author: ALLEN SHARP, Chief Judge.

text:
    Marion BATES, Jr., Plaintiff, v. The CARBORUNDUM COMPANY and the Standard Oil Company of Ohio, Defendants.
    No. S84-740.
    United States District Court, N.D. Indiana, South Bend Division.
    Dec. 19, 1985.

      Richard J. LaSalvia, South Bend, Ind., for plaintiff.
    John A. Simonetti, Cleveland, Ohio, for defendants.
   MEMORANDUM AND ORDER

ALLEN SHARP, Chief Judge.

Plaintiff, Marion Bates, Jr., filed his Amended Complaint in this ease on May 13, 1985 alleging that defendants violated Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., 42 U.S.C. § 1981 and the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621 et seq., when they terminated plaintiffs employment on September 12, 1983. The defendants filed a motion for summary judgment and the parties have fully briefed the issues. The parties have engaged in extensive discovery proceedings, including deposing all principal individuals involved. Accordingly, the motion is ripe for ruling.

Summary judgment must be granted when the pleadings, answers to interrogatories, admissions on file and any affidavits demonstrate that there are no genuine issues of material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.Proc. 56(e). In reviewing the pleadings and supporting documents, they must be viewed in the light most favorable to the nonmoving party. Tndson v. Trane Co., 738 F.2d 770, 771 (7th Cir.1984); Korf v. Ball State University, 726 F.2d 1222, 1226 (7th Cir.1984).

The record in this case reveals the following undisputed facts. Defendants operate an insulation manufacturing plant in New Carlisle, Indiana. Larry Waites was the Plant Manager of the facility at all times relevant to this case and was responsible for all the operations at the New Carlisle facility. The plaintiff, Marion Bates, Jr., was first hired by defendant, Carborundum Company, (Carborundum) in July 1973 as a contract buyer by the Pang-born Division in Hagerstown, Maryland. In 1977, plaintiff was promoted to senior buyer at the Hagerstown plant. For each year that plaintiff was at the Hagerstown plant from 1978-1981, he received the highest performance evaluation which an employee could receive—“above expected: consistently exceeds requirements of position characterized by initiative and valuable contribution to organization goals.” While Marion Bates was a senior buyer at the Pangborn Division, he had one junior buyer that he supervised. He was not involved in manpower planning, recruiting, affirmative action work, compensation studies, safety or environmental studies, training or personal development, labor negotiations, management negotiations or contract administration of the labor agreement.

In 1981, plaintiff responded to an internal job posting for the position of Production Services Manager at the New Carlisle facility. He interviewed for the position and was hired. Mr. Waites hired Mr. Bates as Production Services Manager because of his high evaluations and experience in purchasing. Plaintiff was transferred to New Carlisle and received grade and wage increases with the promotion.

Mr. Bates’ duties as Production Services Manager included production scheduling, shipping, warehousing, purchasing of raw materials and inventory control. Approximately twelve employees reported to plaintiff or his subordinates. Plaintiff was given a first year evaluation as Production Services Manager at New Carlisle of 3— “expected level of performance: performance consistently meets all the requirements of the job and all expectations in terms of contribution to the company.” By definition, this was a very satisfactory performance evaluation. The plaintiff’s second year evaluation at New Carlisle, dated August 1983, reveals that plaintiff received a 2 rating—“with few exceptions meets expected level of performance: with few exceptions meets most, but not all, job requirements and expectations; requires more than minimum help from supervisor and others. Employee has minor performance deficiencies, but shows willingness and ability to overcome them.” This evaluation of Mr. Bates was not discussed with him because it was not received back from headquarters until after Mr. Bates was terminated from his employment at Carborundum. In mid-1983 an opening arose for the position of Human Resource Manager at the New Carlisle facility. The position was posted internally throughout Carborundum’s system in July 1983. No one from the New Carlisle facility applied for the position and no qualified internal candidates were found.

In 1983, adverse business conditions throughout the Insulation Division dictated that staff reductions were needed. The reductions in force were to take place at all three Insulation Division manufacturing locations: New Carlisle, Indiana; Niagra Falls, New York; and New Iberia, Louisiana”. Mr. Waites as plant manager determined that three salary positions could be eliminated at the New Carlisle facility which included Production Services Manager which was plaintiffs position; Fabricated Production Manager which was held by Victor O’Bloek and Assistant Plant Engineer held by Tim Walz. Mr. Waites, in reaching said decision reasoned that the New Carlisle facility had been without a Production Services Manager for some time prior to bringing Mr. Bates on board with subordinate personnel in production scheduling and purchasing reporting directly to him which procedure could be resumed; that the Assistant Plant Engineer position could be totally eliminated because Mr. Walz was working on projects and since the facility was cutting back there would be no project activities to work on; and, that the duties of the Fabricated Production Manager could be handled by the remaining production manager. The recommendation of Mr. Waites, which was based solely on the positions, was accepted by the Insulation Division Management at its Niagra Falls headquarters the end of the week just prior to September 12, 1983.

After deciding which salary positions were to be eliminated, Mr. Waites decided to combine the vacant position of Human Resource Manager with duties of an Administrative Assistant reporting to him. Mr. Waites considered both Mr. Bates and Mr. O’Block for the combined position and reviewed their respective personnel files. After considering the respective qualifications of each individual, Mr. Waites decided to offer the combined position to Mr. O’Block because of Mr. O’Block’s experience in training and working with people in an industrial manufacturing environment, customer contact and quality control as well as Mr. O’Bloek’s knowledge and experience with respect to the quality work life and employee participation program at the New Carlisle facility which he helped set up and his familiarity with the type of organization at the New Carlisle facility. The decision to offer Mr. O’Block the combined position was discussed with company officials in Niagra Falls at the meetings just prior to September 13, 1983. Mr. Pradelski, the Personnel Division Manager, expressed reluctance at the choice because of Mr. O’Block’s lack of experience in personnel matters. Mr. Pradelski agreed, however, with the stipulation of Mr. O’Block having other assignments including customer contact and quality control. Neither Mr. Bates nor Mr. O’Block applied or were interviewed for the combined position.

On September 12, 1983, Mr. Waites privately and individually informed the plaintiff, Mr. O’Block and Mr. Walz that their respective positions were being eliminated as part of the division-wide reduction in force. Victor O’Block was offered the combined position of Human Resource Manager and Administrative Assistant at his same salary and job grade or, alternatively, the opportunity to take a severance package with outplacement services. Mr. O’Block accepted the position. Timothy Walz was offered the opportunity to return to an advisor’s position in the Furnace Department or take the severance plan. Mr. Walz accepted the advisor position at his same grade and salary level. Mr. Bates was advised of the reasons and scope for the reduction in the insulation division and that the severance placement service plan was available to him.

Thereafter, plaintiff was paid severance pay which resulted in his receiving his full salary through December 31, 1983. Plaintiff was also provided with air transportation to Niagra Falls to attend an outplacement seminar and was allowed to use the office, phone, stationary and clerical services at the New Carlisle facility in his job search during outplacement time and to bid on job postings within the Carborundum system. Mr. Waites referred Mr. Bates to a position opening with the New York Life Insurance Company in South Bend and Mr. Bates was employed with them in December 1983.

On December 29, 1983, Marion Bates, Jr. filed a charge of race and age discrimination against Carborundum with the Equal Employment Opportunity Commission (EEOC). The charge only refers to the Human Resources position given to Mr. O’Bloek not the advisor’s position in the Furnace Department offered to Mr. Walz. The EEOC found no reasonable cause to believe that the allegations in Mr. Bates charge were true and issued a right to sue letter.

In September 1983, Mr. Bates was a 42 year old black male. He had been employed by Carborundum for ten years, approximately two years at the New Carlisle facility and the remaining eight years in Hagerstown, Maryland. The plaintiff had a Master’s degree in Management Science which is a specialization in business management. He was at the grade 13 level of Carborundum’s grading system in September 1983. Carborundum’s grading system is based on job description and salary range.

