author: COHEN, Senior District Judge:

text:
    Miller SESSION and Rose Session, his wife, Plaintiffs, v. I.T.O. CORPORATION OF AMERIPORT, Defendant.
    Civ. A. No. 84-2029.
    United States District Court, D. New Jersey.
    Sept. 20, 1985.

      Sovel & Gruber by Charles Sovel, Haddonfield, N.J., for plaintiffs.
    Clayton H. Thomas, Jr., Philadelphia, Pa., pro hac vice, and Saputelli & Young by Gregory Saputelli, Haddonfield, N.J., for defendant.
   OPINION

COHEN, Senior District Judge:

This maritime tort action, in which the plaintiffs seek only equitable relief, is presently before the Court on plaintiffs’ motion for summary judgment. The primary plaintiff, Miller Session, is an injured longshoreman who is currently receiving workers’ compensation benefits from his employer, the defendant herein, the I.T.O. Corporation of Ameriport (ITO). His wife alleges derivative damages and sues per quod. Essentially, Mr. Session, who shall hereinafter simply be referred to as plaintiff, seeks a declaration that ITO is not entitled to be reimbursed for the statutorily mandated payments it made to plaintiff pursuant to the Longshoremen and Harbor Workers’ Compensation Act (the Act or LHWCA), 33 U.S.C. § 901 et seq., because these benefits do not duplicate the compensation for noneconomic losses which he has been offered by the South Jersey Port Corporation (SJPC) in settlement of a third party negligence action. Plaintiff’s claim arises, therefore, under the LHWCA and vests this Court with subject matter jurisdiction pursuant to 28 U.S.C. § 1331.

Because of the preliminary status of this case, its factual background has not been fully developed. Nevertheless, the facts are undisputed and, ultimately, are almost incidental to our disposition of the present motion. All that need be known about the accident in question, which took place on August 17, 1981, is that the plaintiff was seriously injured when a stack of lumber, which had been unloaded from a vessel, fell on him. The plaintiff claims that his injuries were proximately caused by unsafe pier conditions and the negligence of its operators, the SJPC. Mr. Session has already received extensive medical treatment and compensation benefits of more than $100,000.00. He is not entirely ambulatory and may well be permanently disabled.

Pursuant to its obligations under the LHWCA, ITO began paying workers’ compensation benefits to the plaintiff shortly after Session’s accident. In order to achieve a complete tort recovery, the plaintiff brought suit against the allegedly negligent third party, the SJPC. In its answer, the marine terminal operator raised the uncontroverted defense that it is a “public entity” of the State of New Jersey within the meaning of the New Jersey Tort Claims Act, N.J.S.A. § 59:1-1 et seq. As such, the SJPC is only liable to the plaintiff for those injuries which are not compensable from any other source. See The Travelers Insurance Company v. Collella, 169 N.J.Super. 412, 413, 404 A.2d 1250 (App.Div.1979) (workers’ compensation insurer was not entitled to reimbursement from a public entity for benefits paid to injured employee). More specifically, the SJPC is not liable to the plaintiff for the costs of his medical, disability or rehabilitation expenses because these are recoverable under the LHWCA. See 33 U.S.C. §§ 906, 907 & 908.

On April 16, 1984, the Court convened a settlement conference between representatives of Mr. Session and the SJPC. At that time, Mr. Session agreed to accept a $40,-000 settlement offer from the SJPC on the condition that, pursuant to N.J.S.A. § 59:9-2(e), there would be no subrogation claim for reimbursement asserted by ITO and that plaintiff’s right to collect his workers’ compensation payments would not be otherwise affected by the SJPC settlement. Upon learning of this proposed agreement, ITO indicated that it would not be willing to abide by these terms. Instead, the defendant herein claims that it is entitled to credit any amount Mr. Session receives from SJPC against its workers’ compensation liability.

Although ITO has continued to pay compensation benefits to the plaintiff, its unwillingness to approve of plaintiff’s proposed settlement with the SJPC and its stated intention to terminate the plaintiff’s benefits if he consummates the settlement without its consent, see 33 U.S.C. § 933(g)(2), demonstrate the existence of a “definitive and concrete” dispute between parties with “adverse interests” thereby confirming this Court’s ability to respond to plaintiff’s request for declaratory relief. See ACandS, Inc. v. Aetna Cas. & Sur. Co., 666 F.2d 819, 822-23 (3d Cir.1981). Thus, we proceed to explain our resolution of the novel issue presented by this case: Does a stevedore’s lien, acquired by payment of statutory workers’ compensation benefits, apply to any recovery (minus the costs of litigation) an injured longshoreman may obtain from a culpable third party even if the longshoreman clearly will not realize any double compensation by retaining both the statutory benefits and the third party damages? We hold that it does.

