author: HAROLD A. ACKERMAN, District Judge.

text:
    AMERON, INC., Plaintiff, v. U.S. ARMY CORPS OF ENGINEERS, Lt. Col. Michael K. Collmeyer, Contracting Officer, United States of America, and Spiniello Construction Company, Defendants.
    No. 85-1064.
    United States District Court, D. New Jersey.
    March 27, 1985.

      Theodore Botter, Meyer and Landis, Newark, N.J., for Ameron Inc.
    Charles Tiefer, Deputy Gen. Counsel to the Clerk, Steven R. Ross, Gen. Counsel to the Clerk, Michael L. Murray, Asst. Counsel to the Clerk, for plaintiff-intervenors, Speaker and Bipartisan Leadership of the U.S. House of Representatives.
    Morgan Frankel, Asst. Senate Legal Counsel, Michael Davidson, Senate Legal Counsel, Washington, D.C., for plaintiff-in-tervenor, U.S. Senate.
    Edward G. Spell, Asst. U.S. Atty., Deputy Chief, Civ. Div., Newark, N.J., for the U.S. Army Corps, of Engineers.
    Edward G. D’Allessandro, Brian Maho-ney, D’Allessandro, Sussman, Jacovino & Mahoney, Florham Park, N.J., for defendant Spiniello Const. Co.
    Robert Murphy, Harry Van Cleve, for Comptroller General, Washington, D.C., as amicus curiae.
   MEMORANDUM OPINION

HAROLD A. ACKERMAN, District Judge.

THE COURT: Had the conscientious secretary who started this controversy with one little dab of correctional fluid known what would ensue, I wonder whether she would have ever taken that first typing course.

The plaintiff in this action, Ameron, Inc., was the lowest bidder on a pipe-cleaning project for West Point Military Academy. Ameron’s bid was $1,033,000. The next lowest bid was submitted by Spiniello Construction Company with a bid of $1,255,000. Ameron’s bid was, however, rejected by the Army Corps of Engineers as “nonre-sponsive” and the contract was awarded to Spiniello.

After filing protests with the Corps and the U.S. General Accounting Office (GAO), Ameron applied to this court for an Order to Show Cause why defendants should not be preliminarily restrained from performing the contract in question until plaintiff’s protest is decided by the GAO, and for temporary restraints pending the Order to Show Cause.

On March 4, 1985, I issued an Order to Show Cause, but denied the restraints. On March 7, 1985, Ameron returned to this court with an amended request for temporary restraints, bringing to the court’s attention the newly enacted Competition in Contracting Act, specifically, 31 U.S.C. Section 3553(d)(1) (1984). A temporary restraining order was entered and defendants were ordered to appear on March 18, 1985 for a hearing.

Following issuance of the TRO, motions to intervene were received from the Speaker and Bipartisan Leadership Group of the House of Representatives and from the U.S. Senate. Leave was also sought by the Comptroller General of the United States to file a brief of amicus curiae. These motions were all granted because of the importance of the issues presented, the interest of those parties therein, and the timeliness of their application. The Supreme Court has also stated “that Congress is the proper party to defend the validity of a statute when [the Executive Branch argues] that the statute is inapplicable or unconstitutional.” Immigration and Naturalization Service v. Chadha, 462 U.S. 919, 103 S.Ct. 2764, 2778, 77 L.Ed.2d 317 (1983). The extensive briefing done by these parties has been a great help to the court.

On March 18, 1985, oral argument was held on these issues, and I ordered a 10-day extension of the original restraining order for good cause shown pursuant to Rule 65(b) of the Federal Rules of Civil Procedure. I have now had an opportunity to review all the briefs and affidavits submitted by the parties and have researched the significant constitutional issues raised by this controversy, and I am ready to make my findings of fact and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure. I note, however, that time constraints have prevented me from dealing with this problem in a more thorough and scholarly manner.

FINDINGS OF FACT

The U.S. Army Corps of Engineers, New York District, invited bids for a project known as Raw Water Line Improvements. The Project entails cleaning and lining underground pipes which feed the reservoir at the United States Military Academy at West Point, New York.

The bids were opened on January 9, 1985, and, as stated before, Ameron submitted the lowest bid. After the bids were opened, upon request of the Corps, Ameron furnished a letter on January 10th confirming its bid. Ameron also furnished bank references to the Corps and a subcontractor’s plan by letter of January 21, 1985. Ameron’s subcontract plan was approved by the Corps on January 28th. A letter was drafted for signature of defendant, Michael K. Collmeyer, Deputy District Engineer of the Corps, accepting Ameron’s bid for the contract.

‘When these bids were reviewed by Lorraine Lee, attorney-advisor with the Office of Counsel, it was determined that plaintiff’s bid was defective because the penal sum contained in the bid bond had been aitered. The numerals “3” and “000” in the millions and the thousands boxes designating the maximum amount of the bond were typed in over white typing correction fluid.

Based upon this revelation and her knowledge of the law, this bid was deemed nonresponsive and rejected because the alteration was not accompanied by any indication that the surety had consented to be bound to this change.

Indeed, in Ms. Leé’s affidavit, she stated that a question was raised as to whether the figure in the million(s) box was added before or after the surety’s signature. Because of Ameron’s failure to submit a responsive bid as required, its bid was rejected and the contract was awarded to Spiniello Construction Company, the next lowest bidder.

By letter dated February 20, 1985, the U.S. Corps of Engineers articulated its reasons for rejecting plaintiff’s bid as follows:

“The bid bond submitted by your firm has the penal sum of the bond typed over in white typing correction fluid. Since the bond was not accompanied by any evidence that the surety consented to this alteration, your bid is hereby rejected as non-responsive.”

The bond did indeed contain a figure which was later whited out and changed, but this was done by Jan Keating, an employee of Ameron, before the bid bond was signed. When Ms. Keating originally typed the bond, she typed $1.2 million as the maximum amount of the bond. That figure was given to her on her worksheet as the estimated contract price to be submitted by Ameron. Before removing the bid bond from her typewriter, she remembered that she had been asked to type $3,000,000 as the maximum amount of the bond. Therefore, using a small sheet of correct-o-type whiting material, she struck over the “1” and “2” and typed “3” where the “1” was, and typed a “0” where the “2” was. The bond was then signed by Helen Smith, attorney-in-fact for Federal Insurance Co., and by Scott F. Biondi, Eastern Sales Manager of Ameron. Neither of them noticed the alteration in the bond.

On Friday, March 1, Ameron’s attorneys filed a protest with the United States General Accounting Office. The protest was sent by electronic means and was received by GAO on March 1. A copy of the protest was also sent by telecopier to the Corps in New York City on March 1, 1985. Despite this notice and notice given verbally to Ms. Lee on March 1 of Ameron’s protest and request that the Notice to Proceed not issue, the Corps issued its Notice to Proceed to Spiniello on March 4.

On March 7, 1985, plaintiff applied for and obtained an Amended Order to Show Cause stating that pursuant to 31 U.S.C. Section 3553(d)(1), the U.S. Army Corps of Engineers was required to suspend activities related to that contract during the pendency of the protest before the General Accounting Office. Ameron contends that the court’s rejection of its bid was arbitrary, unreasonable and contrary to law and applicable regulations. It further asserts that the public will suffer irreparable injury if the contract to Spiniello is not enjoined or set aside.

The United States contends that the decision of the U.S. Army Corps of Engineers rejecting plaintiffs bid as nonresponsive was clearly rational and lawful, and must therefore not-be disturbed by this court. It also contends that the stay provisions of 31 U.S.C. Section 3553 relied upon by this court in issuing its restraining order are unconstitutional.

I now turn to these contentions.

Before any discussion of the numerous issues briefed by the parties, I note that this case is presently before me on a motion for a preliminary injunction.

In order to prevail in its request for preliminary injunctive relief, Ameron must meet its burden of showing the following: (1) that there is a reasonable likelihood of success on the merits of this litigation; (2) that it will suffer irreparable injury unless the requested relief is granted; (3) that the granting of relief will not substantially harm other interested parties; and (4) that, if the relief is granted, the public interest will not be harmed. Cerro Metal Products v. Marshall, 620 F.2d 964, 972 (3d Cir.1980); Continental Group, Inc. v. Amoco Chemical Corp., 614 F.2d 351, 356-57 (3d Cir.1980).

Plaintiffs first argument is that the Army Corps of Engineers erred as a matter of law in rejecting their bid based on a typographical correction. They contend that the legal principle is firmly established that a typographical correction of a contract made before its execution and delivery does not invalidate the contract. Plaintiffs also contend that the typographical correction did not violate any rule, regulation, law or bid requirement.

This court’s role in this matter is, however, not that of a court seeking to review a contract, nor is it a determination of whether I would have awarded the bid to Ameron or not. This court’s role in reviewing agency procurement decisions is extremely limited. The Third Circuit stated in Princeton Combustion Laboratories v. McCarthy, 674 F.2d 1016 at 1021 (3d Cir.1982):

“We hold that as a matter of law, once the district court ... determines that an agency’s procurement decision is rational, its inquiry is at an end;- the district court must deny the motion for a preliminary injunction....”

Ameron must make a threshold showing that an agency’s decision is clearly illegal, or at least irrational, before a court can interfere with the decision-making process. As the Third Circuit has stated:

“A showing of clear illegality is an appropriate standard to impose on an aggrieved bidder who seeks judicial relief.” Sea-Land Service, Inc. v. Brown, 600 F.2d 429, 434 (3d Cir.1979).

Thus, I turn to an examination of the basis for defendant’s decision to reject Am-eron’s bid. The Corps deemed plaintiff’s bid nonresponsive because the alteration of the bid bond was not accompanied by any indication that the surety had consented to be bound by the change. The regulations of the Corps, and decisions of the Comptroller General, consider the bid bond to be a material part of a bid. Case authority from the office of the Comptroller General states that a bid is nonresponsive where it is accompanied by an altered bid bond without evidence of the surety’s consent to be bound by the change. See, e.g., Montgomery Elevator Co., B-210782, 83-1 CPD para. 400 (1988); Baucom Janitorial Service, Inc., 82-1 CPD para. 356 (1982).

