 F.2d at 493; In Re Grand Jury Subpoenas Served Upon Field, 408 F.Supp. 1169 (S.D.N.Y.1976).

      . Any attempt to argue that Fred Jones’ attorney-client relationship with Doe should bar disclosure would be fruitless. Since Jones has already been convicted for his role in the drug operation, he could not be further incriminated by any disclosure about who paid his fees. See Hodge and Zweig, supra, 548 F.2d at 1353-54. Accordingly, no exception to the general rule exempting fee information from the privilege could properly be invoked by Jones.

      . Because of this disposition of the fee question, I need not and do not decide whether there has been any prima facie showing that an agreement to pay Jones’ fees would constitute a separate, ongoing crime. See Pioggia, supra, at 4; In Re Grand Jury Proceedings, (Pavlick), supra, 680 F.2d at 1029 (Gee, J.) (plurality).


source: Caselaw Access Project

author: GESELL, District Judge.

license: Public Domain

text:
    PUBLIC CITIZEN, et al., Plaintiffs, v. Margaret HECKLER, Secretary of Health and Human Services, Defendant.
    Civ. A. No. 84-2938.
    United States District Court, District of Columbia.
    Jan. 14, 1985.
    Eric R. Glitzenstein, William B. Schultz, Alan B. Morrison, Washington, D.C., for plaintiffs.
    Jacqueline H. Eagle, Dept, of Justice, Washington, D.C., for defendant.
   MEMORANDUM

GESELL, District Judge.

Plaintiffs Public Citizen, the American Public Health Association and others brought this suit seeking to compel the Secretary of Health and Human Services (HHS) to act on a petition asking her department to ban all domestic sales of raw milk and raw milk products. Contending that federal officials have long known of serious risks to human health from consumption of raw milk, plaintiffs contend that the Secretary has unreasonably delayed her decision in violation of the Administrative Procedure Act, 5 U.S.C. § 706(1). The case is before the Court on cross-motions for summary judgment, which have been fully briefed by the parties.

I. The Facts

The facts are essentially undisputed. Raw milk is milk that has not undergone pasteurization, the familiar process whereby harmful bacteria are destroyed by heating the milk to a point below boiling. In 1973, the Food and Drug Administration (FDA) proposed and adopted a regulation requiring that all milk moving in interstate commerce be pasteurized. After receiving an objection from a producer of what is known as “certified” raw milk, the FDA stayed the pasteurization requirement as to certified raw milk but put it in effect for all other milk and milk products, as of December 5, 1974. The stay order published that date states that the FDA Commissioner “still concludes that there are serious safety problems associated with certified raw milk ... and that only pasteurized milk should be shipped for beverage use in interstate commerce” but that a public hearing would be held to resolve the factual dispute over whether certified raw milk was sufficiently safe. 39 Fed.Reg. 42,351. No such hearing has ever been held, and the stay order has remained in effect.

Between 1974 and 1982, the FDA accumulated evidence of the association of certified raw milk with human disease. It concluded in 1982 that the consumption of certified raw milk had been linked “to the outbreak of serious disease.” In particular, as documented by the federal Centers for Disease Control, there had been a number of outbreaks of two serious bacterial diseases, campylobacteriosis and salmonellosis, which typically produce bloody diarrhea, usually lasting several days but sometimes several months. On rare occasions these diseases result in death. A number of states had banned all sales of raw milk in the interim, and the American Academy of Pediatrics in 1980 proposed a federal ban on its marketing.

In 1982, the FDA began drafting a proposed regulation to ban all interstate sale of raw milk and raw milk products. FDA Commissioner Arthur Hayes sent the proposed regulation to the Secretary of Health and Human Services on April 25, 1983. In an attached memorandum supporting the regulation, he concluded that consumption of raw milk “presents a significant public health problem” and that pasteurization was the only feasible way to assure the safety of milk. This proposed rule has never been published.

The director of the Centers for Disease Control also stated in 1983 that raw milk is “inherently unsafe” and that there is a “wealth of evidence” associating its consumption with disease.

In late 1983 and early 1984, Dr. Edward N. Brandt, Jr., the HHS Assistant Secretary for Health, sent to the Secretary “new and further compelling evidence” on the link between raw milk and a particularly serious form of salmonellosis. He concluded that consumption of raw milk was “a serious public health risk” and that a ban on interstate sales was “most advisable.”

Plaintiff Public Citizen filed a formal petition on April 10, 1984 asking Secretary Heckler to ban all domestic sales of raw milk and raw milk products. In response to further correspondence from the group, in a letter dated June 6, 1984, the Secretary told Dr. Sidney Wolfe of Public Citizen that the matter “is under active consideration.” She gave no schedule for reaching a conclusion and indicated that the agency would hold an informal public hearing on the matter. In another letter of September 4, 1984, the Secretary stated that the issue “has been periodically reviewed within the Department for many years without definitive resolution,” and she again refused to indicate when a resolution might be made. This lawsuit was filed on September 19, 1984.

The informal hearing was held on October 11 and 12, 1984. The results of that hearing are under review by the agency. No timetable for further action, if any, has been forthcoming.

II. Analysis

The Administrative Procedure Act requires each agency to “proceed to conclude a matter presented to it” “within a reasonable time.” 5 U.S.C. § 555(b). Reviewing courts have the authority to “compel agency action unlawfully withheld or unreasonably delayed.” 5 U.S.C. § 706(1). In deciding whether agency action has been “unreasonably delayed,” the court “should consider the nature and extent of the interests prejudiced by delay, the agency justification for the pace of decision, and the context of the statutory scheme out of which the dispute arises.” Public Citizen Health Research Group v. Comm’r of Food and Drugs, 740 F.2d 21, 35 (D.C.Cir.1984). “Delays that might be altogether reasonable in the sphere of economic regulation are less tolerable when human lives are at stake.” Public Citizen Health Research Group v. Auchter, 702 F.2d 1150, 1157 (D.C.Cir.1983).

There is ample legal authority for the action for which Public Citizen petitioned the Secretary. Under both the Public Health Service Act’s authorization for regulations to control communicable diseases, 42 U.S.C. § 264, and the Food, Drug and Cosmetic Act’s provisions for the control of adulterated foods, 21 U.S.C. § 342, the Secretary has both the authority and the heavy responsibility to act to protect the nation’s health in situations such as this one.

The facts here speak for themselves and need little elaboration. Officials at the highest levels of the Department of Health and Human Services have concluded that certified raw milk poses a serious threat to the public health. Leading health organizations are unanimous in proposing that sales of any raw milk should be banned. The Food and Drug Administration has twice proposed, in 1973 and 1983, that all milk in interstate commerce be pasteurized. Hundreds of cases of serious gastrointestinal infections have been reported since the ban on raw milk sales was first proposed.

This Court is not asked to decide the substantive merits of a ban on raw milk sales. The only issue here is the reasonableness of the agency’s delay, and the only remedy sought is a judicially established schedule for agency action.

