author: CARRIGAN, District Judge.

text:
    JOHNS-MANVILLE CORPORATION and Johns-Manville Sales Corporation, Plaintiffs, v. The UNITED STATES of America, Defendant.
    Civ. A. Nos. 84-C-893, 84-C-894.
    United States District Court, D. Colorado.
    Jan. 22, 1985.

      Montgomery, Green & Jarvis, James K. Green, H. Keith Jarvis, Englewood, Colo., Dennis Markusson, Robert Batson, Helen Marsh, Rodger Wilson, Denver, Colo., for plaintiffs.
    Linda A. Halpern, Richard K. Willard, U.S. Dept, of Justice, Washington, D.C., for defendant.
   MEMORANDUM OPINION AND ORDER

CARRIGAN, District Judge.

In these two actions, Johns-Manville Corporation and Johns-Manville Sales Corporation (collectively referred to as “Johns-Man-ville”) seek reimbursement or indemnification for damages paid by them in settlement of two asbestos-related actions filed in the Superior Court of California for Los Angeles County. Civil Action No. 84-C-893 seeks reimbursement for the plaintiffs’ $30,000 settlement with Hessuph W. Sexton, who was allegedly exposed to the plaintiffs’ asbestos products while employed at Long Beach Naval Shipyard, California, from 1944 to 1975. Civil Action No. 84-C-894 seeks similar relief in connection with the plaintiffs’ $67,000 settlement with Philsun Owen, who was allegedly exposed while employed by Pearl Harbor Naval Shipyard from 1941 to 1945 and by Long Beach Naval Shipyard from 1950 to 1954 and 1959 to 1978.

Plaintiff Johns-Manville Corporation was incorporated in New York and plaintiff Johns-Manville Sales Corporation was incorporated in Delaware. The headquarters and principal place of business for both plaintiff corporations has been located in Jefferson County, Colorado since 1971.

The complaints in these two cases are virtually identical; each asserts the same six claims for relief. The plaintiffs assert their First, Second, Third and Fourth claims under the Federal Tort Claims Act, 28 U.S.C. § 1346(b), their Fifth claim under the fifth amendment to the United States Constitution, and their Sixth claim under the Public Vessels Act, 46 U.S.C. § 781 et seq. and the Suits in Admiralty Act, 46 U.S.C. § 741 et seq.

The United States has moved, pursuant to Fed.R.Civ.P. 12(b)(3), to dismiss the First, Second, Third, Fourth and Fifth claims in each case on the ground that venue is not proper in Colorado under 28 U.S.C. § 1402(b) and 28 U.S.C. § 1391(e). Alternatively, the United States has moved to transfer the cases to the United States District Court for the Central District of California.

The venue provision applicable to suits under the Federal Tort Claims Act is 28 U.S.C. § 1402(b). It provides that:

“Any civil action on a tort claim against the United States under subsection (b) of section 1346 of this title [28 U.S.C. § 1346(b) ] may be prosecuted only in the judicial district where the plaintiff resides or wherein the act or omission complained of occurred.”

The statute controlling venue for claims against the United States arising under thé Constitution is 28 U.S.C. § 1391(e), which provides for venue in any judicial district in which:

“(1) a defendant in the action resides, or (2) the cause of action arose, or (3) any real property involved in the action is situated, or (4) the plaintiff resides if no real property is involved in the action.”

Subsection (1) has no application because in cases where the United States is the sole defendant, it cannot be treated as residing in a district merely because it maintains an office there. To conclude otherwise would render the remaining three venue limitations superfluous in any suit against the United States. See Reuben H. Donnelley Corp. v. F.T.C., 580 F.2d 264, 267 (7th Cir.1978). I conclude that the United States does not reside in Colorado for purposes of this venue provision. Moreover, subsection (3) does not apply because no real property is involved in this action.

I. Residence of a Corporate Plaintiff for Venue Purposes.

It is clear that a corporate defendant resides for vénue purposes in any judicial district in which it is incorporated or licensed to do business or is doing business. See 28 U.S.C. § 1391(c). But all seven circuit courts which have addressed the question where a corporate plaintiff resides for venue purposes have held that residence is limited to the state of incorporation. Rosenfeld v. S.F.C. Corp., 702 F.2d 282, 283 (1st Cir.1983); Reuben H. Donnelley Corp. v. F.T.C., 580 F.2d 264, 270 (7th Cir.1978); Data Disc, Inc. v. Systems Technology Associates, 557 F.2d 1280, 1289 (9th Cir.1977); American Cyanamid Co. v. Hammond Lead Products, Inc., 495 F.2d 1183, 1184-86 (3d Cir.1974); Manchester Modes, Inc. v. Schuman, 426 F.2d 629, 629-32 (2d Cir. 1970); Carter-Beveridge Drilling Co. v. Hughes, 323 F.2d 417, 418 (5th Cir.1963); Robert E. Lee & Co. v. Veatch, 301 F.2d 434, 435-38 (4th Cir.1961), cert. denied, 371 U.S. 813, 83 S.Ct. 23, 9 L.Ed.2d 55 (1962). The Tenth Circuit has not yet addressed this issue.

A number of district courts that have examined the issue of a corporate plaintiffs residence have concluded that a corporate plaintiff may be treated for venue purposes as residing both in the district of its incorporation and in the district where its principal place of business is located. In Combs Airways, Inc. v. Trans-Air Supply Company, 560 F.Supp. 865, 868 (D.Colo.1983), Judge Kane held that venue is proper under section 1391(a) in the district where a corporate plaintiff has its principal place of business. After noting that section 1391(c) provides that a corporation may be used in any judicial district in which it is incorporated, or licensed to do business or is doing business, his opinion reasoned:

“Because of modern corporate practices, venue and jurisdictional concepts have been broadened to accommodate the realities of contemporary business. The principal place of business may be considerably more significant to jurisdiction and venue than the place of incorporation. While I am aware that courts are not in agreement on this issue, I hold that this broader interpretation should apply to a corporation which institutes a suit as well as to one subject to suit. Another district court came to the same conclusion in Munsingwear, Inc. v. Damon Coats, Inc., 449 F.Supp. 532 (D.Minn.1978).”

In Munsingwear, the court rejected the distinction that had been drawn by most courts between the residence of corporate plaintiffs and corporate defendants for venue purposes, stating:

“Venue rules are intended to facilitate convenience of the parties, and the convenience of the plaintiff, who chose the forum, normally should be given deference. Gardner Eng. Corp. v. Page Eng. Co., 484 F.2d 27, 33 (8th Cir.1973). Given these principles, it makes little sense to adopt a rule whereby a plaintiff corporation is not considered a resident, for venue purposes, of the state where its principal place of business is located simply because it chose for business purposes to incorporate in a state other than the one where it in fact does most of its business.” 449 F.Supp. at 537-38.

Similarly, the court in Inter-Collegiate Press Inc. v. Myers, 519 F.Supp. 765 (D.Kan.1981), acknowledged the many decisions holding that a corporate plaintiff is a resident within the meaning of section 1391(a) only in the state in which it is incorporated, but concluded that “the better view with regard to residence of a corporation for venue purposes is found in Munsingwear, Inc. ...” 519 F.Supp. at 769.

Upjohn Company v. Finch, 303 F.Supp. 241 (W.D.Mich.1969), is particularly instructive because of its in-depth examination of opposing points of view, and because it specifically addressed the residency question in the context of 28 U.S.C. § 1391(e). In holding that the residence of a corporate plaintiff for purposes of venue under section 1391(e) includes its principal place of business, the Upjohn court stated:

“To hold otherwise would create a paradoxical interpretation of § 1391(c) which would result in having corporate residence mean one thing to a corporate plaintiff and something entirely different to a corporate defendant. Nothing has been brought to the attention of this Court which would suggest that the Congress intended such a result. Adherence to the liberal interpretation of subsection (c) seems especially appropriate to this Court in light of the fact that the legislative history demonstrates that the principal reason for the enactment of § 1391(e) was to expand upon the number of judicial districts in which suit against the government or officers thereof could be heard and relieve the burden previously imposed upon the courts of the District of Columbia. The court takes judicial knowledge of the fact that many corporations, large and small, are incorporated in the State of Delaware and have no other relationship to such state. To move the tremendous volume of suits against the Government and its officers from the District of Columbia to the District of Delaware does not appear to have been the intent of the Congress.” 303 F.Supp. at 254.

II. Venue where “The Cause of Action Arose” or “The Act or Omission Complained of Occurred.

The Manville plaintiffs have argued alternate grounds to support venue in this district. They seek to rely on 28 U.S.C. § 1391(e), which provides for venue where “the cause of action arose.” Similarly, they cite 28 U.S.C. § 1402(b), which provides for venue in the district “wherein the act or omission complained of occurred.”