The Comptroller General in Montgomery Elevator explained the reasons for such a regulation:

“An invitation’s requirement for a submission of a bid bond involves a matter of responsiveness with which there must be compliance at bid opening and not later. The reason, in part, is that if the situation were otherwise, a bidder who failed to submit a valid bond could decide after bid opening whether or not to cause its bid to be rejected by submitting or refusing to submit the bond. See 38 Comp.Gen. 532 (1959).
“The submission of a materially altered bond can have the same effect as the failure to submit a bond altogether, because under surety law no one incurs a liability to pay a debt or to perform a duty for another unless expressly agreeing to be bound. An alteration in the bond thus raises a question whether the surety agreed to the altered terms. See 44 Comp.Gen. 495 (1965). A material alteration to a bond, such as in the penal amount, made without the surety’s consent, discharges the surety from liability, 3A C.J.S. Alteration of Instruments Section 46 (1973), and a material alteration thus necessarily raises a question whether the surety has any obligation under the bond.”

The Comptroller General, in responding to arguments substantially similar to those made by plaintiff here, stated:

“The protester’s argument would permit the circumvention of the principle that a bidder should not be able to determine after bid opening whether to have its bid rejected by either submitting or refusing to submit a valid bond. As this case pointedly shows, a bidder’s own employee may have a power-of-attorney to execute bonds on behalf of the surety or may be in a position to influence the surety’s decision whether or not to disavow an altered bond.
“The purpose of a bond is to secure the liability of a surety to the government in accordance with the terms of the bond, so that the question presented in cases where bonds do not comply with invitation requirements is whether the government obtains the same protection in all material respects under the bond actually submitted as it would under a bond complying with the requirement. See General Ship and Engine Works, Inc., 55 Comp.Gen. 422 (1975), 75-2 CPD 269. As stated above, a surety is discharged from liability on a bond if a material term of the bond was altered without its consent, and an altered bond, without contemporaneously-furnished evidence that the surety agreed to the altered terms, simply does not afford the government the desired protection. The burden on the bidder to submit evidence of agreement, or to prepare a new bond, is slight, and is not enough to justify endorsing a situation with the potential for bidders to submit altered bonds and then determine after bid opening whether to have their bids rejected.”

It was based on her knowledge of the considerations described by the Comptroller General and the general procurement law embodied in the Montgomery Elevator decision and others that Ms. Lee determined that Ameron’s bid was nonre-sponsive.

I simply cannot find that such a determination is irrational. The decision to reject Ameron’s bid was clearly justified by rational, established principles. Thus, my inquiry concerning the merits of plaintiff’s protest must be at an end. See Princeton Combustion at 1022. As plaintiff has not shown a likelihood of success on the merits in this regard, there is no need to turn to the question of irreparable injury at this point.

I have, however, been called on to review not only the merits of plaintiff’s protest, but the procedure under which that protest is to be evaluated. Ameron has asked this court to stay further action on a government contract pending a recommendation on plaintiff’s bid protest by the GAO based on the Competition in Contracting Act (“CICA”), Pub.L. No. 98-369, 98 Stat. 494 (1984). CICA was enacted as Title VII of the Deficit Reduction Act of 1984, Sections 2701-2753. 130 Cong.Rec. S 8422, H 7128 (June 27, 1984).

CICA resulted from more than a decade of study of waste and inefficiency in government procurement. See, e.g., Commission on Government Procurement, Report of the Commission on Government Procurement (1972) (submitted to Congress pursuant to Pub.L. No. 91-129 (1969)); H.R.Rep. No. 1157, 98th Cong.2d Sess. 10-17 (1984).

The Congress determined that effective and efficient government procurement required legislation “to increase the use of competition in government contracting and to impose more stringent restrictions on the awarding of noncompetitive-sole-source-contracts.” H.R.Conf.Rep. No. 861, 98th Cong., 2d Sess. 1421 (1984), reprinted in 1984 U.S.Code Cong. & Ad.News, pp. at 697, 2109.

Subtitle D of CICA, 98 Stat. 1199-1203, establishes a statutory procurement system “which codifies and strengthens the bid protest function currently in operation at the General Accounting Office.” H.R. Conf.Rep. No. 861, supra, at 1435, U.S. Code Cong. & Admin.News 1984, at 2123, including an expeditious procedure for the Comptroller General to decide protests filed by interested parties to solicitations for proposals for government procurement contracts and to awards or prospective awards of such contracts. 31 U.S.C.A. Section 3551-3552.

The Comptroller General is to resolve protests by issuing a decision “whether the solicitation, proposed award, or award complies with statute and regulation.” 31 U.S. C.A. Section 3554(b)(1). If the Comptroller General upholds a protest, he issues recommendations to the contracting agency as to whether the agency should recompete the contract, terminate the contract, award a lawful contract, or take other actions to promote compliance with the law. Id. The Comptroller General’s views are recommen-datory only. Contracting agencies are required to report to the Comptroller General, for transmittal to Congress, instances in which they failed fully to implement the Comptroller General’s recommendations. Id., Section 3554(e). In addition, the Comptroller General may award a successful protester its costs of pursuing the protest, including attorneys’ fees, and of preparing the bid and proposal. Id., Section 3554(c).

The statute establishes a timetable for the Comptroller General’s resolution of protests, generally within 90 working days, unless circumstances warrant use of an “express option” limited to 45 calendar days, or require a period longer than 90 working days. Id., Sections 3553(b), 3554(a)(1) and (2). The Comptroller General may dismiss a frivolous protest as soon as he determines that it “does not state a valid basis for protest.” Id., Section 3554(a)(3).

CICA includes automatic “stay provisions.” Pending the resolution of a bid protest, the contracting agency is prohibited from awarding the contract, or, if the contract has been awarded, from permitting performance by the contractor, Id., Sections 3553(c)(1), 3553(d)(1), unless the head of the agency makes “a written finding that urgent and compelling circumstances which significantly affect the interests of the United States will not permit waiting for the decision of the Comptroller General,” or, in the case of an awarded contract, “that performance of the contract is in the best interest of the United States,” Id., Sections 3553(c)(2), 3553(d)(2).

When President Reagan signed CICA into law, he “object[ed] to certain provisions that would unconstitutionally attempt to delegate to the Comptroller General ... duties and responsibilities that ... may be performed only by officials of the Executive Branch.” 20 Weekly Comp.Pres.Doc. 1037 (July 18, 1984). The President “instruct[ed] the Attorney General to inform all Executive Branch agencies as soon as possible with respect to how they may comply with the provisions of this bill in a manner consistent with the Constitution.” Id.

The advice of the Attorney General is contained in an October 17, 1984 memorandum from the Office of Legal Counsel of the Department of Justice that concludes that the bid protest stay provisions are unconstitutional and should not be enforced by executive agencies. The memorandum does not contest the constitutionality of the automatic stay provisions themselves, but only the fact that the Comptroller General’s resolution of a protest would operate to lift the stay, potentially earlier than or later than 90 days. Id. at 15. The Department analogizes this variance in the length of stays to a “legislative veto” provision. Id. Based upon its conclusion that the authority to vary the length of the stay was inseverable from the stay provision itself, the Department opined that the entire stay provision should be invalidated. Id. at 16-18.

The Attorney General notified the President of the Senate and the Speaker of the House of Representatives on November 21, 1984, pursuant to the requirements of Section 203(a) of Pub.L. No. 98-411, 98 Stat. 1545, that the Department of Justice had instructed federal agencies not to execute the bid protest provisions. Based upon the opinion of the Department of Justice, the Director of the Office of Management and Budget instructed all executive agencies on December 17, 1984 to “proceed with the procurement process as though no [stay] provision were contained in the Act.” OMB Bulletin No. 85-8, at 2.

The bid protest provisions of CICA became effective on January 15, 1985, and plaintiff attempts to enforce the stay provision of that act, 31 U.S.C. Section 3553(d) (1984), by bringing this preliminary injunction. The defendants have resisted application of CICA’s stay provisions in this regard, contending that this provision is unconstitutional. However, defendants request the court to avoid deciding the constitutionality of the Act, contending there is an alternative ground for decision.

It is axiomatic that a court will not decide a constitutional question where alternative grounds for the decision exist. See, e.g., Clay v. Sun Ins. Office Limited, 363 U.S. 207, 80 S.Ct. 1222, 4 L.Ed.2d 1170 (1960); Alma Motor Co. v. Timken-Detroit Axle Co., 329 U.S. 129, 67 S.Ct. 231, 91 L.Ed. 128 (1946); Lamb Enterprises, Inc. v. City of Erie, 286 F.Supp. 865 (W.D.Pa.1967), aff'd 396 F.2d 752 (3d Cir.1968).

I turn then to defendant’s proposed alternative ground for decision.

31 U.S.C. Section 3553(d)(1) provides for a suspension of any activity related to the performance of a contract where a protest has been filed in a timely fashion. This in effect stays further activity related to that particular procurement. Defendants contends, however, that pursuant to General Accounting Office Reg. 21.9(a), the stay pursuant to 31 U.S.C. Section 3553(d)(1) is lifted unless the court assuming jurisdiction of the protest specifically requests a decision by the General Accounting Office. That regulation provides as follows:

“The General Accounting Office will dismiss any protest where the matter involved is the subject of litigation before a court of competent jurisdiction, unless the court requests a decision by the General Accounting Office. The General Accounting Office will dismiss any protest after the matter involved has been decided on the merits by a court of competent jurisdiction.

Defendant contends that it is clear from the above provision that once this court declined to request that GAO render a decision, the protest must be dismissed inasmuch as the above language is mandatory. That being the case, the stay under CICA is automatically lifted because there is no longer a protest pending before the GAO.

This reasoning ignores both the present posture of this case before the court and the purpose of GAO Reg. 21.9(a).

I am not ruling in any way on the merits of plaintiff’s protest. Both 31 U.S.C. 3553 and the law expressed in procurement decision cases such as Princeton Combustion, supra, and Sea-Land Service, supra, evidence a preference for allowing the Comptroller General and the GAO to decide the merits of a protest, and not the court. Reg. 21.9(a) envisions the GAO dismissing a protest after the matter “has been decided on the merits by a court of competent jurisdiction.” I have not made and will not make any ruling on the merits of plaintiffs protest.

Reg. 21.9(a) sensibly only refers to a decision on the merits as the regulation is based on an election of remedies principle: if a protester chooses to litigate the merits in district court, instead of before the General Accounting Office, the GAO will not expend its resources issuing useless recommendations. The regulation does not contemplate that contracting agencies would, by deliberately violating CICA, force protesters to file suit to obtain compliance with the CICA provisions.