DISCUSSION

Like other workers’ compensation statutes, the LHWCA employs a fundamental quid pro quo in that it mandates a reciprocal relinquishment of important legal rights. “Employees are assured hospital and medical care and subsistence during convalescence. Employers are assured that regardless of fault their liability to an injured workman is limited under the act.” S.Rep. No. 428, 86th Cong., 1st Sess. 1, reprinted in 1959 U.S.Code Cong. & Ad. News 2134 [hereinafter cited as S.Rep. No. 86-428]. See also Morauer & Hartzell, Inc. v. Woodworth, 439 F.2d 550, 552-53 (D.C.Cir.1970). What seems somewhat atypical about the Act, or more particularly about its evolution, is the frequency with which Congress has responded to Supreme Court interpretations of the Act by enacting subsequent amendments. Most of this interaction between the judiciary and legislature has taken place in regard to actions, like the one at bar, in which longshoremen (or employers subrogated to their rights) sue allegedly negligent third parties. Usually, these third parties are shipowners. In this ease, no vessel contributed to plaintiffs injuries, however.

“[I]n the typical tripartite situation, the longshoreman is not only guaranteed the statutory compensation from his employer; he may also recover tort damages if he can prove negligence by the vessel.” Jones & Laughlin Steel Corp. v. Pfeifer, 462 U.S. 523, 530, 103 S.Ct. 2541, 2547, 76 L.Ed.2d 768 (1980). Prior to the 1972 LHWCA amendments and by virtue of three Supreme Court decisions, a longshoreman could obtain tort recovery from a vessel merely by proving that his injury was caused by an “unseaworthy” condition. The vessel could then recover from the longshoreman’s employer by proving negligence.

The net result, in many cases, was to make the stevedore absolutely liable for statutory compensation in all cases and to deny him protection from additional liability in the cases in which his negligence could be established. The 1972 Amendments protect the stevedore from a claim by the vessel and limit the longshoreman’s recovery to statutory compensation unless he can prove negligence on the part of the vessel.

Id. at 531 n. 7, 103 S.Ct. at 2547 n. 7.

Congress has also expressed its support of Supreme Court opinions which have construed the LHWCA. In Pallas Shipping Agency, Ltd. v. Duris, 461 U.S. 529, 103 S.Ct. 1991, 76 L.Ed.2d 120 (1983), for example, the Court held that a longshoreman’s acceptance of voluntary compensation payments did not constitute an acceptance of compensation “under an award in a compensation order.” Id. at 532-39, 103 S.Ct. at 1994. Thus, an employee’s voluntary acceptance of benefits did not trigger an assignment of his third party cause of action, which has only recently been made revocable, to his employer. See 33 U.S.C. § 933(b). In its 1984 LHWCA amendments, most of which became effective immediately, Congress adopted the Pallas Shipping holding. See H.Conf.R. No. 1027, 98th Cong., 2nd Sess. 36, reprinted in 1984 U.S.Code Cong. & Ad.News 2734, 2786 [hereinafter cited as H.C.R. No. 98-1027],

The 1984 amendment that we find to be dispositive of this case was enacted in reaction to Bloomer v. Liberty Mutual Insurance Co., 445 U.S. 74, 100 S.Ct. 925, 63 L.Ed.2d 215 (1980). There, the Court held that the judicially established stevedore’s lien, which is at issue in this case, is not to be reduced by an amount representing an employer’s proportionate share of the legal expenses a longshoreman encountered in obtaining a recovery from a third party. Id. at 85-88, 100 S.Ct. at 931-33. Essentially, the Court applied the allocation scheme which Congress had specified for third party recoveries obtained by subrogated employers, see 33 U.S.C. § 933(e), to a longshoreman’s own action. A “review of the Act and its legislative history persuade[d] [the Court] that Congress intended the stevedore to recover the full amount of its lien, regardless of who brings the action.” Bloomer, 445 U.S. at 87 n. 14, 100 S.Ct. at 932 n. 14. In its 1984 Amendments, Congress rejected this conclusion.