I ordered the parties to present evidence on the issues of where the cause of action arose and where the act or omission complained of occurred. They were directed to consider Thornwell v. United States, 471 F.Supp. 344, 355-57 (D.D.C.1979), in preparing the record. A hearing was held on October 26, 1984. Johns-Manville thereafter submitted the documentary evidence on which it relies for venue in Colorado.

In Thomwell, the court applied a “preponderance of the contacts” test. 471 F.Supp. at 357.

“[W]here ‘the claim arose’ should in our view be ascertained by advertence to events having operative significance in the case, and a commonplace appraisal of the implications of those events for accessibility to witnesses and records.” 471 F.Supp. at 356, citing Lamont v. Haig, 590 F.2d 1124, 1134 (D.C.Cir.1978).

The court stated that a district court should accept venue “if the activities that transpired in the forum district were not insubstantial in relation to the totality of events giving rise to plaintiff’s grievance.” Id.

In these actions, Johns-Manville is claiming reimbursement for damages paid to two naval shipworkers in settlement of claims filed in a California Superior Court (Los Angeles County) alleging injuries sustained as a result of exposure to asbestos in California. The Central District of California thus appears to be the district where the greatest number of events having operative significance in the case occurred. Johns-Manville relies upon extensive, although generalized, contacts through the years between the United States as a major purchaser of asbestos products and JohnsManville as a major manufacturer of asbestos products. The United States’ relationship with Johns-Manville resulted in contacts with Colorado only because JohnsManville moved its corporate headquarters to Colorado in 1971. In my view, something more than these generalized contacts is required to support venue in Colorado on the basis that Colorado is the district where the cause of action arose or the act or omission complained of occurred.

III. Conclusion.

Having concluded that venue is not properly laid in Colorado on this alternate basis, I hold that venue is proper here on the basis that Johns-Manville resides in Colorado for venue purposes because its principal place of business is located here. Thus I concur with Judge Kane’s conclusion in Combs Airways, supra, that this approach better accommodates the “realities of contemporary business.”

Accordingly,

IT IS ORDERED that the United States’ motion to dismiss, or in the alternative to transfer these cases to the Central District of California, is denied.


source: Caselaw Access Project

author: DONALD J. PORTER, District Judge.

license: Public Domain

text:
    Betty R. ROUBIDEAUX, Plaintiff v. Linda COX, Individually and in her capacity as caseworker for the State of South Dakota, Rodney Lanz, Individually and in his capacity as caseworker for the Department of Social Services of the State of South Dakota, Defendants.
    Civ. No. 83-3053.
    United States District Court, D. South Dakota, C.D.
    Jan. 22, 1985.
    Robert A. Sambroak, Jr., Kadoka, S.D., for plaintiff.
    Richard Dale, Asst. Atty. Gen., Pierre, S.D., for defendants.
   MEMORANDUM OPINION

DONALD J. PORTER, District Judge.

Plaintiff brought this action pursuant to 42 U.S.C. § 1983 against two caseworkers of the South Dakota Department of Social Services, [DSS] in their individual and official capacities, the DSS itself, and the state of South Dakota. Plaintiff requested damages in the amount of $20,000, alleging that defendants deprived plaintiff of public assistance, under the Aid to Families with Dependent Children [ADC] program, in violation of plaintiff’s due process rights. Before the trial, the court dismissed the action as to the state and the DSS, and as to defendants in their official capacities. The jury returned a verdict for plaintiff in the amount of $2,000 against defendant Rodney Lanz in his individual capacity. No appeal from this verdict was taken by any party. Plaintiff has timely moved for an award of attorney’s fees under 42 U.S.C. § 1988.

Defendant claims, initially, that fees cannot be awarded under § 1988 against defendant acting in his individual capacity without a showing of bad faith. The case defendant mainly urges in this regard is Pickett v. Milam, 579 F.2d 1118 (8th Cir. 1978). In Pickett, the plaintiffs brought an action for declaratory and injunctive relief against a county election commission. Plaintiffs contended that the county’s apportionment plan violated equal protection, and plaintiffs prevailed on this contention. A motion for attorney’s fees was made, but was apparently denied because the district court believed that any award of fees could be made only against the defendants in their individual capacities, and that there was no showing of bad faith to justify such an award. The Eighth Circuit agreed that there was no indication of bad faith in the record, and “[t]hus, no award of attorney fees against the appellees in their individual capacities is justified.” 579 F.2d at 1120. The rule in Pickett, however, is inapplicable here.

Pickett, as noted above, involved a suit for injunctive and declaratory relief against government officials in their official as well as individual capacities, as was the situation in Hutto v. Finney, 437 U.S. 678, 98 S.Ct. 2565, 57 L.Ed.2d 522 (1978). Hutto makes it clear that

suits brought against individual officers for injunctive relief are for all practical purposes suits against the state itself ... in such suits attorney’s fee awards should generally be obtained “either directly from the official, in his official capacity, from funds of his agency or under his control, or from the state or local government (whether or not the agency or government is a named party).” ... Awards against the official in his individual capacity, in contrast, were not to be affected by the statute; in injunctive suits they would continue to be awarded only “under the traditional bad faith standard recognized by the Supreme Court in Alyeska.”

Hutto, 437 U.S. at 700, 98 S.Ct. at 2578.

Unlike both Hutto and Pickett, however, this was not an injunctive action against state officials acting in their official capacity; as tried, this was a claim for damages against an official for a constitutional tort committed by that person in his individual capacity. Even assuming that bad faith is required to be shown to justify an award of fees against such a defendant, though, the court is satisfied that there is an adequate record to support the award of fees here.

Defendant affirmatively pled the defense of good faith immunity, and the court instructed the jury that it could find for the plaintiff only if the defendant knew or should have known that his actions would violate plaintiff’s constitutional rights or if defendant took the action with malicious intention to cause the violation of the plaintiff’s constitutional rights, and that defendant acted with such impermissible motivation or with such disregard of the plaintiff’s rights that his action could not be characterized as being in good faith. The fact the jury then awarded plaintiff $2,000 against defendant necessarily implies that it found against defendant on these issues. Though few cases seem to have addressed the issue, this court takes the view that “a failure to meet the requirements of the good faith qualified immunity test generally available to ... government officials ... satisfies [the] bad faith standard.” Visser v. Magnarelli, 542 F.Supp. 1331, 1336 (N.D.N.Y.1982). In the words of McNamara v. Moody, 606 F.2d 621, 627 (5th Cir.1979), a contrary result would mean that “[prevailing plaintiffs who are awarded only money damages against state officials ... would receive no attorney’s fees under the Act. Were we to read the Senate Report as mandating such a result we would be creating a significant gap in § 1988’s coverage without any basis in the statutory language.”

Defendant next argues that under Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983), plaintiffs fee request should be substantially reduced because, defendant contends, plaintiff achieved only very limited success by her action. This court does not agree. Although plaintiff requested $20,000 in her prayer for relief and won only $2,000, this was still a significant award. The court knows of no other jury trial in this district in which a plaintiff welfare mother was able to convince a jury that her rights in her welfare benefits had a monetary value, and what is more, to also convince a jury that it should award her money damages against a state official, as here. Viewed from this perspective, plaintiffs action was, in many ways, a vindication of the interests of all welfare mothers in this state. This court can find no basis for a reduction in plaintiffs award.

Plaintiffs claim is for 50.1 hours at $55 per hour, or an award of $2,755.50. While defendant insists this is excessive, an application of the normal factors which this court has stated before, Hinkle v. Christensen, 548 F.Supp. 630 (D.S.D.1982); Walker v. Wegner, 535 F.Supp. 415 (D.S.D. 1982), indicates that plaintiffs claim is actually quite modest. This was not, at least in the context of a jury trial in South Dakota, where few 42 U.S.C. § 1983 claims have prevailed, a straightforward claim. It also was not a particularly desirable action to pursue. Further, the time employed and the rate claimed are considerably less than many other civil rights actions coming before this court. In Clifford v. Janklow, 601 F.Supp 16 (D.S.D.1984), for instance, this court made an award for work done in excess of 200 hours at a rate of $65 per hour, or a total award of nearly $15,-000. This award was affirmed by the Eighth Circuit. Clifford v. Janklow, 747 F.2d 1229 (8th Cir.1984). While Clifford involved more complex issues, many of the basic rights at stake in the case were presented there, namely, the rights of a welfare recipient under federally funded welfare programs. Defendants’ detailed objections to each time entry of plaintiff’s counsel, in some cases going so far as to demand that a request for twelve minutes work be reduced to two minutes, is nothing more than carping. Plaintiff has made no request for any amount of time that is not regular, proper, or has not been the subject of a previous award. See, e.g., Clifford. To perform the type of major surgery defendant asks be done on plaintiff’s request would have the effect of actively discouraging any private attorney in the state from taking on such actions in direct contravention of the purpose of 42 U.S.C. § 1988. The court therefore awards plaintiff $2,755.50 for her attorney fees in this action.