Mr. Bates had never served as an operations foreman in his ten years with Carborundum. Nor had he ever served in the position of advisor in the Furnace Department at the New Carlisle facility. Although he procured materials used in the Furnace Department and was aware of the operations in the Furnace Department, he did not know how to operate or maintain the machinery in the Furnace Department. Further, Mr. Bates felt he was overqualified for the position and wouldn’t have pursued it if offered the opportunity.

Mr. Victor O’Block is a white male and was 40 years old in September 1983. He was a grade 13 or 14 and had been with Carborundum for six years, all at the New Carlisle facility. Mr. O’Block had a degree in Business Administration and a Masters in Business Administration in management and marketing. When hired at Carborundum in June 1977, he had the position of Quality Control Manager which included responsibility for hiring, disciplinary, action, grading jobs in the system and developing the quality work life system in the department. In September 1979, Mr. O’Bloek became Fabricated Product Manager at the New Carlisle facility. In that capacity, Mr. O’Block supervised 24 employees and had responsibilities that included production, training, accounting and safety.

Mr. Timothy Walz was a white male, 29 years of age in September 1983. He was employed by Carborundum in March 1973 as a furnace operator. In July 1974, he was promoted to shift advisor or foreman, a position he held for five years. Mr. Walz then was in process engineering for one year and then in plant engineering for three years. All ten years of his employment were at the New Carlisle facility. In September 1983, Mr. Walz was a grade 10. The change from plant engineering to Shift Advisor/Foreman in the Furnace Department was a lateral move at the same grade and salary level.

A.

Age Discrimination under ADEA, 29 U.S.C. § 621 et seq.

The ADEA makes it unlawful for an employer covered by the Act to discriminate against an employee because of his age. However, an employer does not violate the ADEA merely by discharging or taking other adverse action against an employee who falls within the protected category—the action by the employer must be taken because of age. See, e.g., Parker v. Federal National Mortgage Ass'n, 741 F.2d 975, 987 (7th Cir.1984).

The burden of proof formula set forth in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973) applies in cases under the ADEA. Stumph v. Thomas & Skinner, Inc., 770 F.2d 93 (7th Cir.1985); Mathews v. Allis-Chalmers, 769 F.2d 1215 (7th Cir.1985); Christensen v. Equitable Life Assurance Society of the United States, 767 F.2d 340 (7th Cir.1985); Tice v. Lampart Yards, Inc., 761 F.2d 1210 (7th Cir.1985); Trembath v. St. Regis Paper Co., 753 F.2d 603 (7th Cir.1985). Thus, a plaintiff has the initial burden of establishing a prima facie case of age discrimination. If he succeeds, the burden shifts to the employer to articulate a legitimate, nondiscriminatory reason for the employment decision. Once the employer states a valid justification, the employee then has the burden of showing that the employer’s justification was a mere pretext for age discrimination. See, e.g., Mathews v. Allis-Chalmers, supra at 1217; Tice v. Lampart Yards, Inc., supra at 1213. Generally in order to establish a prima facie case of age discrimination, a plaintiff must demonstrate that: (1) he was a member of the protected class (persons aged 40 to 70); (2) he was qualified for his position; (3) he was terminated; and (4) he was replaced in his position by a younger person. See, e.g., Strumph v. Thomas & Skinner, Inc., supra at 96; Huhn v. Koehring Co., 718 F.2d 239, 243 (7th Cir.1983). However, this test is not inflexible and has been modified in reduction-in-force situations. In such situations, a plaintiff demonstrates a prima facie case by showing: (1) he was within the protected age group; (2) he was adversely affected; (3) he was qualified to assume another position at the time of the adverse employment action; and (4) circumstantial or direct evidence from which a factfinder might reasonably conclude that the employer intended to discriminate in making the employment decision in question. Mathews v. Allis-Chalmers, 769 F.2d at 1217; see Stumph v. Thomas & Skinner, Inc., supra; Tice v. Lampart Yards, Inc., supra; Trembath v. St. Regis Paper Co., supra.

In this case, Carborundum eliminated plaintiff’s position as well as two other positions in a reduction-in-force situation. The plaintiff does not dispute that the business conditions dictated a need to cut back the salaried work force. Nor does this record indicate that plaintiff is claiming that Carborundum’s decision with respect to what positions were to be eliminated was discriminatory. Rather, plaintiff’s claim of age discrimination is based solely on Carborundum’s decision to offer the Furnace Ad-visor’s position to Tim Walz and the combined position of Human Resources Manager and Administrative Assistant to Victor O’Block rather than to him.

Mr. Bates has shown that he was a member of the protected class, being age 42 at the time of the employment decision, and that he was adversely affected. Further, viewing the evidence in the light most favorable to the plaintiff, it appears that one could reasonably conclude that he was qualified for the combined position of Human Resource Manager and Administrative Assistant. However, the evidence is not as strong with respect to the Furnace Advisor position. Mr. Bates stated in his deposition that he “ran the department and knew that the operation entailed” because his duties as Production Service Manager required him “to interact with different departments, to be aware of the processes that are instrumental in managing the department work and what was necessary.” Mr. Bates further stated, however, that he did not know how to maintain or operate the machinery in the Furnace Department and that he “wouldn’t go into the degree of not being able to put hands on the job.” Even assuming that he has shown that he was qualified for the two positions at issue, the plaintiff has not presented any evidence from which this court could reasonably conclude that Carborundum intended to discriminate against plaintiff on the basis of age in deciding to offer the positions to Mr. O’Block and Mr. Walz.

Mr. Bates claims that discriminatory intent is evidenced by the fact that he was treated less favorably than similarly situated white employees. This “fact” does not provide any evidence of intent and the plaintiff has not provided any other evidence of intent. There are no statements or actions by company employees or officers with respect to “preferring younger employees.” Cf. Stumph v. Thomas & Skinner, Inc., 770 F.2d 93 (7th Cir.1985). In fact, Mr. O’Block was 40 years old at the time of the employment decision which fact would certainly appear to imply lack of discriminatory intent with respect to age on the part of Carborundum. Accordingly, the plaintiff has failed to prove a prima facie case of age discrimination.

Even assuming, however, that plaintiff has presented enough evidence to show a prima facie case, the defendants have articulated a legitimate, nondiscriminatory reason for the employment decision: Mr. O’Block and Mr. Walz were more qualified for the respective positions offered them. See Christensen v. Equitable Life Assurance Society of the U.S., 767 F.2d 340 (7th Cir.1985). Thus, the burden shifted back to the plaintiff to show that the proffered reasons were merely a pretext for discrimination. The plaintiff claims that pretext has been shown by: (1) the way the positions were offered to Mr. Walz and Mr. O’Block; (2) the fact that he was “more qualified” for the respective positions; and (3) the fact that Carborundum did not follow company policy. The court finds these arguments totally without merit. The plaintiff has not shown any causal link between the offering of the positions and his age. The fact that Mr. Bates believes he was more qualified than Mr. O’Block and Mr. Walz for their respective positions does not show intent to discriminate nor present facts from which one could infer discriminatory intent. See, e.g., Parker v. Federal National Mortgage Association, 741 F.2d 975 (7th Cir.1984). Finally, Carborundum did not take applications or interview anyone for the two positions at issue. Mr. Bates was considered for the position of Human Resources Manager and Administrative Assistant. He was rejected because Carborundum found Mr. O’Block more qualified. Carborundum chose Mr. Walz for the Furnace Advisor position because he had performed that job before and Mr. Bates even stated he would not have accepted that job anyway. Accordingly, the plaintiff has failed to present any evidence that the proffered reasons were a pretext for discrimination and thus has simply failed to show that “but for” his age, he would have been offered the job of Furnace Advisor or the combined position of Human Resources Manager and Administrative Assistant.

B.

Race Discrimination under Title VII of Civil Rights Act of 1964, 42 U.S.C. 2000e et seq.

