author: DUHE, District Judge.

text:
    Fred RINGE and Brenda Ringe v. James ROMERO, et al.
    Civ. A. No. 84-2135 “L”.
    United States District Court, W.D. Louisiana, Lafayette-Opelousas Division.
    Dec. 23, 1985.
    William P. Quigley, and Jane Johnson, New Orleans, La., for plaintiffs, the American Civil Liberties Union Foundation of La.
    Gregory K. Morous, Lafayette, La., for defendants, James Romero and Dudley Lastrapes.
    Thomas R. Duplantier, Lafayette, La., for defendant Don Breaux.
   MEMORANDUM RULING

DUHE, District Judge.

Plaintiffs seek by summary judgment a declaration that LSA-R.S. 14:95.4(A) and Lafayette Ordinance 0-2271, codified as §§ 10-74 through 10-74.6, are unconstitutional both facially and as applied to plaintiffs in the instant case.

BACKGROUND

On February 10, 1984, plaintiffs were customers at Rod’s Wammer-Jammer Motorcycle Shop, Bar and Lounge (“Uncle Rod’s”). At that time more than ten police officers from the City of Lafayette and the Lafayette Parish Sheriff’s Department entered Uncle Rod’s to conduct a search of all Uncle Rod’s patrons. Some were in uniform, others were in suits. Guard dogs were stationed with officers at the entrance to prevent customers from leaving.

The officers unplugged the jukebox and ordered the men to stand on one side of the room and the women on the other. Some of the officers then took the men to the hallway, one by one, and conducted personal searches. Fred Ringe was taken into the hallway and ordered to stand against the wall in preparation for a search. When Mr. Ringe asked an officer for a warrant, the officer said that one was not necessary. Mr. Ringe then placed himself against the wall. An officer, using his feet, forced Mr. Ringe’s legs apart, and Mr. Ringe was “patted-down” for weapons. The officers confiscated his pocket knife. His wallet was also searched. Mr. Ringe was then photographed and told to step to an area where the others who had been searched earlier were standing. A police computer check was done on Mr. Ringe’s driver’s license.

Sometime after her husband was searched, Brenda Ringe was taken into the hallway. She was told to stand against the wall. When Mrs. Ringe questioned the propriety of this order, she was pushed against the wall by a female officer. This officer, using her feet, forced Mrs. Ringe’s legs apart and proceeded to “pat-down” Mrs. Ringe, which included unfastening Mrs. Ringe’s bra and shaking it, apparently until the officer was satisfied that the garment contained no weapons. Mrs. Ringe was also told to remove her boots and they were searched. The officer then searched Mrs. Ringe’s wallet and jacket and threw them to the ground. No weapons were found on her. Mrs. Ringe was photographed and allowed to rejoin her husband.

The plaintiffs and the other patrons of Uncle Rod’s were detained for a total of approximately three hours during which the searches of approximately forty-four individuals were conducted. No one was allowed to leave until all the searches were completed. There was apparently no sign in or outside of Uncle Rod’s informing individuals that their entrance into Uncle Rod’s constituted consent to be searched by officials from the sheriff and police departments.

Fred Ringe was searched by C.J. Dartez, Jim Kraft and Roger Punac of the Lafayette City Police Department and Linda Spencer of the Lafayette Parish Sheriff’s Office. Brenda Ringe was searched by Kim LeBlanc and Linda Spencer of the Lafayette Parish Sheriff’s Department. All of the defendants, except James Romero, Don Breaux and Dudley Lastrapes, actually participated in the search of Uncle Rod’s.

The defendants contend that the officers’ authority for the search is 14 La.Rev.Stat. Ann. 95.4(A) (West Supp.1985) and Lafayette, La., Code of Ordinances §§ 10-74 through 10-74.6 (Supp.1982). The search revealed nine knives and one handgun, which were confiscated. No arrests resulted from the search. Uncle Rod’s had been the setting for several incidents of violence involving weapons prior to the evening of February 10, 1984.

DISCUSSION

I. THE FACIAL CONSTITUTIONALITY OF LSA-R.S. 14:95.4(A) AND LAFAYETTE CITY ORDINANCE §§ 10-74 THROUGH 10-74.6

Louisiana Revised Statute 14:95.4(A) provides:

Any person entering an alcoholic beverage outlet as defined herein, by the fact of such entering, shall be deemed to have consented to a reasonable search of his person for any firearm by a law enforcement officer or other person vested with police power, without the necessity of a warrant.

La.Rev.Stat.Ann. § 14:95.4 (West Supp. 1985).

Lafayette City Ordinance Section 10-74.2 provides:

Any sheriff, deputy sheriff, state police, city police, constables, town marshalls, or persons vested with police power, may search any persons found in any place where alcoholic beverages are sold and consumed on the premises, and shall confiscate any firearm or other instrumentality customarily used or intended for probable use as a dangerous weapon, which such police officer may find. This search shall be limited to weapons only, unless probable cause for a wider search is authorized.
Any person who enters a place where alcoholic beverages are sold and consumed on the premises does, by the mere fact of entering, consents to the search of his person for any firearm or other instrumentality customarily used or intended for probable use as a dangerous weapon, while on said premises, by any sheriff, deputy sheriff, state police, city police, constable, town marshall or persons vested with police power, without a warrant.

Lafayette, La., Code of Ordinances § 10-74.2 (Supp.1982).

Plaintiffs claim that the above statute and ordinance violate their right to be secure from unreasonable searches and seizures as protected by the Fourth Amendment of the United States Constitution. The fundamental purpose of the fourth amendment’s prohibition against unreasonable searches and seizures “ ‘is to safeguard the privacy and security of individuals against arbitrary invasions by government officials.’ ” New Jersey v. T.L. O., - U.S. -, 105 S.Ct. 733, 736, 740, 83 L.Ed.2d 720 (1985) (quoting Camara v. Municipal Court, 387 U.S. 523, 528, 87 S.Ct. 1727, 1730, 18 L.Ed.2d 930 (1967)). The protections of the fourth amendment apply to all forms of “governmental action,” — U.S. at-, 105 S.Ct. at 740, as long as “ ‘the person invoking [fourth amendment] protection can claim a “justifiable,” a “reasonable” or a “legitimate expectation of privacy” that has been invaded by [that] government action.’ ” Hudson v. Palmer, 468 U.S. 517, -, 104 S.Ct. 3194, 3199, 82 L.Ed.2d 393 (1984) (quoting Smith v. Maryland, 442 U.S. 735, 740, 99 S.Ct. 2577, 2580, 61 L.Ed.2d 220 (1979)).

The Supreme Court has consistently held that police must, whenever practicable, obtain advance judicial approval of a proposed search by obtaining a warrant based on probable cause. Katz v. United States, 389 U.S. 347, 88 S.Ct. 507, 19 L.Ed.2d 576 (1967); Chapman v. United States, 365 U.S. 610, 81 S.Ct. 776, 5 L.Ed.2d 828 (1961). A search conducted without a warrant is unreasonable per se “subject only to a few specifically established and well-delineated exceptions.” Schneckloth v. Bustamonte, 412 U.S. 218, 93 S.Ct. 2041, 36 L.Ed.2d 854 (1973). The exceptions to the warrant requirement remain limited in scope, and the Supreme Court has been openly reluctant to expand upon them. See United States v. Chadwick, 433 U.S. 1, 97 S.Ct. 2476, 53 L.Ed.2d 538 (1977); United States v. Ramsey, 431 U.S. 606, 97 S.Ct. 1972, 52 L.Ed.2d 617 (1977). The exceptions include: (i) border searches for contraband and illegal aliens, United States v. Martinez-Fuerte, 428 U.S. 543, 96 S.Ct. 3074, 49 L.Ed.2d 1116 (1976); (ii) hot pursuit of an armed criminal suspect, Warden v. Hayden, 387 U.S. 294, 87 S.Ct. 1642, 18 L.Ed.2d 782 (1967); (iii) search incident to a lawful arrest, Beck v. Ohio, 379 U.S. 89, 85 S.Ct. 223, 13 L.Ed.2d 142 (1964); (iv) stop based on articulable suspicions and frisk for weapons, Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968); (v) airport searches for weapons and explosives, United States v. Davis, 482 F.2d 893, 910 (9th Cir.1973); United States v. Moreno, 475 F.2d 44 (5th Cir. 1973), cert. denied, 414 U.S. 840, 94 S.Ct. 94, 38 L.Ed.2d 76 (1973); (vi) searches upon entering courthouse, Downing v. Kunzig, 454 F.2d 1230 (6th Cir.1972); (vii) search based upon consent, Schneckloth v. Bustamonte, 412 U.S. 218, 93 S.Ct. 2041, 36 L.Ed.2d 854 (1973); (viii) regulatory inspections pursuant to a statutory scheme, Colonnade Catering Corp. v. United States, 397 U.S. 72, 90 S.Ct. 774, 25 L.Ed.2d 60 (1970).

Pursuant to the fourteenth amendment, the fourth amendment prohibition against unreasonable searches is applicable to state action. Mapp v. Ohio, 367 U.S. 643, 81 S.Ct. 1684, 6 L.Ed.2d 1081 (1961). This court must therefore determine whether the warrantless searches authorized by the laws in the instant case fit within one of the few exceptions established by the Supreme Court to the warrant-based-on-probable cause requirement of the fourth amendment, or whether they violate the fourth amendment prohibition against unreasonable searches. The burden is on the defendants to show that the searches authorized by the challenged laws fall into one of these exceptions. United States v. Chadwick, 433 U.S. 1, 97 S.Ct. 2476, 53 L.Ed.2d 538 (1977). The only exceptions that the defendants suggest are applicable in the instant case are (a) the airport and courthouse exceptions (iv and vi); (b) the “stop-and-frisk” exception (iv); and, (c) the consent exception (vii).

A. Airport and Courthouse Searches

In extending the exceptions to the fourth amendment’s warrant requirement to searches conducted in airports and courthouses, the courts have carefully balanced “the need to search against the invasion which the search entails” to determine whether the search is reasonable within the meaning of the fourth amendment. Camara v. Municipal Court, 387 U.S. 523, 536-537, 87 S.Ct. 1727, 1734-1735, 18 L.Ed.2d 930 (1967):

On one side of the balance are arranged the individual’s legitimate expectation of privacy and personal security, on the other, the government’s need for an effective method to deal with breaches of public order.

New Jersey v. T.L.O., — U.S. -, 105 S.Ct. 733, 741, 83 L.Ed.2d 720 (1985).