Plaintiff also requested the sum of $137.77 in sales tax. Defendant objects to an award for this purpose, but cites no authority for his objection. It is clear, under SDCL 10-45-5.2, that such a tax is a necessary cost, however, and the court accordingly awards this sum. Finally, the court also finds the claimed trial expenses of $102.08 to be reasonable, and makes a further award for that amount.

For all the reasons given, therefore, the court awards plaintiff the total sum of $2,995.35 for her fees and expenses in this action.

      . The court also instructed the jury that, to make an award, it would have to find that defendant acted with gross negligence toward plaintiff, defining gross negligence as conscious indifference to the rights of the plaintiff.


author: NICKERSON, District Judge.

text:
    Fritz EUSTACHE, Plaintiff, v. SECRETARY OF the DEPT. OF HEALTH AND HUMAN SERVICES OF the U.S., Defendant.
    No. 83 C 3961.
    United States District Court, E.D. New York.
    Jan. 24, 1985.

      Binder & Binder, Hauppauge, N.Y. (Charles E. Binder, Hauppauge, N.Y., of counsel), for plaintiff.
    Raymond J. Dearie, U.S. Atty., Brooklyn, N.Y. (Kiyo Matsumoto, Asst. U.S. Atty., Brooklyn, N.Y., of counsel), for defendant.
   MEMORANDUM AND ORDER

NICKERSON, District Judge.

Plaintiff’s attorney moves for an award of attorney’s fees under both the Social Security Act, 42 U.S.C. § 406(b)(1), and the Equal Access to Justice Act, 28 U.S.C. § 2412(d)(1)(A). On June 21, 1984, the court reversed a determination of the Secretary of Health and Human Services denying plaintiff’s application for a period of disability and disability insurance benefits and Supplemental Security Income based on disability. Familiarity with the court’s memorandum and order is assumed.

1. Attorney’s Fees Under The Social Security Act.

Under section 406(b)(1) of the Social Security Act, a court rendering a judgment favorable to a claimant who was represented by an attorney may allow as part of its judgment a reasonable fee for representation before the court, not to exceed 25% of the total of the past-due benefits. The court determines that a fee of $100 an hour is reasonable for the 28 and V2 hours spent in litigation before this court. Plaintiff's attorney should be advised that this court will not treat the contingency agreement as a factor in setting fees under section 406(b)(1). Modica v. Secretary of Health and Human Services, 581 F.Supp. 39 (E.D.N.Y.1984). Attorneys are not entitled to a flat 25% of the past-due benefits, but only such amount as is determined and allowed as a reasonable fee. The fee is fixed at $2,850.

2. Attorney's Fees Under The Equal Access to Justice Act.

Plaintiff also moves for attorney’s fees under section 2412(d)(1)(A) of the Equal Access to Justice Act. The Act provides that “a court shall award to a prevailing party” fees “incurred by that party” in a civil action against the United States unless the position of the United States was “substantially justified” or special circumstances make an award unjust.

No party disputes the fact that attorney’s fees may be awarded under both the Social Security Act and the Equal Access to Justice Act. The application of both statutes in the same case does not lead to a duplication of attorney’s fee awards. Attorney’s fees under the Social Security Act come out of funds that would otherwise have gone to the claimant and are awarded to the claimant’s attorney. See Ocasio v. Schweiker, 540 F.Supp. 1320, 1321 (S.D.N.Y.1982). The attorney’s fees provision in the Equal Access to Justice Act, on the other hand, authorizes an award against the federal government, and to the claimant, not the claimant’s attorney. Oguachuba v. Immigration and Naturalization Service, 706 F.2d 93 (2d Cir.1983); Tripodi v. Heckler, 100 F.R.D. 736, 738 (E.D.N.Y.1983); Prettyman v. Heckler, 577 F.Supp. 997 (D.Mont.1984). See also Wolverton v. Schweiker, 533 F.Supp. 420, 423 n. 2 (D.Idaho 1982); MacDonald v. Schweiker, 553 F.Supp. 536, 538 (E.D.N.Y. 1982); Watkins v. Harris, 566 F.Supp. 493 (E.D.Pa.1983). Cf. Ceglia v. Schweiker, 566 F.Supp. 118, 120 n. 1 (E.D.N.Y.1983) (legal services is real party in interest); Smith v. Schweiker, 563 F.Supp. 891 (E.D.N.Y.1982) (legal services). The motion for attorney’s fees under the Equal Access to Justice Act is thus construed by the court as being made on behalf of the plaintiff, and not his attorney. See Oguachuba, 706 F.2d at 98.

Since the Equal Access to Justice Act is meant to encourage review of unreasonable government action by defraying the cost of legal assistance, and the claimant has indeed paid for legal assistance under the attorney’s fees provision of the Social Security Act, the claimant is entitled to apply for attorney’s fees under the Equal Access to Justice Act.

Plaintiff argues that the government’s position was not substantially justified. It is clear from the wording of the section that the “position” referred to is that of the government in this court. Smith, 563 F.Supp. at 892. While the burden of proof rests with the government, the test of whether or not a government action is substantially justified is essentially one of reasonableness. Id. See also Berman v. Schweiker, 531 F.Supp. 1149 (N.D.Ill.1982), aff'd, 713 F.2d 1290 (7th Cir. 1983) .

The Administrative Law Judge found that because the claimant had refused “reasonable investigations” that might aid in treating and alleviating his pain, the severity of claimant’s pain could not be considered totally disabling. The claimant was found to have the residual functional capacity to perform sedentary work.

It is of course true that a claimant who fails to cooperate at a consultative examination, without good cause, may have his claim dismissed. See Deuter v. Schweiker, 568 F.Supp. 1414, 1420 (N.D.Ill.1983); McCoy v. Secretary of Health and Human Services, 532 F.Supp. 359, 363 (S.D.Ohio 1981) and cases cited; Kaminski v. Califano, 465 F.Supp. 367, 371 (S.D.N.Y.), aff'd, 614 F.2d 1288 (2d Cir.1979); 20 C.F.R. §§ 404.1512-.1518. As this court found, claimant was not unreasonable in refusing a further myelogram after experiencing intense pain in a previous attempt. Furthermore, a myelogram is not ordinarily performed solely for investigatory purposes due to the hazards of such a procedure.

The evidence that the Administrative Law Judge went on to consider overwhelmingly established that the claimant could not do even sedentary work. Even the defendant’s own consulting doctors did not state facts that supported a finding that the sedentary criteria had been met. Eustache v. Secretary of the Dept. of Health and Human Services, 83 C 3961 at 9-10 (E.D.N.Y.1984) (unpublished opinion). While the mere fact that the defendant was not the prevailing party does not necessarily mean that its position was not substantially justified, see Ceglia, 566 F.Supp. at 123, the court cannot conclude that the government’s position had a reasonable basis both in law and fact. See, e.g., Kauffman v. Schweiker, 559 F.Supp. 372, 375-76 (M.D.Pa.1983) and cases cited.

Plaintiff seeks an award of $2,137.50 representing 28 and V2 hours of legal work before the court at $75 per hour. Absent special factors, $75 an hour is the maximum rate permitted by the Act. 28 U.S.C. § 2412(d)(l)(C)(2)(A). The court has examined the petition and finds $75 an hour and the 28 and lh hours reasonable. See Tripodi, 100 F.R.D. at 739-40.

The court awards plaintiff’s attorney $2,850 under the Social Security Act and awards plaintiff $2,137.50 under the Equal Access to Justice Act. So ordered.


author: JOSEPH H. YOUNG, District Judge.

text:
    UNITED STATES of America v. $23,530 IN UNITED STATES CURRENCY.
    Civ. No. Y-83-4060.
    United States District Court, D. Maryland.
    Jan. 25, 1985.

      Larry D. Adams, Asst. U.S. Atty., Baltimore, Md., for plaintiff.
    Charles W. Halleck, Gaithersburg, Md., for defendant.
   MEMORANDUM

JOSEPH H. YOUNG, District Judge.

This action concerns the forfeiture of $23,530 in cash seized from the claimant, Mack Wilson, during a drug transaction in the men’s room of a Holiday Inn. The government contends that Wilson intended to use the money for the purchase of drugs in that transaction, and that therefore the money is subject to forfeiture under 21 U.S.C. § 881(a)(6). That section provides for the forfeiture of “all money, negotiable instruments, securities, or other things of value furnished or intended to be furnished by any person in exchange for a controlled substance.” Wilson contends that he did not intend to supply the $23,530 in exchange for drugs and that the money is therefore not subject to forfeiture.

The underlying facts are as follows:

On November 25, 1983, claimant Mack Wilson, Jr. was convicted upon a plea of guilty of conspiracy to possess with intent to distribute marijuana in violation of 21 U.S.C. § 846. In the statement of facts which the government alleged it would have proved had the matter gone to trial, which was read to the Court at the time it accepted Mr. Wilson’s plea, it was stated that the money was intended to be used for the drug transaction. Wilson contested the statement that the entire sum of money was to be used to purchase drugs, but admitted that “quite a large sum” was to be used for the purchase of marijuana. It was also alleged that Wilson committed other acts in furtherance of the conspiracy and that he was aware of the conspiracy to distribute a large quantity of marijuana. This Court accepted Wilson’s plea of guilty at that time.