The new § 33(f) of the LHWCA, which became effective on September 28, 1984 to all pending cases, provides that, in the event of an employee’s third party recovery,

the employer shall be required to pay as compensation under this chapter a sum equal to the excess of the amount which the Secretary determines is payable on account of such injury or death over the net amount recovered against such third person. Such net amount shall be equal to the actual amount recovered less the expenses reasonably incurred by such person in respect to such proceedings (including reasonable attorneys’ fees).

33 U.S.C. § 933(f) (West Supp.1985). Thus, while reversing the specific holding in Bloomer and allowing employees to retain their entire costs of litigation, Congress has validated the attempt of the Court in Bloomer to negate the “suggestion] that [a] stevedore’s lien has priority over the longshoreman’s expenses.'’ 445 U.S. at 86 n. 13, 100 S.Ct. at 932 n. 13 (emphasis supplied). Specifically, Congress has directed that an employee must reimburse an employer for its workmen compensation payments with the net amount of his third party recovery and has defined this net amount to be “the actual amount recovered less the expenses [of litigation].” 33 U.S.C. § 933(f) (emphasis supplied). Thus, unless we find plaintiff’s recovery from the SJPC for pain and suffering to be a cost of litigation, we cannot hold that it is excluded from the amount to be reimbursed to the defendant ITO. Of course, we must reject this absurd definition of pain and suffering. See, e.g., Dobbs, Remedies 544-45 (1st ed. 1973).

Our holding does not comport with the rationale which led to the judicial establishment of the stevedore’s lien. In the seminal case of The Etna, 138 F.2d 37 (3d Cir.1943), the court held that the lien was necessary in order to give effect to “the right of subrogation which, under equitable principles, attaches where one, not acting officiously, pays money on account of a legal obligation resting upon him for the imposition whereof another is held pecuniarily responsible.” Id. at 39. In support of its holding, the court cited § 162 of the Restatement of Restitution. This provision states that equitable subrogation is employed in order to disallow unjust enrichment. Thus, The Etna has been credited with first articulating the proposition that a longshoreman may not retain, by virtue of a third party suit, a double recovery of full statutory compensation plus full damages in an action at law. See, e.g., Edmonds v. Compagnie Generate Transatlantique, 443 U.S. 256, 270 n. 25, 99 S.Ct. 2753, 2761 n. 25, 61 L.Ed.2d 521 (1979); Dodge v. Mitsui Shintaku Ginko K.K. Tokyo, 528 F.2d 669, 674 (9th Cir.1975). See generally Norris, The Law of Maritime Personal Injuries § 95 at 171 n. 17 (3d ed. 1975). Congress has, in the past, expressed only agreement with this proposition. See, e.g., S.Rep. No. 86-428 at 2; Hearings on S. 2318 et al. before the Subcommittee on Labor of the Senate Committee on Labor and Public Welfare, 92nd Cong., 2d Sess., 160, 371 & 720.

In the case at bar, there would be no double recovery if the plaintiff were permitted to retain both the $40,000 offered by the SJPC, an amount specifically intended to compensate him for noneconomic losses (principally pain and suffering) for which compensation is not available under the LHWCA, and his statutory compensation for medical and subsistence expenses. Moreover, it is “the Judiciary [which] has traditionally taken the lead in formulating flexible and fair remedies in the law maritime____” United States v. Reliable Transfer Co., 421 U.S. 397, 409, 95 S.Ct. 1708, 1715, 44 L.Ed.2d 251 (1975). Nevertheless, we feel bound to apply the unambiguous language of § 33(f) of the LHWCA and declare that the net proceeds of any settlement between the SJPC and the plaintiff would belong to the defendant ITO.

We are guided, in this holding, by the case of United States v. Lorenzetti, 467 U.S. 167, 104 S.Ct. 2284, 81 L.Ed.2d 134 (1984) reversing 710 F.2d 982 (3d Cir.1983). There, the Court held that a federal agent, who was injured in an automobile accident in Pennsylvania, had to reimburse his employer (the federal government) for payment made pursuant to the Federal Employees’ Compensation Act (FECA) from his third party recovery even though the FECA payments had only compensated him for economic losses and his third party recovery was limited, by the Pennsylvania No-Fault Vehicle Insurance Act, to noneconomic losses like pain and suffering. Thus, in a setting which is almost perfectly analogous to the case before us, the Court ruled that the unambiguous language of § 8132 of the FECA was presumptively dispositive and that “[n]othing in FECA’s legislative history [demonstrated] that § 8132 means something less than what it says.” Id. at -, 104 S.Ct. at 2290. The same is true of § 33(f) of the LHWCA.