The Department’s justification for its continued delay is lame at best and irresponsible at worst. In its papers filed in this lawsuit, the Department admits that “the consumption of 'certified’ raw milk ... has been linked to the outbreak of serious disease____” McGarrahan Declaration at 117. In the face of overwhelming evidence, the Department insists, however, that further study is warranted because “the issue is controversial and complicated.” Since its own top health officials are on the record to the contrary, this assertion can be given no credence. As to the Department’s related assertion that it needs time to study regulatory options such as a warning label on milk bottles in lieu of a ban on sales, such study has been underway for nearly two years, and still no agency action has been proposed.

The Department also asserts that interstate sales of certified raw milk are “negligible.” While it has offered no facts supporting this, any such figures are meaningless if the risk per sale is high, as the Department’s own statistics indicate. The volume of interstate sales also does not address the safety of intrastate sales, which plaintiffs also have proposed to ban.

“When the public health may be at stake, the agency must move expeditiously to consider and resolve the issues before it.” Public Citizen Health Research Group v. Commissioner of Food and Drugs, 740 F.2d at 34. The Department has wholly failed to meet that mandate here.

Accordingly, the plaintiff’s motion for summary judgment is granted and the defendant’s motion for summary judgment is denied. An appropriate Order setting out a schedule for agency action is filed herewith.

ORDER

Upon consideration of the parties’ cross-motions for summary judgment, the briefs of counsel, and the entire record herein, for reasons stated in an accompanying Memorandum, it is hereby

ORDERED that the plaintiffs’ motion for summary judgment is granted and the defendant’s motion for summary judgment is denied, and judgment is entered for plaintiffs, and it is further

ORDERED that defendant shall publish within 60 days a proposed rule reflecting its decision on plaintiffs’ petition, and shall proceed expeditiously to complete any ensuing rule-making proceeding.

      . 38 Fed.Reg. 27,924; 37 Fed.Reg. 18,392.

      . "Certified” raw milk is that produced under standards established by the American Association of Medical Milk Commissions. Those standards are significantly different from those used in the production of raw milk in general. For example, vacuum hoses that pump milk from cows are required to be designed so that they never touch any source of contamination. The FDA is aware of only two dairies that sell certified raw milk in interstate commerce.

      . 39 Fed.Reg. 42,351.

      . Declaration of Eugene T. McGarrahan, special assistant for dairy sciences to the associate director for nutrition and food sciences at FDA’s Center for Food Safety and Applied Nutrition, at ¶ 7.

      . A particularly strong link with raw milk consumption was found in an especially virulent form of salmonellosis caused by the salmonella dublin bacterium, which often invades sites outside the intestine such as the lung and spinal fluid.

      . Commercial sale of unpasteurized milk to the final consumer is banned in 20 states and allowed in 24. The other six allow sale of unpasteurized milk only by dairy farmers directly to final consumers. Testimony of Dr. Morris Potter, Centers for Disease Control, Def.Ex. 1 at 112.

      . Organizations supporting a pasteurization requirement for all milk for human consumption include the American Academy of Pediatrics, the Association of Food and Drug Officials, the American Veterinary Medical Association and HHS’s own Centers for Disease Control.

      . Accordingly, defendant’s contention that the question is not ripe for review because there is no final agency action is misplaced.

      . Defendant’s memorandum in support of summary judgment motion at 15.

      . As noted above, the Commissioner of Food and Drugs, the director of the Centers for Disease Control and the Assistant Secretary for Health all have made unequivocal statements in support of a ban on interstate raw milk sales, including certified raw milk.

      . A recent review by the FDA’s Bureau of Foods found that an individual consuming certified raw milk was 51 times more likely than a person consuming pasteurized milk to be infected with Salmonella dublin. Plf.Ex. J.


author: CURTIN, District Judge.

text:
    Robert G. BARON, Plaintiff, v. Andrew P. MELONI, Individually and as the Sheriff of the County of Monroe; and The County of Monroe, Defendants.
    No. Civ-82-816C.
    United States District Court, W.D. New York.
    Jan. 17, 1985.

      Lipsitz, Green, Fahringer, Roll, Schuller & James, Buffalo, N.Y. (Frank S. Kedzielawa, Buffalo, N.Y., of counsel), for plaintiff. John D. Doyle, Monroe County Atty., Rochester, N.Y. (Nira T. Kermisch, Rochester, N.Y., of counsel), for defendants.
   CURTIN, District Judge.

Plaintiff Robert G. Baron, a former member of the Monroe County Sheriff’s Department, brings this action under 42 U.S.C. § 1983. He claims that his discharge from the Sheriff’s Department violated his constitutional right to privacy, free association, and due process. Defendants, the County of Monroe and Andrew P. Meloni, County Sheriff, have moved for summary judgment under Rule 56 of the Federal Rules of Civil Procedure.

For the reasons that follow, the defendants’ motion for summary judgment is granted, and the complaint is dismissed.

Factual History

Plaintiff served as a deputy sheriff with the Monroe County Sheriff’s Department from February 22, 1971, until his discharge on May 7, 1980. In early 1978, he met Linda Vaccaro, wife of reputed organized crime member Angelo Vaccaro. In March or April, 1978, his patrol car was observed in the driveway of the Vaccaro residence. While not legally separated, Linda and Angelo Vaccaro were living apart at this time. Both Mrs. Vaccaro and the residence were under surveillance by the Monroe County Organized Crime Task Force, which was attempting to locate her husband. Although Mrs. Vaccaro was known to have had past associations with organized crime figures, she was never convicted of any crime.

On April 24, 1978, plaintiff was summoned to the office of Chief of Detectives Anthony Yazback. He was then told of Mrs. Vaccaro’s identity and of the Task Force’s activities. Plaintiff was ordered not to associate with Mrs. Vaccaro.

Plaintiff was seen with Mrs. Vaccaro on three occasions during the months of June and July, 1978. On July 7, 1978, plaintiff was again ordered not to associate with Mrs. Vaccaro. On July 17, 1978, departmental charges were filed against plaintiff by then-sheriff William Lombard. Although plaintiff was unsuccessful in his state court action, seeking to have the charges dismissed before the hearing, a hearing was never held. Baron v. Lombard, 71 A.D.2d 823, 419 N.Y.S.2d 388 (4th Dept.1979), aff'd, 50 N.Y.2d 896, 430 N.Y.S.2d 591, 408 N.E.2d 920 (1980).

On December 7, 1978, plaintiff wrote to then-Sheriff Lombard, seeking advice as to whether the orders not to associate with Mrs. Vaccaro were still in effect. Plaintiff received a response from Chief Deputy Thomas Cellura on December 15, 1978, which stated that the orders had not been rescinded.

New charges were filed against plaintiff on April 13, 1979, based on his association with Linda Vaccaro. He again attempted to stay the hearing in state court, and this time challenged the constitutionality of the order. On July 24, 1979, New York State Supreme Court Judge Elizabeth Pine ruled against plaintiff, finding that defendants were not acting in excess of their authority in attempting to hold a disciplinary hearing on the charges. She also found that defendants had a basis for issuing the orders. No further action was taken on these charges.

On March 21 and/or 22, 1980, Linda Vaccaro was injured in an automobile accident while driving plaintiff’s privately owned car. After this incident, plaintiff was charged with insubordination, consorting with persons of ill repute, and conduct discrediting the department.