The government contends that Wilson’s conviction on the charges of conspiracy to distribute should be sufficient to dispose of the issue of whether the money was intended to be used for the purchase of marijuana and is therefore subject to forfeiture. Presently before the Court is the government’s motion for summary judgment and the claimant’s opposition to that motion. The government has argued that the claimant is collaterally estopped from claiming that this money was to be used in the drug transaction because of his plea of guilty to the conspiracy charge. The government’s theory is that because the claimant pleaded guilty to the charge of conspiracy, he necessarily admitted that the money he was carrying with him at the time of his arrest was intended to be used to purchase drugs, in furtherance of the conspiracy. The claimant has opposed this view, arguing that the question of whether money in Wilson’s possession was intended to be used to purchase marijuana is still very much in dispute despite the plea of guilty. A hearing was held before the Court on December 14, 1984, and testimony concerning the drug transaction in question was heard. The parties agreed that the matter of the forfeiture could be decided by the Court on the basis of that hearing regardless of the Court’s decision on the motion for summary judgment.

For reasons set forth herein, the government’s motion for summary judgment will be denied. Generally, a defendant who pleads guilty may be held to be estopped in subsequent civil litigation from contesting facts representing essential elements of the crime to which he pleads guilty. See Restatement (Second) of Judgments § 133 Comment b. In Ivers v. United States, 581 F.2d 1362 (9th Cir.1978), a case involving the forfeiture of money illegally carried into the United States, the court noted that although Ivers contended that he was ignorant of the reporting requirements, “this contention cannot survive his plea of guilty.” “We must take his plea of guilty to be an admission of each and every essential element of the offense charged, including the element of knowledge and willfulness. This being so, Ivers is now, in a suit arising out of the same transaction and involving the same parties, collaterally estopped from denying that he willfully and knowingly failed to report the currency in his possession.” See also Brazzell v. Adams, 493 F.2d 489 (5th Cir. 1974) (prisoner is estopped from denying essential elements in a § 1983 action after a guilty plea).

In general, however, the rules of collateral estoppel would seem to require that an issue be fully and actually litigated in another proceeding before a person would be estopped from claiming it in a subsequent proceeding. In Prosise v. Haring, 667 F.2d 1133 (4th Cir.1981), the Fourth Circuit held that a judgment based on a guilty plea should not have preclusive effect as to potential but not actually litigated issues regarding the exclusion of evidence on Fourth Amendment grounds. The court based its conclusion in large part on the idea that “among the most critical guarantees of fairness in applying collateral estoppel is the guarantee that the party sought to be estopped had not only a full and fair opportunity but also had an adequate incentive to litigate to the hilt.” The court found that with respect to issues representing the very elements of the crime charged, the adequacy of the incentive to litigate was manifest in relation to any guilty plea. The court reasoned, however, that there might be no real incentive to seek suppression of some evidence if the state had other evidence that would overwhelmingly lead to conviction.

The same reasoning would seem to apply in this case. The question of whether Wilson intended to furnish the $23,530 in exchange for drugs was not preclusively established unless it was an element of the crime to which he pleaded guilty. The government has argued that the only overt act to which Wilson pleaded guilty was the act of furnishing the money for the drug transaction, but Wilson has argued, and the Court agrees, that there were other overt acts specified in the government’s statement of facts that would satisfy the requirements that there be some overt act in furtherance of the conspiracy. Furthermore, Wilson did protest at the time of his rearraignment that he did not intend to furnish the entire $23,530 in exchange for drugs. While Wilson did eventually admit that he intended to use “a large sum” to purchase drugs, that admission is hardly sufficient to establish that fact conclusively for collateral estoppel purposes. Wilson would not have had the incentive to litigate that issue “to the hilt” if there were other overt acts charged against him. Therefore, the government’s motion for summary judgment on collateral estoppel grounds must be denied.

The claimant initially requested a jury trial on the forfeiture issue, but indicated at the hearing on December 14, 1984, that he was waiving his right to a jury trial and was content to have the Court decide the issue on the basis of the evidence presented at the hearing. That evidence consisted mostly of the testimony of the claimant, Mack Wilson, Jr., and of the government agent who was present at the drug transaction for which Wilson was allegedly to supply the money. Both Wilson and the government indicated that they had no other evidence that they could present. On the basis of the evidence presented, this Court holds that the $23,530 seized from Mack Wilson is subject to forfeiture.

The burden of proof in a forfeiture action is set forth in 19 U.S.C. § 1615, as incorporated by 21 U.S.C. § 881(d):

In all suits or actions ... brought for the forfeiture of any vessel, vehicle, merchandise, or baggage seized under the provisions of any law relating to the collections of duties on imports or tonnage, where the property is claimed by any person, the burden of proof shall lie upon such claimant____ Provided, that probable cause shall be first shown for the institution of such suit or action, to be judged of by the court.

Thus, once the government has met its burden of establishing probable cause to institute the forfeiture action, the burden then shifts to the claimant to show by a preponderance of the evidence that the property is not subject to forfeiture.

The probable cause which the government must show before it may institute a forfeiture proceeding is a reasonable ground for belief of guilt, supported by less than prima facie proof but more than a mere suspicion. United States v. $22,287 in U.S. Currency, 709 F.2d 442 (6th Cir. 1983), United States v. $364,960 in U.S. Currency, 661 F.2d 319 (5th Cir.1981). The government must also establish a nexus between the property to be forfeited and the criminal activity defined by the statute, here the exchange of a controlled substance. 661 F.2d at 323.

The government has established probable cause for instituting the forfeiture action. According to the testimony of the government agent who was involved in the drug transaction, Mack Wilson entered the men’s room of the Holiday Inn and told the agent that the briefcase he carried contained money which he intended to use to purchase drugs. The agent claims that he asked to see the money and that Wilson showed him the bundles of cash, the entire contents of the briefcase, but he did not count it. The money was seized from Wilson’s person directly following this incident, so there is no problem in establishing the nexus between the exchange and the currency. Furthermore, this testimony establishes that the government had a reasonable ground for believing that Wilson intended to furnish this cash in return for a large quantity of marijuana.

Because the government has shown probable cause, the burden shifts to the claimant, Wilson, who must show by a preponderance of the evidence that the forfeiture is not justified on the facts. See United States v. $10,000 in U.S. Currency, 521 F.Supp. 1253 (D.Ill.1981), United States v. $4,255,625.39 in U.S. Currency, 551 F.Supp. 314 (D.Fla.1982) (burden on the claimant to show that currency is not in violation of the statute or to show innocent ownership). Wilson must therefore establish that it is more likely true than not that he did not intend to use this money to purchase marijuana. Wilson testified at the hearing before this Court that he was carrying a large quantity of money with him on a trip to Atlantic City, that he just happened to stop and pick up a friend, his co-defendant Richard Foster, who needed a ride to the Holiday Inn, and that he went into the Holiday Inn only to order a mixed drink. Wilson also testified that he was asked whether he wished to purchase some marijuana, but that when he replied that he did, he only meant to purchase a small quantity. He insists that he did not intend to use the entire $23,530 to purchase marijuana.

The Court finds that Wilson’s testimony is not entirely credible. Wilson told the agent at the time of the transaction that he was there to purchase drugs, and when asked if he had the money, he showed the agent the entire quantity contained in the briefcase. Wilson’s testimony that he just “happened” to pick up his friend, drive with him to this Holiday Inn, and participate unwillingly in this transaction does not seem plausible. Wilson’s credibility was also strained by his testimony concerning where he obtained such a large sum of money. The Court is not convinced that the money was obtained through lottery winnings and “suitcases” (lawsuits which Wilson claims he won), and although the source of the money is not in issue in this proceeding, Wilson’s lack of credibility on this issue affects the entire testimony.

On the other hand, the testimony of Agent Jennings, the government agent who was involved in the transaction, is entirely credible and indicates that Wilson was supplying the cash for the drug transaction. Of the two versions, one told by Wilson and the other by Agent Jennings, the testimony of Agent Jennings seems the more likely true.

Wilson has failed, therefore, to establish by a preponderance of credible evidence that the money is not subject to forfeiture. The Court is not convinced that Wilson’s story is more likely true than not. Therefore, the money that was seized from Wilson at the time of the transaction will be forfeited to the United States as “money ... intended to be furnished by any person in exchange for a controlled substance.” 21 U.S.C. § 881(a)(6).


author: JOHN P. MOORE, District Judge.

text:
    UNITED STATES of America, Plaintiff, v. Donald TRETTENARO, Gerald Syslo, Defendants. UNITED STATES of America, Plaintiff, v. Richard Jerome HANDY, Defendant. UNITED STATES of America, Plaintiff, v. Frank Douglas ESCOVE, Defendant.
    Crim. A. Nos. 84-CR-16, 84-CR-67 and 84-CR-74.
    United States District Court, D. Colorado.
    Jan. 25, 1985.