The courts have applied the balancing test employed in the airport and courthouse search cases in determining whether warrantless searches of rock concert patrons are reasonable within the meaning of the fourth amendment. See Gaioni v. Folmar, 460 F.Supp. 10 (M.D.Ala.1978); Stroeber v. Commission Veteran’s Auditorium, 453 F.Supp. 926 (S.D.Iowa 1977); Wheaton v. Hagan, 435 F.Supp. 1134 (M.D. N.C.1977); Collier v. Miller, 414 F.Supp. 1357 (S.D.Tex.1976). As the searches in question are closely analogous to those involved in the “rock concert” cases, these cases will be used in evaluating the reasonableness of the searches under analysis here. In these cases, the airport/courthouse balancing test for reasonableness is broken down into the tripártate considerations of (1) the degree and nature of intrusion entailed by the search, (2) the public necessity for the search measured in terms of potential harm to the public, and (3) the efficacy of the search. The searches authorized by the challenged statute and ordinances will now be analyzed under the same standard.

1. The Intrusiveness of the Search

a. The Reasonable Expectation of Privacy

The Supreme Court has recently affirmed its well-established doctrine that “even a limited search of the person is a substantial invasion of privacy.” New Jersey v. T.L.O., 105 S.Ct. at 741 (citing Terry v. Ohio, 392 U.S. 1, 24-25, 88 S.Ct. 1868, 1882-1883, 20 L.Ed.2d 889 (1967)) (the “limited” search in Terry was a “pat-down” search or frisk). The degree of intrusiveness of a particular search, as the reasonableness of the search in general, depends largely on the context within which the search takes place. New Jersey v. T.L.O., 105 S.Ct. at 741. The intrusion, in particular, must be measured in relationship to the individual’s expectation of privacy at the time of the search. Blackburn v. Snow, 771 F.2d 556, 563-564 (1st Cir.1985). The Supreme Court has held that the “controlling” inquiry in evaluating an individual’s expectation of privacy is whether the expectation is one “ ‘society is prepared to recognize as “reasonable.” ’ ” Hudson v. Palmer, 104 S.Ct. at 3199 & n. 7 (quoting in part Katz v. United States, 389 U.S. 347, 360-361, 88 S.Ct. 507, 516, 19 L.Ed.2d 576 (1967) (Harlan, J., concurring)).

Though it seems clear that society would be “prepared to recognize” that an individual’s expectation of privacy upon entering a “public” eating and drinking establishment is necessarily lower than it would be in his own home, society would also be prepared to recognize that it is not diminished to the point where a body search, or pat-down, would be within his reasonable expectation. Society certainly recognizes that individuals entering a public eating and drinking establishment retain a legitimate expectation of privacy as to their persons, as well as to their possessions, that excludes the possibility of a personal search.

b. Discretionary vs. Indiscretionary Searches

The courts have held that where the decision to search is left entirely to the discretion of the searching officers, the intrusion can be particularly great. See Collier v. Miller, 414 F.Supp. at 1364; Wheaton v. Hagan, 455 F.Supp. 1134 (M.D.N.C.1977). The rationale is that when the search procedure is not applied indiscriminately, but only to isolated individuals at the officers’ discretion, a stigma attaches to the search that embarrasses the individual subjected to the search. See United States v. Skipwith, 482 F.2d 1272 (5th Cir.1973); Downing v. Kunzig, 454 F.2d 1230 (6th Cir.1972). The use of a magnetometer in airport and courthouse searches has been upheld largely due to its indiscriminate method of search. Collier, 414 F.Supp. at 1363 (citing United States v. Edwards, 498 F.2d 496 (2nd Cir.1974); United States v. Palazzo, 488 F.2d 942 (5th Cir.1974)).

The searches authorized by the statute and ordinance in the instant case are not indiscriminate. The decision of which drinking establishments, and which individuals within those establishments, to search, is left entirely within the discretion of the police officers. Every patron of every lounge in Louisiana is not subjected to a search upon entering that lounge. Though defendants point out that the search in question was conducted indiscriminately upon all Uncle Rod’s customers, that goes to the question of whether this statute and ordinance are unconstitutional as applied, as opposed to facially. Moreover, the defendants fail to recognize that the decision to search Uncle Rod’s, as opposed to some other bar or restaurant, was an act of discretion. Under the laws in question, the officers could have searched only isolated individuals in Uncle Rod’s if they had so chosen, just as they chose to search only Uncle Rod’s out of all the other bars, lounges and restaurants in Lafayette. The fact that these laws authorize discretionary, as opposed to indiscriminate, searches increases the stigma that attaches to such searches and therefore militates in favor of finding the searches they authorize particularly intrusive. See Collier, 414 F.Supp. at 1364; Wheaton, 435 F.Supp. at 1145.

c. The Relative Intrusiveness of Different Types of Searches

The laws at issue, by omission, leave the type and degree of search, as well as the decision to search itself entirely to the discretion of the public officers. The Supreme Court has recognized a “pat-down,” or frisk, as a “severe ... annoying, frightening, and perhaps humiliating [intrusion]....” Terry, 392 U.S. at 24-25, 88 S.Ct. at 1881-1882. Because a pat-down is the standard police method of searching for weapons, the statute and ordinance in question clearly authorize on their faces at least that severe a level of intrusion.

The defendants have not cited, nor is this court aware of, any case in which a non-consensual pat-down search for weapons is permitted in the absence of some particularized level of reasonable suspicion. See Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968). In airport and courthouse searches, the individuals wishing to board airplanes or enter courthouses have to walk through a magnetometer and submit their bags and parcels to an examination for weapons. The courts have reasoned that this sort of search, in contrast to a frisk, involves an “absolutely minimal invasion of privacy.” See, e.g., United States v. Albarado, 495 F.2d 799, 806 (2nd Cir.1974). Only in the event that a magnetometer is triggered is the reasonable suspicion necessary for an ensuing pat-down engendered.

By contrast, the laws in the instant case authorize “searches,” be they pat-downs, body cavity, or merely magnetometer, in the absence of any particularized level of suspicion. Such intrusiveness clearly goes beyond that authorized by the airport and courthouse exceptions. See also Wheaton v. Hagan, 435 F.Supp. 1134, 1146 (M.D.N. C.1977); Collier v. Miller, 414 F.Supp. at 1365.

2. Public Necessity

In determining the public necessity requiring a particular type of warrantless search, the courts have examined the nature and degree of the threat of public danger arguably necessitating the search. In the early 1970’s, the courts recognized the public necessity for warrantless airport searches as particularly “grave and urgent” because of the “great threat to hundreds of people,” Albarado, 495 F.2d at 806, and the “enormous potential for violence,” United States v. Davis, 482 F.2d 893, 910 (9th Cir.1973), created by the rash of hijackings that occurred during that time. The courts found the nature of the threat created by hijackings particularly grave:

The potential damage to persons and property from [airline hijacking] is enormous. The disruption of air traffic is severe. There is a serious risk of complications in our foreign relations.

Id.

Similarly, in authorizing courthouse searches, the courts recognized the immense and very real threat to public safety that arose from the “outburst of acts of violence, bombings of federal buildings, and hundreds of bomb threats, resulting in massive evacuations of federal property, and direct financial loss to the Government,” throughout the country. See Downing v. Kunzig, 454 F.2d 1230 (6th Cir.1972).

In the “rock concert” cases, involving searches for bottles and cans, e.g., Collier v. Miller, 414 F.Supp. 1357, and drugs and alcohol, e.g., Gaioni v. Folmar, 460 F.Supp. 10, the courts distinguished the airport and courthouse cases as involving “unique circumstances” not involved in a rock concert case. See, e.g., Gaioni, 460 F.Supp. at 13. The searches in these cases were not instituted to uncover weapons or other instruments of mass violence, but rather to find either contraband or objects that could be dangerous if broken or used as projectiles. Id. Because the items for which the rock concert patrons were searched posed no threat of public danger equivalent to that posed by a bomb or gun, the courts have consistently held that the necessity of searching rock concert patrons is “minimal” compared to that for airport searches. See id. at 14; Wheaton, 435 F.Supp. 1134; Collier, 414 F.Supp. 1357.

Though, unlike the searches conducted in the rock concert cases, the searches authorized by the state statute and municipal ordinance at issue are for the purpose of uncovering weapons, the searches are nonetheless not justified by the “unique circumstances” present in airport and courthouse searches. The potential damage to hundreds of persons and to property present in the airport and courthouse settings, from a single individual’s weapon, is simply not the type of damage the laws in question address.

Furthermore, the “public necessity” addressed by these laws is apparently the danger to individuals in a bar at the hands of one who is armed and intoxicated. This public purpose in no way equals such national concerns as the foreign policy implicated by hijackings, or the threat to the judicial system implicated by courthouse bombings. This court simply cannot find that special circumstances exist in a barroom setting justifying “pat-down” searches of individuals in the absence of any level of particularized suspicion authorized by the laws in question.

Moreover, though no evidence has been put in the record on the matter, this court is willing to assume that patrons of bars who carry weapons are much more likely than patrons of bars who do not carry weapons to commit acts of violence. Yet, logic dictates that anyone who carries a weapon, in or outside of a bar, is more likely than one who does not carry a weapon to commit an act of violence. Nonetheless, the public danger of being harmed by an individual carrying a weapon cannot justify a blanket policy of warrantless searches without probable cause. See United States v. Skipwith, 482 F.2d at 1275 & n. 4.

The assumption upon which defendants apparently justify the statute and ordinance is that individuals with weapons in bars are much more likely to commit acts of violence than individuals with weapons outside of bars. Even if there were evidence that a higher incidence of crime results from concealed weapons in places where alcohol is sold, than from concealed weapons outside of places where alcohol is sold, that evidence alone could not make warrantless searches in such places reasonable. See id. at 1275. The Fifth Circuit observed in Skipwith that “no court has ever approved a dragnet search of all citizens in a high crime area of any urban center based upon the justification that the danger of criminal conduct would be reduced.” Id. at n. 4. Accordingly, a degree of “public necessity” alone, “whether produced by danger, or otherwise,” cannot justify an otherwise unreasonable search in the absence of a warrant based on probable cause. Id. at 1275. Therefore, in order for the searches authorized by these laws to be reasonable, the possible harm to the public in bars from individuals with concealed weapons must still be measured in relation to the likelihood that warrantless searches of bar patrons will effectively avoid the potential harm, and the defendant must show that this necessity justifies the privacy intrusion the search entails. Id.

3. Efficacy

The necessity of a search must be measured not only in terms of potential public danger, but also in terms of whether “the search procedure will be effective in averting potential harm.” United States v. Skipwith, 482 F.2d at 1275. The courts have consistently found that airport magnetometer searches are highly effective. See, e.g., Skipwith, 482 F.2d at 1275; Folmar, 468 F.Supp. at 14. Magnetometers have been found to “detect the ‘overwhelming majority’ of items searched for, and consequently have caused a dramatic decline in the number of hijackings and bombings.” Folmar, 468 F.Supp. at 14 (citing United States v. Albarado, 495 F.2d 799 (2nd Cir.1974)). The Folmar court noted by contrast that the random searching of rock concert patrons is not very effective in controlling drug and alcohol violations at the concert. 468 F.Supp. at 14.