Accordingly, the regulation does not apply to situations such as this in which there has been no voluntary election of remedies. The contrary interpretation would insulate executive agencies’ disregard of CICA from judicial review.

The decisions of the Comptroller General cited by defendant to support its interpretation of Reg. 21.9 stress that the GAO will not consider the merits of a protest where the material issues are before a court and that court has not expressed interest in obtaining GAO’s views. See, e.g., Douglass Industries, Inc., B-215727, 84-2 CPD, para. 212 (1984); Joule Maintenance Corp., B-212753, 84-1 CPD, para. 128.

It is clear from the posture of this case that this court is interested in obtaining GAO’s views on this matter. The court would not issue a stay pending review of the merits by GAO unless the court expected the GAO to render a decision in accordance with 31 U.S.C. Section 3551 et seq.

Moreover, under the terms of 31 U.S.C. Section 3552, the duty to decide bid protests that CICA imposes upon the Comptroller General is mandatory. The Comptroller General does not have the statutory authority to dismiss a protest unless it “is frivolous or ..., on its face, does not state a valid basis for protest.” 31 U.S.C. Section 3554(a)(3). Thus, to the extent that 4 C.F.R. Section 21.9 could be interpreted to require the Comptroller General to dismiss a protest that has not been withdrawn, merely because of the filing of a suit such as this, the provision would be contrary to law and could not be applied.

Thus, Reg. 21.9 does not obviate the need for this court to decide the constitutional issue presented.

There is also no reason to treat this case as a suit for injunctive relief under the Administrative Procedure Act (“APA”).

The plaintiff’s CICA claim takes precedence over plaintiff’s APA claim, because the APA authorizes judicial review of only those “agency action[s] for which there is no other adequate remedy in a court.” 5 U.S.C. Section 704 (1982). As long as plaintiff’s protest is pending before the Comptroller General, it has an adequate remedy through the court’s enforcement of CICA. Therefore, unless plaintiff were to dismiss its CICA claim, or the court were to invalidate CICA, the merits of plaintiff’s protest would not properly be before the court, but only before the Comptroller General.

In the statutorily required notification to the Senate that the Department of Justice was instructing executive agencies not to comply with the stay provisions of CICA, the Attorney General of the United States stated: “[T]he Department’s decision to advise Executive Branch agencies not to execute the unconstitutional provisions will best assure a rapid and definitive judicial resolution of these constitutional issues. Any bid protester who is aggrieved by an Executive agency’s failure to comply with these provisions may raise the constitutional issues for judicial resolution.” Letter from Attorney General William French Smith to Vice-president George Bush, November 21, 1984, at 10. The Acting Deputy Attorney, General recently reiterated that the goal of achieving “a speedy judicial resolution of this question” underlay the Department’s directive that agencies disobey the law. See, Prepared Statement of Acting Deputy Attorney General D. Lowell Jensen Before the Subcomm. on Legislation and National Security of the House Comm, on Government Operations Concerning competition in Contracting Act of 1984, March 7, 1985, at 10.

In spite of these assurances, the litigating posture of the executive defendants in this case seems to be one designed to avoid a judicial resolution of the lawfulness of agencies’ conduct in continuing to disobey the law. This court rejects defendants’ attempt to insulate their actions from judicial review. It is “emphatically the province and duty of the judicial department to say what the law is.” Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177, 2 L.Ed. 60 (1803).

I turn then to the question of whether the provision of CICA which allows the Comptroller General to lift stays by rendering decisions on bid protests is constitutional.

I note at the outset that consideration of whether “to declare an Act of Congress unconstitutional ... is the gravest and most delicate duty that th[e] Court is called on to perform.” Blodgett v. Holden, 275 U.S. 142, 147-48, 48 S.Ct. 105, 106-07, 72 L.Ed. 206 (1927) (Holmes, J., concurring). “Every possible presumption is in favor of the validity of a statute.” Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 355, 56 S.Ct. 466, 487, 80 L.Ed. 688 (1936) (Brandeis, J., concurring) (quoting The Sinking Fund Cases, 9 OTTO 700, 718, 99 U.S. 700, 718, 25 L.Ed. 496, 504 (1878)):

Defendant contests the CICA provision at issue because it vests in the Comptroller General, a legislative official, executive powers which result in the alteration of legal rights, duties and relations of persons outside of the legislative branch and is therefore inconsistent with the separation of powers principle. INS v. Chadha, supra, 103 S.Ct. at 2764.

Plaintiff contends that CICA is constitutional because the Comptroller General is an “Officer of the United States” as that phrase is used in the Appointments Clause, Art. II, Section 2, cl. 2, of the Constitution. Thus, he may perform all duties that Congress may statutorily assign officers of the United States.

Before turning to the law concerning the separation of powers and the roles of executive and legislative officers, - I think it would be helpful to quote extensively from Judge Holtzoff’s opinion in United States v. Stewart, 234 F.Supp. 94 (D.D.C.1964), aff'd 339 F.2d 753 (1964), who I think described the office of the Comptroller General very correctly and thoroughly:

. “In this connection it seems desirable to give some consideration to the role of the Comptroller General in a situation of the type presented here. The Comptroller General is the head of the General Accounting Office, 31 U.S.C. Section 41. Unlike heads of most departments and establishments of the government, he occupies a dual position and performs a two-fold function. First, he makes investigations of matters relating to the receipt, disbursement and application of public funds, and reports the results of his scrutiny to the Congress with appropriate recommendations. In addition, he pursues investigations that may be ordered by either House of Congress, or by any committee of either House, in matters relating to revenue, appropriations or expenditures, 31 U.S.C. Section 53.
“In forming these functions, the status of the Comptroller General is that of an officer of the legislative branch of the government. The Congress has comprehensive authority to undertake investigations in aid of legislation, or in connection with the appropriation of funds. Investigations are an aid to legislation and to the making of appropriations and are therefore auxiliary to the basic functions of the Congress. The Congress may conduct investigations either through committees or through an official such as the Comptroller General.
“The Comptroller General has also a second status as the chief accounting officer of the government. His second principal function is that of approval or disapproval of payments made by government departments and other agencies, as well as of settling and adjusting accounts in which the government is concerned, 31 U.S.C. Section 71. This is an executive function, and in performing it the Comptroller General acts as a member of the Executive Branch of the government. The dual status of the General Accounting Office is not anomalous, for many regulatory commissions fulfill in part a legislative function and in part carry out executive duties, Humphrey’s Executor v. United States, 295 U.S. 602, 55 S.Ct. 869, 79 L.Ed. 1611 [ (1935) ]. Cf. Myers v. United States, 272 U.S. 52, 47 S.Ct. 21, 71 L.Ed. 160 [(1926)]. Thus we have developed in comparatively recent years a fourth type of government agency, — one that combines two kinds of basic powers.” Stewart at 99-100.

In turning to the separation of powers issue, I repeat Justice Burger’s statement in INS v. Chadha, supra, 103 S.Ct. at 2781:

“[t]he principle of separation of powers was not simply an abstract generalization in the minds of the Framers: it was woven into the documents that they drafted in Philadelphia in the summer of 1787.” Buckley v. Valeo, supra, 424 U.S. 1 at 124, 96 S.Ct. 612 at 684, 46 L.Ed.2d 659 (1976). Just as we relied on the textual provision of Art. II, Section 2, cl. 2, to vindicate the principle of separation of powers in Buckley, we find that the purposes underlying the Presentment Clauses, Art. I, Section 7, els. 2, 3, and the bicameral requirement of Art. I, Section 1 and Section 7, cl. 2, guide our resolution of the important question presented in this case. The very structure of the articles delegating and separating powers under Arts. I, II and III exemplify the concept of separation of powers.”

And at p. 2784: “The Constitution sought to divide the delegated powers of the new federal government into three defined categories, legislative, executive and judicial, to assure, as nearly as possible, that each branch of government would confine itself to its assigned responsibility. The hydraulic pressure inherent within each of the separate branches to exceed the outer limits of its power, even to accomplish desirable objectives, must be resisted.

“Although not ‘hermetically’ sealed from one another, Buckley v. Valeo, supra, 424 U.S., at 121, 96 S.Ct., at 683, the powers delegated to the three branches are functionally identifiable. When any branch acts, it is presumptively exercising the power the Constitution has delegated to it. See Hampton & Co. v. United States, 276 U.S. 394, 406, 48 S.Ct. 348, 351, 72 L.Ed. 624 (1928).”

As the determinative issue in determining whether the Comptroller General is violating the doctrine of separation of powers in carrying out his duties under CICA is whether the Comptroller General is a legislative or an executive officer, I turn to the seminal cases on that question.

In Buckley v. Valeo, 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976), the U.S. Supreme Court in reviewing the constitutionality of the appointment process of the Federal Election Commission reviewed at great length the nature of legislative and executive functions, and what was constitutionally required of an officer who carried out executive functions. The Court first quoted in full the Appointment Clause, Art. II, Section 2, cl. 2 of the Constitution, and then stated: “We think its fair import is that any appointee exercising significant authority pursuant to the laws of the United States is an ‘Officer of the United States,’ and must, therefore, be appointed in the manner prescribed by Section 2, cl. 2, of that Article.” Buckley at 126, 96 S.Ct. at 685.

The Court, after deciding that any officer who is carrying out executive duties must be appointed by the Executive, invalidated part of the Federal Election Campaign Act of 1971’s provisions, because some of the members of the Commission who were exercising law enforcement functions were appointed by Congress and not the Executive. The court in dicta, explicitly approved the Comptroller General’s functioning as an executive officer, stating: “Appellee Commission has relied for analogous support on the existence of the Comptroller General, who as a ‘legislative officer’ had significant duties under the 1971 Act. Section 308, 86 Stat. 16. But irrespective of Congress’s designation, Cf. 31 U.S.C. Section 65(d), the Comptroller General is appointed by the President in conformity with the Appointments Clause. 31 U.S.C. Section 42.” Buckley at p. 128 fn. 165, 96 S.Ct. at 686 fn. 165.

The court distinguished the constitutionality of giving legislative officers executive duties from the constitutional practice of giving executive officers legislative powers. The Court cited Springer v. Philippine Islands, 277 U.S. 189, 48 S.Ct. 480, 72 L.Ed. 845 (1928), in which it was said:

“Not having the power of appointment, unless expressly granted or incidental to its powers, the legislature cannot engraft' executive duties upon a legislative office, since that would be usurp the power of appointment by indirection; though the case might be different if the additional duties were devolved upon an appointee of the executive.” Id., at 202, 48 S.Ct. at 482. Buckley, 424 U.S. at 136-137, 96 S.Ct. at 690-691.