      Andrew A. Vogt, Asst. U.S. Atty., Denver, Colo., for plaintiff.
    Rollie Rogers, Denver, Colo., for Trettenero.
    John Richilano, Asst. Federal Public Defender, Denver, Colo., for Syslo.
    Richard Jerome Handy, pro se.
    Jesse J. Garcia, Hayward, Cal., Lee D. Foreman, Denver, Colo., for Escove.
   MEMORANDUM OPINION

JOHN P. MOORE, District Judge.

This matter was heard sua sponte upon my determination that prior orders setting restitution pursuant to 18 U.S.C. § 3579 may have been incorrect. New evidence has been presented, and I now conclude my concern was well founded; therefore, upon reconsideration I believe the previous orders for restitution must be modified in the cases of Defendants Trettenaro, Syslo, and Handy. In view of Mr. Escove’s voluntary pre-conviction payments to a victim of the offense, as I shall detail later, I conclude requiring him to make further restitution is unwarranted.

The cases involving these defendants arise from the theft and interstate transportation of approximately 7,421 pounds of silver bearing sludge. The material was taken from the Windsor, Colorado, plant of the Eastman Kodak Co. (Kodak) and ultimately delivered to a plant in Jackson, Ohio, where silver was extracted from the sludge. Kodak has subsequently recovered a substantial amount of the processed silver, but an equally substantial quantity has been lost.

As a victim of this offense, Kodak has filed with the U.S. Attorney a statement of its claimed losses. In addition to claiming the value of the unrecovered silver, Kodak has claimed other sums associated with the criminal transaction which Kodak asserts must constitute a part of the “value” of its loss pursuant to 18 U.S.C. § 3579(b)(l)(B)(i). Included are claims for repair costs to a semi-tractor, windows, and carts used for conveyance of sludge, as well as the value of padlocks, radios, and a bolt cutter destroyed or lost by some of the defendants during the transaction. While the defendants admit the basis for the assertion of these claims is legally proper, they dispute the validity of the amounts asserted for some items.

Other associated costs incurred by Kodak are contested by defendants as beyond the purview of the statute. Kodak asserts claims for costs incurred in the recoveries of the refined silver and its transportation to Kodak’s Rochester, New York, facility. Kodak also claims attorney fees; travel costs for employees; costs associated with Kodak’s own internal investigation of the theft; interest on the value of unrecovered silver; and a reward paid by Kodak for information which led to the arrest of the defendants. In my judgment, the defendants’ objections to these claims are well founded.

The government asserts the purpose of § 3579 is to make whole the victim; hence when a corporate victim sustains costs incurred as a consequence of a property offense, those costs should be recognized as part of the loss defined in § 3579(b)(1)(B). Moreover, it is urged, when the corporate victim undertakes and achieves the recovery of the lost property, thus minimizing its losses, it should not be “penalized” by not being allowed to recover from the defendants the costs of that recovery. Finally, it is argued that costs arising as a consequence of the loss of property, but not otherwise attributable to the “value” of lost property should be recoverable.

While I can see the social value in complying with the government’s theory, I believe its plea is better addressed to the Congress. First, I am not certain the intent of Congress was to “make whole” the victim. Second, the government admits the statute permits the claimed allowances only upon construing the statute by inference based on the legislative history. Yet, the plain language of the law clearly is more circumscribed than allowance of the victim’s claim would permit. It has become almost shibbolethic that by resort to legislative history, a court may not construe an act of Congress when the meaning of the statute is clear on its face. Ex parte Collett, 337 U.S. 55, 69 S.Ct. 944, 93 L.Ed. 1207 (1949); T.V.A. v. Hill, 437 U.S. 153, 98 S.Ct. 2279, 57 L.Ed.2d 117 (1978); Glenn v. U.S., 571 F.2d 270 (5th Cir.1978); U.S. v. Mehrmanesh, 689 F.2d 822 (9th Cir.1982). In this case, it is beyond cavil that the statute limits the definition of a compensible loss to “damage to or loss or destruction of property of a victim____” (Emphasis added.)

Clearly, the loss must be from physical injury to the property; therefore, care must be taken not to confuse that injury with the concept of “damages” normally attributable to the tortious loss of property. Thus, a victim can be compensated for the cost of repairs to the injured property, but not for interest on money required to replace the injured property. In the same vein, expenses connected with the recovery of stolen property are not compensible as those expenses are not “damage to or loss or destruction of property.” The same can be said for the remaining categories of loss asserted and contested here.

By contrast, it is uncontested that during the course of the offense, windows were broken and carts were damaged. These items were repaired, and the cost of those repairs falls within the ambit of § 3579(b)(1). As there is no controversy over the cost of those repairs, I find Kodak should be compensated in the amount of $935.00 therefor.

Likewise, the lost or destroyed padlocks ' and bolt cutter replaced at the cost of $160.00 must be included in the value of the property under § 3579(b)(1)(B). The uncontested cost of this replacement is $160:00.

Two other asserted losses have been disputed on the facts alone. Kodak claims two radios were taken or destroyed, and it claims $3,934.00 for the loss. Additionally, a semi-tractor was taken from the Windsor plant and used by defendants to haul away the stolen sludge. When the tractor was recovered, three of its motor mounts were broken, and repairs costing $689.00 were undertaken.

Defendants have disputed the claimed cost for the lost radios because Kodak was unable to establish the value thereof on either the date they were lost [18 U.S.C. § 3579(b)(1)(B)®] or the date of sentencing [18 U.S.C. § 3579(b)(1)(B)®)]. The testimony established only the original cost and the replacement cost of the equipment, and neither falls within the statutory basis of the value to be awarded. The value to be accorded lost property is its own value on the precise statutory dates, and had Congress intended some other measure of worth be employed, it could have easily said so. Accordingly, the government has not satisfied its burden of proof on this claim. 18 U.S.C. § 3580(d).

Defendants also contest the inclusion of the costs of repair to the tractor. The only evidence offered by the government was the tractor was damaged when it was recovered, and the cost of repairs was $689.00. Defendant Syslo, an experienced truck driver, testified, however, the tractor was approximately 12 years old, in deteriorated state, and used by Kodak only on its own premises to haul trailors within its yard. On the basis of his twenty-odd years as a long distance truck driver, he testified he did nothing in driving the truck to cause damage to the motor mounts. Indeed, because of the nature of the tractor, he exerted great care in driving to avoid a breakdown to avert discovery.

In light of this testimony, I am unpersuaded that the acts of the defendants are any more the cause of Kodak’s injury to the tractor than the tractor’s age and state of deterioration. Because the burden of proof is the government’s, risk of nonpersuasion falls upon the victim. Accordingly, the unconvincing nature of the testimony persuades me to deny the claim for repairs to the tractor.

The major loss incurred by Kodak was the loss of silver. It is agreed that after credit for recovered silver is allowed, the value of unrecovered silver is $73,068.00. When this value is added to the values previously discussed, Kodak's loss amounts to $74,163.00. Having reached that determination, only half of my responsibility has been acquitted.

In determining the amount of restitution, the Court is obliged to make inquiry into the financial condition of the defendant and the defendant’s dependents. 18 U.S.C. § 3580(a). However, the burden of establishing the financial resources and earning ability of the defendant and his dependents falls not upon the government but upon the defendant. 18 U.S.C. § 3580(d). Thus, when the amount of the loss is established, but the defendant fails to produce any financial evidence, the Court must presume the defendant’s ability to fully pay his share of the loss. To put it another way, when no financial evidence is introduced by the defendant, the defendant’s ability to pay does not become a consideration in the Court’s determination of the amount of restitution to order.

In this case, only defendant Syslo has offered financial evidence at the hearing. Defendant Handy stated he cannot return to his former employment in security or law enforcement, and Defendant Trettanaro indicated he received only $8,000.00 for his participation. Defendant Escove’s presentence investigation report indicates he borrowed $170,000.00 and paid that sum over to A-Mark Precious Metals, a metals broker that was also a victim of this offense.

Defendant Syslo testified as a truck driver he normally netted $14,000.00 per year. He also stated he was learning carpentry and hoped that skill would permit him to earn another $12,000.00 per year. He is married and has three teenaged children. His family expenses normally amount to approximately $12,000.00 per year, and he has other debts totaling some $21,000.00, on which he expects to make payment of approximately $7,000.00 per year until paid. His wife is presently working, but the amount of her income was not established.

From the basis of this evidence, it would appear defendant Syslo would have no ability to pay from his earnings as a truck driver, and it would be only through the presently speculative income from carpentry that there would be any source for payment of restitution. The presently speculative basis of those earnings has not been contested, and it must be considered.