An administrative hearing was held April 21 and 22, 1980. The hearing officer, in a May 6, 1980 decision, found plaintiff guilty of insubordination but dismissed the two remaining charges for vagueness and over-breath. On May 7, 1980, defendant Sheriff Andrew Meloni discharged plaintiff for insubordination. The termination was affirmed in a November 19, 1980, arbitration proceeding, in which it was found that the decision to discharge plaintiff was not arbitrary or capricious.

There is no dispute that, during this entire period, plaintiff continued to perform well in his duties as a deputy sheriff.

Procedural History

Plaintiff’s complaint was filed September 1, 1982, in United States District Court, Western District of New York, before Honorable Michael A. Telesca. Judge Telesca granted a motion by defendants for summary judgment on February 18, 1983. 556 F.Supp. 796.

On appeal, the United States Court of Appeals for the Second Circuit vacated that judgment and remanded the case for further findings. 742 F.2d 1439. Judge Telesca recused himself from the case, and the action was transferred to this court.

In the October 5, 1983, order remanding the action, the Second Circuit wrote the following:

On the present state of the record, we cannot be entirely certain whether it was appropriate to enter summary judgment for the defendants. The decision of the Hearing Officer states that the orders of April 24, 1978, and July 7, 1978, prohibiting plaintiff from associating with Mrs. Vaccaro had a reasonable basis “when issued.” However, the Hearing Officer also stated that “it does not appear from the record before me that they continue to have such a basis.” (Emphasis in original). It is not clear whether a reasonable basis for discharging plaintiff had ceased to exist only as of the date of the Hearing Officer’s decision, May 6, 1980, or also as of the earlier time in March 1980 when plaintiff was in the company of Mrs. Vaccaro at his residence and at the Genesee Hospital____ If the orders that plaintiff violated remained reasonable through the time of the March 1980 episode and did not become unreasonable until some time thereafter, then there would be no question that his discharge was lawful. However, if those orders had ceased to be reasonable on March 21 and 22, 1980, then the issue arises whether plaintiff was validly found guilty of insubordination.
* * * * * *
Our remand is without prejudice to a renewed motion for summary judgment upon a clarified record. There may well be undisputed facts upon which a determination can be made whether the 1978 orders were reasonable in March 1980.

Item 17 (emphasis added).

Discussion

Initially, it should be noted that defendants claim this action is barred by collateral estoppel and res judicata based on Judge Pine’s July 1979 decision denying plaintiff’s request for a writ of prohibition. It may be that her decision of July 24, 1979, would have some preclusive effect as to the constitutionality of the orders in 1978 and 1979. This court need not decide that, however, since Judge Pine could not decide at that time whether the orders continued to be constitutional in March of 1980. Her decision has no bearing on that determination.

Plaintiff claims that his discharge violated his rights to privacy and free association under the first and fourteenth amendments to the United States Constitution. Pursuant to the instructions of the Second Circuit, this court must determine whether the orders prohibiting plaintiff from associating with Linda Vaccaro were still reasonable, and therefore lawful, in March, 1980.

The only new addition to the record by defendants is the February 27, 1984, deposition of defendant Sheriff Andrew Meloni. In his deposition, defendant Meloni noted that Angelo Vaccaro was incarcerated and recently convicted at the time the final set of charges was filed in March of 1980 {see Meloni deposition, Item 22, p. 11). When questioned as to his opinion of whether the department would have a continuing interest in Linda Vaccaro subsequent to Angelo Vaccaro’s conviction, the Sheriff responded, “Quite possible.” (Item 22, p. 12.) When asked to elaborate, the Sheriff explained:

There’s no question in our mind that she was still associating with people who, again, allegedly were mobsters in this community. In that sense, I felt the association of Deputy Baron with Linda Vaccaro was truly bringing discredit to the department, and he was putting himself in the position of exploitation. He had access to information, he had access to the license plates and criminal histories and files in this organization and, I felt, was exposed by his association with the person who had been acknowledged to have kept the company of alleged mobsters in this community.
[H]e had what every other deputy would have had: a great deal of access to a pool of information that could be sensitive ____

Item 22, pp. 13, 20.

It is important to note that, although the Organized Crime Task Force had been disbanded by 1980, there was still an ongoing investigation into organized crime, in which the Monroe County Sheriff’s Department was actively involved (Item 22, p. 19).

Plaintiff does not dispute that the Monroe County Sheriff’s Department was involved in investigations into organized crime activity in 1980. Nor does he dispute that, as a deputy sheriff, he had access to the criminal history files and the investigative files of the Sheriff’s Department.

Nor does plaintiff dispute that, at the time of the accident in March, 1980, Linda Vaccaro was still the wife of Angelo Vaccaro. Although Angelo Vaccaro had just instituted divorce proceedings against Linda, the two were legally married until June, 1980. Plaintiff does not dispute that Linda Vaccaro was present at Angelo’s January, 1980, trial (Hearing Transcript, p. 91), or that she visited him during his incarceration (Item 22, p. 14).

Finally, although defendant Meloni acknowledged that plaintiff had been properly carrying out his duties (Item 22, p. 10), the Sheriff believed that plaintiff’s association with Mrs. Vaccaro limited the areas to which he could be assigned. Defendant Meloni flatly stated that he would not place plaintiff in the detective division or give him any investigative or organized crime assignments (Item 22, pp. 20-21).

Based on all of the above, the court cannot find that the orders were in any way unreasonable on March 21 and 22, 1980, or that Sheriff Meloni unreasonably enforced them. Plaintiff was a deputy sheriff with the Monroe County Sheriff’s Department and, as such, had access to various investigative files. As Sheriff Meloni pointed out, the department was still actively involved in organized crime investigations. Plaintiff had been ordered not to associate with the wife of a then-convicted organized crime leader. Although divorce proceedings had begun at that point, Linda Vaccaro was still married to Angelo Vaccaro. She had appeared frequently at his trial two months before the 1980 incident. She was known to be associating with suspected organized crime members. Under the circumstances, it was reasonable for defendant Meloni to find that plaintiff was putting himself in a tenuous position, a position which might invite exploitation and discredit the department.

Since the orders were reasonable on March 20 and 21, 1980, as shown by undisputed facts provided by defendant Meloni, plaintiff’s discharge was lawful. (See Order of the Second Circuit, Item 17.)

After the action was remanded to this court, plaintiff filed an amended complaint, in which he raised a new cause of action: a violation of his procedural due process rights under the fourteenth amendment (Item 27).

Although plaintiff states that he did not have an opportunity to be heard, there was a two-day hearing held on April 20 and 21, 1980. Plaintiff was represented by counsel. The crux of plaintiff’s complaint seems to be that he was denied the right to be heard before the “ultimate decision-maker” — in this case, Sheriff Meloni.

Defendant Meloni admits that he did not read that transcript of the hearing before reaching his decision to terminate plaintiff. Yet, he was aware of the hearing officer’s dismissal of two charges and of the finding that plaintiff was guilty of insubordination. He was also aware that the hearing officer recommended leniency (Item 22, p. 15). Yet, he terminated plaintiff, because he routinely terminated anyone who was found guilty of insubordination (Item 22, p. 16).