Section 33(f) of the LHWCA contains no ambiguity and there is also no question that Congress was aware of the possibility that a longshoreman might have to reimburse an employer for its compensation payments with damages recovered in a third party action for injuries that are not compensable under the LHWCA. To illustrate the latter point, we quote the following passage from the House Committee’s Report on the 1984 LHWCA amendments:

S. 38, as passed by the Senate, made changes to Section 33(f) of the current law, with respect to the disposition of the proceeds of a third party law suit which was brought by the employee or person entitled to compensation under this Act. The Senate bill provided that the entire amount recovered would be available to the employer’s lien for compensation paid, or compensation to be paid under this Act. This provision concerned the Committee because of the uncertainty as to responsibility for payment of the attorneys’ fees and litigation expenses associated with such suit, especially where the employer’s lien equalled or exceeded the amount of the award or settlement achieved in the law suit. Accordingly, the House version clarifies this situation by specifically providing that the claimant/plaintiff’s litigation expenses shall be paid from the recovery in the law suit before the employer’s compensation lien would apply. The Committee also added a provision that after such litigation expenses are paid, a sum equal to 15% of the remaining recovery shall be provided to the claimant/plaintiff. Only the amount of such recovery which remains after payment of the claimant/plaintiff’s litigation expenses and the 15% of net ater [sic] payment of such expenses which is earmarked exclusively for the claimant/plaintiff would be available to satisfy the employer’s compensation lien. The Committee very strongly believes that if the claimant bears the burden of bringing and sustaining a law suit, and succeeds in that suit, the claimant should “walk away from the courthouse” with some portion of the recovery in that suit. In the Committee’s view, the law suit against the third party can be, and often is for damages which are not compensable under the workers’ compensation system, such as pain and suffering, and loss of consortium. It is for this reason that the Committee believes some provision must be made to insure that the person bringing the law suit retain some of the proceeds of the suit, for damages for which he otherwise would not be compensated.

H.C.R. No. 98-1027 at 8. Notwithstanding the Committee’s quoted concerns, Congress decided that it was only necessary to ensure that a longshoreman retain enough of his third party recovery to guarantee that he did not lose the costs (including attorneys’ fees) of his third party litigation. See 33 U.S.C. § 33(f). Congress apparently rejected the Committee’s recommendation of a 15% residual accruing to the longshoreman’s benefit and we must, of course, give effect to this determination.

For all of the foregoing reasons, we hold that the defendant, ITO, is entitled to be reimbursed for the workers’ compensation benefits which it has paid to the plaintiff from any recovery the plaintiff obtains from SJPC excepting the expenses reason-, ably incurred by the plaintiff in the third party litigation. Plaintiff’s expenses do not include compensation for noneconomic losses such as pain and suffering.

In addition to declaratory relief, the plaintiff sought an order enjoining ITO from terminating its payment of benefits if' Mr. Session settles his suit with SJPC without ITO’s consent. See 33 U.S.C. § 933(g). Given our previous determinations and ITO’s obvious interest in the proposed settlement, we will, of course, deny plaintiff’s request for an injunction. The Court shall issue an appropriate order.

      . In relevant part, the New Jersey Tort Claims Act provides:
      e. If a claimant receives or is entitled to receive benefits for the injuries allegedly incurred from a policy or policies of insurance or any other source other than a joint tortfeasor, such benefits shall be disclosed to the court and the amount thereof which duplicates any benefit contained in the award shall be deducted from any award against a public entity or public employee recovered by such claimant; provided, however, that nothing in this provision shall be construed to limit the rights of a beneficiary under a life insurance policy. No insurer or other person shall be entitled to bring an action under a subrogation provision in an insurance contract against a public entity or public employee.
      N.J.S.A. § 59:9-2(e) (West 1982).
      It is clear that the SJPC is a “public entity” within the definition of the state act. See N.J. S.A. § 59:1-3. See also S.E.W. Friel Company v. N.J. Turnpike Authority, 73 N.J. 107, 115-16, 373 A.2d 364 (1977). At oral argument, defendant’s counsel agreed that this material fact is undisputed.