Defendant Handy has already made a payment to Kodak valued at $4,493.21. Any responsibility of his for restitution must be offset by this value.

Having made these considerations, I am left with one perplexing question. Congress has given us no guidance in the case of multiple defendants. Should all be jointly and severally liable in the nature of joint tortfeasors, or should the amount of loss be shared in accordance with each defendant’s ability to pay? I think two inferences control.

First, the award of restitution is discretionary. Thus, I infer the question of joint or several liability may be decided in the Court’s discretion as well.

Second, as already noted, the defendant’s individual financial condition is to be considered in setting the amount of restitution. This suggests to me each defendant should be treated as an individual.

In this case, each defendant played a different role, in which the degree of culpability varied. They were not charged with the same offense. Their criminal activity in relation to the victim’s losses was varied. Consequently, in the exercise of the discretion I perceive, I do not believe this is an appropriate case in which to assess a joint and several liability for the defendants.

Accordingly, starting with the total loss of $74,163.00, I divide that by the number of defendants. That leaves an initial cost of loss in the amount of $18,540.75 per defendant. Taking into consideration the financial factors I have discussed, I conclude defendant Trettanaro should pay the full amount of his share, defendant Handy should pay $14,047.54, defendant Syslo $10,000.00, and defendant Escove nothing. Appropriate orders will enter.

      . See § 3579(a) wherein it is suggested the Court may award restitution and § 3580(a) where the amount to be awarded is based upon factors “the Court deems appropriate.”


author: WISEMAN, Chief Judge.

text:
    INTERNATIONAL UNION, et al. v. Stacey GARNER, et al.
    No. 1-83-0088.
    United States District Court, M.D. Tennessee, Columbia Division.
    Jan. 28, 1985.

      Jon S. Kubiak, Chicago, 111., Arnold E. Perl, Young & Perl, P.C., Memphis, Tenn., Aubrey B. Harwell, Jr., Philip N. Elbert, Neal & Harwell, Nashville, Tenn., for defendant Maremont Corp., Gabriel Shock Absorber Div.
    Jack B. Henry, Pulaski, Tenn., Susan Emery McGannon, Donelson, Stokes, Bartholomew, Nashville, Tenn., for defendants Stacey Garner, Stanley Newton, Robert Barnes, Greg Roberts and City of Pulaski.
    B.J. Wade, Gerber, Gerber & Agee, Memphis, Tenn., and Jordan Rossen, Gen. Counsel, Leonard Page, Assoc. Gen. Counsel, United Auto., Aerospace, etc., Detroit, Mich., for plaintiffs.
    Cornelia A. Clark, Farris, Warfield & Kanaday, Nashville, Tenn., for defendant City of Pulaski.
    William N. Ozier, Bass, Berry & Sims, Nashville, Tenn., for defendant Billy D. Polly.

      Vincent E. Wehby, Nashville, Tenn., for defendant Ben Jared.
    Richard J. Braun, Nashville, Tenn., for defendant Ronnie H. Pruett.
   MEMORANDUM

WISEMAN, Chief Judge.

The question before the Court is whether a state law cause of action for invasion of privacy can be maintained on the assertion that the mayor, chief of police, and various police officers engaged in surveillance of union meetings held at a public place, recorded the license tag numbers of persons attending the meetings, and then upon checking on the registrations of such license tag numbers, furnished such information to the employer of a number of persons attending the union meeting. The Court concludes that such activities fail to state a claim for tortious invasion of privacy under the law of Tennessee and, therefore, the Court dismisses that particular claim of the plaintiffs’ amended complaint. Fed.R.Civ.P. 12(b)(6).

Facts

This case involves an attempt to unionize a plant in Middle Tennessee. The plaintiffs are employees of defendants Maremont Corporation, and are also union organizers for the United Auto Workers and the International Union. In addition to the Maremont Corporation, the defendants include the mayor and the chief of police of the City of Pulaski, Tennessee, and two employees of the police department. The present motion focuses on the activities of certain members of the Pulaski Police Department who engaged in surveillance of the plaintiffs and other employees of the Maremont Corporation at or near union meetings and recorded license plate numbers and the identity of persons attending the union meetings, and subsequently traced the license plate numbers to automobile registrations and then provided the identity of such persons to the employer corporation. On September 19, 1983, the Court entered a preliminary injunction enjoining the defendants from further surveillance of this manner. Plaintiffs amended their complaint to charge that such acts constituted an invasion of their privacy under the law of Tennessee. Defendants Garner, Newton, Barnes, and Roberts now move to dismiss the plaintiffs’ claim for invasion of privacy asserting that the claim is insufficient as a matter of law to entitle the plaintiffs to relief.

Law

While the right to privacy has received most of its popular recognition through the constitutional analysis contained in such cases as Griswold v. Connecticut, 381 U.S. 479, 85 S.Ct. 1678, 14 L.Ed.2d 510 (1965), and Roe v. Wade, 410 U.S. 113, 93 S.Ct. 705, 35 L.Ed.2d 147 (1973), state law jurisprudence also recognizes causes of action for invasion of privacy which sound in tort. As with much of tort law, it is Thomas Prosser’s work which provides the definitional guidelines for classifying the various types of privacy claims and the elements which constitute each of the separate causes of action. Prosser identifies four distinct torts as representative of the cause of action for invasion of privacy. They are: appropriation; intrusion; public disclosure of private facts; and false light in the public eye. T. Prosser, The Law of Torts § 117 (4th Ed.1971). Prosser’s definitions are now embodied in the Restatement (Second) of Torts §§ 652A-I (1977). No Tennessee state court has recognized the distinctions; however, in Beard v. Akzona, Inc., 517 F.Supp. 128, 131 (Ed.Tenn.1981), the United States District Court for the Eastern District of Tennessee adopted and applied the Prosser classifications in a case applying Tennessee law. Similarly, this Court will follow Prosser’s framework for purposes of analyzing the validity of the plaintiffs’ claim.

A. False Light

The plaintiffs’ claim for invasion of privacy does not state a cause of action under false light. Under the theory, a cause of action is made out when the plaintiff or aspects of his life have been presented in a misleading manner that would be highly offensive to a reasonable and prudent person. Restatement (Second) of Torts § 652E. Plaintiffs do not contend that the information conveyed to their employer was misleading. Accordingly, the theory of false light is not applicable to the instant facts.

B. Appropriation

The plaintiffs do not make out a cause of action for appropriation. Appropriation contemplates the unauthorized commercial use of a part of a person’s appearance, such that it fairly exploits a person’s property right or his right of publicity. Restatement (Second) of Torts § 652C. This particular legal theory is in-apposite to the present facts.

C. Public Disclosure of Private Facts

The issue of whether the plaintiffs may make out an action for public disclosure of private facts is a closer question; yet, the Court concludes that the facts are insufficient as a matter of law to maintain the claim. The Restatement (Second) of Torts § 652D defines the tort as follows:

One who gives publicity to a matter concerning the private life of another is subject to liability to the other for invasion of privacy, if the matter publicized is of a kind that (a) would be highly offensive to a reasonable person, and (b) is not of legitimate concern to the public.

The cause of action recognizes the right of all persons to be free from publication of information, regardless of its truth, which is truly private and the dissemination of which would be harmful or embarrassing.

The facts in this case do not satisfy the two-part test set out in the Restatement (Second) of Torts. First, the “matter publicized” is not highly offensive to a reasonable person. Rather, assuming the truth of the facts asserted by the plaintiffs, what may be deemed offensive in this case is the manner of dissemination of the publicity. The plaintiffs assert that the Pulaski Police Department was responsible for conducting surveillance on citizens who sought to engage in legitimate activities. The matter publicized itself, however, is not highly offensive nor is it private. A reasonable person would not be offended by the revelation that another person was engaged in union organization activity.

The fact that the plaintiffs were participating in a union organization meeting is distinguishable from other cases in which the plaintiff claimed their recovery under the theory of public disclosure of private facts. See, e.g., Trammell v. Citizens News Co., 285 Ky. 529, 148 S.W.2d 708 (1941) (finding liability where the defendant has posted a notice in his public garage announcing to the world that the defendant owed him money and would not pay it); Melvin v. Reid, 112 Cal.App. 285, 297 P. 91 (1931) (defendant held liable for exhibiting a motion picture which disclosed the present identity of a reformed prostitute who, seven years before, was a defendant in a murder trial); Prosser § 117 at 809-10; Restatement (Second) of Torts § 652D cm. a-c. In this case the matter itself is not highly offensive; therefore, the plaintiffs’ proper cause of action is not one for invasion of privacy, but rather one which challenges the method and purpose of the surveillance conducted by the public officials.