Plaintiff had a full and fair hearing. Defendant Meloni accepted the findings of the hearing officer as to plaintiff’s guilt on each of - the charges. He discharged plaintiff, which was within his discretion. This discharge was affirmed by arbitration. In no way was plaintiff denied due process.

Defendants’ motion for summary judgment is granted. The complaint is dismissed, and judgment shall be entered for defendants.

So ordered.

      . Plaintiff married Linda on July 13, 1980. They are now divorced.

      . Plaintiff stated that he had nothing further to add to the record.
      The factual data relied upon by Plaintiff is contained in the documents already on file in the United States District Court Clerk's Office. There are no further exhibits or documents being submitted by Plaintiff at this time.
      Item 25, ¶ 3.


author: ROSZKOWSKI, District Judge.

text:
    Raymond O’DONNELL, Plaintiff, v. Stanley T. KUSPER, Cook County Clerk, in his individual and official capacity, Office of the County Clerk of Cook County, Stanley Kusper Campaign Committee, Harrison Lithographing, Inc., J.J. Collins’ Sons, Cahill Printing Company, F.J. Nenning & Sons, M. Kallis & Company, Inc., Northwestern Printing House, Inc., and the Board of Commissioners of Cook County, and the following Commissioners, Matthew Bieszczat, Charles Bowen, Bernard Carey, Frank Chesrow, George Dunne, Carl Hansen, Irene Hernandez, May McDonald, Daniel O’Brien, Jeanne P. Quinn, Matt Ropa, Richard A. Siebel, John H. Strozer, Jr., Martin Tuchow, Harold L. Tyrrell, Samuel G. Vaughan, and Joseph Woods, both in their individual and official capacity, Defendants.
    No. 83 C 9717.
    United States District Court, N.D. Illinois, E.D.
    Jan. 21, 1985.

      John L. Gubbins, Freeman, Atkins & Coleman, Ltd., Chicago, Ill., for plaintiff.
    Joseph V. Roddy, Richard M. Daley, State’s Atty. of Cook County, Michael B. Nash, Nash & Nash, E. Bryan Dunigan, Linda Coffing, Sidney C. Kleinman, Ltd., James Vogler, Jeffrey Spears, Winston & Strawn, Roger L. Price, Michael G. Berland, Donald S. Lowitz, Lawrence A. Serlin, Aaron, Schimberg, Hess & Gilbert, David A. Ward, Harvey M. Silets, Royal B. Martin, Jr., Jayne Carr Thompson, Silets & Martin Ltd., Chicago, Ill., for defendants.
   ORDER

ROSZKOWSKI, District Judge.

Before the court are defendants’ various motions to dismiss and motions for sanctions. Also before the court is plaintiff’s motion to file a Second Amended Complaint. The court’s subject matter jurisdiction is asserted to rest upon 28 U.S.C. § 1331 (1982) and 18 U.S.C. § 1964 (1982). For the reasons set forth herein, defendants’ motions to dismiss are granted and defendants’ motions for sanctions are denied. Plaintiff’s motion to file a Second Amended Complaint is also denied.

BACKGROUND

On December 30, 1983, plaintiff, Raymond O’Donnell, a resident taxpayer of Cook County, Illinois filed a three count complaint in this court. Count I alleged a substantive violation of the Racketeer Influenced and Corrupt Organizations (“RICO”) statute. 18 U.S.C. § 1962(c). Count II alleged a conspiracy to violate the RICO statute. 18 U.S.C. § 1962(d). Count III, a pendent state action, purported to allege a violation of Chapter 34, Section 1001 et seq. of the Illinois Revised Statutes. ILL.REV.STAT. ch. 34, ¶ 1001 et seq. (1983).

The various defendants named in the plaintiff’s initial complaint included the Cook County Clerk, his election campaign committee, the office of the County Clerk, five printing companies located within the County, the County Board of Commissioners, and all of the individual Board and Board finance committee members. The complaint alleged the Board, upon the urging of the County Clerk, approved contracts for the printing of election ballots with the five named printing companies. According to the plaintiff’s complaint, the contracts with the five named printers were extended and approved without complying with the public notice and sealed competitive bidding requirements of ILL. REV.STAT. ch. 34, II1006 (1983). The complaint further alleges that various of the named, printers made substantial contributions to the County Clerk’s election campaign. In his prayer for relief, plaintiff sought to require the defendants to return to Cook County all of the money paid out on the allegedly unlawful contracts. In addition, plaintiff sought treble damages on behalf of the County.

On February 2, 1984, plaintiff filed his First Amended Complaint. The plaintiff’s First Amended Complaint simply added various allegations to the effect that one of the five named printers had substantially completed the printing it was contracted to perform at the time the County Clerk urged the Board to authorize the contract. No counts were added or deleted; the prayer for relief was not altered.

On February 29, 1984, the defendants filed various motions to dismiss. The defendants’ motions sought to dismiss Counts I and II on the grounds that they failed to allege a separate enterprise, any predicate offense or any RICO injury. In addition, defendants contended the plaintiff lacked standing to bring Counts I and II. The defendants also sought to dismiss Count III on the grounds no pendent'jurisdiction remained.

On March 7, 1984, this court set a briefing schedule allowing the plaintiff until March 21, 1984 to file a response to the various motions to dismiss and giving the defendants until March 28, 1984 to reply. On March 19, 1984, plaintiff filed a motion for an extension of time, until April 27, 1984, “... to file his consolidated answer to [the] defendants’ motions to dismiss.” In this court’s absence, that extension was granted by the Honorable Judge Milton I. Shadur. On April 5, 1984, in view of the extension granted the plaintiff, this court extended the time for the defendants to file their replys to May 7, 1984.

On May 2, 1984, plaintiff again presented a motion seeking an extension of time, until May 25, 1984, in which to respond to [the] Defendants’ motions to dismiss.” The court again granted the requested extension. On May 8, 1984, the defendant Clerk filed his initial motion to recover costs and attorneys’ fees; the motion arose out of the allegedly improper notice given with respect to plaintiff’s May 2, 1984 motion for an extension of time. After the hearing on the defendant Clerk’s motion, the court shortened the “[t]ime for plaintiff to file [a] consolidated response to defendants’ [m]otion[s] to [dismiss with supporting memoranda” to May 25, 1984. The court took the defendant Clerk’s motion for costs under advisement. On May 17, 1984, upon the plaintiff’s renewed motion, the time for responding was again extended to May 25, 1984.

On May 25, 1984, plaintiff filed a motion to add Omega Graphics as a plaintiff, an amended nine-count complaint, and a memorandum in support of his proposed amended complaint. In addition to seeking recovery on behalf of the County, Omega Graphics prayed for damages on its own behalf. On June 5, 1984, defendants filed a joint motion for sanctions, for denial of leave to file the Second Amended Complaint, to strike the Second Amended Complaint, and to dismiss the First Amended Complaint with prejudice. All of the motions were taken under advisement.

On September 6,1984, plaintiff presented a motion for leave to file his amended complaint and for leave to add Omega Graphics as a plaintiff. Defendants renewed their previously filed motions. The entire matter was again taken under advisement.