The functions of the Comptroller General in ensuring that contracts are awarded in accordance with the law is then constitutional as the Comptroller General is appointed by the Executive and therefore may exercise law enforcement functions.

The statutory scheme challenged here by defendants is substantially similar to that challenged in Humphrey’s Executor v. U.S., 295 U.S. 602, 55 S.Ct. 869, 79 L.Ed. 1611 (1935). In that case President Roosevelt fired the Commissioner of the Federal Trade Commission before his tenure had statutorily expired. The executors of his estate had brought suit to recover the income not paid to Humphrey from the point of his firing until the statutory expiration of his term. The Justice Department opposed Humphrey, urging that as Humphrey performed functions such as the resolution of claims against the government — functions that may constitutionally only be performed by officials appointed by the Executive — then Humphrey must also be subject to removal by the Executive. This attempt to tie the appointment and function of an officer into the right of removal is also attempted here by defendants.

The Court in Humphrey’s Executor found the FTC Commissioner’s quasi-judicial and quasi-legislative role constitutional, stating at p. 629, 55 S.Ct. at 874:

“We think it plain under the Constitution that illimitable power of removal is not possessed by the President in respect of officers of the character of those just named. The authority of Congress, in creating quasi-legislative or quasi-judicial agencies, to require them to act in discharge of their duties independently of executive control cannot well be doubted; and that authority includes, as an appropriate incident, power to fix the period during which they shall continue in office, and to forbid their removal except for cause in the meantime. For it is quite evident that one who holds his office only during the pleasure of another, cannot be depended upon to maintain an attitude of independence against the latter’s will.”

The court then described the FTC in terms that I find directly on point for the determination of the GAO’s status:

“The commission is to be nonpartisan; and it must, from the very nature of its duties, act with entire impartiality. It is charged with the enforcement of no policy except the policy of the law. Its duties are neither political nor executive, but predominantly quasi-judicial and quasi-legislative. Like the Interstate Commerce Commission, its members are called upon to exercise the trained judgment of a body of experts ‘appointed by law and informed by experience.’ ” Id. at 624, 55 S.Ct. at 872 (citations omitted).

The court explicitly approved of the Congressional creation of “a body of experts who shall gain experience by length of service — a body which shall be independent of executive authority, except in its selection, and free to exercise its judgment without the leave or hindrance of any other official or any department of the government.” Id. at 625-626, 55 S.Ct. at 872-873.

Thus, the role of the Comptroller General as described in CICA is not constitutionally infirm due to the fact that it exercises authority over the Executive Branch and is independent of the Executive Branch.

Lastly, I turn to a consideration of Immigration and Naturalization Service v. Chadha, 462 U.S. 919, 103 S.Ct. 2764, 77 L.Ed.2d 317 (1983), the Supreme Court’s last pronouncement concerning the constitutional separation of powers. In Chadha, the Supreme Court held that the section of the Immigration and Nationality Act authorizing one House of Congress, by resolution, to invalidate a decision of the Executive Branch to allow a particular deportable alien to remain in the United States, is unconstitutional because the action by the House pursuant to that section is essentially legislative and thus subject to the constitutional requirements of passage by a majority of both Houses and presentation to the President.

In Chadha, the Court struck down the Congressional veto provision because it found that it was essentially legislative in purpose and effect. Chadha, 103 S.Ct. at 2784. “The House took action that had the purpose and effect of altering the legal rights, duties and relations of persons, including the Attorney General, Executive Branch officials in Chadha, all outside the legislative branch.” Id.

That is not the case here. Just because the Comptroller General’s decision is independent of the Executive Branch, it is not then necessarily legislative. Congress enacted the provisions of CICA pursuant to its legislative authority to study various problems in government and enact statutory solutions to correct them. Once the procedures outlined in CICA are enacted, however, Congress has no involvement whatsoever in the procurement process. Congressional influence is completely excluded from the bid protest process, unlike the legislative veto procedure struck down in Chadha.

Defendant relies largely on the legislative veto cases, notably INS v. Chadha, and on Buckley v. Valeo. In these cases, the House of Congress subjected agency operations to political control. In Chadha, they did so by a resolution ordering that Mr. Chadha be deported; in Buckley, by appointing commissioners of the Federal Election Commission. No such political control exists here.

Indeed, in Humphrey's Executor, the Court found it appropriate for Congress to empower agencies to conduct quasi-judicial and quasi-legislative activity. In this regard, Buckley reaffirmed the doctrine of Humphrey’s Executor.

I find that the facts do not bear out defendant’s attempt to label the Comptroller General a legislative officer and call his stay function a “legislative veto.” Justice Cardozo’s observation is entirely on point: “A fertile source of perversion in constitutional theory is the tyranny of labels.” See Snyder v. Massachusetts, 291 U.S. 97, 114, 54 S.Ct. 330, 335, 78 L.Ed. 674 (1934).

I accordingly look past defendant’s labels and find the contested statute constitutional.

Having decided that the challenged provisions of CICA are constitutional, it- is clear that plaintiffs will prevail on the merits of their claim that no work may go forward until the Comptroller General has either ruled on the merits of plaintiff’s protest, or dismissed the protest in accordance with 31 U.S.C. Section 3551 et seq. I therefore must turn to the requirement of irreparable harm.

The provisions of CICA and the question of irreparable harm are inextricably intertwined. I need not dwell on the enormous procurement problems studied in the Congressional hearings and reports spanning more than a decade, for they are widely known, in large part because of those hearings. In fiscal year 1983, the federal government awarded $168 billion in contracts. Although procurement statutes had long favored awards through competitive methods, procuring agencies have persisted in using sole-source acquisition (acquisition from a single supplier, without competition), and other noncompetitive methods. Of that $168 billion “only about one-third, $54 billion, was categorized as competitive.” Competition in Contracting Act of 1984: H.R.Rep. No. 1157, 98th Cong., 2d Sess. 12 (1984) (“CICA Report’’).

In deciding to enact a stay provision to give the GAO time to examine protests, the House committee holding hearings on CICA was very concerned with fait accom-pli situations where the administrative agency moved ahead with its procurement, in spite of the protest, thereby precluding meaningful judicial review. The committee referred to two opinions in which the court’s ability to grant meaningful relief was limited because the agencies had made the challenged awards fait accompli in the time it took plaintiffs to get to the courthouse.

In Robert E. Derecktor of Rhode Island, Inc. v. Goldschmidt, 506 F.Supp. 1059 (D.R.I.1980), the plaintiff filed a protest with the GAO concerning a Coast Guard procurement, but “before the GAO acted upon the protest, the Coast Guard executed the contract with [the protester’s competitor].” Id. at 1061. The Court cited the procurement regulations discussed above, which required that before making an award “[w]here it is known that a protest against the making of an award has been lodged directly with GAO,” approval must be given “at an appropriate level above that of the contracting officer ... [and] a notice of intent to make award in such circumstances shall be furnished GAO_” Id. at 1061-62 (quoting regulations). The Coast Guard, evidently not wanting to have an independent opinion on the validity of its action, had not followed that regulation..

In Aero Corp. v. Department of the Navy, 540 F.Supp. 180 (D.D.C.1982), the plaintiff protested to the GAO concerning a Navy aircraft procurement, but the Navy succeeded in having GAO dismiss the protest as premature. Then, before the plaintiff could protest again, or seek judicial review, the Navy moved ahead with its procurement, apparently trying to present the GAO “with a fait accompli,” id. at 215, citing Derecktor, supra. By such steps, the Navy, “besides making competition impossible, made extremely dangerous any delay that might be occasioned by the judicial process or GAO review.” Id. at 185 n. 7. In effect, the Navy “had finessed plaintiff’s efforts to make a timely protest to the General Accounting Office, and had denied plaintiff an opportunity for timely judicial review of the sole-source decision as to the first 20 aircraft.” Id. at 185.

The House report noted: “GAO has no power to stop a contract award or contract performance while a protest is pending. As a result, agencies usually proceed with their contracts, knowing that they will preclude any possibility of relief simply by delaying the protest process.” CICA Report, supra, at 24 (quoting hearing testimony). Congress’ solution was to enact the stay provision in 31 U.S.C. Section 3553.

I find, therefore, that plaintiffs have made a sufficient showing of irreparable injury in light of the purposes of the Act. The Act specifically provides for a stay such as I am ordering to give the GAO time to review the protest.

I note that the provisions of the Act have a built-in safety valve to prevent undue harm to the United States. Should the head of the procuring activity find that urgent and compelling circumstances which significantly affect interests of the United States be present, work can proceed on the contract in spite of the protest. See 31 U.S.C. Section 3553(c)(2)(A).

I also find that the harm to defendant Spiniello is limited at this point. They have ordered some materials for the project and have organized their work plans and geared up for the project, but no evidence has been presented to demonstrate that any harm greater than a limited monetary investment would ensue if all work were stopped.

I accordingly preliminarily enjoin defendants from going- forward with any work except in accordance with the CICA provisions.


source: Caselaw Access Project

author: RAFEEDIE, District Judge.

license: Public Domain

text:
    Sidney L. SOFFER, Plaintiff, v. CITY OF COSTA MESA, Harbor Towing, Defendants.
    No. CV 83-2252-ER(B).
    United States District Court, C.D. California.
    March 28, 1985.

      Sidney L. Soffer, pro per.
    James M. Tillipman, Los Angeles, Cal., for City of Costa Mesa.
    Steven P. Crickard, Hillsinger & Cos-tanzo, Los Angeles, Cal., for Harbor Towing.
   AMENDED MEMORANDUM ORDER

RAFEEDIE, District Judge.

Motions by defendants City of Costa Mesa and Harbor Towing for summary judgment in the above captioned case came before this Court for oral argument on January 21, 1985. The Court granted partial summary judgment as to certain issues and denied summary judgment as to others. Concerned about the procedural posture of the case, the Court reviewed all the files, motions, and orders in the case and issues this Order to clarify for the parties the issues that remain to be decided either by a future motion for summary judgment or at trial. This case has been pending for nearly two years and has consumed a significant amount of the Court’s resources. It is the hope of the Court that this Order will focus the unresolved legal and factual issues in the case so that they can be expeditiously resolved.