The plaintiffs also fail to state a valid cause of action under the theory of public disclosure of private facts because the matter publicized is a matter of legitimate concern to the public. In Cox Broadcasting Corp. v. Cohn, 420 U.S. 469, 95 S.Ct. 1029, 43 L.Ed.2d 328 (1975), the Supreme Court indicated an action for invasion of privacy cannot be maintained when the subject matter disclosed is a matter of “legitimate concern to the public.” In that case, the defendant broadcasting company disclosed the identity of a victim of murder and rape, contrary to a state statute prohibiting such disclosure. The victim’s identity was obtained by a reporter who had examined the criminal indictment of six youths. The Court held that “[b]y placing the information in the public domain on official court records, the State must be presumed to have concluded that the public interest was thereby being served.” Id. at 495, 95 S.Ct. at 1096. While Cox focuses on the press’ right to disseminate information contained in public records, the basic inquiry leading to that conclusion is whether the disclosed matter is of legitimate interest to the public. In Cox, the information disseminated was found to be a matter of legitimate public concern and therefore protected by constitutional guarantees under the first amendment. Similarly, in this case, although the circumstances of the disclosure may be offensive and the defendants are not members of the press, the fact that the individual plaintiffs were attending a union organization meeting certainly presents an issue of legitimate local concern and interest. That the plaintiffs would have preferred that this information remain confidential is of no consequence to the objective inquiry whether the matter itself is one which would interest the public at large.

Finally, the Court is somewhat troubled by the fact that the plaintiffs are claiming that they had a legitimate expectation that the police would not write down their license tag numbers and disclose the information obtained from them to other individuals. An individual who parks his car in a public place and then enters a private meeting has a legitimate right to expect that others will not eavesdrop on the meeting. But that individual has no right to expect that persons passing by on the street will not take note of — and draw inferences from — the presence of the individual’s car parked on the street in plain view for all to see. Indeed, the Court believes that had such surveillance and dissemination of information been conducted by the local press, the plaintiffs would not presently be pursuing this cause of action. Rather, the plaintiffs complain because the surveillance and dissemination was conducted by public officials. For this Court to rule that the plaintiffs now state a cause of action for invasion of privacy would have profound, adverse affects beyond the factual context of the case and, undoubtedly, would have a chilling effect on investigative reporting of matters of legitimate public interest by the press.

D. Intrusion

The plaintiffs maintain that they have made out a cause of action by stating the defendants have intruded upon their solitude by committing an unreasonable intrusion into an area in which they had a legitimate expectation of privacy. The Court disagrees..

Restatement (Second) of Torts § 652B defines intrusion upon seclusion as follows:

One who intentionally intrudes, physically or otherwise, upon the solitude or seclusion of another or his private affairs or concerns, is subject to liability to the other for invasion of this privacy, if the intrusion would be highly offensive to a reasonable person.

The plaintiffs claim that they had a reasonable expectation that their participation in the meetings and the topics discussed therein were private and that any revelation of this information without their consent was an intentional intrusion upon their privacy. Participation in a union meeting is not a matter of individual solitude or seclusion. As to the plaintiffs’ assertion that the defendants unreasonably intruded on the private affairs and concerns, the Court finds that if the plaintiffs truly wanted their participation in the meeting to be private, they would not have left their cars in front of the meeting hall. The cars were in plain view for all to see, and it was not unreasonable for the defendants, in the context of a claim for invasion of privacy, to take note of that fact and to draw inferences therefrom. The plaintiffs do not allege that the defendants wiretapped or in any way eavesdropped on the matters and topics discussed therein. In sum, the Court finds that a person does not have a legitimate expectation of privacy, solitude, or seclusion in being free from the dissemination of inferences drawn from observations readily perceivable in public view. As previously stated, although certain rights of the plaintiffs may indeed have been infringed by the defendants’ acts, the defendants did not violate any interests of the plaintiffs that may be remedied through an action for tortious invasion of privacy.

For these reasons, the motion of the defendants to dismiss the plaintiffs’ claim for invasion of privacy is granted. Fed.R. Civ.P. 12(b)(6).


author: MacLAUGHLIN, District Judge.

text:
    Maurice LaFOND, Plaintiff, v. UNITED STATES of America, Defendant and Third Party Plaintiff, v. CITY OF OWATONNA, Third Party Defendant.
    No. Civ. 4-84-170.
    United States District Court, D. Minnesota, Fourth Division.
    Jan. 29, 1985.
    Stephen J. Smith, Smith & Tollefson, Owatonna, Minn., for plaintiff.
    James M. Rosenbaum, U.S. Atty., and James E. Lackner, Asst. U.S. Atty., Minneapolis, Minn., for defendant and third party plaintiff.
    David K. Wendel, Joseph M. Stocco & Associates, Edina, Minn., for third party defendant.
   MEMORANDUM AND ORDER

MacLAUGHLIN, District Judge.

This matter is before the Court on defendant’s motion for summary judgment. Defendant’s motion will be granted.

FACTS

This is a suit brought under the Federal Tort Claims Act, 28 U.S.C. § 2671 et seq., in which plaintiff alleges that he slipped on an ice patch on the sidewalk adjacent to the U.S. Post Office in Owatonna, Minnesota. Defendant United States of America has brought a third party action against the city of Owatonna. Plaintiff is a 61 year old resident of Owatonna who customarily walks to his job at the Jostens’ manufacturing plant. The Jostens’ plant is approximately seven blocks from plaintiff’s house. On Monday, February 14, 1983, plaintiff left his home at approximately 6:30 a.m. to begin the walk to work. At the time plaintiff left his home, it was still dark. The weather in Owatonna over the preceding weekend had been fairly warm. As a result of this thaw, snow on the sidewalks had melted and then refrozen, causing some slippery spots. At his deposition, plaintiff made the following comments regarding the condition of the sidewalks on his route to work:

Well, I could see the results of what caused the accident that I was in. There had been — Sunday the weather had been mild and there had been spots where snow had melted and then it froze, made ice spots on the sidewalks.

Deposition of Maurice LaFond at 20. Plaintiff also testified that he had encountered a number of icy spots on the sidewalk prior to the place where he fell. LaFond Deposition at 21, 24.

The U.S. Post Office in Owatonna is located across the street from Jostens’, on the corner of Elm Street and Broadway. While proceeding north on the sidewalk adjacent to the post office, plaintiff slipped on a patch of ice and fell to the ground, fracturing his left leg. At the spot where plaintiff fell, the post office had shoveled a narrow path on the sidewalk and piled the snow on both sides of the walk. On the side of the walk closest to the post office building, the snow had been piled against a brick planter. On the morning of the accident, a postal employee had salted some of the ice spots in front of the building, but not the one that plaintiff slipped on.

Plaintiff seeks $75,000 in damages. His claim is essentially that the post office negligently removed the snow because the snow which was piled against the brick planter had no place to go when it melted but across the sidewalk. Defendant now moves for summary judgment.

DISCUSSION

A defendant is not entitled to summary judgment unless the defendant can show that no genuine issue exists as to any material fact. Fed.R.Civ.P. 56(c). Summary judgment is an extreme remedy that should not be granted unless the moving party has established a right to judgment with such clarity as to leave no room for doubt and unless the nonmoving party is not entitled to recover under any discernible circumstances. E.g., Vette Co. v. Aetna Casualty & Surety Co., 612 F.2d 1076, 1077 (8th Cir.1980). In considering a summary judgment motion, a court must view the facts most favorably to the nonmoving party and give that party the benefit of all reasonable inferences that can be drawn from the facts. Unlaub Co. v. Sexton, 568 F.2d 72, 76 (8th Cir.1977). The nonmoving party may not merely rest upon the allegations or denials of the party’s pleading, but must set forth specific facts by affidavits or otherwise showing that there is a genuine issue for trial. Burst v. Adolph Coors Co., 650 F.2d 930, 932 (8th Cir.1981).

Under the Federal Tort Claims Act, the United States is liable in the same manner and to the same extent as a private individual under like circumstances. 28 U.S.C. § 2674. Accordingly, the law of the state of Minnesota governs plaintiff’s tort suit. In Minnesota, the law is clear that an owner or occupier of property abutting a public sidewalk has no affirmative legal duty to keep that sidewalk in a safe condition. Sternitzke v. Donahue’s Jewelers, 249 Minn. 514, 83 N.W.2d 96 (1957) (summary judgment for defendant property owner where plaintiff slipped on natural accumulation of snow and ice on adjoining sidewalk). The Minnesota Supreme Court in Sternitzke stated the rule as follows:

[T]he duty of keeping a sidewalk in a reasonably safe condition for travel is placed on the city and is not on abutting owners or occupants unless they created the defect or dangerous condition or were negligent in maintaining in a dangerous and defective condition facilities erected on the sidewalk for their convenience or for the benefit of their building. Persons who own or occupy property abutting on a sidewalk are not liable to pedestrians for injuries sustained in consequence of stumbling or slipping on ridges or hummocks of snow and ice which form from natural causes on the sidewalk.