The plaintiff maintains that this is a “disparate treatment” case under Title VII and maintains that he has shown that defendants have discriminated against him on the basis of his race by showing he was treated less favorably than white employees. The analysis of this claim is virtually the same as Mr. Bates’ age discrimination claim. The shifting burdens announced in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973) apply to this claim as well and the plaintiff has failed to carry his burden of showing that “but for” his race, he would have been offered the position of Furnace Advisor or the combined position of Human Resources Manager and Administrative Assistant.

The plaintiff has shown that he is black and that Mr. O’Block and Mr. Walz are white. However, Mr. Bates has not presented any evidence, direct or circumstantial that race was considered at all in making the employment decision at issue, much less that it was a determining or motivating factor. As noted above, the defendants have demonstrated a legitimate, nondiscriminatory reason for their decision. Mr. Bates has failed to present any evidence that shows or from which a reasonable inference can be drawn that the reasons were a pretext for purposeful race discrimination. Thus, defendants are entitled to summary judgment on this claim. See Klein v. Trustees of Indiana University, 766 F.2d 275 (7th Cir.1985).

C.

Age and Race Discrimination under 42 U.S.C. § 1981

At first it should be noted that an age discrimination claim cannot be main-tamed under 42 U.S.C. § 1981. See Bell v. City of Milwaukee, 746 F.2d 1205, 1232 (7th Cir.1984) (§ 1981 protects against discrimination on basis of race or alienage); Kodish v. United Air Lines, Inc., 628 F.2d 1301 (10th Cir.1980) (age discrimination claim not maintainable under § 1981). Further, plaintiffs claim of race discrimination under 42 U.S.C. § 1981 is subject to the same analysis as his claim under Title VII, see Christensen v. Equitable Life Assurance Society Of The U.S., 767 F.2d 340 (7th Cir.1985). Accordingly, judgment must also be entered in favor of defendants on this claim.

For the foregoing reasons, defendants’ Motion for Summary Judgment is GRANTED. This case is hereby DISMISSED with prejudice. SO ORDERED.


source: Caselaw Access Project

author: HAWKINS, District Judge.

license: Public Domain

text:
    Carel W. LEVENDAG and Jewel E. Levendag, Plaintiffs, v. Douglas CHURCHILL and E. Thomas Byrd, Defendants. Carel W. LEVENDAG and Jewel E. Levendag, Plaintiffs, v. DEAN WITTER REYNOLDS, INC., Defendant.
    Civ. A. Nos. 2:85-0877-1, 2:85-0876-1.
    United States District Court, D. South Carolina, Charleston Division.
    Dec. 19, 1985.
    Morris A. Ellison and Marshall Winn, Buist, Moore, Smythe & McGee, Charleston, S.C., for plaintiffs.
    Walter Bilbro and William C. Cleveland, McKay & Guerard, P.A., Charleston, S.C., for defendant Churchill.
    H. Brewton Hagood, Rosen, Rosen & Hagood, Charleston, S.C., for defendant Byrd.
    William b. Boyd, III, Thomas R. Gottshall and Daryl L. Williams, Boyd, Knowlton, Tate & Finlay, Columbia, S.C., for Dean Witter Reynolds.
   ORDER

HAWKINS, District Judge.

This matter is before the court on motions of the defendants Douglas Churchill, E. Thomas Byrd, and Dean Witter Reynolds, Inc., to dismiss for lack of subject matter jurisdiction and failure to state a claim, to compel arbitration, and to stay judicial proceedings. The defendants filed their motions, respectively, on June 10, 1985, May 20, 1985, and September 20, 1985. At the time these motions were filed, the defendants were being sued separately in two different actions; however, the two cases have since been consolidated, thus making a simultaneous ruling on these motions proper at this time.

Oral arguments on these motions were heard on September 24, 1985, at which time the court ruled on the majority of these matters, but took under advisement defendant Byrd’s motion to dismiss and all three defendants’ motions to compel arbitration and stay proceedings pending arbitration. In addition, it should be noted that Dean Witter’s motion to dismiss, or in the alternative to compel arbitration of the plaintiffs’ RICO claim, was not argued at that time. Instead, it was agreed that a hearing on this matter would be rescheduled. Therefore, a ruling on this motion will be reserved until such time as oral arguments are heard by this court.

Subsequent to the September 24th hearing, the Honorable Sol Blatt, Jr., United States District Judge, issued an order in a similar case on November 19, 1985, which, if followed by this court, would be dispositive of the issues taken under advisement. See Blomquist v. Churchill, Civ. No. 2:85-964-8 (D:S.C., Nov. 19, 1985) (Order). In that order, Judge Blatt denied the defendants’ motion to compel arbitration of the plaintiffs’ federal securities law claims and granted the motion to compel arbitration of the plaintiffs’ remaining state law claims. In addition to these rulings, the court also denied the defendants’ motion to stay judicial proceedings pending resolution of the issues sent to arbitration.

In his order the district judge based his rulings on several alternative grounds. The first ground on which Judge Blatt denied the motion to compel arbitration of the federal securities law claims was provided by the authority contained in 17 C.F.R. § 240.15c2-2. In essence, this rule prohibits broker-dealers from using pre-dispute arbitration clauses to compel public customers to arbitrate claims arising under the federal securities laws. See 48 Fed. Reg. 53404 (1983). In addition, the court denied this particular motion on the basis of persuasive case law that extends the rationale of Willco v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953), for denying compulsory arbitration to causes of action arising under the Securities Exchange Act of 1934. See Dean Witter Reynolds; Inc. v. Byrd,—U.S.-, 105 S.Ct. 1238, 1240, n. 1, 84 L.Ed.2d 158 (1985) (cases cited within footnote).

Conversely, as to the motion to compel arbitration of the remaining state law claims, Judge Blatt relied on the holding in Byrd to the effect that pending state-law claims must be sent to arbitration when the parties have entered into an arbitration agreement.

Finally, the denial of the defendants’ motion to stay judicial proceedings was based on Justice White’s concurring opinion in Byrd. In that opinion, Justice White stated that “while the impossibility of the lawyers being in two places at once may require some accommodation in scheduling, it seems to me that the heavy presumption should be that the arbitration and the lawsuit will each proceed in its normal course.” Byrd, 105 S.Ct. at 1245 (White, J., concurring).

After reviewing the above-cited authorities, this court finds Judge Blatt’s order of November 19, 1985, to be persuasive. Thus, in light of that order, which is attached hereto and made a part of this order, and after consideration of the parties’ memoranda, oral arguments and of the applicable law, it is

ORDERED, that defendant E. Thomas Byrd’s motion to dismiss for lack of subject matter jurisdiction and failure to state a claim be, and the same is hereby, denied. It is

ORDERED FURTHER, that defendants’ motion to compel arbitration be, and the same is hereby, denied as to the plaintiffs’ federal securities law claims against defendants Byrd and Churchill which include the first cause of action for violation of § 10(b) and Rule 10b-5 of the 1934 Act, the second cause of action for violation of § 15(c) of the 1934 Act, and the seventh cause of action for violation of § 17(a) of the Securities Act of 1933; and that this motion be, and the same is hereby, granted as to the plaintiffs’ remaining state law claims against these two defendants which include the fifth cause of action for negligent misrepresentation, the sixth cause of action for fraud, and the eighth cause of action for violation of § 35-1-1490 of the South Carolina Uniform Securities Act. It is

ORDERED FURTHER, that the defendants’ motion to compel arbitration be, and the same is hereby, denied as to the plaintiffs’ federal securities law claims against defendant Dean Witter Reynolds, Inc. which include the first cause of action for violation of § 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, the second cause of action for violation of § 15(c) of the 1934 Act, and the fifth cause of action for violation of § 17(a) of the Securities Act of 1933. It is

ORDERED FURTHER, that defendants’ motion to stay these judicial proceedings pending resolution of the issues sent to arbitration be, and the same is hereby, denied.

AND IT IS SO ORDERED.