I. FACTS

This matter was filed in pro per on April 8, 1983. The case arises out of the towing of plaintiff Sidney Soffer’s 1962 Cadillac on April 9, 1980 by defendant Harbor Towing on orders from defendant City of Costa Mesa’s Police Department. On June 3, 1980, after several meetings between plaintiff and police officials, plaintiff was notified by the City of Costa Mesa that the car would be released with the City of Costa Mesa paying all towing and storage charges. The car was returned to plaintiff.

On April 8, 1983 plaintiff, a resident of Costa Mesa, filed this action alleging that defendants failed to provide due process before and during the temporary impoundment of his vehicle. Plaintiff seeks damages for violation of 42 U.S.C. § 1983 in the amount of $800 for the property damage to his car, $10,000 for deprivation of his constitutional rights, and $10,000 in exemplary damages.

As the action was filed in pro per it was assigned to Magistrate Volney V. Brown, Jr. who decided a number of motions before the case returned to this Court.

The basic facts of the case are stated in plaintiff’s complaint and, for the most part, are not disputed by the defendants. Plaintiff’s Cadillac was parked on Arbor Street in the City of Costa Mesa, California. On March 31, 1980 plaintiff saw a “violation notice” on the windshield of the automobile which stated that the vehicle might be violating Costa Mesa Municipal Ordinance No. 76-40 which provides that no person shall park a vehicle on any street for more than seventy-two consecutive hours without having moved that vehicle three car lengths and the odometer not having changed at least Vioth of a mile. On April 9, 1980, nine days after plaintiff received notice of possible violation of the Ordinance, Cadet Whitehead of the Costa Mesa Police Department ordered that the car be towed and defendant Harbor Towing towed the car. Unwilling or unable to pay the towing fee, plaintiff did not recover his car from Harbor Towing until approximately two months after the towing when the City agreed to pay all charges.

Soon after the car was towed, plaintiff had a meeting with Sergeant Holbrook of the Costa Mesa Police Department who determined that the towing was proper. No witnesses appeared at that session. A similar session was held between plaintiff and Police Chief Neff who reached the same conclusion as Sergeant Holbrook. On June 4, 1980 a third review of the matter was scheduled before the City Manager Fred Sorsabal, however, before that meeting took place, the City Manager sent a letter to plaintiff stating that the towing and storage of plaintiff’s vehicle had been reviewed and that the vehicle would be released with the City paying the towing and storage charges.

For reasons that are not apparent, plaintiff persisted in this matter and requested a review of the City Manager’s decision by the Costa Mesa Council. The request was denied by the Council on July 28, 1980.

Either during the towing or during the storage of plaintiff’s automobile, it was damaged on the passenger side. Defendant Harbor Towing has admitted liability for that damage.

Approximately four months after plaintiff’s vehicle was towed, the City repealed the Ordinance which authorized the towing and replaced it with a new Ordinance, No. 80-13, providing additional procedural protections.

II. PROCEDURAL HISTORY

After two motions had been considered by Magistrate Brown on the issue, the Magistrate dismissed eight of the original defendants in the action including the police chief, the city manager, and members of the city council. That order was entered October 26, 1983 leaving only two defendants in the action — the City of Costa Mesa and Harbor Towing. The dismissed defendants filed for and were awarded attorney’s fees under 42 U.S.C. § 1988 because of the Magistrate’s finding that the allegations against these defendants were unfounded, unreasonable, and/or vexatious.

Plaintiff filed no pleadings opposing the award of fees.

On April 17, 1984 the Magistrate heard argument on two summary judgment motions, one filed by defendant City of Costa Mesa and one filed by plaintiff Soffer. The City of Costa Mesa argued in its motion for summary judgment that the case was moot due to the passage of the new ordinance. Plaintiff Soffer sought summary adjudication that the ordinance was unconstitutional and that defendants were liable. Both motions were denied.

The matter was then transferred to this Court as plaintiff would not stipulate to have the case tried before the Magistrate.

On August 30, 1984 this Court denied plaintiff’s motion objecting to Magistrate Brown’s ruling on plaintiff’s summary judgment motion. This Court adopted the Magistrate’s Order and Findings with regards to plaintiffs motion for summary judgment only. This Court did not review the mootness question. On January 21, 1985 this Court heard oral argument on two new motions for summary judgment filed separately by each remaining defendant. Defendant Harbor Towing moved for summary judgment based on its alleged lack of liability under § 1983, the constitutionality of the ordinance, and the existence of an adequate state remedy. Defendant City of Costa Mesa moved for summary judgment solely on the latter issue arguing under Parratt v. Taylor, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981), that there exists an adequate state law remedy and, therefore, no due process violation had occurred.

III. HARBOR TOWING’S LIABILITY

Defendant Harbor Towing contests its liability under § 1983 on the basis of a district court opinion, Watters v. Parrish, 402 F.Supp. 696 (D.Va.1975), and a Fourth Circuit opinion, Huemmer v. Mayor and City Council of Ocean City, 632 F.2d 371 (4th Cir.1980). While the reasoning of these cases is persuasive, they are not the law of this circuit. Two Ninth Circuit opinions have held that a private towing company “acting at the behest of a police officer and pursuant to a statutory scheme designed solely to accomplish the state’s purpose of enforcing its traffic laws act under color of state law for the purposes of Section 1983.” Goichman v. Rheuban Motors, 682 F.2d 1320, 1322 (9th Cir.1982) citing Stypmann v. City and County of San Francisco, 557 F.2d 1338 (9th Cir.1977). Therefore, this Court is compelled to reject defendant Harbor Towing’s argument in its motion for summary judgment that it is not liable under § 1983 for merely towing plaintiff’s vehicle.

IV. PARRATT v. TAYLOR

Both defendants contend that summary judgment is appropriate because plaintiff Soffer has adequate post deprivation remedies under state law. In Parratt v. Taylor, 541 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981) the Supreme Court held that a prisoner was not deprived of property without due process of law where there existed a state tort claim statute that could provide full redress for his property loss.

Parratt would be on point if all plaintiff sought was compensation for the damage done to his car during the towing. “The majority opinion in Parratt concentrates on problems inherent in turning federal courts into forums for dealing with common law torts that are the regular business of state courts.” Wakinekona v. Olim, 664 F.2d 708 (9th Cir.1981). However, in the instant case plaintiff challenges the procedures of the City of Costa Mesa, not a negligent or intentional deprivation of property. As the Supreme Court recently wrote in Hudson v. Palmer, — U.S. -, 104 S.Ct. 3194, 82 L.Ed.2d 393 (1984):

Two terms ago we reaffirmed our holding in Parratt in Logan v. Zimmerman Brush Co., 455 U.S. 422, 102 S.Ct. 1148 [71 L.Ed.2d 265] (1982) in the course of holding that post-deprivation remedies do not satisfy due process where a deprivation of property is caused by conduct pursuant to established state procedure, rather than random unauthorized action.

Parratt is, therefore, not applicable to consideration of plaintiff’s challenge to the Costa Mesa ordinance. It is however, applicable to his claim for damages for the damage to his automobile. In light of the admission of liability by defendant Harbor Towing, the Court will exercise pendent jurisdiction over this state law claim. The sole issue remaining for final resolution of that claim is the amount of damages.

With respect to any claims of negligent or intentional deprivation of property by employees of the City of Costa Mesa that might be precluded by Parratt, the Court need not reach that question as those employees are not defendants in this case. Municipalities cannot be sued under § 1983 under a respondeat superior theory for the unconstitutional acts of their employees. Monell v. Department of Social Services, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978).

The only question then that remains in this case is the constitutionality of the Cos-ta Mesa ordinance.

Y. MOOTNESS

Article III of the Constitution empowers federal courts to decide cases and controversies. Federal courts do not issue advisory opinions on matters which may have presented a case or controversy when they were filed, but have subsequently become moot. The question of mootness is often raised by the court on its own because it is a jurisdictional matter. St. Paul Fire & Marine Ins. Co. v. Barry, 438 U.S. 531, 537, 98 S.Ct. 2923, 2927, 57 L.Ed.2d 932 (1978); Memphis Light, Gas & Water Div. v. Craft, 436 U.S. 1, 98 S.Ct. 1554, 56 L.Ed.2d 30 (1978).

The passage of the new ordinance by the Costa Mesa City Council raises the question of whether the instant case between Mr. Soffer and the City of Costa Mesa presents sufficient adverseness at this stage in the litigation to illuminate the constitutional due process questions that necessarily must be decided in this case. If a court concludes that “new legislation was specifically intended to resolve the questions raised by pending litigation, a court may find that the dispute is moot ...” 13A Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction 2d § 3533.6 at 337. This rule would be applicable to the instant case if the remedy plaintiff sought was declaratory or injunctive relief. The case would be moot and dismissed. But plaintiff in this case has never sought such relief; he seeks only damages for the alleged constitutional deprivation under § 1983.

Another district court has faced a nearly identical factual situation. In Hann v. Carson, 462 F.Supp. 854 (M.D.Fla.1978) plaintiff sued challenging the constitutionality of the Jacksonville, Florida towing and impoundment ordinance. The City Council repealed the ordinance and enacted a different one to provide sufficient procedural due process. The plaintiffs requests for declaratory and injunctive relief were mooted by the City Council’s action but plaintiffs request for compensatory relief was not.

Similarly in McKenna v. Peekskill Housing Authority, 647 F.2d 332 (2d Cir.1981) a constitutional challenge to a housing authority’s rules was mooted by a change in the rules, but the § 1983 claim for damages remained alive. The McKenna court stated:

[Plaintiffs’ damage claim was “sufficient to ensure that the requisite case or controversy exists,” ... “Although this may influence the size of the award, it does not preclude recovery. If the wrong complained of is a mere technical violation of the plaintiff’s constitutional rights and she is unable to prove actual damage, she would nevertheless be entitled to a recovery of nominal dam-ages_ The availability of either nominal damages or substantial damages is sufficient to prevent this case from becoming moot.”

Id. at 335 quoting Davis v. Village Park II Realty Co., 578 F.2d 461 (2d Cir.1978).