DISCUSSION

A. Motion To Dismiss: Standing

Defendants challenge the plaintiff’s standing to bring the present action on two distinct grounds. First, the majority of the defendants contend the plaintiff lacks standing because he has failed to allege a cognizable “racketeering injury.” Second, relying upon Flast v. Cohen, 392 U.S. 83, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968) and Larson v. Valente, 456 U.S. 228, 102 S.Ct. 1673, 72 L.Ed.2d 33 (1982), the defendant Commissioners contend the plaintiff, as a taxpayer, lacks a sufficient “personal stake” to sue on behalf of the County.

Title 18, Section 1964, 18 U.S.C. § 1964 (1982), provides that:

Any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the costs of the suit including a reasonable attorney’s fee.

In order to allege a violation of section 1962, plaintiff must allege a defendant participated in, or conspired to participate in, a “pattern of racketeering activity.” A “pattern of racketeering activity” is defined as “... at least two acts of racketeering activity ... ” occurring within a specified period. Among the types of conduct expressly designated as “racketeering activity” are various crimes indictable under state and federal law.

The majority of the defendants contend the “by reasons of” language of § 1964 requires the plaintiff to allege he has suffered some “racketeering injury” separate and apart from any injury he has suffered as a result of the “predicate acts” of racketeering activity allegedly giving rise to the violation of § 1962. Absent such an injury, defendants contend the plaintiff lacks standing to bring a suit based upon a RICO violation.

Defendants’ argument is of no avail. The Seventh Circuit has recently made clear that it is not necessary to allege a separate “racketeering injury” apart from the injury caused by the underlying predicate acts in order to allege a violation of RICO. Haroco, Inc. v. American National Bank and Trust Co. of Chicago, 747 F.2d 384, 398 (7th Cir.1984). Thus, to the extent the defendants’ motions rely upon the absence of any such “racketeering injury,” they are denied.

The question of the plaintiff’s standing to sue on behalf of the County presents a far more difficult question. Plaintiff points to various state statutes which he asserts allow him to bring the present action. The only statute plaintiff cites expressly providing for a derivative taxpayer action, ILL.REV.STAT. ch. 34, ¶ 959 (1983), however, does not apply in the present case. That statute would only be applicable if the plaintiff had alleged the County had not provided for the printing of election ballots in its appropriation bill, or that the County had paid more for the printing of election ballots than it had provided for in its appropriation bill. Neither is alleged to be the case.

The statute governing any action in the present case, ILL.REV.STAT. ch. 34, ¶ 1008 (1983), is silent as to any derivative taxpayer action. Moreover, no Illinois court has decided whether such an action should be implied under that statute. Despite the fact that one statute expressly provides for a derivative taxpayer suit and the other is silent, however, Illinois courts probably would recognize a taxpayer derivative suit under both provisions. Based upon taxpayers’ interest in public property, Illinois courts have generally allowed taxpayers to bring actions premised upon violations of state and local law. See Young v. Public Building Commission of St. Clair County, 5 Ill.App.3d 892, 284 N.E.2d 485, 487 (1st Dist.1972). Thus, in the view of this court, Illinois courts would probably recognize the plaintiff’s standing to bring an action based upon a violation of the statutory notice and competitive bidding requirements contained in § 1006. ILL.REV.STAT. ch. 34, ¶¶ 1006, 1008 (1983).

The mere fact that Illinois courts would recognize the plaintiff’s standing to bring such an action, however, does not mean he has standing to bring a federal action arising from the same occurrence. The plaintiff’s standing to assert a federally created right is not controlled by state law. As one commentator has noted, “[i]f a challenged state act indeed violates federal law, no reason has yet been found to rest federal standing determinations on the disparate allocations of power that underlie fifty different governmental structures.” Wright & Miller, Federal Practice and Procedure, § 3531.10 (1984), p. 653. Thus, the determination of whether the plaintiff, as a taxpayer, has standing to bring a RICO action on behalf of a governmental entity must be determined under federal law.

No court has been faced with the issue of whether a taxpayer has standing to bring a RICO action on behalf of an injured governmental entity. The issue has surfaced with some frequency, however, under the private enforcement provisions of the antitrust laws. 15 U.S.C. § 15 (1982). Title 15, section 15, provides in relevant part:

Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefore ... and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee.

In each of the decisions resolving the issue under the antitrust laws, federal standing has been denied to taxpayers. In Cosentino v. Carver-Greenfield Corporation, 433 F.2d 1274 (8th Cir.1970), for example, the court denied a taxpayer standing to bring a derivative antitrust action on behalf of the City of Omaha despite the fact that Nebraska law permits a taxpayer to bring a derivative action when municipal funds are unlawfully expended. In reaching this conclusion, the court noted it was unable to find any decision “... which allows a private citizen to assert derivatively an antitrust claim on behalf of the city in which he lives.” Id. at 1277. The court reasoned,

A citizen of Omaha, Nebraska, cannot expect to elevate himself by means of a lawsuit to a position in which he can exercise the power of a public authority, at least absent abusive or illegal acts by city officials, which are not alleged in this case. Id. (emphasis added).

Similarly, in Ratliff v. Burney, 657 F.2d 640 (4th Cir.1981), the court affirmed a lower court dismissal of a taxpayer action on the grounds that: (1) the plaintiff could not maintain an individual action because he was not in the “target area” of the alleged antitrust violation; and (2) the plaintiff could not maintain a derivative action because he failed to allege fraud by the county officers. The appellate court noted, however, that “[t]he [district] court did not decide whether derivative actions analogous to shareholder suits are available to taxpayers seeking to sue under Section 4 of the Clayton Act.” (emphasis added) 657 F.2d at 642.

In Ratliff and Ragar, the courts were not required to decide whether taxpayers have standing to bring an action analogous to a shareholder derivative suit because, even assuming the recognition of an analogous action, the plaintiffs had failed to allege fraud on the part of the governmental officials responsible for bringing such an action. In shareholder derivative suits, such allegations are necessary to allow the shareholder to represent the injured corporation in lieu of the corporate officers. See Ash v. International Business Machines, Inc., 353 F.2d 491, 493 (3rd Dist.1965), cert. denied, 384 U.S. 927, 86 S.Ct. 1446, 16 L.Ed.2d 531 (1966), and Swanson v. Traer, 249 F.2d 854, 858 (7th Cir.1957); see also Fed.R.Civ.Pro. 23.1.

This court has been unable to locate any decisions determining whether a shareholder has standing to maintain a RICO action on behalf of an injured corporation. As in Ratliff and Ragar, however, this court need not decide the issue because, even assuming the recognition of a RICO shareholder derivative action and an analogous taxpayer derivative action, the plaintiff has failed to allege any fraud on the part of the County official responsible for deciding whether to institute any RICO action. While the plaintiff has alleged fraud on the part of the County Clerk and County Commissioners, he has not alleged any fraud on the part of the County State’s Attorney.