APPENDIX

JAN-OLOF BLOMQUIST and VANJA BLOMQUIST, Plaintiffs v DOUGLAS CHURCHILL, E. THOMAS BYRD, JR., and DEAN WITTER REYNOLDS, INC., Defendants

Civil Action No. 85-964-8

ORDER

On October 23, 1985, this matter came before the court for oral argument on defendants’ motion to dismiss for failure to state a claim, to compel arbitration, and to stay judicial proceedings. The court ruled at that time on the majority of these matters, but held in abeyance a ruling on a stay of these judicial proceedings and, pending defendants’ supplemental briefing, a ruling in the alternative on arbitration of those causes of action that allege violation of the Securities Exchange Act of 1934. After consideration of the parties’ memoranda, oral arguments and applicable law, this court rules, for the reasons orally advanced at the hearing of October 23, 1985, and for the reasons stated herein, as follows:

(1) the defendants’ motion to dismiss for failure to state a claim is denied as to the plaintiff’s second cause of action alleging a violation of § 15(c)(1) of the 1934 Act, denied as to plaintiff’s third cause of action for violation of § 17(a) of the Securities Act of 1933,[] and granted as to plaintiff’s fifth cause of action alleging a violation of the South Carolina Unfair Trade Practices Act;
(2) the defendants’ motion to compel arbitration is denied as to the plaintiffs’ federal securities law claims which include the first cause of action for violation of § 10(b) and Rule 10b-5 of the 1934 Act, the second cause of action for violation of § 15(c)(1) of the 1934 Act and the third cause of action for violation of § 17(a) of the 1933 Act.[] The motion is granted as to the plaintiff’s remaining state law claims which include the sixth cause of action for common law fraud; seventh cause of action for negligent misrepresentation; eighth cause of action for negligence and recklessness; ninth cause of action for breach of contract and tenth cause of action for breach of implied contract; and
(3) the defendants’ motion to stay these judicial proceedings pending resolution of the issues sent to arbitration is denied.

During oral argument, the court based its decision to deny arbitration of the causes of action arising under the 1934 Act on the authority of 17 C.F.R. § 240.15c2-2. In essence, this rule prohibits broker-dealers from using predispute arbitration clauses to compel public customers to arbitrate claims arising under the federal securities laws. See 48 Fed.Reg. 53404 (1983). The Securities and Exchange Commission’s written discussion states that the basis of the rule was the antiwaiver analysis that the United States Supreme Court articulated for the 1933 Act in Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953), the holding and rationale of which “are equally applicable to cases arising under the 1934 Act.” 48 Fed.Reg. 53404 (1983) (quoting First Heritage Corp. v. Prescott, Ball & Turben, 710 F.2d 1205, Fed.See.L.Rep. (CCH) ¶ 96,328-29 (6th Cir.1983)).

This court continues to be persuaded that 17 C.F.R. § 240.15c2-2 prohibits the defendants from compelling arbitration in this case under the predispute arbitration clause contained in its agreement with plaintiffs. In the alternative, however, the court denies defendants’ motion to compel arbitration on the basis of persuasive case law that extends the rationale of Wilko, supra, for denying compulsory arbitration to causes of action arising under the 1934 Act. See Dean Witter Reynolds Inc. v. Byrd,—U.S.-, 105 S.Ct. 1238, 1240 n. 1, 84 L.Ed.2d 158 (1985) (cases cited within footnote). While the defendants contend that the Wilko analysis should no longer be extended to claims under the 1934 Act in light of Justice White’s criticism of that practice in Byrd, supra, at 1244-45 (White, J., concurring), this court prefers to await a more definitive statement from a larger following of United States Supreme Court justices or a ruling from the Fourth Circuit before taking a position that would effectively bar plaintiffs from a Congressionally granted right to judicial resolution of alleged federal securities law violations.

This court, however, is in agreement with Justice White concerning denial of a stay: “[wjhile the impossibility of the lawyers being in two places at once may require some accommodation in scheduling, it seems to me that the heavy presumption should be that the arbitration and the lawsuit will each proceed in its normal course.” Byrd, supra, at 1245 (White, J., concurring). The defendants’ motion for a stay of these judicial proceedings is denied. It is, therefore,

ORDERED, that the defendants’ motion to dismiss for failure to state a claim, to compel arbitration and to stay judicial proceedings is denied in part and granted in part in accordance with this order.

AND IT IS SO ORDERED.

/s/ Sol Blatt, Jr. UNITED STATES DISTRICT JUDGE

Charleston, South Carolina

November 18, 1985

      . It should be noted that the parties to the present action failed to call this rule to this court’s attention during oral arguments.

      . The plaintiffs’ fourth cause of action in their amended complaints, which alleges violation of § 12(2) of the Securities Act of 1933, is, of course, nonarbitrable, Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953), and defendants have not argued to the contrary.

      . The plaintiffs' claim under the South Carolina Unfair Trade Practices Act, although inadvertently pled in the amended complaints as a third cause of action, was withdrawn by the plaintiffs during oral arguments. Therefore, this particular state law claim will not be compelled to arbitration inasmuch as it is no longer a viable cause of action in this lawsuit.

      . Hereinafter the 1934 Act.

      . Hereinafter the 1933 Act.

      . The plaintiffs fourth cause of action for violation of § 12(2) of the 1933 Act is, of course, nonarbitrable, Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953), and defendants have not argued to the contrary.

      . Since neither the Fourth Circuit Court of Appeals nor the United States Supreme Court has ruled on this issue, this court must rely on persuasive, rather than binding, precedent.

      . In Byrd, the motion was to stay arbitration of the pendant state law claims pending judicial resolution of a federal law claim; here, in contrast, the motion was to stay judicial proceedings pending arbitration of the state law claims.


author: EDWARD WEINFELD, District Judge.

text:
    D.S. MAGAZINES, INC., Plaintiff, v. WARNER PUBLISHER SERVICES, INC., Defendant.
    No. 85 Civ. 1877 (EW).
    United States District Court, S.D. New York.
    Dec. 19, 1985.
    Michael F. Dennis, Mineóla, N.Y., for plaintiff.
    Weil, Gotshal & Manges (R. Peyton Gibson, of counsel), New York City, for defendant.
   OPINION

EDWARD WEINFELD, District Judge.

Plaintiff D.S. Magazines moves to compel a nonparty witness to answer questions posed during a deposition, to impose sanctions on defendant Warner Publisher Services (“Warner”) and its counsel, and for an order disqualifying Weil Gotshal & Manges from representing Warner.

On November 25 and 27, 1985, D.S. took the oral deposition of Mary McGrath, a former employee of Warner who was the account executive handling D.S.’s account with Warner. During the deposition, McGrath testified that she had retained defendant’s counsel to help her prepare for the deposition. McGrath, asserting the attorney-client privilege, refused to answer questions asked of her about the contents of her discussions with counsel in preparation for the deposition.

D.S. contends either there is no attorney-client relationship between McGrath and Weil Gotshal or, if there is one, Weil Gotshal should be disqualified from representing Warner on the ground of conflict of interest.

There is no merit to D.S.’s contention that the attorney-client privilege does not exist between McGrath and Weil Gotshal. McGrath testified that she retained Weil Gotshal as her attorney for the deposition and there is no evidence to the contrary.

Our Court of Appeals has made clear that because attorney disqualification has a serious impact on a client’s right to choose his counsel, such motions “ordinarily should be granted only when a violation of the Canons of the Code of Professional Responsibility poses a significant risk of trial taint.” This is not a case, like T.C. Theatre Corp. v. Warner Bros. Pictures, Inc., in which an attorney is representing one client in an adverse proceeding against a former client. Here, one law firm is representing the defendant and a former employee, non-party witness in the same action.

Warner, the defendant, has consented to its counsel’s representation of McGrath. McGrath has not only consented to, but has sought, representation by her former employer’s counsel. There is no indication that the interests of McGrath and Warner are adverse or will become adverse. There is almost no likelihood that Warner and McGrath will be opposing litigants with respect to the subject matter of this litigation.