In the instant case, if plaintiff prevails on his constitutional claim of denial of due process he would be entitled to damages under § 1983. Therefore, a live case and controversy exists despite the fact that the City is less likely to defend vigorously a defunct ordinance than an existing one. The possibility of damages, however small, still exists. As the Supreme Court wrote in Carey v. Piphus, 435 U.S. 247, 98 S.Ct. 1042, 55 L.Ed.2d 252 (1978):

Because the right to procedural due process is “absolute” in the sense that it does not depend on the merits of a claimant’s substantive assertions, and because of the importance to organized society that procedural due process be observed, we believe that the denial of procedural due process should be actionable for nominal damages without proof of actual injury. We therefore hold that if, upon remand, the District court determines that respondents’ suspensions were justified, respondent nevertheless will be entitled to recover nominal damages not to exceed one dollar from petitioners.

435 U.S. at 266, 98 S.Ct. at 1054 (citations omitted).

In this important damages case, the Supreme Court cited similar awards of nominal damages in lower court cases decided under § 1983. Therefore, even if the City of Costa Mesa’s contention that Mr. Soffer did not suffer actual damages is correct, it may be appropriate, if a constitutional violation is found, to award nominal damages to plaintiff following the dictates of the Supreme Court in Carey v. Piphus, supra.

VI. PRE-TOW HEARING

Plaintiff contends that the notice he received on March 31, 1980 that his car was violating the Costa Mesa Municipal Ordinance was insufficient due process. He argues that the Fourteenth Amendment requires that a hearing be given before “abandoned” vehicles are towed. As there is no Circuit Court precedent directly on point, the Court considers the pre-tow hearing question with respect to “abandoned” vehicles worthy of careful consideration.

The law is clear in other circuits that “illegally parked” vehicles can be towed without a pre-tow hearing. Sutton v. City of Milwaukee, 672 F.2d 644, 648 (7th Cir.1982); Cokinos v. District of Columbia, 728 F.2d 502 (D.C.Cir.1983) (“As for the right to notice and hearing before towing in a non-emergency situation we follow [Sutton v. City of Milwaukee] and conclude there is no right to pre-tow notice and hearing.”). Ninth Circuit cases that have considered the due process requirements in towing situation have not addressed the pre-tow hearing issue. Goichman v. Rheuban Motors, Inc., 682 F.2d 1320, 1323 (9th Cir.1982); Stypmann v. City and County of San Francisco, 557 F.2d 1338, 1342 (9th Cir.1977) (“In our view this case does not present the issue of whether a hearing is required before seizure occurs”). The Stypmann court did note in dicta at footnote 10 that towing without notice and hearing is proper in some circumstances while “in other circumstances the need for summary action is not so clear.” For this latter proposition, the court cited two District Court opinions. Tedeschi v. Blackwood, 410 F.Supp. 34 (D.Ct.1976) (three judge court); Graff v. Nicholl, 370 F.Supp. 974 (N.D.Ill.1974) (three judge court).

In Tedeschi v. Blackwood, supra, the court did not expressly decide the ,pre-tow hearing issue though it did discuss the importance of notice before abandoned cars are towed:

The importance of prior notice is increased in this situation because the statute in question is not narrowly drawn. It [does not] define[ ] “abandoned” ... In the case at hand the determination was made that the car was abandoned because it had not been moved within 24 hours and because it had a flat tire. Neither of these facts seems particularly conclusive. Failure to respond to adequate notice, on the other hand, would, be particularly probative in the determination of a question which turns essentially on the subjective intent of the owner of the vehicle.

Id. at 45 (emphasis added).

In the instant case, notice was not only given but plaintiff Soffer admits receiving it. The facts that were absent in Tedeschi are present in the case this Court must decide. The fact that nine days after the notice of a violation was placed on Mr. Soffer’s vehicle the notice had not been removed and the car was in the same location was “particularly probative” in Cadet Whitehead’s determination that the car had been abandoned.

The second case cited in Footnote 10 of Stypmann is relied on heavily by plaintiff. In Graff v. Nicholl, 370 F.Supp. 974 (N.D.Ill.1974) (three judge court) the court stated explicitly, “due process requires that notice and an opportunity for a hearing be accorded to owners of abandoned vehicles prior to towing.” Id. at 983.

The statement of law regarding pretow hearings in Graff is straightforward, however, this Court is not bound by a District Court opinion and believes that review of the constitutional issue is called for in light of the major Supreme Court pronouncements on due process that have been made in the decade since Graff was decided. The Graff case was decided two years before Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976) in which the Supreme Court held that an evidentiary hearing is not required before the termination of Social Security disability benefits. Mathews set the standard that this Court must apply to determine the extent to which due process requires an evidentiary hearing prior to the deprivation of some type of property interest if such hearing is provided thereafter. That standard requires the consideration of three factors:

First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and probable value, if any, of additional safeguards; and finally, the Government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.

Id. at 335, 96 S.Ct. at 903.

A. INTEREST AFFECTED

A person’s interest in his or her automobile is certainly significant. Goichman v. Rheuban Motors, Inc., 682 F.2d 1320, 1324 (9th Cir.1982). This is particularly true in Southern California, however, in weighing the importance of an interest, “the duration of any potentially wrongful deprivation of a property interest is an important factor ...” Mackey v. Montrym, 443 U.S. 1, 12, 99 S.Ct. 2612, 2618, 61 L.Ed.2d 321 (1979). The law in the Ninth Circuit is that a post-tow hearing must be held within 48 hours of the tow. Goichman, supra at 1325. Therefore, the interest affected in considering this matter is the potential wrongful deprivation of a vehicle for, at most, two days. See Sutton v. City of Milwaukee, 672 F.2d at 646 (1982) (property interest in temporary loss of use of automobile termed “slight”).

The Supreme Court considered a related interest, a driver’s license, in Dixon v. Love, 431 U.S. 105, 97 S.Ct. 1723, 52 L.Ed.2d 172 (1977) and unanimously held no pre-revocation hearing was required. In examining the nature of the private interest at stake in the loss of driving privileges, the court found it “not so great as to require us ‘to depart from the ordinary principle, established by our decisions, that something less than an evidentiary hearing is sufficient prior to adverse administrative action.’ ” Id. at 113, 96 S.Ct. at 1728.

B. RISK OF ERRONEOUS DEPRIVATION

The second Mathews v. Eldridge factor this Court must weigh is the risk of erroneous deprivation and the probable value of additional safeguards. The Costa Mesa ordinance, the substance of which plaintiff does not challenge, is violated when (1) a vehicle is parked on the street for more than 72 consecutive hours without having been moved three car lengths; and (2) the odometer has not changed at least one-tenth of a mile. The determination of these two factors is rather cut and dried and the risk of erroneous deprivation by a police officer is small. Either the odometer has moved- the required amount or it has not and it is doubtful that an officer would misread an odometer before ordering a tow. Similarly it is doubtful that an officer would mistakenly order the towing of a car which had actually moved three car lengths.

“Procedural due process rules are meant to protect persons not from the deprivation, but from the mistaken or unjustified deprivation of life, liberty or property. Thus, in deciding what process constitutionally is due in various contexts, the Court repeatedly has emphasized ‘procedural due process rules are shaped by the risk of error inherent in the truth-finding process ... ’ ” Carey v. Piphus, 435 U.S. 247, 98 S.Ct. 1042, 55 L.Ed.2d 252 (1978). The risk of error in the application of Costa Mesa ordinance does not appear to be a substantial one.

Because it is conceivable, however, that an erroneous towing could occur, the Court must consider whether additional pre-tow safeguards, over and above the notice of violation Costa Mesa police place on the vehicle, would reduce that risk. The Court thinks not. Vehicle owners who contested the violation before towing would have to be those who had seen the notice. Given the ease with which they could move their vehicles and,thereby comply with the ordinance, it would be unduly burdensome to read into the constitution a requirement that a hearing must be provided for those litigious citizens who would rather argue about than comply with a municipal ordinance. Post-tow hearings stand on a very different footing, as the deprivation can be longer, permanent in some situations, and the cost of towing and storage can be assessed to the owner and a lien placed on the car for those charges. See Stypmann v. City and Cty. of San Francisco, 557 F.2d 1338, 1344 (9th Cir.1977) (Seizure of property without hearing sustained only where owner afforded prompt post-seizure hearing “at which the person seizing the property must at least make a showing of probable cause”).

C. GOVERNMENTAL INTEREST AND BURDENS

There is a governmental interest in removing abandoned cars from its streets for aesthetic reasons and to prevent vandalism. While the immediacy of this governmental interest is not as great as, for example, the interest in towing cars that are blocking traffic, in a given neighborhood abandoned cars can be of great concern to residents. In addition, there is a “substantial public interest in administrative efficiency [that] would be impeded by the availability of a pre-[tow] hearing in every case” Dixon v. Love, supra at 114, 196 S.Ct. at 1728.

The Supreme Court could have been talking about this case when it wrote:

Where the potential length or severity of the deprivation does not indicate a likelihood of serious loss and where the procedures underlying the decision to act are sufficiently reliable to minimize the risk of erroneous determination, government may act without providing advance procedural safeguards.

Memphis Light, Gas & Water Division v. Craft, 436 U.S. 1, 19, 98 S.Ct. 1554, 1565, 56 L.Ed.2d 30 (1978).

Since the three judge district court’s opinion in Graff holding that a pre-tow is required, the Supreme Court has held that no pre-deprivation hearing is required before the loss of Social Security disability benefits, Mathews v. Eldridge, supra, or before the revocation of a driver’s license, Dixon v. Love, supra, or for nursing home residents before the revocation of their nursing home’s authority to provide them with nursing care at government expense, O’Bannon v. Town Court Nursing Center, 447 U.S. 773, 100 S.Ct. 2467, 65 L.Ed.2d 506 (1980). While the above cases implicate different interests than the instant case, it simply cannot be said that the same due process clause which does not require pre-deprivation hearings in the above situations requires a hearing before a municipality can tow what it reasonably believes to be an abandoned automobile.

This order does not and need not address the exact confines of what type of notice due process requires before abandoned vehicles are towed. Due process would likely require notification that is reasonably calculated to let the owner of the vehicle know that the municipality believes the vehicle is in violation of a local ordinance. Since notice here was given and received, the adequacy of the notice procedures is not an issue in this case.

YII. POST-TOW HEARING

To satisfy due process, a post-tow hearing must be held within forty-eight hours to determine whether the car was properly towed. Goichman v. Rheuban Motors, Inc., 682 F.2d 1320, 1324 (1982). In Goichman, the Los Angeles ordinance required the city [to] “establish probable cause for the removal of the vehicle. If unable to meet this burden, the city must itself pay the towing and storage costs. In many, if not all, cases, the city must rely on the testimony of the officer who issued the citation. The city needs sufficient time to arrange for substitute coverage of the officer’s usual duties.” Id. See also Sutton, supra at 645. (Milwaukee post-tow procedures)

In the instant case it cannot be determined from the factual record as it has been developed whether or not Costa Mesa’s post-tow hearing procedures comport with due process.