Under Illinois law, a state’s attorney has the duty “[t]o prosecute ... all actions and proceedings for the recovery of debts, revenues, moneys, fines, penalties and forfeitures accruing to the State or his county....” ILL.REV.STAT. ch. 14, 115(2) (1983). Interpreting that statute, Illinois courts have long recognized that, with respect to the state's attorney, “[t]he county board has no power to lessen his duties or to curtail the exercise of his lawful authority or to control him therein.” Wilson v. County of Marshall, 257 Ill.App. 220, 224 (2nd Dist.1930). Indeed, the Illinois Supreme Court has recognized the right of a state’s attorney, on behalf of his county, to bring an action for diversion of public money in violation of a state statute against the members of his county board of commissioners, his county treasurer and his county clerk. People ex rel. Courtney v. Ashton, 358 Ill. 146, 153-54, 192 N.E. 820 (1934). Thus, the County official responsible for maintaining a RICO action in the present case is the State’s Attorney.

Under the circumstances of this case, plaintiff lacks standing to maintain the present action. There has been no allegation that the State’s Attorney’s failure to institute a similar action was fraudulent, collusive or represented anything other than the honest exercise of his legal judgment. This court is in agreement with the court in Cosentino that a taxpayer of Cook County cannot expect to elevate himself, by means of a lawsuit, to a position in which he can exercise the power of the State’s Attorney, at least absent abusive or illegal acts by the State’s Attorney. Defendants’ motion to dismiss for lack of standing, therefore, must be allowed.

B. Motion For Leave To Amend

A remaining question is whether this court should allow the plaintiff leave to file his proposed Second Amended Complaint. That complaint purports to add, or more accurately substitute, Omega Graphics as a plaintiff in this action. While it is not clearly plead, Omega Graphics would apparently seek to recover RICO damages on its own behalf, as well as on behalf of the County.

To the extent that it would seek to recover on behalf of the County, Omega Graphics would have no better standing than the present plaintiff. To the extent that it would seek to recover on its own behalf, Omega Graphics would be asserting a new action, distinct from the plaintiff’s present claim. Moreover, Omega Graphics injuries and remedies would not be co-extensive with the County’s. Thus, the issue is whether the court should allow a new plaintiff, seeking different relief, to substitute for a plaintiff dismissed for lack of standing.

This court is unaware of any rule or decision authorizing such a procedure. Rule 17(a) was clearly not intended to accomplish such a result. Rule 17(a) is intended to allow substitution when an improper plaintiff has been inadvertently named; it is not intended to permit an attorney to locate and substitute a new plaintiff, suing upon a new claim, simply to sustain a pending action. Wright & Miller, Federal Practice and Procedure, § 1555 (1984). Thus, plaintiff’s motion to file a Second Amended Complaint is denied.

C. Motions For Sanctions

The final issue is the imposition of any sanctions. Defendants seek costs and attorneys’ fees based upon the plaintiffs háving:

... repeatedly ignored the orders of this Court, violated the Federal Rules of Civil Procedure by improperly noticing motions and other pleadings, by improperly serving or failing to serve other parties, and by misrepresenting to defense counsel the date, time and location at which a motion will be heard.

This court finds no evidence of such repeated violations. While some confusion was generated by plaintiff’s improper notice of his second motion for an extension, the inconvenience was minor. This is not the type of conduct for which this court normally assesses sanctions.

Moreover, the court finds nothing objectionable about the plaintiff’s attempting to file a Second Amended Complaint in response to the defendants’ motions to dismiss. In large part, the defendants’ motions were devoted to technical pleading deficiencies; the standing issue, for example, was barely developed outside the context of the rejected “racketeering injury” requirement. The plaintiff was merely attempting to cure defendants’ technical objections by filing his Second Amended Complaint. While it was improper to file the amended complaint and add an additional party without leave of court, the court believes the plaintiff’s conduct was not deliberate. Once the error was brought to the plaintiff’s attention, plaintiff filed an appropriate motion. Once again, this is not the type of deliberate conduct for which this court is accustomed to awarding sanctions. Thus, defendants’ motions for sanctions are denied.

CONCLUSION

For all of the reasons set forth herein, defendants’ motions to dismiss are granted, and defendants’ motions for sanctions are denied; plaintiff’s motion to file a Second Amended Complaint is also denied.

      . Flast and Larson are inapplicable to the present action since they involve direct constitutional actions rather than derivative damages claims.

      . Plaintiff tacitly admits the State’s Attorney’s authority to bring the instant action, disclosing that he requested the State's Attorney to file such an action before he took it upon himself to do so. The plaintiff does not indicate why the State’s Attorney declined to file suit, but he does not allege the State’s Attorney’s motives were improper.

      . Plaintiff does not allege standing to sue on his own behalf. Were he to have done so, this court would have had little difficulty in denying him standing. See Ragar v. J.T. Raney & Sons, 388 F.Supp. 1184 (E.D.Ark.) aff'd 521 F.2d 795 (8th Cir.1975) (denying a taxpayer standing to bring an antitrust action on his own behalf); See abo In re Industrial Gas Antitrust Litigation, 681 F.2d 514 (7th Cir.1982), cert. denied, 460 U.S. 1016, 103 S.Ct. 1261, 75 L.Ed.2d 487 (1983) (dismissing an employee’s antitrust action for lack of standing, in part, because "... his injury [was] simply too remote from the alleged illegal conduct.” Id. at 519).

      . Rule 17(a) might support allowing the County to substitute for O'Donnell as plaintiff; according to O’Donnell, however, the County, through the State’s Attorney, has expressed an unwillingness to bring such an action. Such actions, however, have been recognized. See Alcorn County, Mississippi v. U.S. Interstate Supplies, Inc., 731 F.2d 1160 (5th Cir.1984).


author: POLOZOLA, District Judge.

text:
    INTERNATIONAL BROTHERHOOD OF BOILERMAKERS, IRON SHIPBUILDERS, FORGERS AND BLACKSMITHS LOCAL LODGE NO. 582 v. DELTA SOUTHERN COMPANY, INC.
    Civ. A. No. 84-146-B.
    United States District Court, M.D. Louisiana.
    Jan. 21, 1985.

      Barker, Boudreaux, Lamy, Gardner & Foley, Louis L. Robein, New Orleans, La., for plaintiff.
    Richard Marcus, Reuben R. Proctor, Chicago, 111., Robert L. Roland, Watson, Blanche, Wilson & Posner, Baton Rouge, La., for defendant.
   POLOZOLA, District Judge.

This matter is before the court on motion of the defendant, Delta Southern Company, Inc. (Delta Southern) for summary judgment. For reasons which follow, the court finds that defendant’s motion for summary judgment should be denied because the court believes the parties are required to arbitrate the grievance which is the subject of this lawsuit. Because the plaintiff has not filed a motion for summary judgment, the court cannot order arbitration at this time. However, plaintiff may either file a motion for summary judgment on the same record, or the parties may submit a consent judgment requiring arbitration and reserving, if necessary, the defendant’s right to appeal this court’s decision.

The International Brotherhood of Boilermakers, Iron Shipbuilders, Forgers, and Blacksmiths Local Lodge No. 582 (Union) filed this suit to compel arbitration of the issue of whether Delta Southern, which has permanently ceased operations at its plant in Baton Rouge, must arbitrate whether the company’s former employees are entitled to severance pay under the expired collective bargaining agreement. The facts of this case are not in dispute. Delta Southern operated a production facility in Baton Rouge until the latter part of 1983. Certain production and maintenance employees who worked at that facility were represented by the union. There were several collective bargaining agreements which were entered into by the parties, the last of which was executed in August of 1980. The 1980 agreement was later extended until August 21, 1983.