Moreover, regardless of the applicability of the attorney-client privilege, the contents of McGrath’s conversations with Weil Gotshal are irrelevant to the issues in this case.

Plaintiff's motion is denied in all respects.

So ordered.

      . Glueck v. Jonathan Logan, Inc., 653 F.2d 746, 748 (2d Cir.1981); see also Board of Educ. v. Nyquist, 590 F.2d 1241, 1246 (2d Cir.1979).

      . 113 F.Supp. 265 (S.D.N.Y.1953).

      . See United States v. Occidental Petroleum Corp., 606 F.Supp. 1470, 1474 (W.D.N.Y.1985). Cf. In re Coordinated Pretrial Proceedings in Petroleum Products Antitrust Litigation, 658 F.2d 1355 (9th Cir.1981).


author: JOSÉ A. CABRANES, District Judge:

text:
    UNITED STATES of America v. ONE 1984 CHEVROLET TRANS STAR. UNITED STATES of America v. ONE 1984 CHEVROLET TRANS STAR.
    Civ. Nos. H-84-693(JAC), H-84-297(JAC).
    United States District Court, D. Connecticut.
    Dec. 20, 1985.

      Leslie C. Ohta, New Haven, Conn., for plaintiff.
    Stuart J. Susser, New York City, for defendants-claimants.
   RULING ON PENDING MOTIONS

JOSÉ A. CABRANES, District Judge:

These consolidated cases are before the court on the government’s motions to amend the complaints and to withdraw admissions and the claimant’s motion for summary judgment.

The actions arise out of the seizure by federal agents of two Chevrolet Trans Star vans owned by the Holy Spirit Association and Unification World Christianity and its International One World Crusade (the “claimants”). The government contends that the vans had been used to transport illegal aliens in violation of 8 U.S.C. § 1324(a)(2), and therefore are subject to forfeiture pursuant to 8 U.S.C. § 1324(b).

I.

The government has sought leave to amend its complaints in both actions to assert that the vans were used in violation not only of 8 U.S.C. § 1324(a)(2), which prohibits the transportation of illegal aliens, but also of 8 U.S.C. § 1324(a)(3), which prohibits the harboring of illegal aliens.

The Supreme Court observed in Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962) that

Rule 15(a), [Fed.R.Civ.P.], declares that leave to amend “shall be freely given when justice so requires”; this mandate is to be heeded____ If the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits. In the absence of any apparent or declared reason—such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.—the leave sought should, as the rules require, be “freely given.”

See also Madison Fund, Inc. v. Denison Mines Limited, 90 F.R.D. 89, 91 (S.D.N.Y.1981) (holding that leave to amend a complaint is not to be denied based on “the sufficiency of the amended claims” unless those claims are patently “frivolous”); Glover v. City of New York, 446 F.Supp. 110, 113 (E.D.N.Y.1978).

The claimants in these actions have not demonstrated that the government’s amended claims are “frivolous.” Moreover, they have offered no evidence of bad faith, dilatory motive or undue prejudice sufficient to overcome the mandate of Rule 15(a) that leave to amend a pleading “shall be freely given.”

Accordingly, the government’s motions for leave to file amended complaints are hereby granted.

II.

The government seeks to withdraw its admissions (filed March 21, 1985) that certain aliens transported in the van that is the subject of United States v. One 1984 Chevrolet Trans Star, Civil Action No. H 84-693 (JAC), entered the United States legally. The government now contends that the entry of these individuals, pursuant to facially valid tourist visas, was actually unlawful because the visas had been fraudulently obtained.

Rule 36(b), Fed.R.Civ.P., states that
the court may permit withdrawal or amendment [of admissions] when the presentation of the merits of the action will be subserved thereby and the party who obtained the admission fails to satisfy the court that withdrawal or amendment will prejudice him in maintaining his action or defense on the merits.

It is clear that “the presentation of the merits of the action” would be served by permitting the government to withdraw its admissions with respect to the legality of the entry into the United States of certain aliens transported or harbored in one of the defendant vehicles. The government would be denied an opportunity to obtain a determination on the merits of its claim to the vehicles if the admissions were not withdrawn and if an illegal entry were later found to be a prerequisite to liability under 8 U.S.C. § 1324(a).

The test of whether a party will be prejudiced by the withdrawal of an admission is whether that party “is now any less able to obtain the evidence required to prove the matters which had been admitted” than he would have been at the time that the admission was made. Westmoreland v. Triumph Motorcycle Corporation, 71 F.R.D. 192, 193 (D.Conn.1976) (Blumenfeld, J.).

The claimants base their claim of prejudice on their inability to locate those aliens whose legality of entry into the United States is now disputed by the government. However, the claimants’ sworn affidavit states that those aliens departed from the United States on or about May 27, 1984. See Affidavit of Stuart J. Susser (filed Dec. 11, 1985), MI 3, 4. Furthermore, the claimants have indicated that they had no knowledge of the whereabouts of those aliens once they left the United States. See Responses to Interrogatories (filed May 20, 1985), MI 3, 7.

The admissions that the government now seeks to withdraw were filed March 21, 1985, ten months after the apprehension and departure from the United States of the aliens who are the subjects of these admissions. It therefore appears that the claimants are no “less able” today than they were on March 21, 1985, to prove that the aliens entered the United States lawfully-

Accordingly, the government’s motion to withdraw admissions is hereby granted.

III.

The- claimants have moved for summary judgment in both actions on the ground that 8 U.S.C. § 1324(a)(2) prohibits the transportation or harboring of an alien who entered the United States illegally, but not of an alien who was lawfully admitted to the country but who later became subject to deportation for violation of the immigration laws. The government asserts that the statute applies to all “illegal aliens” regardless of whether they violated the immigration laws at the time of their entry into the United States or only sometime thereafter.

Our Court of Appeals has repeatedly recognized “the well-established rule that ‘when words are free from doubt they must be taken as the final expression of the legislative intent, and are not to be added to or subtracted from by considerations drawn ... from any extraneous sources.’ ” Checkrite Petroleum, Inc. v. Amoco Oil Co., 678 F.2d 5, 8 (2d Cir.1982) (Meskill, J.), cert. denied, 459 U.S. 833, 103 S.Ct. 74, 74 L.Ed.2d 73 (1982), citing Caminetti v. United States, 242 U.S. 470, 37 S.Ct. 192, 61 L.Ed. 442 (1917). See also Board of Education v. Harris, 622 F.2d 599, 609 (2d Cir.1979) (Meskill, J.), cert. denied, 449 U.S. 1124, 101 S.Ct. 940, 67 L.Ed.2d 110 (1981) (same).

The plain language of Section 1324(a) states that any person who knowingly transports or harbors “any alien ... not duly admitted by an immigration officer or not lawfully entitled to enter or reside within the United States” is guilty of a felony. Accordingly, if one gives the disjunctive “or” its ordinary meaning, the statute prohibits the knowing transportation or harboring of “any alien ... not lawfully entitled to ... reside within the United States.”

The Supreme Court observed in Reiter v. Sonotone Corporation, 442 U.S. 330, 339, 99 S.Ct. 2326, 2331, 60 L.Ed.2d 931 (1979), that “[cjanons of construction ordinarily suggest that terms connected by a disjunctive be given separate meanings, unless the context dictates otherwise.” See also Federal Communications Commission v. Pacifica Foundation, 438 U.S. 726, 739-740, 98 S.Ct. 3026, 3035-3036, 57 L.Ed.2d 1073 (1978) (holding that use of the disjunctive in the phrase “obscene, indecent, or profane” implies that each word has a separate meaning). The claimants have pointed to nothing in the “context” of Section 1324(a) that suggests to the court that the terms “enter” and “reside” ought not to be given their separate meanings.