In the instant case, defendants argue that the particular search in question was effective because it uncovered nine knives and one handgun. The laws in question, however, must be analyzed in terms of their overall effectiveness in protecting public safety, and the particular incident at issue in this lawsuit is but one example. The defendant offers no other evidence on the laws’ effectiveness. Nonetheless, this court concedes that the laws could have a significant deterrent effect in establishments where they were regularly enforced.

4. The Balancing

Balancing the need for the Louisiana statute and the Lafayette ordinance, which subject all individuals who enter establishments where alcoholic beverages are sold to an unlimited search, based on neither reasonable suspicion nor probable cause, against the necessity of such searches to curtail the number of shootings and stabbings that occur in barrooms, this court finds that the laws do not meet the test of reasonableness established by the airport and courthouse exceptions. Airport and courthouse searches are justified by a much greater threat to public harm, yet are accomplished by a much lower level of personal intrusion, and are as effective as the constraints of feasible technology allow. The defendants have therefore failed to meet their burden of proving that the searches authorized by the statute and ordinance in question fall within the airport and courthouse exceptions for warrantless searches.

B. The Stop-and-Frisk Exception

Defendants also argue that the searches authorized by these laws fall into the “stop- and-frisk” exception to the fourth amendment requirement of a warrant based on probable cause. The “stop-and-frisk” exception was created by the Supreme Court for the very specific factual situation involved in the case of Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968). In that situation, where a police officer directly encounters a citizen face-to-face, and has a “reasonable suspicion” that the individual is armed and dangerous, the officer may conduct a limited “pat-down” or frisk of the individual’s clothing in order to determine if that individual is armed. Id. at 24-25, 88 S.Ct. at 1881-1882. Though the officer does not need to have probable cause to conduct such a search, he must have “reasonable suspicion” and be able “to point to specific and articulable facts” on which he bases his suspicion. Id.

Clearly, the purpose of the statute and ordinance in the instant case is not to afford officers an opportunity to pat-down individuals with whom they are confronted and whom they reasonably suspect to be armed and dangerous. The purpose is, rather, to give police officers an opportunity to search for concealed weapons even when an officer’s personal safety is not at issue and the persons searched are not reasonably suspected to be armed and dangerous. Yet, as the Collier court noted, Terry does not “sanction wholesale searches of the general public in the absence of exigent circumstances, regardless of the searching official’s valid interest in preventing potential injuries.” Collier v. Miller, 414 F.Supp. at 1365 (citing United States v. Davis, 482 F.2d 893, 906 (9th Cir.1973)).

Moreover, if the reasons for the statute and ordinance were coextensive with the reasons for the stop-and-frisk exception, there would be no need for the laws. Police officers would already be authorized under the United States Constitution, as interpreted by Terry, to make the kind of searches they seek to justify under the statute and ordinance. The fact is, these laws authorize Terry type searches, but do not require the Terry level of particularized suspicion as a requisite to those searches. Consequently, the searches authorized by the laws are not reasonable under the Terry exception.

C. The Consent Exception

It is “well settled that one of the specifically established exceptions to the requirements of both a warrant and probable cause is a search that is conducted pursuant to consent.” Schnekloth v. Bustamonte, 412 U.S. 218, 93 S.Ct. 2041, 36 L.Ed.2d 854 (1973) (citing Davis v. United States, 328 U.S. 582, 66 S.Ct. 1256, 90 L.Ed. 1453 (1965)). Though defendants do not specifically urge the consent exception as a justification for the laws at issue, they have urged it implicitly in that (1) consent was one of the exceptions considered in the airport, courtroom and rock concert cases proffered by defendants, and (2) defendants’ supplemental memorandum emphasizes that the laws in question direct drinking establishment owners to post signs outside their doors notifying customers that entering the premises constitutes consent to being searched for weapons. The purpose of the memorandum is obviously to suggest that the laws at issue mandate “knowing” consent as a requisite to being searched.

In order for consent to constitute an exception to the fourth amendment warrant requirement, the consent must be voluntary. Schnekloth, 412 U.S. at 222, 93 S.Ct. at 2045. Voluntariness is a fact to be determined in light of “the totality of the circumstances,” and the defendants have the burden of proving that the consent was voluntary. Id. The defendants must also show that consent was “unequivocable and specific,” Judd v. United States, 190 F.2d 649, 651 (D.C.Cir.1951), and an argument that a search is reasonable because it was consented to implicitly is not sufficient. Collier v. Miller, 414 F.Supp. at 1365.

In the “rock concert” cases, the courts have held that where public access to a concert is conditioned on the submission to an otherwise unreasonable search, such a search is not justified under the consent exception because it is coerced — not voluntary. See Collier v. Miller, 414 F.Supp. at 1366 (citing United States v. Albarado, 495 F.2d 799, 806-807 (2nd Cir.1974)). Accord Gaioni v. Folmar, 460 F.Supp. at 14. Moreover, in United States v. Albarado, 495 F.2d 799, 806, 807 & n. 14 (2nd Cir. 1974), the United States Court of Appeals for the Second Circuit refused to base its decision upholding an airport magnetometer search on the consent exception. It found that “[t]o make one choose between flying to one’s destination and exercising one’s constitutional right [to be free from an otherwise unlawful search] ... is a form of coercion, however subtle.” See also United States v. Kroll, 481 F.2d 884, 886 (8th Cir.1973).

In Gaioni v. Folmar, as in the instant case, the defendants contended that the searches conducted at the entrance to a civic center hosting a rock concert fell within the consent exception because signs were placed at the entrances warning patrons that if they entered the concert they were subject to being searched. The signs read:

NOTICE

PERSONS ENTERING THE

MONTGOMERY CIVIC CENTER

AND THEIR

POSSESSIONS

ARE

SUBJECT

TO

SEARCH

NO ALCOHOLIC BEVERAGES OR ITEMS IN

VIOLATION OF THE ALABAMA CONTROLLED

SUBSTANCES ACT ARE ALLOWED

The Folmar court held first that the defendant simply could not condition public access to the civic center on submission to a search unless the defendant could meet its burden of proving that those subjected to the search consented voluntarily. Folmar, 460 F.Supp. at 14-15 (citing U.S. v. Chicago, Milwaukee St. Paul, & Pacific R.R. Co., 282 U.S. 311, 328-329, 51 S.Ct. 159, 163-164, 75 L.Ed. 359). The court then held that the defendants failed to meet their burden of proving that the plaintiffs voluntarily consented to be searched because

[a]ny consent obtained under such circumstances [i.e. through conditioning access to the concert] was an inherent product of coercion, since people undoubtedly felt that if they refused to be searched they would forfeit their right to attend the concert.

Id. at 14 [(citing Collier, 414 F.Supp. 1357; Albarado, 495 F.2d 799)]. The court found further:

Defendants’ reliance on the warning signs is misplaced. Voluntary consent cannot be implied solely from the presence of such signs, especially since many patrons never saw them. Of course, the presence of the signs ... has been considered in evaluating the totality of the circumstances.

Folmar, 460 F.Supp. at 15 & n. 14.

Under this line of cases, it is clear that the statute and ordinance at issue do not pass constitutional muster on the basis that they require signs to be posted outside of drinking establishments notifying the customers that entrance into the establishment constitutes consent to a search for weapons. There is no guarantee that bar and restaurant owners actually post such signs. Furthermore, as the Folmar court noted, even if the signs are posted, there is no assurance that all of the customers entering the bar or restaurant will be aware of the sign. Finally, even if the patrons see the signs, the fact that they go ahead and enter the establishment does not establish that their consent to a search by the police is “unequivocable and specific.” Id.

This court therefore concludes that the defendants have failed to meet their burden of proving that the Louisiana statute and the Lafayette ordinance fall within the consent exception to the fourth amendment warrant-based-on-probable-cause requirement. As defendants offer no other basis for finding the searches authorized by these laws reasonable within the meaning of the fourth amendment, this court finds that the authorized searches are unreasonable and, hence, the statute and ordinance authorizing such searches are facially unconstitutional.

II. THE CONSTITUTIONALITY OF THE STATUTE AND ORDINANCE AS APPLIED

Having concluded that the statute and ordinance in question are facially unconstitutional, it is not necessary that this court determine the constitutionality of these laws as applied in the instant case.

      . The standard policy, however, is that the individual who has triggered the magnetometer has the option of not boarding the plane or entering the courthouse rather than submitting to further search. Id. at 801. This court also recognizes that the courts have upheld airport frisks in situations where the searched party has not triggered a magnetometer. These searches, however, are also based on some particularized level of reasonable suspicion. United States v. Moreno, 475 F.2d 44 (5th Cir.1973), cert. denied, 414 U.S. 840, 94 S.Ct. 94, 38 L.Ed.2d 76 (1973).


source: Caselaw Access Project

author: RUSSELL E. SMITH, District Judge.

license: Public Domain

text:
    IDEAL MUTUAL INSURANCE COMPANY, a New York corporation, By and Through GLOBAL AVIATION INSURANCE MANAGERS, INC., a Texas corporation, Plaintiffs, v. Jerry PATZER, father of Cindy Diane Patzer, deceased, and natural guardian of Lisa Patzer and Justin Patzer; Cheryl Bradshaw Patzer, mother of Cindy Diane Patzer, deceased, and natural guardian of Lisa Patzer and Justin Patzer; Lisa Patzer, minor sister of Cindy Diane Patzer; Justin Patzer, minor brother of Cindy Diane Patzer; Fred Medlar, Administrator of the Estate of James Frederick Medlar, deceased; Bitterroot Aviation, Inc., d/b/a Hamilton Aviation, Defendants. Fred MEDLAR, Administrator of the Estate of James Frederick Medlar, deceased, Plaintiff, v. IDEAL MUTUAL INSURANCE COMPANY, a corporation, Global Aviation Insurance Managers, Inc., a corporation, a/k/a National Excess Insurance Services, Inc., a corporation, Defendants.
    Nos. CV 84-65-M-RES, CV 84-203-M-RES.
    United States District Court, D. Montana, Missoula Division.
    Dec. 24, 1985.
    Susan E. Loggans and Associates, Chicago, 111., for plaintiffs in No. 84-203-M-RES.
    Ronald Bender, Worden, Thane & Haines, Missoula, Mont., for plaintiff in No. 84-65-M-RES.
    Catherine E. Tinker, William J. Mullins, Conklin & Adler, Ltd., Chicago, 111., for defendants in No. 84-203-M-RES.
    . Richard A. Weber, Jr., Hamilton, Mont., Susan E. Loggans & Associates, Chicago, 111., George H. Corn, Robinson, Boyle & Bell, Hamilton, Mont., for defendants Jerry Patzer, Cheryl Bradshaw Patzer, Lisa Patzer and Justin Patzer.
   OPINION

RUSSELL E. SMITH, District Judge.