On December 17, 1982, Delta Southern notified the union that because of business losses, the company was permanently shutting down its Baton Rouge plant and that it expected to terminate all bargaining unit employees by the end of January 1983. On May 24, 1983, the union requested the company to bargain over the effects of the shutdown. The company met with the union on August 23, 1983 for a bargaining session, during which the company rejected the union’s request for séverance pay. On the same day, counsel for the union advised the company that it was filing a grievance under the collective bargaining agreement as a result of the company’s refusal to provide severance pay to bargaining unit employees. On September 3, 1983, the company rejected the union’s grievance and request for arbitration under the agreement. The union then filed this suit to compel arbitration on February 7, 1984.

Delta Southern now seeks to have this suit dismissed by summary judgment. Delta Southern advances several arguments in support of its motion for summary judgment. It contends that: (1) the dispute is not arbitrable under the terms of the collective bargaining agreement; (2) there can be no arbitration after termination of the employment relation; (3) the collective bargaining agreement has expired, foreclosing arbitration; (4) the union failed to meet conditions precedent to arbitration under the agreement; (5) arbitration is barred by laches; and (6) there was no proper service of process made on it.

Delta Southern maintains that the dispute is not arbitrable because it is not a “grievance” as defined in the collective bargaining agreement. It contends that only grievances are arbitrable under the agreement. The bargaining agreement defines a grievance as follows:

Grievances are defined hereby to include only the discipline of employees and complaints involving the interpretation and application of the express provisions of this contract.

The company argues that because there is no express provision in the agreement for severance pay for bargaining unit employees, this dispute is not a “grievance” under the agreement and, therefore, is not arbitrable.

The union has filed an opposition to Delta Southern’s motion. The union claims that this dispute is a grievance as defined in the.contract, because it does involve an “express provision of this contract”. The union maintains that this dispute over severance pay falls under Article XVIII of the collective bargaining agreement which provides:

There shall be no discrimination by the Company against ... any employee in regard to ... discharge [or] layoff ... on account of his Union or Nonunion Membership ...

The union claims that non-bargaining unit employees were given severance pay and that such a payment constitutes a violation of Article XVIII of the agreement, thus making this dispute arbitrable as it involves the interpretation and application of that express provision of the contract.

Whether or not a party is bound to arbitrate and what issues it is bound to arbitrate is a matter to be determined by the courts on the basis of the contract entered into by the employer and the union. An employer has no duty to arbitrate issues which it has not agreed to arbitrate and cannot be compelled to arbitrate if the arbitration clause does not bind it to do so. John Wiley and Sons, Inc. v. Livingston, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964). Atkinson v. Sinclair Refining Company, 370 U.S. 238, 82 S.Ct. 1318, 8 L.Ed.2d 462 (1962), International Union of Operating Engineers Local, 406 v. Altex Ready Mix Concrete Corp., 529 F.Supp. 479 (M.D.La.1982), aff’d., 683 F.2d 416 (5th Cir.1982). However, national labor policy favors arbitration of labor disputes. United Steelworkers of America v. Warrior and Gulf Navigation Company, 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960). Also, there is a presumption of arbitrability of disputes. See Local Union No. 4-449, Oil, Chemical and Atomic Workers Union, AFL-CIO v. Amoco Chemical Corp., 589 F.2d 162 (5th Cir.1979).

The court also finds the case of United Steelworkers of America v. American Manufacturing Co., 363 U.S. 564, 80 S.Ct. 1343, 4 L.Ed.2d 1403 (1960), particularly helpful and applicable under the facts of this case. The arbitration clause involved in the United Steelworkers of America case is very similar to the one in the instant case. It provided for arbitration of “[a]ny disputes, misunderstandings, differences or grievances arising between the parties as to the meaning, interpretation, and application of the provisions of this agreement....” Id. at 565, 80 S.Ct. at 1345. Relying on that clause, the union claimed that the company had violated a specific provision of the collective bargaining agreement. American Manufacturing claimed that it had not violated a specific provision of the agreement and, therefore, it could not be compelled to arbitrate. In holding that the dispute involved was arbitrable, the Supreme Court stated:

The function of the court is very limited when the parties have agreed to submit all questions of contract interpretation to the arbitrator. It is confined to ascertaining whether the party seeking arbitration is making a claim which on its face is governed by the contract. Whether the moving party is right or wrong is a question of contract interpretation for the arbitrator.

Id. at 567-68, 80 S.Ct. at 1346-47.

After reviewing the contract in this case, the court finds that the arbitration clause therein covers the issue pending before the court. The issue and dispute involved in this case calls for the interpretation of the “Antidiscrimination Clause” of the contract in Article XVIII. As such, it falls under definition of “grievance” as defined in Article XX of the contract and must be decided by the arbitrator.

The company also argues that submission of the union’s grievance to arbitration would inevitably result in judgment for the employer. A similar argument was rejected by the Supreme Court in United Steelworkers of America v. American Manufacturing, supra, wherein the court stated:

The objection that equity will not order a party to do a useless act is outweighed by the catharic value of arbitrating even a frivolous grievance and by the dangers of excessive judicial intervention.

Id. at 568 n. 6, 80 S.Ct. at 1347 n. 6. See also Piggly Wiggly Operators’ Warehouse, Inc. v. Piggly Wiggly Operators’ Warehouse Independent Truck Drivers Union, Local No. 1, 611 F.2d 580 (5th Cir.1980).

The company further contends that the union may not compel arbitration because the collective bargaining agreement has expired. Delta Southern contends that a party may not be compelled to arbitrate in the absence of a valid agreement to do so. In other words, Delta Southern argues that arbitration may not be ordered where the operative provisions of the collective bargaining agreement are no longer in effect. A similar argument was rejected by the Supreme Court in Nolde Brothers, Inc. v. Local No. 358, Bakery & Confectionery Workers Union, AFL-CIO, 430 U.S. 243, 97 S.Ct. 1067, 51 L.Ed.2d 300 (1977). The issue in Nolde was whether the employer was required to arbitrate a dispute over severance pay pursuant to the arbitration clause of a collective bargaining agreement, where the dispute arose after the termination of the contract. In Nolde, the court held that when the dispute is over an obligation arguably created by the expired agreement, it is subject to arbitration even if the dispute arose after termination of the agreement. Id. at 252, 97 S.Ct. at 1072. See also John Wiley and Sons v. Livingston, supra. Delta Southern attempts to distinguish this case by arguing that Nolde only held that the duty to arbitrate existed after expiration of the collective bargaining agreement i/the matter was arbitrable pri- or to the expiration of the agreement. It argues that the dispute before this court was not arbitrable prior to the expiration of the agreement. Because the court has found that this dispute was arbitrable under the agreement, there is no basis for the court to distinguish this case from Nolde. Delta Southern further attempts to distinguish Nolde on the basis that it involved a broadly worded grievance and arbitration clause, requiring a holding that even disputes which arose after expiration of the agreement were arbitrable. However, even if the arbitration clause in Nolde is broader than the one in the instant case, the court does not find that to be a valid basis to distinguish the two cases. There is no provision in the contract before the court which excludes claims arising after termination of the agreement from arbitration. The Nolde court indicated that failure to include such an exclusion supports the conclusion that the parties intended to arbitrate disputes arising after contract termination:

[T]he parties failure to exclude from arbitrability contract disputes arising after termination, far from manifesting an intent to have arbitration obligations cease with the agreement, affords a basis for concluding that they intended to arbitrate all grievances arising out of the contractual relationship. In short, where the dispute is over provision of the expired agreement, the presumptions favoring arbitrability must be negated expressly or by clear implication.