In sum, the relevant provisions of Section 1324(a) must be read to encompass the transportation and harboring of aliens who entered the United States legally but whose continued presence in the United States later became unlawful. The court finds that this interpretation of the term “enter or reside” is free from doubt and therefore “must be taken as the final expression of the legislative intent, and [is] not to be added to or subtracted from by considerations drawn” from legislative history or other “extraneous sources.” See Checkrite Petroleum, Inc. v. Amoco Oil Co., supra, 678 F.2d at 8.

This interpretation of Section 1324(a) is consistent with the decision of our Court of Appeals in United States v. Rodriguez, 532 F.2d 834 (2d Cir.1976) (Friendly, J.). The court, while reversing a conviction under Section 1324(a) on the ground that the government had introduced tainted evidence at trial, declined to dismiss the underlying indictment because admissible evidence of the defendant’s harboring of three “illegal aliens” constituted probable cause to charge the defendant with violation of the statute. Significantly, the court did not distinguish between the one alien who had been smuggled into the United States and the two aliens whose presence in the United States became illegal only after they had overstayed their tourist visas. See id. at 839.

Conclusion

For the reasons stated above, the government's motions to amend the complaints and the government’s motion to withdraw admissions are hereby granted. The claimant’s motion for summary judgment is denied.

It is so ordered.

      . The claimants note that Dirk Van Dorsten, one of the aliens whose entry into the United States is now challenged by the government, returned to the United States sometime after May 27, 1984, and departed under threat of deportation on or about April 22, 1985. However, the claimants state that Van Dorsten’s “renewed presence [in the United States] was not of any consequence to the defendants as he was unable to assist counsel in obtaining the statements or observations of the other immigrants who had left the country earlier, on the subject matter of their immigrant status and the seizures of the defendant vehicles.” Affidavit of Stuart J. Susser (filed Dec. 11, 1985), ¶ 5. The claimants have not alleged that they would have been able to question Van Dorsten during his second visit to the United States about the matters contained in the admissions that the government now seeks to withdraw.


text:
    Sylvia M. GLAVIN, Plaintiff, v. PRUDENTIAL-BACHE SECURITIES, INC., a Corporation, Defendant.
    Civ. A. No. 2:84-3048-1.
    United States District Court, D. South Carolina, Charleston Division.
    Dec. 20, 1985.
    John V. Esposito, Hilton Head Island, S.C., for plaintiff.
    Paul A. Dominick, Columbia, S.C., for defendant.
   ORDER

HAWKINS, District Judge.

This matter is before the court on motion of the plaintiff to reconsider this court’s order dated August 13, 1985, compelling arbitration and staying proceedings pending arbitration. The plaintiff filed her motion on August 26, 1985.

Oral arguments on the plaintiff’s motion were heard on September 25, 1985, at which time this motion was taken under advisement. Subsequent to taking this motion under advisement, this court issued an order in similar consolidated cases on December 1, 1985, which is dispositive of the issues before this court. See Levendag v. Churchill and Levendag v. Dean Witter Reynolds, Inc., 623 F.Supp. 620 (D.S.C.1985). That order denied the defendants’ motion to compel arbitration of the plaintiffs’ federal securities law claims and granted the motion to compel arbitration of the plaintiffs’ remaining state law claims. In addition, that order also denied the defendants’ motion to stay judicial proceedings pending resolution of the issues sent to arbitration.

In its order of December 19, 1985, this court based its rulings on several alternative grounds. The first ground on which this court denied the motion to compel arbitration of the federal securities law claims was provided by the authority contained in 17 C.R.R. § 240.15C2-2. In essence, this rule prohibits broker-dealers from using predispute arbitration clauses to compel public customers to arbitrate claims arising under the federal securities laws. See 48 Fed.Reg. 53404 (1983). In addition, the court denied this particular motion on the basis of persuasive case law that extends the rationale of Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953), for denying compulsory arbitration to causes of action arising under the Securities Exchange Act of 1934. See Dean Witter Reynolds, Inc. v. Byrd,—U.S.-, 105 S.Ct. 1238, 1240, n. 1, 84 L.Ed.2d 158 (1985) (cases cited within footnote).

Conversely, as to the motion to compel arbitration of the remaining state claims, this court relied on the holding in Byrd to the effect that pendent state-law claims must be sent to arbitration when the parties have entered into an arbitration agreement.

Finally, the denial of the defendants’ motion to stay judicial proceedings was based on Justice White’s concurring opinion in Byrd. In that opinion, Justice White stated that “while the impossibility of the lawyers being in two places at once may require some accommodation in scheduling, it seems to me that the heavy presumption should be that the arbitration and the lawsuit will each proceed in its normal course.” Byrd, 105 S.Ct. at 1245 (White, J., concurring).

Thus, in view of its order of December 19, 1985, issued in Levendag, which is made a part of this order by specific reference, it is this court’s opinion that its order of August 13, 1985, should be vacated, and that a new order should be issued in conformance with the above-cited authorities. It is, therefore,

ORDERED, that this court’s order filed August 26, 1985, be, and the same is hereby, vacated. It is

ORDERED FURTHER, that defendant’s motion to compel arbitration be, and the same is hereby, denied as to the plaintiff’s federal securities law claims as alleged in the plaintiff’s second and third causes of action, and that this motion be, and the same is hereby, granted as to the plaintiff’s remaining state law claims as alleged in plaintiff’s first, second and third causes of action. It is

ORDERED FURTHER, that defendant’s motion to stay these judicial proceedings pending resolution of the issues sent to arbitration be, and the same is hereby, denied.

AND IT IS SO ORDERED.

      . It should be noted that the parties to the present action failed to call this rule to this court’s attention during oral arguments.


author: LASKER, District Judge.

text:
    Dolores K. DEARY and Harvey London, individually and on behalf of all others similarly situated, Plaintiffs, v. GUARDIAN LOAN COMPANY, INC., Chase Manhattan Bank, N.A., Mullooly Jeffrey, Rooney & Flynn, Citibank N.A., European-American Bank, Chemical Bank, Sennet & Krumoltz, Sol Wachtler, Chief Judge and the New York Court of Appeals, the Administrative Board of the New York Courts and Robert J. Sise, Chief Administrative Judge of the United Court System of New York, Vincent Tese, Superintendent of Banks, Defendants.
    80 Civ. 1976(MEL).
    United States District Court, S.D. New York.
    Dec. 26, 1985.
    See also, D.C., 550 F.Supp. 642.
    Toby Golick, Legal Services for the Elderly, New York City, for plaintiffs; John C. Gray, Jr., Jane Greengold Stevens, Brooklyn Legal Services Corp. B, Brooklyn, N.Y., of counsel.
    Robert Abrams, Atty. Gen., New York City, for State defendants; Howard L. Zwickel, Jeffrey I. Slonim, Asst. Attys. Gen., of counsel.
   LASKER, District Judge.

Plaintiffs in this § 1983 action obtained a declaratory judgment that various New York State statutes pertaining to the enforcement of judgments were unconstitutional and an injunction against enforcement of these statutes. They now seek attorneys’ fees as “prevailing parties” under 42 U.S.C. § 1988 from Chief Judge Sol Wachtler, Chief Administrative Judge Robert J. Sise and Superintendent of Banks Vincent Tese (“the state defendants”). For the reasons set forth below the plaintiffs’ motion is denied.

Dolores K. Deary and Harvey London brought this suit for declaratory, injunctive and compensatory relief on behalf of themselves and all other judgment debtors in the State of New York who had property exempt from restraint and execution under various state and federal laws. Plaintiffs alleged that N.Y.CIV.PRAC.LAW §§ 5222, 5230 and 5232 (McKinney 1978), containing procedures for restraint and execution on judgments, violated the due process and supremacy clauses of the United States Constitution because they did not provide the judgment debtor with notice of, or an opportunity to challenge, the restraint or execution authorized by New York law. The state defendants, the banks which had served or accepted restraining notices concerning the named plaintiffs, the law firms which had served such notices, the New York Court of Appeals and the Administrafive Board of the Courts were named as defendants in the complaint.