These cases were brought to determine the liability of the Ideal Mutual Insurance Company (Ideal) for the damages resulting from the death of James Frederick Medlar (Medlar).

Bitterroot Aviation Inc., d/b/a Hamilton Aviation, was the owner of Cessna aircraft No. 'N-5112Q. It procured from Ideal an insurance policy, No. AHL-047915, which was in effect on May 22, 1983. On that day, Cindy Diane Patzer (Cindy) rented the aircraft from the owner. The aircraft crashed while Cindy was flying it and both Cindy and her passenger, Medlar, received fatal injuries.

The policy obligates Ideal to:

[P]ay ... all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person, excluding passengers as defined herein, caused by an occurrence and arising out of the ownership, maintenance or use of the aircraft. (Emphasis supplied).

The policy defines the term “insured”:

The unqualified word “Insured” wherever used in this Policy ... includes not only the Named Insured but also any person while using or riding in the aircraft and any person or organization legally responsible for its use, provided the actual use is with the permission of the Named Insured.
The provisions of this paragraph do not apply:
(a) * * *
(b) * * *
(c) to any person operating the aircraft under the terms of any rental agreement or training program which provides any remuneration to the Named Insured for the use of said aircraft. (Emphasis supplied).

The printed declarations of the policy in Item 6 read: “PURPOSE(S) OF USES: The aircraft will be used for the purposes indicated by ‘X’.” By means of typewritten attachments, it is shown that one of the permitted purposes of use of aircraft N-5112Q, is the printed paragraph (c) which, so far as pertinent here, reads:

(e) “Limited Commercial”. The term “Limited Commercial” is defined as including all the uses permitted in (a) and (b) above and including Student Instruction and Rental to pilots but excluding passenger carrying for hire or reward.

The Medlars contend that when the insuring agreements are read in connection with the declarations relating to purposes of use that the policy becomes ambiguous, that it should be construed against the insured and that so construed, Cindy was a person using the policy with the permission of the insurers and was thus covered.

Under Montana law, where a policy of insurance is susceptible of two constructions, the one favoring the insured will be adopted. Ambiguities are to be resolved against the insurance companies. State Farm Mutual Automobile Insurance Co. v. Queen, 685 P.2d 935, (Mont.1984); Unigard Mutual Insurance Co. v. Abbott, 732 F.2d 1414 (9th Cir.1984); Kansas City Fire & Insurance Co. v. Clark, 217 F.Supp. 231 (D.Mont.1963). Where there is a conflict between the printed and typewritten portions of a policy the latter prevail. Mont. Code Ann. § 28-3-205 (1985).

In my opinion the policy here was not ambiguous. The policy insures against the losses which the owner may sustain because of the ownership of the aircraft and the language of the policy says just that. The obligation is “to pay ... all sums which the insured shall be legally obligated to pay as damages.” The insured is defined as the named insured and persons using with the permission of the named insured. But by express language persons operating under a rental agreement are not insured.

An owner may be responsible for an injury caused by his aircraft because of the way he flies it, or if flown by another because of the condition of the plane, or perhaps because he was negligent in permitting a particular third person to operate it. But in each ease the liability originates in the negligence of the owner and not in negligence of someone else.

An owner might willingly pay the premium costs of insuring his own liability but be unwilling to pay the cost of insuring some other person. On the other hand, an insurer has a legitimate interest in purposes for which an insured plane will be used and would quite logically use language in the policy restricting that use. As I see it, the owner here wanted liability insurance for himself and the insurer wanted to limit the uses of the aircraft. I see nothing inconsistent in those purposes and I find no language in the policy which confuses them.

It is true that language not carefully used may blur the intentions of contracting parties, or may mislead one of them, but I see nothing which suggests that the limitations on use in the purposes clause expands the insuring clauses to provide coverage for those who are expressly excluded.

The majority of the courts considering claimed ambiguities between the insuring clauses and the purposes of use clauses of insurance policies reach the conclusion which I have reached. See Crawford v. Ranger Insurance Co., 653 F.2d 1248 (9th Cir.1981); Levra v. National Union Fire Insurance Co., 99 Idaho 871, 590 P.2d 1017 (1979); Jahrman v. Valley Air Park, Inc., 333 So.2d 712 (La.App.1976); Ranger Insurance Co. v. Silverthorn, 553 S.W.2d 530 (Mo.App.1977); Greemore v. American Home Assurance Co., 113 N.H. 250, 305 A.2d 681 (1973); Saliba v. American Policyholders Insurance Co., 158 N.J.Super. 48, 385 A.2d 328 (1976), aff'd, 157 N.J.Super. 476, 385 A.2d 239 (1978); Buestad v. Ranger Insurance Co., 15 Wash. App. 754, 551 P.2d 1033 (1976).

Medlar relies on Kansas City Fire & Marine Insurance Co. v. Clark, 217 F.Supp. 231 (D.Mont.1963), aff'd, 329 F.2d 647 (9th Cir.1964). That case differs in the facts and is not controlling. In Kansas City Fire & Marine, a typewritten endorsement, which was made part of the declarations, read:

A. WHILE THE AIRCRAFT IS BEING USED FOR PURPOSES OF STUDENT INSTRUCTION: “STUDENT PILOTS WHILE UNER THE DIRECT SUPERVISION AND CONTROL OF A PROPERLY CERTIFICATED INSTRUCTOR PILOT.”

Kansas City Fire & Marine, 217 F.Supp. at 231. This endorsement made the use of the aircraft at the time of the accident a permitted use within the terms of the insuring clause. Id. at 238.

The case of Petro v. Ohio Casualty Insurance Co., 95 F.Supp. 59 (S.D.Cal.1950), relied upon in Kansas City Fire & Marine, is likewise distinguishable. In Petro, the court held that the contract between the insured and the person operating the plane was not a contract of hiring but a contract to furnish education. Petro, 95 F.Supp. at 65.

For the reasons stated the court decides that Cindy Diane Patzer was not insured by Ideal Mutual Insurance Company and Global Aviation Insurance Managers, Inc., for the accident of May 22, 1983 in aircraft No. N-5112Q and that such companies have no duty to defend the Patzer Estate against claims brought by the Medlar Estate and have no duty to pay any damages that may be assessed against the Estate of pilot Patzer in any action brought on account of the death of James Frederick Medlar.

Let judgment be entered accordingly.

      . I find that on May 22, 1982, Cindy Diane Patzer rented the 1981 Cessna Model 152 aircraft bearing Federal Aviation No. N-5112Q from Bitterroot Aviation, Inc., and was using the plane as a renter when it crashed. This finding is based on the affidavits filed in support of a motion for summary judgment. There is a motion to strike these affidavits. It is denied. Some parts of the affidavits may be based on hearsay and may state conclusions but there is sufficient unobjectionable evidence in them to demonstrate that on the day in question, the aircraft was being operated under the terms of a rental agreement and that the relationship between Cindy Diane Patzer and Bitter-root Aviation was that of renter-rentee and nothing else.


author: LEIGHTON, District Judge.

text:
    Byron C. GRAVES, Plaintiff, v. METHODIST YOUTH SERVICES, INC., Defendant.
    No. 84 C 4402.
    United States District Court, N.D. Illinois, E.D.
    Dec. 24, 1985.
    Richard K. Wray, Arnstein, Gluck & Lehr, Janis M. Gibbs, Chicago, 111., for plaintiff.
    Samuel W. Witwer, Jr., Witwer, Moran, Burlage & Witwer, Larry J. Hagen, Oak Park, 111., for defendant.
   Memorandum

LEIGHTON, District Judge.

Plaintiff, a Negro male, filed this multicount suit against defendant, a social services organization operated by the Methodist Church. In Counts I and II, he alleges that defendant violated Title VII of the Civil Rights Act of 1964 by terminating him from his position as counselor on August 23, 1983, because of his race and religion. Plaintiff filed charges with the Illinois Human Rights Department and with the Equal Employment Opportunity Commission (“EEOC”) on October 3, 1983, charging defendant with racial employment discrimination. The EEOC issued a Notice of Right to Sue which plaintiff received on May 11, 1984.

Count III, brought pursuant to Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794 (1976), alleges that he is a handicapped person, having a record of mental illness which defendant regarded as limiting his major life activities. However, plaintiff alleges he can perform the essential functions required of a counselor; he also alleges that he was discharged from his position as counselor because of his mental handicap. In Count IV, a pendent state law claim, plaintiff alleges the intentional infliction of emotional distress. He alleges that during his employment he was verbally harassed about his religion and his mental condition by his superiors and other employees. Further, he claims he was assaulted by unknown assailants who threw objects at him and damaged his car while he was at work, or while he was travelling to or from work. Defendant moves to dismiss, pursuant to Fed.R.Civ.P. 12(b)(1), for lack of subject matter jurisdiction.

In its motion as to Counts I and II, defendant contends that it is not engaged in an activity affecting interstate commerce; and therefore, this court lacks subject matter jurisdiction. It argues that for Title VII to be applicable, the alleged wrongful activity must fall within the definitions in 42 U.S.C. § 2000e. Subparagraph (h) of that section states that industry affecting commerce means “any activity, business, or industry in commerce or in which a labor dispute would hinder or obstruct commerce____” Subparagraph (g) defines commerce as “... trade, traffic, commerce, transportation, transmission or communication among the several states____” Defendant argues that it does not fall within these definitions because it is only a local concern: its board of trustees is made up of ministers of the Northern Illinois Conference of the United Methodist Church as well as members of local churches; it does not maintain any office or facility outside the state; it does not directly receive any federal funds; and it does not solicit funds outside the state or serve persons who live outside the state. Additionally, defendant asserts it is not a business or industry and does not charge for its services. Therefore, it thus concludes that the required interstate nexus does not exist.