Id. 83 N.W.2d at 100. The court distinguished the case before it from cases where protruding hinges on a sidewalk trapdoor were an obstruction and where the owner maintained drainpipes so that water flowed over the sidewalk and froze. Id. at 101. Finally, the court held that the existence of a city ordinance requiring property owners to keep sidewalks free of snow and ice does not impose such a duty on property owners for the purposes of tort liability. Id. at 101. Even if it is assumed that defendant violated the Owatonna city snow and ice removal ordinance, then, such a violation is not sufficient to establish tort liability under Minnesota law.

For the purposes of the instant motion for summary judgment, plaintiff does not contest the above principles of tort liability. Rather, plaintiff contends that there are two grounds on which the motion for summary judgment should be denied. First, plaintiff contends that an owner or occupier of property abutting a public sidewalk has a duty to refrain from actions which permit ice to accumulate on the sidewalk. Second, plaintiff cites the Restatement (2d) of Torts, §§ 323, 324A for the proposition that one who voluntarily undertakes to perform an act he is not bound to do must use due care in the performance of the action, or be held liable for the harm that results. Both of these arguments rest on the contention that defendant can be held liable on the basis that it acted negligently by piling up the snow so that when it melted it could drain nowhere but onto the public sidewalk.

The Court will reject plaintiffs arguments. The rule in Minnesota on the creation of a dangerous icy condition is stated in Bentson v. Berde’s Food Center, 231 Minn. 451, 44 N.W.2d 481, 483 (1950):

[I]t is well settled that a person may not use his property carelessly to the injury of others, and that where the owner of abutting property maintains it so that ice is caused to form on the adjacent sidewalk as the result of artificial rather than natural causes, liability for injuries sustained by a person falling thereon may follow.

The cases which the court cited to support the above rule are clearly distinguishable from the facts of the instant case. Isham v. Broderick, 89 Minn. 397, 95 N.W. 224 (1903) (water from drainpipe falling onto sidewalk and freezing); Johnson v. Elmborg, 165 Minn. 67, 205 N.W. 628 (1925) (same); Bannister v. City of St. Paul, 131 Minn. 448, 155 N.W. 627 (1915) (ridge of ice caused by slanting cellar door). Defendant’s argument that the cause of the ice patch was natural rather than artificial is supported by the fact that plaintiff encountered a number of icy patches similar to the one in front of the post office on his way to work. LaFond Deposition at 90.

Plaintiff’s argument that defendant is liable because of the manner in which the snow was shoveled was rejected by the Minnesota Supreme Court in Abar v. Ramsey Motor Service, 195 Minn. 597, 263 N.W. 917 (1935). In Abar, the plaintiff argued, inter alia, that by removing snow and ice in spots only, the defendant created the dangerous condition which caused plaintiff’s fall. In rejecting this argument, the Minnesota Supreme Court made the following comments:

Occupants and owners of property abutting city streets often do clean or attempt to clean the sidewalk in front thereof. Their worthy efforts should not be discouraged by holding them liable where no liability otherwise exists, simply because they endeavor to free the sidewalk of snow and ice.

263 N.W. at 920. Abar is almost directly on point to the instant case, and provides strong support for defendant’s summary judgment motion. Defendant also correctly points out that the general rule, as stated in 39 Am.Jur.2d, Highways, Streets, and Bridges § 519, is that “no liability on the part of an abutting owner or occupant results from his deposit of snow or ice on or near a sidewalk, with the result that after a thaw and later refreeze, ice or packed snow forms on the sidewalk, and a pedestrian is injured when he slips thereon.” (citing Riccitelli v. Sternfeld, 1 Ill.2d 133, 115 N.E.2d 288 (1953); Mahoney v. Perreault, 275 Mass. 251, 175 N.E. 467 (1931); Taggart v. Bouldin, 111 N.J.L. 464, 168 A. 570 (Err. & App.1933); Kelley v. Park View Apartments, Inc., 330 P.2d 1057 (Ore. 1958)). Contra, Prosser, Law of Torts (1971) at 344. The public policy rationale for this rule, as defendant points out and the Minnesota Supreme Court recognized in Abar, is that efforts by the public to clear ice and snow off the sidewalks should be encouraged rather than discouraged.

Plaintiff’s final argument against summary judgment is based on the Restatement (2d) of Torts § 324A. That section provides as follows:

Liability to Third Person for Negligent Performance of Undertaking
One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if
(a) his failure to exercise reasonable care increases the risk of such harm, or
(b) he has undertaken to perform a duty owed by the other to the third person, or
(c) the harm is suffered because of reliance of the other or the third person upon the undertaking.

Plaintiff makes the following argument under section 324A: the defendant owed a duty to the city of Owatonna, albeit not directly to the plaintiff, to maintain the sidewalk in front of the post office; the defendant undertook to maintain that sidewalk, either as a gratuitous service or as the city’s agent, in recognition of the fact that such a service was necessary for the protection of third persons such as the plaintiff; finally, the defendant failed to exercise reasonable care in maintaining the sidewalk, thereby increasing the risk of harm to third persons such as the plaintiff.

The Court recognizes that the plaintiff’s argument is a logical one which falls within the language of the Restatement rule. The Court will nevertheless reject plaintiffs argument and grant defendant’s motion for summary judgment, for the following reasons. First, despite the fact that plaintiff's argument fits within the Restatement rule, the Minnesota Supreme Court’s holding in Abar v. Ramsey Motor Service, Inc., 195 Minn. 597, 263 N.W. 917 (1935) precludes an argument based on “negligent shoveling.” Second, the policy rationale behind the Abar holding is a sound one. A decision which would allow individuals such as the defendant to be held liable for their efforts to shovel public sidewalks would serve to discourage such activity. Finally, the instant case is clearly distinguishable from those cases in which the Minnesota Supreme Court has imposed liability for slips on ice resulting from “artificial” rather than “natural” causes. See, e.g., Isham v. Broderick, 89 Minn. 397, 95 N.W. 224 (1903); Bannister v. City of St. Paul, 131 Minn. 448, 155 N.W. 627 (1915); Johnson v. Elmborg, 165 Minn. 67, 205 N.W. 628 (1925).

Based on the foregoing, IT IS ORDERED that defendant’s motion for summary judgment is granted.

LET JUDGMENT BE ENTERED ACCORDINGLY.

      . A report from the National Oceanic and Atmospheric Administration indicates that the high and low temperatures in Owatonna were 34 degrees and 25 degrees on Saturday, February 12, 1983, and 38 degrees and 28 degrees on Sunday, February 13, 1983.

      . That ordinance provides as follows:
      650:05, Subd. 1: All snow, ice, dirt, and rubbish remaining on a public sidewalk more than 24 hours after its deposit thereon is a public nuisance. The owner and the occupant of any property adjacent to a public sidewalk shall use due diligence to keep such walk safe for pedestrians. No such owner or occupant shall allow snow, ice, dirt or rubbish to remain on the walk longer than 24 hours after its deposit thereon.

      . The Court notes, however, that the cases on which plaintiff relies are clearly distinguishable from the instant case. Abresch v. Northwestern Bell Telephone Co., 246 Minn. 408, 75 N.W.2d 206 (1956); Arrett v. Northwestern Bell, CIVIL 1-77-510 (D.Minn.1979) (MacLaughlin, J.); Walsh v. Pagra Air Taxi, Inc., 282 N.W.2d 567 (Minn.1979). While each of these decisions did cite section 324A of the Restatement in support of their holdings, each presented an element of reliance on the defendant’s actions which is not present in the instant case. In Abresch and Arrett the plaintiffs suffered injury when the operator for the telephone company failed to' transmit their message of a fire; in both cases the company had represented to the public that it would transmit emergency messages. The Minnesota Supreme Court, in reversing a grant of summary judgment for the defendant in Abresch, noted that "while the telephone company is under no duty to assume the responsibility of delivering messages in cases of emergency, if it does voluntarily assume such responsibility and thereby leads others to rely on such assumption of duty and to refrain from taking other and more direct action to protect themselves, the company is required to exercise reasonable care ____" 75 N.W.2d at 211-12 (emphásis added). See also Arrett, at 3. Likewise, in Walsh, a municipality voluntarily assumed a duty to render fire protection services to a local airport, and the defendant contracted with the municipality to undertake its fire protection duty. The Minnesota Supreme Court, in holding that the defendant could be held liable for fire-related damages under section 324A because it negligently performed the services which were necessary for the protection of third persons, pointed to record evidence that the injured plaintiff relied upon the airport fire protection service. 282 N.W.2d at 570-71. In the instant case, there is no evidence that the plaintiff relied upon the defendant’s actions in shoveling the sidewalk.

      . The Court recognizes that Abar was decided before the adoption of either the First or the Second Restatement of Torts (1939 and 1964, respectively). Nevertheless, the Court is not free to disregard the clearly expressed holding of the Minnesota Supreme Court in favor of a different rule.