On December 8, 1980 the state defendants moved pursuant to Rules 12(b)(6) and 12(c), FED.R.CIV.P., for judgment on the pleadings dismissing the complaint against them for failure to state a claim. The motion was denied on the grounds that, inter alia, under Supreme Court of Virginia v. Consumers Union, 446 U.S. 719, 100 S.Ct. 1967, 64 L.Ed.2d 641 (1980), a court and its members are not immune from suit when the relief that is sought from them is that they “exercise their supervisory powers to prevent enforcement of the existing procedures which plaintiffs challenge[d],” Deary v. Guardian Loan Company, Inc., No. 80-1976, slip op. at 2 (S.D.N.Y. June 9, 1981), and that the state defendants are Rule 19(a)(1) (FED.R.CIV.P.) “necessary parties” since in their absence “complete relief cannot be accorded among those already parties.” Id. at 1. The state defendants were instructed that their involvement in the case “need not require active defense ... unless they choose to assert it.” Id. at 1-2.

By Memorandum Opinion, on March 2, 1982 plaintiffs’ motion for summary judgment declaring unconstitutional the challenged sections of the N.Y.CIV.P.LAW was granted. Deary v. Guardian Loan Company, Inc., 534 F.Supp. 1178 (S.D.N.Y.1982). Subsequently, the plaintiffs and the defendants other than the state defendants submitted proposed orders to the Court. By letter dated January 3, 1983 counsel was advised that an order for “partial summary judgment” had been entered except that, as the letter stated,

“the ordering paragraphs that refer to Chief Judge Cooke and the Superintendent of Banks of the State of New York [had been stricken] because the applicability of the judgment to those persons is sub judice.”

At the Court’s invitation, the state defendants subsequently moved to reargue the June 9, 1981 decision denying them judgment on the pleadings. The motion for reargument was denied on May 16, 1983. The decision stated that:

The question, therefore, is not whether the state defendant has placed his signature or stamp on the challenged form, but whether he has “some connection with the enforcement of the act by virtue of [his] office.”

Deary v. Guardian Loan Company, 563 F.Supp. 264, 266 (S.D.N.Y.1983) (quoting Socialist Workers Party v. Rockefeller, 314 F.Supp. 984, 988 n. 7, aff'd, 400 U.S. 806, 91 S.Ct. 65, 27 L.Ed.2d 38 (1970)). It concluded that “it cannot be said that plaintiffs ‘can prove no set of facts in support of [their] claim which would entitle [them] to relief.’ Conley v. Gibson, 355 U.S. 41, 45-6 [78 S.Ct. 99, 102, 2 L.Ed.2d 80] (1957).” Id.

Subsequent to the May 1983 decision, plaintiffs sought no further relief from the state defendants until they filed the motion for attorneys’ fees which is the subject of this Memorandum.

The state defendants assert that the plaintiffs are not entitled to an award of attorneys’ fees from them. They argue that the plaintiffs have not “prevailed” against them because the claims against the state defendants were never adjudicated. They assert further that they were not needed for, and played no part in, the determination of the statutes’ unconstitutionality. They add that the challenged statutes were enforced by attorneys or court clerks and that the state defendants did not apply or enforce the statutes which the plaintiffs attacked.

The plaintiffs respond that the judgment declaring the New York statutes unconstitutional and the injunction against enforcement of the statutes is binding on all the defendants in this action. They assert further that the injury suffered by the plaintiffs was not only the past restraint and execution on their property but the threat of repetition, and that the state defendants were the parties with the power to allow or prevent future injury.

Plaintiffs may properly sue enforcement officials in an action challenging the constitutionality of a statute in which plaintiffs seek declaratory and injunctive relief. Supreme Court of Virginia v. Consumers Union, 446 U.S. 719, 736, 100 S.Ct. 1967, 1977, 64 L.Ed.2d 641 (1980). Such “enforcement officials” may include courts and members of the judiciary when they are acting in an enforcement capacity. Id.

When § 1983 plaintiffs are the “prevailing parties”, the Civil Rights Attorney's Fees Award Act, 42 U.S.C. § 1988, authorizes district courts to award them “a reasonable attorney’s fee”. Consistent with the legislative scheme, attorney’s fees may be recovered from state officials who are sued in their official capacity, Hutto v. Finney, 437 U.S. 678, 694, 98 S.Ct. 2565, 2575, 57 L.Ed.2d 522 (1978), and such fees should ordinarily be awarded “unless special circumstances would render such an award unjust.” Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 402, 88 S.Ct. 964, 966, 19 L.Ed.2d 1263 (1968) 9per curiam). “Accordingly, enforcement authorities against whom § 1983 judgments have been entered would ordinarily be charged with attorney’s fees.” Supreme Court of Virginia v. Consumers Union, 446 U.S. at 738, 100 S.Ct. at 1977.

As of 1980, the year Consumers Union was decided,

Fee awards against enforcement officials [were] run-of-the-mill occurrences, even though, on occasion, had a state legislature acted or reacted in a different or more timely manner, there would have been no need for a lawsuit or for an injunction.

Id. at 739, 100 S.Ct. at 1978. Relying upon this theory, courts continue to award attorney’s fees based upon an enforcing-official theory of liability. See O’Sullivan v. Bri er, 540 F.Supp. 1200, 1207 (D.Kan.1982); Connor v. Winter, 519 F.Supp. 1337, 1343-44 (S.D.Miss.1981). Accordingly, the law supports the proposition that plaintiffs who have successfully attacked the constitutionality of a statute have prevailed against enforcement official defendants within the meaning of § 1988. However, a careful reading of the caselaw reveals that such awards are based upon an explicit or implicit determination that a defendant held liable for fees is in fact the “officer charged with responsibility for enforcing the legislative policy.” Connor v. Winter, 519 F.Supp. at 1343. See also Supreme Court of Virginia v. Consumers Union, 446 U.S. at 737-39, 100 S.Ct. at 1977-78 (fee award would have been appropriate against the court and the chief justice since the court claimed inherent power to discipline attorneys and the court was authorized by statute to enforce the challenged disciplinary rule); O’Sullivan v. Brier, 540 F.Supp. at 1207 (attorney’s fees awarded against the Secretary of State as the “state officer in charge of administering the election laws.”); Holy Spirit Association v. Peterson, 489 F.Supp. 428, 429-30 (N.D.Ill.1979) (fees awarded against the chief of police and the city attorney since they would have had to arrest and prosecute the plaintiffs if plaintiffs had violated the challenged ordinance).

In the case at hand, whether the state defendants were “enforcement officials” was a vigorously disputed issue which was never resolved. Indeed, it was the absence of a resolution as to this question which, we concluded, made it inappropriate to include the state defendants in the judgment entered on January 4, 1983. Under these circumstances it cannot be stated with certainty that plaintiffs have prevailed against the state defendants as enforcement officials since there was never a determination that the state defendants were the officials properly charged with administering the challenged statute. Cf. Annunziato v. The Gan, Inc., 744 F.2d 244 (2d Cir.1984) (attorney’s fees award unwarranted where there was no evidence that The Gan, a private religious organization, was acting “under color of state law,” a prerequisite to § 1983 liability).

In contrast to cases in which, for example, the defendants concede their enforcement role, see Supreme Court of Virginia v. Consumers Union, 446 U.S. at 721, 100 S.Ct. at 1969 (Supreme Court claims inherent authority to discipline attorneys), or the enforcement role is apparent, see Holy Spirit Association v. Peterson, 489 F.Supp. at 429, or there is a determination after an evidentiary proceeding that the defendants have an enforcement role, O’Sullivan v. Brier, 540 F.Supp. 1200, here, the nature of the state defendants’ responsibilities in enforcing the statute is not readily apparent on the statute’s face and the question of their enforcement duties, if any, was not considered in the decision declaring the statutes unconstitutional, nor were the merits of the proposition otherwise litigated. Moreover, where, as here, the state defendants include members of the judiciary who “enjoy absolute immunity from damages liability for acts performed in their judicial eapaeitie[s],” Supreme Court of Virginia v. Consumers Union, 446 U.S. at 735, 100 S.Ct. at 1976, it is particularly important to give careful consideration as to whether liability is properly based upon the exercise of their enforcement authority since imposition of a fees award might be erroneously premised upon acts or omissions as to which the defendants are immune. See id. at 738, 100 S.Ct. at 1977 (holding district jourt’s award of attorney’s fees was erroneous since court relied upon a theory of liability under which defendants had immunity).