In response to defendant’s argument, plaintiff directs the court’s attention to defendant’s answers to interrogatories. Plaintiff asserts that defendant admitted purchasing various office supplies from companies such as Chemcraft, Public Office Supply, Shaw/Walker, Sears Roebuck and Co., W.J. Saunders and Holleb. Defendant also purchased office machines made by A.B. Dick, IBM, and Xerox. Plaintiff asserts that because these goods did not all originate in Illinois, defendant engaged in activity affecting interstate commerce. In further support of his argument, plaintiff refers the court to defendant’s long-distance telephone bills between April 1983 and April 1984, wherein defendant was charged for telephone calls to such places as Pennsylvania, Connecticut, California, Texas, Wisconsin, North Carolina, Indiana, New York, etc. In response, defendant argues that its purchases of office supplies was a de minimis level of activity. Further, defendant states its out-of-state telephone bills amounted to $175.00, with many of the telephone calls resulting from unauthorized use by its wards. Thus, the issue as to Counts I and III is whether defendant engages in activity which affects interstate commerce so as to be subject to the provisions of Title VII, and to this court’s jurisdiction.

As to Count III, defendant argues that since it receives no federal financial assistance, this court lacks jurisdiction because Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794 (1976) is inapplicable to the facts alleged. The section states that:

No otherwise qualified handicapped individual in the United States, as defined in section 706(7) of this title, shall, solely by reason of his handicap, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance____

Section 505(a)(2), added to the Act by amendment via the Rehabilitation, Comprehensive Services, and Developmental Disabilities Act of 1978, 29 U.S.C. § 794a(a)(2), makes available the “remedies, procedures and rights set forth in Title VI of the Civil Rights Act of 1964 ... to any person aggrieved by any act or failure to act by any recipient of Federal assistance or Federal provider of such____”

A program or activity must therefore receive federal funding to meet the jurisdictional requisite of the Act. Again directing the court’s attention to the interrogatories he propounded, plaintiff states that defendant answered and admitted receiving federal aid through the Illinois Department of Children and Family Services (“DCFS”) from which defendant receives 84.3% of its funds. Plaintiff points out that the funds from DCFS are reimbursed by the federal government under Title XX of the Social Security Act, 42 U.S.C. § 1397 et seq. Plaintiff thus concludes that because the United States government provides funds to DCFS, defendant is a recipient of federal assistance under the Rehabilitation Act. Defendant responds by arguing that the money it receives from DCFS at the time of distribution is the property of Illinois, even though the state is reimbursed with federal funds. Consequently, it does not receive federal funding and is not subject to claims under the Rehabilitation Act. Thus, the issue as to Count III is whether defendant receives federal funding, making it subject to the Rehabilitation Act and the jurisdiction of this court.

Counts I and II, Title VII Claims

When jurisdictional allegations are questioned, the plaintiff has the burden of proving jurisdiction. Rosemound Sand & Gravel Co. v. Lambert Sand & Gravel Co., 469 F.2d 416 (5th Cir.1972). Moreover, in a case involving a Title VII claim, the plaintiff has the burden of proving the requisite nexus with interstate commerce. Equal Employment Opportunity Commission v. California Teachers Association, 534 F.Supp. 209 (N.D.Cal.1982). Further, where a party raises a factual question concerning the jurisdiction of the district court, that court may properly look beyond the jurisdictional allegations of the complaint and review whatever evidence has been submitted to determine whether subject matter jurisdiction exists. Grafon Corporation v. Hausermann, 602 F.2d 781 (7th Cir.1979); Western Transportation Co. v. Couzens Warehouse & Distributors, Inc., 695 F.2d 1033 (7th Cir.1982).

Shortly after the Civil Rights Act of 1964 was enacted, the Supreme Court addressed the interstate commerce requirement in Katzenbach v. McClung, 379 U.S. 294, 85 S.Ct. 377, 13 L.Ed.2d 290 (1964) and Heart of Atlanta Motel v. United States, 379 U.S. 241, 85 S.Ct. 348, 13 L.Ed.2d 258 (1964). In Katzenbach, a restaurant corporation brought an action seeking enforcement of its rights under the Civil Rights Act of 1964. In determining whether Congress had authority to regulate certain purely local activities because they affected interstate commerce, the court, relying on the test supplied in Wickard v. Filburn, 317 U.S. 111, 63 S.Ct. 82, 87 L.Ed. 122 (1942), stated:

But even if appellee’s activity be local and though it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce. Id. at 125, 63 S.Ct. at 89 [emphasis added].

The court concluded that frequent interstate travelers and $70,000 worth of food purchased by the restaurant, had a substantial economic effect on interstate commerce. In this way, the restaurant engaged in activity affecting interstate commerce, and thus was subject to regulation by Congress. Katzenbach, 379 U.S. at 294, 85 S.Ct. at 377. Accordingly, the question arises whether in this case, defendant’s long-distance telephone calls totalling $175 and purchase of office supplies had a “substantial economic effect” on interstate commerce. In arguing that defendant engaged in activity affecting interstate commerce, plaintiff relies heavily on EEOC v. Rinella & Rinella, 401 F.Supp. 175 (N.D.Ill.1975).

In Rinella, the EEOC filed suit against Rinella & Rinella, a Chicago law firm, based on a charge that the firm had intentionally discriminated against female employees. The Commission alleged that the law firm was subject to the Civil Rights Act of 1964 because it was an employer within the meaning of Section 701(b) of Title VII, 42 U.S.C. § 2000e(b). Defendant moved to dismiss for lack of subject matter jurisdiction. Finding the law firm subject to claims under Title VII, the court held it had engaged in activity affecting interstate commerce. The court looked to the amount of out-of-state business in which the firm engaged, including travel, traveling expenses, long-distance telephone bills and the purchase of equipment from out-of-state companies. Consequently, the court denied the defendant’s motion to dismiss for lack of subject matter jurisdiction. Id. at 175, 182.

Defendant’s activities in this case are easily distinguished from those in EEOC v. Rinella & Rinella, 401 F.Supp. 175 (1975). In that case, there was extensive out-of-state travel for business purposes amounting to approximately $2,000.00. In addition, the firm in Rinella purchased office equipment amounting to $8,400 and law and reference books amounting to $2,500.00 from out-of-state companies. Id. at 182. In this case, it has been shown that defendant purchased office supplies from out-of-state companies, but there is no indication that these purchases affected commerce. In other words, plaintiff states that these purchases amount to substantial economic dealings which affect interstate commerce, without showing the nature and amount of these purchases, much less their origin.

Further, plaintiff alleges that defendant’s long-distance telephone bills are also indicative of substantial effect on interstate commerce. Plaintiff refers to the telephone bills because the court in Rinella included the firm’s long-distance telephone bill of $1,277.01 as one of the factors in determining that it engaged in activity affecting commerce. Rinella, 401 F.Supp. at 182. However, the law firm’s telephone bill of $1,277.01 is a far cry from the $175.00 long-distance charges incurred by the defendant over a one-year period, the same amount of time reflected in Rinella’s charges, especially in light of many of defendant’s telephone calls being the result of unauthorized use of its telephones by its wards.

Although there is no set of standards an activity must meet in order to determine whether it affected commerce within the meaning of the Civil Rights Act of 1964, the economic effect on interstate commerce must be substantial. Katzenbach v. McClung, 379 U.S. 294, 85 S.Ct. 377, 13 L.Ed.2d 290 (1964) (citing with approval Wickard v. Filburn, 317 U.S. 111, 63 S.Ct. 82, 87 L.Ed. 122 (1942)). It is the opinion of this court that defendant’s long-distance telephone charges amounting to $175.00, and purchase of office supplies from various companies, is not substantial; and in fact, is a de minimis level of activity. If this activity were found to affect interstate commerce, it is conceivable that no person or entity could be excluded from the definition of “industry ... activity affecting interstate commerce.” Surely this was not the intent of Congress.

Analogous support for the result reached by this court may be found in cases before the National Labor Relations Board in which the board’s jurisdiction was at issue. It has set a $500,000.00 standard for non-retail entities below which it will not assert jurisdiction. And it has determined that out-of-state purchases below this amount are not substantial and, therefore do not affect interstate commerce. National Labor Relations Board v. Custom Excavating Inc., — N.L.R.B. -, 98 L.R.R.M. 2259, enforced 575 F.2d 1340 (7th Cir.1978); Father Flanagan’s Boys’ Home and Boys Town Education Association, 225 N.L.R.B. 782 (1976); Cf., National Labor Relations Board v. Reliance Fuel Oil Corp., 371 U.S. 224, 83 S.Ct. 312, 9 L.Ed.2d 279 (1963). For these reasons, this court concludes that plaintiff has not met his burden of establishing that this court has jurisdiction over defendant under Title VII. Thus, the motion to dismiss Counts I and II must be granted.

Count III, The Rehabilitation Act Claim

The court must next determine whether it has jurisdiction pursuant to Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794 (1976) as alleged in Count III. First, the court must decide whether defendant is a recipient of federal funds. Recently, the Supreme Court affirmed the Third Circuit’s conclusion that a college was subject to Title IX of the Education Amendments of 1972 (20 U.S.C. § 1681 et seq.) because it received indirect federal assistance. Grove City College v. Bell, 687 F.2d 684 (3d Cir. 1982), aff'd, 465 U.S. 555, 104 S.Ct. 1211, 79 L.Ed.2d 516 (1984).

The college and its students sought to void the Department of Education’s termination of students’ financial aid; a large number of students enrolled in the college received Basic Educational Opportunity Grants (BEOGs) allocated by the Department of Education. The BEOGs were paid directly to the students; the college itself did not receive any direct federal or state assistance. However, the Department determined that the college received federal financial assistance via the students’ BEOGs, and attempted to secure an Assurance of compliance with Title IX which prohibits sex discrimination in any education program receiving federal funds. Grove City College, 687 F.2d at 684.

In determining whether the college received indirect federal financial assistance, the court considered the Department of Education’s contention that the institution fell within the definition of “recipient” in its regulations, 34 C.F.R. § 106.2(h). The Department argued that the college was a “recipient” because its students received the BEOGs from the federal government which were used to pay their educational expenses. The college, however, argued that Section 901 of Title IX did not apply to it, interpreting the statute to apply only to entities receiving direct rather than indirect federal aid. Id. at 684.

The court also considered the legislative history of Title IX, and concluded that it was consistent with the Department’s position that Title IX applies not only to institutions receiving direct financial assistance, but also to those receiving indirect aid. The court stated, “... we are satisfied that monies which are paid to students, who in turn use those funds for their education, constitute no less a part of a college’s revenues than federal monies paid directly to the institution itself.” Id. at 693. Additionally, the court said that “the Department was well within its authority when it defined ‘recipient’ to include any institution which receives federal financial assistance through another recipient” Grove City College v. Bell, 687 F.2d 684, 693 (3d Cir.1982), aff'd, 465 U.S. 555, 104 S.Ct. 1211, 79 L.Ed.2d 516 (1984).