The Court notes that the City of Costa Mesa has never moved for summary judgment on this particular issue. Defendant Harbor Towing has, but cannot illuminate the City’s procedures as well as the City might be able to do.

The state of the factual record does not permit this Court to grant defendant Harbor Towing’s motion for summary judgment on the constitutionality of the post-tow hearing.

VIII. ISSUES REMAINING FOR ADJUDICATION

The sole issues remaining for adjudication in this case are the amount of damages Harbor Towing is required to pay under the pendent state claim for damage to plaintiff’s Cadillac and the constitutionality of the post-tow procedures employed by the City of Costa Mesa under former Ordinance 76-40. If the ordinance is held to violate due process, the amount of nominal damages to be awarded and, actual damages, if any can be shown, will be left for determination at trial. See Carey v. Piphus, 435 U.S. 247, 98 S.Ct. 1042, 55 L.Ed.2d 252 (1978) (need for and amount of nominal damages discussed). If the City concedes that its former ordinance did not provide due process, only the damages question would remain.

Defendants’ Motions for Summary Judgment are granted in part and denied in part, consistent with this Order.

IT IS SO ORDERED.

      . "B. No person who owns or has possession, custody or control of any vehicle ... shall park such vehicle upon any street or alley for more than a consecutive period of seventy-two (72) hours.
      "C. Vehicles found parked in violation of this article may be cited or towed away and stored by the City. Any towing and storage charges shall be due and payable by the owner or possessor of such vehicle prior to its being released. If no owner or possessor claims such vehicle within thirty (30) days, it may be sold for such costs in the manner provided in CVC Section 22705 or Section 22850 et seq.”

      . "Thus the precise question we must decide is whether it is a denial of due process to tow a person’s illegally parked car without giving him notice and an opportunity to be heard before the car is towed. The question is one of first impression at the federal appellate level.” Sutton v. City of Milwaukee, 672 F.2d 644, 645 (7th Cir.1982) (emphasis added). Sutton held no pre-tow hearing required when vehicle illegally parked. The instant case presents the pre-tow hearing question in situations where "abandoned" cars are towed.

      . The facts of Graff are distinguishable from the instant case. There a police notice was placed on the vehicle by the police stating that the vehicle could be towed as abandoned. Ten days later the officer returned and found that the notice was gone. "[Plaintiff] testified that he never saw this notice and there was no evidence to indicate how long it had remained on the automobile.” Graff v. Nicholl, supra at 978. Plaintiff Soffer makes much of dicta in Sutton v. City of Milwaukee, 672 F.2d 644 (7th Cir.1982) that supports the holding of the Graff v. Nicholl case. A careful reading of Sutton shows that the court only focused on the question of notice before towing of an abandoned car when it reviewed Graff, not the question of a pre-tow hearing. 672 F.2d at 647. Costa Mesa provided notice, received by plaintiff, that the vehicle would be towed.

      . In applying due process calculus, this Court is not required to nor will it abandon common sense. See generally Mashaw, "The Supreme Court’s Due Process Calculus for Administrative Adjudication in Mathews v. Eldridge: Three Factors in Search of a Theory of Value,” 44 U.Chi.L.Rev. 28 (1976). There is no interest to be served by requiring a pre-deprivation hearing before towing abandoned cars as long as notice is given to the owner. The post-deprivation hearings in the instant case, where plaintiff and police officers presumably debated about whether or not the Cadillac had moved one tenth of a mile or three car lengths, demonstrate in the Court's view, the circus that a pre-tow hearing in each case could create. The Constitution does not require that police officers spend valuable time debating with citizens whether their car has moved a tenth of a mile when those citizens can simply move their vehicles and cure the violation of the ordinance.


author: GIERBOLINI, District Judge.

text:
    FEDERAL DEPOSIT INSURANCE CORPORATION, Plaintiff, v. C.A. CONSTRUCTION CORPORATION Amado G. Cordero Castillo and his wife Asuncion Abreu De Cordero, and their legal conjugal partnership, and Noemi Rodriguez Abreu, Defendants.
    Civ. No. 81-0968 GG.
    United States District Court, D. Puerto Rico.
    March 29, 1985.
    Dan Persinger, Deputy General Counsel, Rae Schupack, Area Counsel, Federal Deposit Insurance Corp., New York City, John David Ferrer, Counsel, Ivan Cintron Campos, Attorney, San Juan, P.R., for plaintiff.
    Ortiz-Toro & Ortiz Brunet Noemi Rodriguez-Abreu, Hato Rey, P.R., for defendant.
   OPINION AND ORDER

GIERBOLINI, District Judge.

This is an action for collection of monies brought by plaintiff, the Federal Deposit Insurance Corporation (F.D.I.C.) against C.A. Construction Corporation, Amado G. Cordero Castillo and his wife Asunción Abreu de Cordero and their legal conjugal partnership, and Noemi Rodriguez Abreu. Default Judgment was entered on December 17, 1982, against C.A. Construction Corporation. Amado G. Cordero Castillo and his wife Asunción Abreu de Cordero and the legal partnership constituted by them filed a bankruptcy petition and on February 27, 1985, an Order of Discharge of Debtors was entered in their case. Therefore, the only defendant remaining in the present action is Noemi Rodriguez Abreu (Rodriguez-Abreu). Jurisdiction is invoked pursuant to 28 U.S.C. § 1345.

Now pending before us is plaintiffs motion accompanied by a sworn statement and other supporting documents requesting the entry of summary judgment as to defendant Noemi Rodriguez Abreu. Defendant Rodriguez-Abreu has filed an opposition accompanied by her own sworn statement.

Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment is appropriate “if the pleadings, depositions, answer to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material facts and that the moving party is entitled to judgment as a matter of law.” In ruling on such a motion, the court must look at the record in the light most favorable to the party opposing the motion and must indulge all inferences favorable to that party. Stepanischen v. Merchants Despatch Transportation Corp., 722 F.2d 922 (1st Cir.1983); Hahn v. Sargent, 523 F.2d 461, 464 (1st Cir.1975), cert. denied, 425 U.S. 904, 96 S.Ct. 1495, 47 L.Ed.2d 754 (1976).

Furthermore, Rule 56(c) provides that once a motion for summary judgment has been made and properly supported, the non-moving party may not rest upon mere allegations, but must instead reply setting forth specific facts showing that there is a genuine issue for trial. If a movant has alleged specific undisputed facts that entitle it to summary judgment as a matter of law, then the burden shifts to the opposing party to show that summary judgment is inappropriate. Nicholas Acoustics & Specialty Co. v. H. & M. Construction Co., 695 F.2d 839, 844 (5th Cir.1983).

We have closely examined the record, including defendant’s answer to the complaint, and find that the following facts are uncontested:

1- This court has jurisdiction over this action pursuant to 28 U.S.C. § 1345.

2- Plaintiff, Federal Deposit Insurance Corporation, a corporation organized pursuant to Title 12 U.S.C. § 1811, et seq., brings this action in its corporate capacity.

3- Banco Crédito y Ahorro Ponceño (the Bank) was a banking institution organized and existing under the laws of the Commonwealth of Puerto Rico prior to March 31, 1978.

4- On or about March 31, 1978, the Secretary of the Treasury of Puerto Rico determined that the Bank was insolvent.

5- Pursuant to 12 U.S.C. § 1821(e), the F.D.I.C. was appointed receiver of the Bank.

6- The F.D.I.C., in its corporate capacity, purchased certain assets of the Bank.

7- Among the assets acquired by plaintiff was the loan and promissory note subject of the present controversy.

8- On March 19, 1976, C.A. Construction as principal and Amado Cordero Castillo, as guarantor, issued a $50,000 promissory note to the order of Banco Crédito y Ahor-ro Ponceño with 12% interest and due on demand. (Copy of the note was annexed as Exhibit A of the Complaint).

9- For the purpose of securing the payment of the principal of said note, plus interest as agreed therein, several security instruments were tendered. Among them was the following:

Bearer demand note in the principal amount of $10,000 issued by co-defendant Noemí Rodriguez Abreu and executed on July 2, 1974, through affidavit # 11,894 before Notary Public Luis Pérez Centeno which note is presently held by plaintiff. (Copy of the note was annexed as Exhibit B of the complaint). This note was guaranteed by a mortgage constituted over the following property:
URBAN: Lot located in the Mabu Ward of the Township of Humacao, Puerto Rico, of the semi-rural Antonio Roig Urbanization, consisting of ONE THOUSAND TWO HUNDRED SIXTY ONE SQUARE METERS WITH SEVEN HUNDRED NINETY ONE THOUSANDTHS OF ANOTHER (1,261.791) and in boundaries by the North in twenty eight meters with fifty hundredths of another (28.50) with lands of Don Seferi-no Morell; by the South in eighty meter with seventeen thousandths of another (80.017) with lands of Don Justino Cruz; by the East in six meters with Street A of the Antonio Roig Urbanization; and in twenty four meters with seventy centimeters of a meter with lot B segregated from the main lot and by the West in thirty one meters with five hundred thirty four thousandths of another (31.534) with lands of Ryder Memorial Hospital.

10- Plaintiff is the legal owner and/or holder of the $10,000 note issued by defendant Rodriguez-Abreu and its payment has been demanded.

11- Plaintiff is entitled to recover from defendant Rodriguez-Abreu the following amounts: (See affidavit of Mr. Thomas Ni-emczyk annexed to motion for summary judgment).

Principal $10,000.00

Interests as of July 19, 1984 3,045.20

Total $13,045.20

Per diem $ 2.47

Court costs and attorney’s fees 1,000.00

It is not controverted that defendant Rodriguez-Abreu is liable. The only issue pending determination is defendant’s claim that she acted only as a surety for C.A. Construction and not as a joint debtor, and as such, the F.D.I.C. must collect first from the principal debtor. She further asserts that it was expressly understood when the loan was granted by the Bank that her liability would be conditioned on the default of the principal debtors, prior co-defendants C.A. Construction Corporation, Amado Cordero and Carmen Abreu de Cordero. Thus, it appears that defendant’s argument is based on an alleged oral agreement with the Bank, substantially modifying the promissory note in record, which is an asset of the F.D.I.C.