Nolde, supra at 255, 97 S.Ct. at 1074 (emphasis added).

Therefore, the court finds that the fact that the collective bargaining agreement between the company and the union expired prior to the dispute involved herein does not affect the company’s duty to arbitrate.

In a somewhat related argument to the above, Delta Southern also argues that under the agreement, only “employees” have standing to request arbitration, and the termination of the employer-employee relationship ended the employer’s duty to arbitrate. The company contends that because the union did not grieve the matter at issue until three months after the plant shut down, there were no more “employees” at the plant. Therefore, its duty to arbitrate ended. The court finds that this argument is without merit. The rationale in Nolde is equally applicable to this contention. While the dispute may not have arisen until after termination of the employment relationship, it clearly arose from the employment relationship. An obligation arguably created by that relationship is subject to arbitration. The presumption favoring arbitration requires a finding that the parties intended such disputes to be subject to arbitration.

The company also contends that the union failed to meet conditions precedent to arbitration required under the agreement. Because these conditions were not met, Delta Southern states that it has no duty to arbitrate this dispute. The Supreme Court dealt with this issue in the case of John Wiley & Sons Inc. v. Livingston, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964) wherein it stated:

Once it is determined, as we have, that the parties are obligated to submit the subject matter of a dispute to arbitration, “procedural” questions which grow out of the dispute and bear on its final disposition should be left to the arbitrator.

Id. at 557, 84 S.Ct. at 918. The court has found that the subject matter of this dispute must be submitted to the arbitrator. Therefore, whether the conditions precedent to arbitration found in the agreement have been met is a question for the arbitrator.

Delta Southern contends that John Wiley indicated that decisions involving procedural issues should be made by the court, rather than the arbitrator, when failure to follow procedures in the contract would operate to “bar arbitration altogether” rather than merely “limit or qualify” the award. The court does not find support for that proposition in John Wiley. Defendant fails to recognize the importance of the phrase introducing the statement on which it attempts to rely to distinguish this case:

Even under a contrary rule, a court could deny arbitration only if it could confidently be said not only that a claim was strictly “procedural”, and therefore within the purview of the court, but also that it should operate to bar arbitration altogether, and not merely limit or qualify an arbitral award.

Id. at 557-558, 84 S.Ct. at 918-919 (emphasis added).

Delta Southern argues that the union’s delay in seeking arbitration constituted laches barring enforcement of the contract. The company argues that the union was notified of the company’s intent to shut down in December of 1982, and that all bargaining unit employees were terminated as of January 31, 1983. However, the union did not request bargaining over the effects of the shut down until May of 1983. The company states that when the union failed to obtain severance pay at the bargaining table, it made a “belated” decision to grieve the matter in August 1983. In short, the company, states that the union’s knowledge of the alleged discrimination in May of 1983, but its failure to attempt to grieve the matter until August of 1983 constitutes laches.

In opposition, the union argues that the issues of laches is a question for the arbitrator and cites the case of International Union of Operating Engineers, Local 150 v. Flair Builders, Inc., 406 U.S. 487, 92 S.Ct. 1710, 32 L.Ed. 248 (1972) in support of this proposition. The initial question for the court is whether the issue of laches is one for the court or whether it should be decided by the arbitrator. Unfortunately, Flair does not directly answer the question posed here. The court in Flair simply held that the parties in that case had agreed to arbitrate the issue of laches. Id. at 491, 92 S.Ct. at 1712. The arbitration clause in Flair provided for arbitration of “any difference” between the parties and no limitation was placed on this language. Id. The court in Flair specifically noted that it did not have to reach the question of whether questions of “extrinsic” timeliness are for the court or the arbitrator in the absence of an agreement. While John Wiley may have involved only “intrinsic” timeliness, many of the reasons for making such questions a matter for the arbitrator apply with equal force to an issue of extrinsic timeliness such as laches. For example, it would be difficult to consider the issue of laches “without consideration of the merits of the dispute”. John Wiley, supra, 376 U.S., at 557, 84 S.Ct. at 918. Also, if the court did order arbitration, the arbitrator would often reconsider the same facts as the court in determining whether the grievance was timely under the contract. The result would be a needless duplication of effort. Id. at 558, 84 S.Ct. at 918. See also Tobacco Workers International Union, Local 317 v. Lorillard Corporation, 448 F.2d 949 (4th Cir.1971). In this case, it would seem necessary for the arbitrator to determine when the union became aware that the non-unit employees received severance pay and its reasons for any delay in filing a grievance to determine whether the grievance was timely under the contract. Much the same inquiry would be necessary to determine whether the doctrine of laches applies to these facts. Finally, requiring a court to decide the issue of laches before a dispute is committed to arbitration would lead to additional delays which the arbitral process is designed to avoid. John Wiley, supra, 376 U.S., at 558, 84 S.Ct. at 918. Delta Southern relies on the case of Reid Burton Construction, Inc. v. Carpenter’s District Council of Southern Colorado, 535 F.2d 598 (10th Cir.1976), cert. denied, 429 U.S. 907, 97 S.Ct. 272, 50 L.Ed.2d 188 (1976) in support of its proposition that the issue of laches is for the court rather than the arbitrator. However, the court does not find that ease to be applicable here. In Reid Burton the court held that an equitable defense that a party had practiced “evasive” and “dilatory” pleading practices before the court was for the court to decide. The court in that case limited its holding to a defense “aris[ing] solely during the course of the judicial process [involving] whether the judicial process has been abused by either party or at all or whether an equitable defense to the main dispute has been established during the course of the judicial trial by in-trial conduct.” Id. at 604 (emphasis added). There is no need to explain why the court is the proper forum to decide such a defense. However, the issue before this court does not involve abuse of the judicial process, but events which occurred prior to suit. Indeed, the court in Reid Burton stated that generally, equitable defenses are for the arbitrator. Id. This court finds that the issue of laches in this case is an issue for the arbitrator to resolve.

The company’s final argument is that the court lacks jurisdiction over the person of the defendant because of the union’s failure to effect service of process on the appropriate party. The court finds that the defendant has waived this defense by filing this motion for summary judgment. Fed.Rule Civ.Pro. 12(h)(1).

Therefore:

IT IS ORDERED that defendant’s motion for summary judgment be, and it is hereby DENIED.

      . Questions of extrinsic timeliness may be distinguished from questions of "intrinsic” timeliness which involve whether time limits within the collective bargaining agreement itself have been met. Questions of intrinsic timeliness were held to be questions for the arbitrator in John Wiley & Sons, supra.