As the Department of Education issues regulations pursuant to Title IX, so the Office of the Secretary of Labor and the Department of Health and Human Services issue regulations pursuant to the Rehabilitation Act. In both instances, the term “recipient” is defined as:

any state or its political subdivisions, any instrumentality of a state or its political subdivisions, any public or private agency, institution, organization, or other entity, or any person to which Federal financial assistance is extended directly or through another recipient, including any successor, assignee or transferee of a recipient, but excluding the ultimate beneficiary of the assistance.

29 C.F.R. § 32.3, 45 C.F.R. § 84.3(f) [emphasis supplied].

The phrase concerning receipt of federal assistance “directly or through another recipient” is the same as that used in the Department of Education’s regulations (34 C.F.R. § 106.2(h)). Thus, when defendant received its funding from DCFS which was reimbursed by the federal government, this was equivalent to Grove City College receiving indirect federal funds through its students who received BEOGs. In both cases, federal funds were received “through another recipient.” Consequently, relying on the Third Circuit’s holding in Grove City College, and on the definitions of “recipient” in the regulations issued by the Office of the Secretary of Labor and the Department of Health and Human Services, this court concludes that defendant indirectly received federal funding. Since this is so, it is subject to the Rehabilitation Act. Accordingly, its motion to dismiss as to Count III must be denied.

Alternatively, defendant argues that even if it is found to receive federal funds, its motion to dismiss should be granted because the Rehabilitation Act does not apply to employees and employment discrimination. However, as plaintiff points out, the Supreme Court recently determined that Section 504 of the Rehabilitation Act of 1973 was intended to reach employment discrimination. Consolidated Rail Corp. v. Darrone, 465 U.S. 624, 104 S.Ct. 1248, 79 L.Ed.2d 568 (1984).

In Darrone, the plaintiff brought suit against defendant for violation of his rights under Section 504 of the Rehabilitation Act. He alleged that he had been employed by the defendant and that an accident, requiring amputation of his left hand and forearm, left him disabled. Afterward, the defendant refused to employ him. Defendant moved to dismiss and the district court granted the motion on the ground that plaintiff did not have standing to sue because he did not meet the “primary objective test.” On appeal, the Third Circuit reversed and remanded. The court held that the cause of action for employment discrimination in cases brought pursuant to Section 504, was not limited to situations where a primary objective of federal financial aid was to provide or promote employment. Darrone, 104 S.Ct. at 1248.

The Supreme Court, in affirming the Third Circuit held that Section 504 was not limited to situations where the primary objective of the federal financial aid was to provide employment. Rather, “that section prohibits discrimination against the handicapped under 'any program or activity receiving Federal financial assistance.’ ” Therefore, the court concluded, "... it is unquestionable that the section was intended to reach employment discrimination.” Id. at 1253. This being so, plaintiff in this case has standing to sue pursuant to that Act; and, accordingly, this court has jurisdiction. For these reasons, defendant’s motion to dismiss as to Count III is denied.

Since Count IV is brought under the court’s pendent jurisdiction and this court finds it has jurisdiction over Count III, this court also has jurisdiction over Count IV consequently, the defendant’s motion to dismiss as to Count IV is denied. Moore v. Marketplace Restaurant, Inc., 754 F.2d 1336, 1361 (7th Cir.1985).

In summary, defendant’s motion to dismiss Counts I and II is granted and its motion to dismiss Counts III and IV is denied.

      . The deceased, Thomas LeStrange, originally brought the suit. Upon LeStrange’s death, his administratrix, Darrone, was substituted as the respondent.


author: ERWIN, District Judge.

text:
    Betsy FARLOW, Plaintiff, v. UNIVERSITY OF NORTH CAROLINA, Through ITS BOARD OF GOVERNORS; William Friday, President of the University of North Carolina in his official capacity; Western Carolina University; and Harold Robinson, Chancellor of Western Carolina University in his official capacity, Defendants.
    No. C-84-18-D.
    United States District Court, M.D. North Carolina, Durham Division.
    Dec. 24, 1985.

      John W. Gresham and Leslie J. Winner, Charlotte, N.C., for plaintiff.
    Thomas J. Ziko, N.C. Dept, of Justice, Raleigh, N.C., for defendants.
   FINDINGS OF FACT AND CONCLUSIONS OF LAW

ERWIN, District Judge.

The court conducted a trial of this action without a jury at the September 26 through October 1, 1985 Civil Session at Greensboro. Plaintiff, a tenured associate professor in the Music Department of Western Carolina University, brought this action pursuant to Title VII, 42 U.S.C. § 2000e et seq., alleging that she was sexually discriminated against in her 1980 application for promotion to full professor. Additionally, plaintiff alleges that she was retaliated against in defendants’ failure to promote her to full professor after plaintiff’s 1981 application. Defendants contend that plaintiff did not meet the minimum qualifications for promotion and deny any sexual animus or retaliation on their part.

Having fully considered the oral and documentary evidence presented by the parties and after hearing argument of counsel for the parties, the court enters its findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure.

Findings of Fact

1. Plaintiff, a white female, is employed as an associate professor of music in the Department of Music at Western Carolina University (WCU).

2. Defendant Western Carolina University is one of the sixteen constituent institutions of the University of North Carolina. During the time pertinent to this action, defendant William Friday was President of the University of North Carolina, and defendant Harold Robinson was Chancellor of Western Carolina University. The individual defendants are sued in their official capacities only.

3. Plaintiff began her employment at WCU in 1968 as an assistant professor of music. In 1969, she received her Ph.D. degree in Music History from the University of North Carolina at Chapel Hill. In 1971, plaintiff was granted tenure at WCU. In 1972, plaintiff was promoted to associate professor.

4. At the time of plaintiff’s promotion to associate professor, her primary teaching duties were to teach music history. Additionally, plaintiff taught music appreciation and occasionally piano.

5. Upon request of their department head, plaintiff and Mr. Richard Trevarthen, an associate professor of music theory, investigated the possibility of instituting a new curriculum in the Music Department.

6. This new curriculum, the Comprehensive Musicianship (CM), required the integration of traditional music history courses and traditional theory courses with other components of the curriculum, such as voice training.

7. Plaintiff and Mr. Trevarthen researched and developed a curriculum for use at WCU. In the Spring 1973, the Music Department faculty voted to establish a Comprehensive Musicianship Curriculum and assigned to plaintiff and Mr. Trevarthen the responsibility of implementing the curriculum change. This responsibility was in addition to plaintiff and Mr. Trevarthen’s teaching duties and required a substantial expenditure of time. The Comprehensive Musicianship Curriculum was implemented in 1974.

8. Plaintiff and Mr. Trevarthen developed a loose-leaf text for the CM curriculum. The text was revised and rearranged after 1977 to meet the requirements of Dr. Thomas Tyra, the head of the Music Department, as well as to reflect curriculum changes. Plaintiff provided the history portions of text. She also edited and synthesized materials prepared by Mr. Trevarthen, typed the manuscripts, and coordinated the printing of the texts at WCU. Mr. Trevarthen wrote the music theory portions and the accompanying musical illustrations. Although WCU students used the text as part of their course work, the text was never published.

9. In the Spring 1973, plaintiff presented a paper to the American Musicological Society on the “Aspect of Gospel Music.”

10. In the Spring 1978, plaintiff received a grant from the National Endowment for the Humanities for an eight-week summer seminar at Ohio State University. Plaintiff presented a paper at the seminar.

11. Plaintiff co-authored a paper in the Spring 1980 with Mr. Trevarthen entitled “Comprehensive Musicianship: A Practical Reality?” and presented the paper to the South Central Chapter of the American Musicological Society. Plaintiff also presented several papers to the Popular Culture Association.

12. Neither plaintiffs research on the harpsichord while touring Europe in the Summer 1980 nor her research on “white Gospel music” resulted in publication.

13. In September 1980, plaintiff submitted an application for promotion to full professor. This is the highest faculty rank awarded at WCU.

14. All faculty promotions at WCU are governed by the standards and procedures set out in The Code of the Board of Governors of the University of North Carolina (The Code), The Tenure Policies and Regulations of Western Carolina University (WCU Tenure Policies), the Faculty Handbook of Western Carolina University (Faculty Handbook), and, in the case of faculty in the Department of Music, the Department of Music Procedures and Criteria for Appointment, Reappointment, Non-Reappointment, Tenure and Promotion Recommendations (Department of Music Procedures).

15. As well as providing the substantive guidelines for promotion, these governing documents also specify the administrative procedure by which a faculty member’s application for promotion will be reviewed. Each candidate’s application is independently reviewed to determine whether he or she has developed a record of professional achievement which would merit the recognition which comes with promotion.

16. Plaintiff’s 1980 application was considered by the Department of Music Personnel Committee on October 28,1980. After discussing plaintiff’s application, the committee voted five to one to recommend her promotion to professor. Dr. Tyra, head of the Department of Music, also recommended that plaintiff be promoted to professor, although with reservations regarding plaintiffs lack of scholarly publications.

17. Plaintiff’s application next went to the School of Arts and Sciences Advisory Committee on Tenure and Promotion (School Committee), a committee of twelve faculty members from the School of Arts and Sciences. Six members are elected and six are appointed by Dr. John MeCrone, Dean of the School of Arts and Sciences. The Dean serves as the non-voting chairman of the committee. Dr. Tyra served on the School Committee for the 1980-81 academic year along with nine other males.

18. After a short presentation of plaintiff’s application by Dr. Tyra and a brief discussion by the committee members, the School Committee voted three to eight against recommending plaintiff for promotion. In accordance with established procedures, Dean MeCrone and Dr. Tyra abstained from voting.

19. Plaintiff’s failure to publish any scholarly work in an academic journal was the basis for the School Committee’s recommendation against promotion to full professor.

20. Dean MeCrone concurred with the School Committee’s recommendation and recommended that plaintiff not be promoted to full professor. His decision was based on his opinion that plaintiff had failed to establish an appropriate record of professional development.

21. A subsequent review by the University Wide Committee on Tenure and Promotion (University Committee), the University Committee chairman, Vice Chancellor Robert Stoltz, and Chancellor Robinson resulted in defendants’ denial of plaintiff’s application for promotion to full professor.

22. In accordance with her rights, plaintiff filed a written request for appeal with the Chancellor’s Office on March 14, 1981. In her Notice of Appeal, plaintiff complained that the decision not to promote her was not based on a fair evaluation of her qualifications, but rather on her sex and without proper consideration of WCU’s affirmative action obligations.

23. Plaintiff met with Dean MeCrone on March 30, 1981 to discuss her application and Dean McCrone’s recommendation that she not be promoted. In spite of plaintiff’s insistence, Dean MeCrone refused to compare plaintiff’s qualifications with those of Mr. Trevarthen, who had applied for promotion the same time as plaintiff and who had, in fact, been promoted to full professor. The discussion became heated, and plaintiff began to cry. Dean MeCrone apologized and stated to plaintiff that he frequently did the same thing to his wife.