Unquestionably, with respect to the litigation in general, plaintiffs in this action are prevailing parties under § 1988. See Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 1939, 76 L.Ed.2d 40 (1983). And it is true that “a final finding of liability under § 1983 [is] not necessary for a fee award under § 1988.” Annunziato v. The Gan, Inc., 744 F.2d at 251; see McCann v. Coughlin, 698 F.2d 112,128 (2d Cir.1983); Gagne v. Maher, 594 F.2d 336, 341 (2d Cir.1979), aff'd, 448 U.S. 122, 100 S.Ct. 2570, 65 L.Ed.2d 653 (1980) (plaintiffs may be prevailing parties where lawsuit is catalyst for the defendants taking corrective action). However, absent a determination that the state defendants may properly be considered enforcement officials, there is no nexus in this case between the state defendants and the plaintiffs’ success. Accordingly, we conclude that an award of attorneys’ fees at this time would be premature.

The plaintiffs’ motion for attorneys’ fees is denied.

It is so ordered.

      . Each of the present State defendants was automatically substituted for his predecessor in office pursuant to FED.R.CIV.P. 25(d)(1).

      . The class was certified on March 2, 1982 "with the qualification that the class [was] limited to those judgment debtors who receive income exempt under state or federal law and who currently maintain or in the future hold an account at the defendant banks.” Deary v. Guardian Loan Co., Inc., 534 F.Supp. 1178, 1190 (S.D.N.Y.1980).

      . The complaint against the New York Court of Appeals and the Administrative Board of the Courts was dismissed. Deary v. Guardian Loan Co., Inc., No. 80-1976, endorsement decision (S.D.N.Y. Oct. 2, 1981).


text:
    In re AIR CRASH AT DALLAS/FORT WORTH AIRPORT ON AUGUST 2, 1985.
    No. 657.
    Judicial Panel on Multidistrict Litigation.
    Dec. 17, 1985.
   TRANSFER ORDER

This litigation presently consists of 22 actions pending in four federal districts as follows:

Southern District of Florida 15
Northern District of Texas 5
Southern District of Texas 1
District of Utah 1

Before the Panel is a motion, pursuant to 28 U.S.C. § 1407, by Delta Air Lines, Inc. (Delta) to centralize these actions in the Northern District of Texas for coordinated or consolidated pretrial proceedings. Plaintiffs in five Florida actions have cross-moved to centralize the actions in the Southern District of Florida. Most responding parties agree that centralization is appropriate; however, they disagree regarding the choice of the appropriate transferee district. In addition to movant Delta, defendants Lockheed Aircraft Corp. (Lockheed), Enterprise Aviation, Inc. and Rufus Lewis as well as plaintiffs in two actions pending in the Northern District of Texas and one action pending in the Southern District of Florida support centralization in the Texas forum. In addition to cross-movants, plaintiffs in five actions pending in the Southern District of Florida favor centralization there. Plaintiff in one action pending in the Southern District of Texas opposes Section 1407 transfer.

On the basis of the papers filed and the hearing held, the Panel finds that the actions in this litigation involve common questions of fact and that centralization under Section 1407 in the Northern District of Texas will best serve the convenience of parties and witnesses and promote the just and efficient conduct of this litigation. These actions arise from the August 2, 1985 crash on approach to Dallas/Fort Worth International Airport of a Lockheed L-1011 aircraft operated by Delta, in which numerous persons aboard the aircraft and one person on the ground were killed and several persons were injured, and share factual questions concerning the cause or causes of the accident. Transfer under Section 1407 is desirable in order to avoid duplicative discovery, prevent inconsistent pretrial rulings, and conserve the resources of the parties, their counsel and the judiciary.

We are persuaded that the Northern District of Texas is the most appropriate transferee forum. We note that the crash occurred within that district and that pertinent witnesses and documents may be found there.

IT IS THEREFORE ORDERED that, pursuant to 28 U.S.C. § 1407, the actions listed on the following Schedule A and pending in districts other than the Northern District of Texas be, and the same hereby are, transferred to the Northern District of Texas and, with the consent of that court, assigned to the Honorable David 0. Belew, Jr. for coordinated or consolidated pretrial proceedings with the actions pending in that district and listed on Schedule A.

SCHEDULE A

Southern District of Florida

Esther Ledford, et al. v. Delta Air Lines, Inc., C.A. No. 85-6601-Civ-JAG

Annie Edwards v. Delta Air Lines, Inc., C.A. No. 85-6625-Civ-SMA

Robert Katz, et al. v. Lockheed Aircraft Corp., et al, C.A. No. 85-6638-Civ-NCR

Homer LeVar, etc. v. Delta Air Lines, et al., C.A. No. 85-6666-Civ-SM

John Reynolds, etc. v. Delta Air Lines, et al, C.A. No. 85-6667-Civ-JCP

Gilbert G. Greene v. Delta Air Lines, Inc., C.A. No. 85-6656-Civ-JAG

Andria Goodkin, etc. v. Delta Air Lines, Inc., C.A. No. 85-6639

Gary Johnson, etc. v. Lockheed Corp., C.A. No. 85-6715-Civ-NCR

Thomas Kenneth Jurkowski, et al. v. Delta Air Lines, Inc., C.A. No. 85-6713

Katharen Reynolds, et al. v. Delta Air Lines, Inc., C.A. No. 85-6714-Civ-JCP

Robert Klein, etc. v. Delta Air Lines, Inc., C.A. No. 85-3217-Civ-JLK

Robert Klein, etc. v. Delta Air Lines, Inc., C.A. No. 85-3218-Civ-CA

William B. Baner etc. v. Delta Air Lines, Inc., C.A. No. 85-3219-Civ

William B. Baner, etc. v. Delta Air Lines, Inc., C.A. No. 85-3220-Civ-JWK

Jaswant S. Bahatti, et al. v. Delta Air Lines, Inc., C.A. No. 85-6770-Civ

Northern District of Texas

Dean Lavern Shawl, etc. v. Delta Air Lines, Inc., C.A. No. CA-4-85-520-K

Cynthia Zoe Dahl v. Delta Air Lines, et al, C.A. No. CA-3-85-1611-T

Kristin Lori Schatz, etc. v. Delta Air Lines, Inc., C.A. No. CA3-85-1758-G

Charles H. Polk, et al. v. Delta Air Lines. Inc., C.A. No. CA3-85-1779-D

Ronald Harris, et al. v. Delta Air Lines, Inc., C.A. No. CA3-85-1941-G

Southern District of Texas

Christopher John Meir, et al. v. Delta Air Lines, et al., C.A. No. H-85-4996

District of Utah

Shaun McLaughlin, et al. v. Delta Air Lines, Inc., C.A. No. 85-C-1112A

      . The motion, as amended, included a total of 24 actions. Two of these actions, Judy Cassedy, et al, v. Delta Air Lines, Inc., C.D. California, C.A. No. CV85-6366-KN (Kx), and Reed Bunzel, et al v. Delta Air Lines, Inc., C.D. California, C.A. No. 85-C-1112A, were recently remanded to California state court. Accordingly, the question of transfer with respect to these actions is moot.

      . The Panel has been advised of the pendency of several recently filed related actions. These actions will be treated as potential tag-along actions. See Rules 9 and 10, R.P.J.P.M.L., 89 F.R.D. 273, 278-80 (1981).