Notwithstanding, 12 U.S.C. § 1823(e) provides:

No agreement which tends to diminish or defeat the right, title or interest of the Corporation in any asset acquired by it under this section, either as security for a loan or by purchase, shall be valid against the Corporation unless such agreement (1) shall be in writing, (2) shall have been executed by the bank and the person or persons claiming an adverse interest thereunder, including the obligor, contemporaneously with the acquisition of the asset by the bank, (3) shall have been approved by the board of directors of the bank or its loan committee, and (4) shall have been, continuously, from the time of its execution, an official record of the bank.

This statute prescribes the requirements an agreement must meet to be valid against the F.D.I.C. Furthermore, it reflects Congress’ intention of providing special protection to assets acquired by the F.D.I.C. that are not available to ordinary holders of commercial paper and are not dependent on whether F.D.I.C. would qualify as a holder in due course under state law. F.D.I.C. v. Merchants National Bank of Mobile, 725 F.2d 634 (11th Cir.1984), cert. denied, — U.S. -, 105 S.Ct. 114, 83 L.Ed.2d 57.

In the present case there is no evidence on record of the existence of the agreement between defendant Rodriguez-Abreu and the Bank, therefore, if the agreement did exist, it must have been a verbal one. In fact, defendant does not contend that said agreement was in writing. Clearly, this fails to meet the threshold requirement of Section 1823(e) that the agreement be in writing.

Therefore, since the agreement does not meet the statute’s requirements, it cannot defeat or diminish F.D.I.C.’s right, title, or interest in the asset. See Federal Deposit Insurance Corporation v. Merchants National Bank, supra, at p. 638; Gunter v. Hutcheson, 674 F.2d 862 (11th Cir.) cert. denied, 459 U.S. 826, 103 S.Ct. 477, 74 L.Ed.2d 624 (1982); Chatham Ventures, Inc. v. Federal Deposit Insurance Corporation, 651 F.2d 355 (5th Cir.1981) (Unit B), cert. denied, 456 U.S. 972, 102 S.Ct. 2234, 72 L.Ed.2d 845 (1982).

The asset subject of the present controversy is a promissory note issued to bearer and payment is due on presentation. (See Exhibit B of the Complaint). The Uniform Law of Negotiable Instruments defines a negotiable promissory note as “an unconditional promise in writing made by one person to another signed by the maker engaging to pay on demand, or at a fixed or determinable future time, a sum certain in money to order or to bearer ...” Title 19 L.P.R.A. § 361. Certainly, the promissory note issued by defendant meets the conditions set forth in Section 361.

Furthermore, an instrument payable to bearer is transferable by mere delivery. Lozada Merced v. Registrar, 100 P.R.R. 97, 102 (1971). The mere delivery of the promissory note to secure a debt places it in circulation and a negotiable instrument with value emerges to legal life. This must be so because otherwise, it would not have any value as security for the receiver. Vendrell v. Torres, 85 P.R.R. 842, 845 (1962).

In this case the promissory note was delivered to the Bank. The F.D.I.C. thereafter acquired the note and is now its present holder in due course. Consequently, it may demand and collect payment from the issuer, the defendant herein. Given these facts, defendant’s argument of a contract of surety fails completely. As stated before, we are dealing with a promissory note payable to the bearer which is a negotiable instrument.

Additionally, from the transcript of the deposition of defendant, it appears that she accepted and acknowledged that she owes the ten thousand dollars plus interest and whatever else is agreed to in the promissory note. She also acknowledged that the F.D.I.C. was the current holder of the note, that the note was to the bearer, and that it was due on presentation. (See Attachment A of Motion for Summary Judgment at pp. 6, 8 and 11).

WHEREFORE, it appearing from all of the above that plaintiff has positively established that there is no genuine issue as to any material fact and that it is entitled to summary judgment as a matter of law, plaintiff’s motion for summary judgment is hereby granted.

The clerk shall enter judgment against defendant Noemí Rodríguez Abreu for the amounts set forth in paragraph eleven of this Opinion and Order.

SO ORDERED.

      . In the complaint and other motions filed in this case, this defendant is also referred to as Carmen Abreu de Cordero.

      . There is no controversy that the deed of mortgage was never recorded due to several defects and, consequently, the mortgage was never validly constituted.


text:
    UNITED STATES of America v. Pablo SEPULVEDA-SEPULVEDA.
    Cr. No. 82-236 GG.
    United States District Court, D. Puerto Rico.
    March 29, 1985.

      Everett de Jesús, Asst. U.S. Atty., Hato Rey, P.R., for U.S.
    Gabriel Hernández, Old San Juan, P.R., for defendant.
   OPINION AND ORDER

GIERBOLINI, District Judge.

Defendant Pablo Sepúlveda-Sepúlveda, together with others, was indicted for knowingly and intentionally possessing with intent to distribute 40,000 pounds of marihuana, a Schedule I, Controlled Substance in violation of 18 U.S.C. §§ 2, 7 and 3238 and Title 21 U.S.C. § 955a. After a trial, a jury found him guilty and a sentence of fo.ur years imprisonment was imposed to be followed by a special parole term of ten years. Similar sentences were imposed on other co-defendants.

Sepúlveda now files a motion to correct an alleged illegal sentence as provided by Rule 35(a) of the Federal Rules of Criminal Procedure. A previous motion seeking a reduction of sentence was denied on June 27, 1983. Defendant, pro se, asserts that the special parole term is unconstitutional under the due process provisions of the Fifth Amendment in that (1) it fails to indicate a fixed term to which an offender is subject; and (2) it fails to provide a judge with statutorily defined limits in which to determine a period of imprisonment. In support of his motion defendant cites United States v. Tebha, 578 F.Supp. 1398, N.D. Ca.1984. (Judge Wyzanski, sitting by designation).

In that case, the court concluded that the special parole term was either meaningless or, if meaningful, unconstitutional. The court further found that the statutory provision was constitutionally infirm since it fails to state a fixed period of imprisonment for violation of the special, parole term or, alternatively, it fails to give the judge at any time specific authority to determine within statutorily defined limits, the period of imprisonment for a violation of the special parole term. The court noted that since a prisoner could not be held to a sanctionless obligation and Congress indicated no sanctions, defendant was not provided with due notice of the maximum penalty that could be imposed for a violation of the special parole term. Additionally, the court reasoned that since judges could not impose any penalty they deem proper without legislative guidelines, this provision violates the separation of powers doctrine under Article I, § 1 of the Constitution.

We disagree with the reasoning of Tebha and align ourselves with the Tenth, Fifth and Eighth Circuit Courts of Appeals upholding the constitutionality of the special parole term. 21 U.S.C. 841(b)(1)(A) All courts considering this matter have disagreed with the rationale of Tebha which remains a lone cry from the west, albeit by an eastern judge. The Tebha court held that:

... there has been a lack of due process under the Fifth Amendment to the Constitution in the Congressional provision in 21 U.S.C. § 841(b)(1)(A) commanding a court to impose a special parole term of at least 3 years in addition to such term of imprisonment as the court specifically designates. The constitutional flaw is that there is no provision for notice to the potential special parolee of what will be the precise maximum penalty to which he may be subjected if he disobey the special parole order. Id. at 1400.

This is a clear misapprehension of the question involved. The special parole term is applicable only when a term of imprisonment is imposed. Thus, prior to the imposition of an imprisonment term, notice of the special parole term that may be imposed is not relevant. It only becomes relevant and mandatory after the imposition of such a term, and at that time the sentencing judge informs the defendant without equivocation what is the maximum term of special parole that he is going to serve.

The argument that the statute constitutes both a vague and invalid delegation of legislative power, and therefore repugnant to Article 1, § 1 of the Constitution of the United States is also unpersuasive. In United States v. Jones, 540 F.2d 465, 468 (10th Cir.1976) the United States Court of Appeals for the Tenth Circuit authoritatively construed the statute as to validly authorize a maximum special parole term of life. Citing Binkley v. Hunter, 170 F.2d 848, 849 (1948) cert. denied, 336 U.S. 926, 69 S.Ct. 645, 93 L.Ed. 1087 (1949), the Tenth Circuit went even further and ruled that leaving the determination of maximum sentences to the court is not unconstitutional or uncommon. See also United States v. Kuck, 573 F.2d 25 (10th Cir.1978).

Likewise, in United States v. Simpson, 481 F.2d 582 (5th Cir.1973) the court held that the special parole term provided in 841(b)(1)(A) was not constitutionally vague. The court reasoned that by leaving to judicial discretion the maximum limits of the special parole term, Congress implicitly recognized “the equitable and remedial considerations which go into such a sentencing process and accordingly have deferred to the expertise of the sentencing tribunal who must deal with such problems on a case by case basis.”

Finally, the 8th Circuit Court in United States v. Rich, 518 F.2d 980 (8th Cir.1975) also found that there was no fundamental unfairness or due process violation arising from Congress’ failure to specify maximum limits to penalties. Also see United States v. Sims, 529 F.2d 10 (8th Cir.1976).

In sum, we find that Congress did make specific provisions in the event of violation of a special parole term and that these provisions gave defendant adequate notice of the sentence being imposed. Even though the potential maximum total imprisonment is not fixed by statute, the maximum is clear at the time of sentencing. Since we conclude that the special parole term provision of 21 U.S.C. § 841 does not violate the due process clause of the Fifth Amendment to the United States Constitution, nor any other constitutional mandate, defendant’s motion to correct his sentence is hereby denied.

SO ORDERED.

      . Article I § 1 of the United States Constitution provides:
      All legislative powers herein granted shall be vested in a Congress of the United States which shall consist of a Senate and House of Representatives.

      . U.S. v. Hollins, 599 F.Supp. 311 (D.D.C.1984); Ugland v. U.S., 596 F.Supp. 156 (D.N.J.1984); U.S. v. Lockley, 590 F.Supp. 1215 (N.D.Ga.1984); U.S. v. Davi, 588 F.Supp. 91 (E.D.N.Y.1984).

      .See 841(b)(1)(B) which in relevant part prescribes:
      Any sentence imposing a term of imprisonment under this paragraph shall, in absence of such prior conviction impose a special parole term of at least 3 years in addition to such term of imprisonment and shall, if there was such a prior conviction, impose a special parole term of at least 6 years in addition to such term of imprisonment.