24. Plaintiff supplemented her original application and had another faculty member, Dr. Temple Smith, present her case for promotion at the appeal before the School Committee on April 9,1981. In response to a question at the appeal meeting, Dr. Tyra stated that in his opinion, Mr. Trevarthen’s contribution to the CM text was more original and creative than plaintiff’s contribution to the music history portion of the text.

25. During the appeal process, plaintiff met with Vice Chancellor Stoltz several times to express her concerns that proper credit was not given to her contributions to the CM text and that Mr. Trevarthen was promoted even though he possessed comparable qualifications as plaintiff.

26. After plaintiff’s appeal was denied, she filed a grievance with the WCU Grievance Committee. Plaintiff asserted, inter alia, that Vice Chancellor Stoltz and Dean MeCrone had failed to assure that WCU’s affirmative action goals were properly considered when reviewing her application for promotion and that Dr. Tyra had unfairly represented her qualifications for promotion to the School Committee. Dean MeCrone, Vice Chancellor Stoltz, and a majority of the School Committee members responded to the grievance.

27. The Grievance Committee decided that it did not have jurisdiction over plaintiff’s claim that WCU had failed to follow its affirmative action plan when it decided not to promote her in 1980-81.

28. Dr. Tyra made several sexist remarks to Dr. Joyce Farwell, a female faculty member in the Music Department, that reveal sexual animus on his part. Specifically, Dr. Tyra informed Dr. Farwell when she complained about not having a full-time position while teaching a full course load that if she was not happy with her position she “could always sell her body.” Additionally, Dr. Tyra commented after a performance by Dr. Farwell that her work “wasn’t bad for a broad.”

29. Although WCU’s affirmative action plan required so, no committee on women and minorities existed at the University.

30. The promotion of two male faculty members, Mr. Raymond Nelson in 1977-78 and Mr. Jack Barnette in 1978-79, does not support a finding of sexual discrimination, although neither men possessed a doctorate degree or any publications in refereed journals. Both men were members of the School of Business, and both were promot- ' ed before the upgrading of standards for promotion at the University. These factors make comparisons to plaintiff impossible.

31. Mr. Trevarthen’s work as an arranger has earned him a considerable reputation throughout the Southeast.

32. Plaintiff again applied for promotion to full professor in the 1981-82 school term. She received a unanimous vote of support from the Department Committee, along with Dr. Tyra’s recommendation. However, the School Committee, which included seven members from the previous year, voted eight to three to advise against promotion.

33. The School Committee members were aware of plaintiff’s previous grievance and appeal charging sexual discrimination in the decision not to promote plaintiff to full professor.

34. After exhaustion of the administrative process for promotion, plaintiff’s 1981 application for promotion to full professor was also rejected.

35. Plaintiff did not produce any scholarly work that resulted in publication between her 1980 and 1981 applications for promotion to full professor.

36. The decision not to promote plaintiff in 1981-82 was based on the fact that no significant change existed in plaintiff’s record for professional development.

Discussion

Sexual Discrimination Claim

In a discriminatory employment case under Title VII, the plaintiff must carry the initial burden of establishing a prima facie case of racial discrimination. Once the plaintiff has established a prima facie case, the burden shifts to defendant to articulate legitimate, non-discriminatory reasons for the employment action. If the defendant carries its burden, then the plaintiff must show that the reasons offered by the defendant are not true, but are a pretext for discrimination. Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1980).

Plaintiff attempts to create an inference of sexual animus that would support a finding of sexual discrimination by showing that the two male decision-makers, who had the greatest role in the promotion decision, made specific sex-based derogatory comments about female faculty members. The court is particularly disturbed at the offensive (and undisputed) comments made to Dr. Farwell, a female faculty member, by Dr. Tyra, head of the Music Department. These comments well support a finding of sexual bias on the part of Dr. Tyra.

Additionally, plaintiff attempts to create an inference of sexual discrimination by showing that defendants failed to implement their affirmative action plan. Indeed, the court finds that defendants did not follow their own affirmative action plan. Such failure served to relax the University’s general attitude toward eliminating racial and sexual bias.

However, in order for plaintiff to ultimately prevail on her first claim in which she alleges that she was sexually discriminated against in her 1980 application for promotion to full professor, she must show that she met minimum qualifications for appointment as a full professor and was not promoted and that defendants promoted males with similar qualifications as she. Smith v. University of North Carolina, 632 F.2d 316 (4th Cir.1980). Thus, the issues before the court are whether plaintiff possessed minimum qualifications for promotion to full professor and whether defendants promoted males with similar qualifications as plaintiff.

After a careful review of the record, the court concludes that plaintiff did not meet the minimum qualifications for promotion to full professor. Plaintiff failed to demonstrate a sufficient record of professional development through scholarly research and publication. Although plaintiffs contribution to the Comprehensive Musicianship Curriculum program and text was a significant professional endeavor, it did not compensate for the lack of scholarly publication.

The court’s subsequent inquiry is whether defendants promoted males with similar qualifications as plaintiff. The court holds that defendants did not do so. Plaintiff’s primary comparative is Mr. Richard Trevarthen, another faculty member in the Music Department, who was promoted to full professor in 1980-81. Plaintiff and Mr. Trevarthen hold different roles in music education; plaintiff is a music historian, and Mr. Trevarthen is a music theorist. Consequently, the standard for evaluation of each one’s professional development will differ. Although Mr. Trevarthen possessed neither a doctorate degree nor scholarly publications, he demonstrated sufficient record of professional development as a music theorist. The court finds Mr. Trevarthen’s body of creative works, both original compositions and arrangements, impressive.

Retaliation Claim

Plaintiff contends that defendants’ failure to promote her to full professor in 1981 was in retaliation for her charge of sexual discrimination. Providing guidance as to the governing law of Title VII retaliation cases within this circuit, the court in Ross v. Communications Satellite Corp., 759 F.2d 355, 365-66 (4th Cir.1985), held that in order for an employee to disprove a legitimate, non-discriminatory explanation for adverse action, the employee must show that the adverse action would not have occurred “but for” the protected conduct. Stated in the converse, defendants must show that plaintiff would not have been promoted to full professor in 1981 in any event. The court finds that there was no significant change from plaintiff’s 1980 application to her 1981 application. Having already found that plaintiff did not meet the minimum qualifications for promotion to full professor from her 1980 application, the court now finds that plaintiff would not have been promoted to full professor in any event in 1981.

Conclusions of Law

1. All parties are properly before the court, and the court has jurisdiction over this action pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. Western Carolina University is an employer within the meaning of 42 U.S.C. § 2000e(b).

2. This is an individual treatment case. Two issues are before the court. The first issue is whether defendants discriminated against plaintiff on the basis of her sex in its failure to promote her to full professor in 1980-81. The second issue is whether defendants retaliated against plaintiff because of her complaints of alleged sexual discrimination.

3. The court finds that plaintiff has established a prima facie case of sexual discrimination.

4. Defendants, however, have articulated legitimate, non-discriminatory reasons for its decision not to promote plaintiff to full professor in 1980-81.

5. Plaintiff has failed to meet her burden of proof by a preponderance of the evidence that defendants violated Title VII with respect to defendants’ failure to promote her in 1980-81.

6. The court finds that plaintiff has established a prima facie case of discrimination in retaliation for the filing of complaints of sexual discrimination to the Chancellor’s Office.

7. Defendants, however, have articulated legitimate, non-discriminatory reasons for its decision not to promote plaintiff to full professor in 1981-82.

8. Plaintiff has not met her burden of proof by a preponderance of the evidence that defendants violated Title VII by retaliating against her for complaints of alleged sexual discrimination.

A Judgment will be filed contemporaneously with these Findings of Fact and Conclusions of Law dismissing this action with prejudice as to the defendants and without the assessment of costs.


author: SWEET, District Judge.

text:
    Dixon CHOK and George Chok & Sons, Sdn. Bhd., Plaintiffs, v. S & W BERISFORD, PLC, J.H. Rayner Ltd., Chris Ariel, and Berisford Trading, Sdn. Bhd., Defendants.
    No. 85 Civ. 1363 (RWS).
    United States District Court, S.D. New York.
    Dec. 24, 1985.
    Michele Forzley, New York City, for plaintiffs.
    Barrett Smith Schapiro Simon & Armstrong, New York City (Robert C. Macek, of counsel), for defendants S & W Berisford PLC, J.H. Rayner and Chris Ariel.
   OPINION

SWEET, District Judge.

Defendants S & W Berisford, PLC (“Berisford”), a corporation engaged in international trade, J.H. Rayner, Ltd. (“Rayner”), a subsidiary of S & W Berisford, Chris Ariel, an employee of Rayner (“Ariel”), and Berisford Trading Sdn. Bhd. (“Berisford Trading”), also a subsidiary of S & W Berisford, have moved pursuant to Fed.R. Civ.P. 12(b)l to dismiss the complaint of plaintiffs Dixon Chok, George Chok & Sons Sdn. Bhd. (Chok & Sons) (collectively “Chok”), for lack of subject matter jurisdiction, and have also requested leave to file a motion for attorney’s fees and costs under Rule 11, Fed.R.Civ.P., alleging that plaintiffs’ action was brought for improper purposes and without a chance for success. Chok and Chok & Sons have moved pursuant to Fed.R.Civ.P. 15(a) for leave to amend their complaint to cure an inadvertent failure to allege the facts establishing diversity jurisdiction. For the reasons stated below, the plaintiffs’ motion for leave to amend the complaint and the defendants’ motion to dismiss the amended complaint will be granted. The defendants’ motion for attorney’s fees and costs will be denied.

Chok, a trader in the cocoa industry, has sued for breach of an alleged oral agreement to assign contractual obligations to buy and sell cocoa beans and for damage to business reputation resulting from alleged misrepresentations made in connection with' the repudiation of the oral agreement. According to the complaint, on or about September 21 and 22, 1982, Rayner entered into contracts to purchase 24 shipments of a total of 900 tons of cocoa beans from Sakilan Desa SDN, BHD (“Sakilan”), a quasi-governmental corporation from Malaysia which is not a party to this action. The contracts were negotiated between Ariel, a Rayner employee, and Chok, the then-general manager of Sakilan. Plaintiffs allege that, at the same time that those written agreements were entered into, Ariel also orally agreed on behalf of Rayner that after two shipments of cocoa beans the seller’s obligations under the contracts would be assigned to Chok & Sons. The complaint states that defendants repudiated this agreement and thereby caused Chok to be wrongfully discharged by Sakilan and that plaintiffs’ business reputations were also damaged by certain communications made by Rayner to Sakilan that plaintiffs were financially unsound.

Subject matter jurisdiction in this case is based solely on diversity. According to the complaint, Chok is a citizen of Malaysia, residing in Tawaee, Malaysia, and Chok & Sons is a corporation formed under the laws of Malaysia and maintaining its principal place of business in the State of Sebah, Malaysia. The parties agree that 1) Berisford is a corporation formed under the laws of the United Kingdom and maintains a place of business in London, England; 2) Rayner, a subsidiary of S & W Berisford, is also a corporation formed under the laws of the United Kingdom; 3) Ariel is a British subject residing in the United States; and 4) Berisford Trading is a corporation formed under the laws of the Country of Malaysia and is a wholly-owned subsidiary of Berisford.

Plaintiffs allege that Berisford and its subsidiary, Rayner, both have principal places of business in New York, are involved in substantial corporate activity in the United States and “have close ties with the New York commercial fabric and United States futures markets.” Plaintiffs claim that due to such activity, Berisford and Rayner are citizens of New York and that such citizenship establishes jurisdiction by diversity with Chok and Chok & Sons, as aliens. According to the defendants, even assuming that corporations chartered by foreign states may be considered United States citizens for diversity purposes, Berisford and Rayner are at best dual citizens of both the United Kingdom and the State of New York, so that they remain aliens, non-diverse to the alien plaintiffs and that, even if Berisford and Rayner are deemed to be exclusively New York citizens, the presence of Ariel and Berisford Trading as additional defendants destroys complete diversity. Defendants also argue that due to the obvious lack of jurisdiction, the action could only have been brought for “an improper purpose such as to harass or to coerce unnecessary delay or needlessly increase the cost of litigation.”

Discussion

a) Leave to Amend

Rule 15(a), Fed.R.Civ.P., provides that a party may amend his pleading by leave of the court or by written consent of the adverse party and that “leave shall be freely given when justice so requires.” In this action, plaintiffs seek leave to amend their original complaint to include facts establishing Berisford and Rayner’s principal place of business. For purposes of considering the defendants’ motion to dismiss, leave to amend the complaint is granted. Abdul-Warith v. Arthur G. McKee and Co., 488 F.Supp. 806, 309 n.2 (E.D.Pa.1980) (granting leave to amend complaint where plaintiff failed to allege diversity with respect to defendant’s principal place of business), aff'd, 642 F.2d 440 (3d Cir.1981).

b) Diversity Jurisdiction

Federal diversity jurisdiction exists in a controversy between citizens of a state and citizens or subjects of a foreign state. 28 U.S.C. 1332(a)(2). For diversity purposes, § 1332(c) states that “a corporation shall be deemed a citizen of any state by which it has been incorporated and of the state where it has its principal place of business.” According to Chok, the defendants Berisford and Rayner both have their principal places of business in New York and that, therefore, under § 1332(c) they are New York citizens, diverse from the. alien plaintiffs.

There is some question as to whether alien corporations enjoy such dual citizenship under the federal diversity statute. See Eisenberg v. Commercial Union Assurance Co., 189 F.Supp. 500 (S.D.N.Y. 1960). It is not necessary to address this issue, however, because in this case the presence of Ariel, a British subject, and the foreign-chartered corporation, Berisford Trading, as defendants, destroys complete diversity. Regardless of the status of Berisford and Rayner, there are still aliens on both sides of the action. The presence of aliens in both sides of a controversy will defeat diversity jurisdiction. IITv. Vencap Ltd., 519 F.2d 1001, 1015 (2d Cir.1975). When there are alien parties on both sides of the controversy, jurisdiction will be found lacking even though they are citizens of different foreign countries, or one is a resident or domiciliary of the United States. Cuozzo v. Italian Line, “Italia”— Societa Per Azioni Di. Navigazione—Genoa, 168 F.Supp. 304, 305-06, (S.D.N.Y. 1958). Ferrigno v. Ocean Transport, Ltd, 188 F.Supp. 179, 180 (S.D.N.Y.1960). Thus the fact that Ariel, a British subject, is presently employed and residing in New York City does not impart this alien with United States citizenship status for diversity purposes. Moreover, there has been no allegation that Berisford Trading is anything but an alien corporation with its principal place of business abroad. Therefore, the inclusion of these alien defendants in an action brought by alien plaintiffs destroys diversity jurisdiction.

The contention that Ariel and Berisford Trading are merely “additional parties” under 28 U.S.C. § 1332(a)(2) whose presence does not affect on this court’s jurisdiction of the action is without merit. Under § 1332(a)(3), diversity jurisdiction exists in an action between citizens of different states where aliens are additional parties. If the defendant, an alleged New York corporation, was being sued in this action by citizens of different states, then the presence of Ariel and Berisford Trading would not affect diversity jurisdiction. Plaintiffs, however, are not citizens of states other than New York, they are citizens of a foreign country. Therefore, the “additional parties” provision of § 1332(a)(3) is not applicable, see K & H Business Consultants Ltd v. Cheltonian, 567 F.Supp. 420 (D.N.J.1983).

Were it necessary to reach the issue of the citizenship of Berisford and Rayner for diversity purposes, the complaint would still be dismissed for lack of subject matter jurisdiction. This is because, assuming arguendo that § 1332(c) is applicable to these foreign-charter defendants (and there is substantial authority to the contrary) it would then function as it does for domestic corporations, conferring dual citizenship on the defendants, making them citizens of both New York and the United Kingdom. Section 1332(c) creates a principle of dual citizenship, not alternative citizenship. Hercules, Inc. v. Dynamic Export Corp., 71 F.R.D. 101 (S.D.N.Y.1976). In the Hercules case, a party sought to establish that a corporation chartered in the Bahamas with its principal place of business in Delaware should be considered only a citizen of Delaware for diversity purposes. The court, in finding that the corporation was a citizen of both places, stated that under the principle of dual citizenship, “where a corporation is incorporated in a state A and has its principal place of business in state B, and the adverse party is a citizen of either A & B, diversity is lacking ... Likewise ... when an alien corporation with its principal place of business in state A is adverse to either an alien or a citizen of state A, diversity is lacking.” Hercules at 107, citing Bank of California Nat’l Ass’n v. Twin Harbors Lumber Co., 465 F.2d 489 (9th Cir.1972); Inland Western Inv. Co. v. Winkler Realty Corp., 65 F.R.D. 515 (S.D. N.Y.1975) (MacMahon, J.) This is consistent with the legislative intent of limiting federal jurisdiction by creating diversity jurisdiction. This reasoning was adopted in Corporacion Venezolana de Fomento v. Vintero Sales, 477 F.Supp. 615 (S.D.N.Y. 1979). Therefore, even if § 1332(c) applies to alien corporations, and even if defendants S & W Berisford and Rayner have New York as their principal place of business, the fact that they are incorporated under the laws of the United Kingdom would make them dual citizens of both New York and the United Kingdom. As British subjects they are aliens, non-diverse from aliens Chok and Chok & Sons, both of which claim only Malaysia as their place of citizenship. Thus common alienage by virtue of corporate dual citizenship would destroy diversity between the parties.

For the reasons stated above, plaintiff has failed to establish that diversity exists under § 1332(c) and the motion to dismiss for lack of subject matter jurisdiction is granted. However, due to the lack of uniform authority on the subject of the citizenship of alien corporations under § 1332(c), the action brought by plaintiff was not brought without conceivable hope of success and, therefore, defendants’ request for leave to move for sanctions under Rule 11, is denied.

The complaint is dismissed and the clerk is directed to enter judgment to this effect with costs to the defendants.

IT IS SO ORDERED.

      . See Union Marine & General Ins. Co. v. American Export Lines, Inc., 274 F.Supp. 123, 125 n.1 (S.D.N.Y.1966); Tsakonites v. Transpacific Carriers Corp, 246 F.Supp. 634, 641 (S.D.N.Y. 1965); aff'd, 368 F.2d 426 (2d Cir.); Chemical Transportation Corp. v. Metropolitan Petroleum

        Corp., 246 F.Supp. 563 (S.D.N.Y. 1964) (all per Cooper, J.); Mazzella v. Pan Oceanica A/S Panama, 232 F.Supp. 29, 31 n.l (S.D.N.Y.1964); Eisenberg v. Commercial Union Assurance Co., 189 F.Supp. 500 (S.D.N.Y.1960).

      . See Sen.Rep. No. 1830, 85th Cong. 2d Sess.; H.Rep. No. 1706, 85th Cong. 2d Sess. (1958), U.S.Code Cong. & Admin.News 1958, 3099.


text:
    NYSA-ILA GAI FUND, NYSA-ILA Vacation and Holiday Fund and NYSA Container Royalty Fund, Plaintiffs, v. Joseph M. POGGI, Defendant.
    No. 85 Civ. 2249 (RWS).
    United States District Court, S.D. New York.
    Dec. 24, 1985.
   MEMORANDUM OPINION

SWEET, District Judge.

Plaintiffs, NYSA-ILA GAI Fund, NYSA-ILA Vacation and Holiday Fund and NYSA container Royalty Fund (collectively, the “Funds”) have brought a motion for reargument pursuant to Local Rule 3(j) requesting that this court reconsider the September 16, 1985 opinion dismissing this action, 617 F.Supp. 847. The motion for reconsideration is hereby granted to permit the following amendment of the September 16 opinion.

The Funds correctly note on this motion that the September 16 opinion mischaracterized the Funds as “pension plans.” The Funds, however, are not pension plans but rather are other types of ERISA benefit plans. Notwithstanding this amendment of the court’s findings, the reasoning of the September 16 opinion still applies to the Funds. Each of the ERISA sections relied upon by the September 16 opinion are applicable to ERISA “fringe benefit trust funds” as well as pension funds. See 29 U.S.C. § 1132(a)(2); (a)(3)(A); (a)(3)(B). Moreover, the case law of this Circuit which restricted the federal court’s jurisdiction over individual pension plan disputes supports the denial of jurisdiction in the present context of a fringe benefit plan.

The Funds' citation of this court’s decision in NYSA-ILA GAI Fund v. Rinaldi, 100 Labor Rel. Case Rep. (CCH) ¶ 10,838 (S.D.N.Y.1983), is not of significant precedential value since the opinion of the Honorable Charles S. Haight, Jr. assumed without question an apparent opposition that jurisdiction was proper under 29 U.S.C. § 301. However, as stated in Hagans v. Lavine, 415 U.S. 528, n. 5 at 535, 94 S.Ct. 1372, n. 5 at 1378 (1974):

When questions of jurisdiction have been passed on in prior decisions sub silentio, this Court has never considered itself bound when a subsequent case finally brings the jurisdictional issue before us.

Upon reconsideration, the September 16 opinion dismissing this action, having been amended as provided herein, is reaffirmed.

IT IS SO ORDERED.