      . Mitchell v. Trawler Racer, Inc., 362 U.S. 539, 549-50, 80 S.Ct. 926, 932-33, 4 L.Ed.2d 941 (1960); Ryan Stevedoring Co. v. Pan-Atlantic S.S. Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956); Seas Shipping Co. v. Sieracki, 328 U.S. 85, 66 S.Ct. 872, 90 L.Ed. 1099 (1946).

      . See LHWCA Amendments of 1984, Pub.L. No. 98-426, § 28, 98 Stat. 1639, 1655 (1984).

      . There are some factual differences between Lorenzetti and the case at bar but none convinces us that a contrary holding would be proper. In both cases, the purpose of the statutory reimbursement provision was "to prevent double recoveries [and] minimize the cost of' workers’ compensation programs to employers. 467 U.S. at -, 104 S.Ct. at 2291. In Lorenzetti, however, it was the employer’s sovereign immunity which may have led the Court to construe the FECA (effectively a waiver of the same) narrowly. In the case at bar, it is the sovereign immunity of the third party, the SJPC, which will ultimately deprive the plaintiff of the full panoply of tort recoveries. We do not find this difference to be significant. In both cases, the holdings are products of unambiguous statutory provisions which, absent a clear expression of contrary legislative intent, are deemed conclusive. See, e.g., Consumer Product Safety Comm, v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980).
      We note, finally, that the case at bar does not present a conflict of state and federal law. The sovereignty of the states is as much a part of the federal constitutional plan as is the sovereignty of the federal government. See, e.g., Tribe, American Constitutional Law, § 3-35 (1978). Thus, the LHWCA does not conflict with New Jersey’s limited liability in a manner that would allow us to invoke the Supremacy Clause to ensure their peaceful coexistence.


source: Caselaw Access Project

author: LUONGO, Chief Judge.

license: Public Domain

text:
    Thomas J. LACEY, Robert Dudash, Edward C. Silverstein and the Committee to Re-Elect Thomas J. Lacey, v. The BOROUGH OF DARBY, PA., the Honorable Louis Saraullo, Mayor of the Borough of Darby the Police Department of the Borough of Darby, Pa.
    Civ. A. No. 83-5391.
    United States District Court, E.D. Pennsylvania.
    Sept. 20, 1985.

      Kenneth R. Schuster, Media, Pa., Edward C. Harkin, Collingdale, Pa., for plaintiffs.
    Peter J. Nolan, Media, Pa., for defendants.
   OPINION

LUONGO, Chief Judge.

Plaintiffs in this action claim that the Borough of Darby and certain Borough officials violated their first and fourteenth amendment rights in connection with a 1983 election campaign. Defendants have moved for summary judgment. For the reasons stated below, I will grant defendants’ motion as to the Darby Police Department and deny it as to Mayor Louis J. Saraullo and the Borough of Darby.

I. Facts and Contentions

Certain facts are not in dispute. In 1983, plaintiff Thomas J. Lacey was seeking reelection as a District Justice for the Boroughs of Darby and Colwyn. Lacey and members of his reelection committee requested and received permission from the mayor of Darby, Louis J. Saraullo, to use sound equipment during the spring primary campaign. Shortly before the November 8,1983 election Robert Dudash and Edward Harkin, members of the Committee to Re-Elect Thomas J. Lacey, again used sound equipment to play music and broadcast speeches. They were stopped by Darby police officer Dominic Squillace.

Plaintiffs’ allegations concerning what happened next are set forth in their complaint, the depositions of Dudash, Harkin and Thomas Lacey, and an affidavit submitted by Harkin. According to plaintiffs, Officer Squillace told them they could nót use sound equipment because they did not have a permit. Plaintiffs claim the mayor had said they did not need a permit. They therefore believed they had a right to use the equipment and refused to stop. Plaintiffs claim the officer then arrested Du-dash, Harkin and four children who were with them.

Plaintiffs further submit that Lieutenant Robert Smythe, Darby’s chief of police, told plaintiffs’ counsel that the police were acting under orders from the mayor. The parties were released, but were threatened that they would be arrested and charged if they continued to use sound equipment. The mayor later told plaintiffs’ counsel that use of sound equipment was regulated by Darby Ordinance § 106-11.

Plaintiffs claim that § 106-11 deals only with the use of sound equipment by peddlers and does not regulate equipment used in a political campaign. They assert that use of sound equipment was Lacey’s only effective means of countering certain accusations made against him on the eve of the election. According to the complaint, the mayor is a member of the same political party as Lacey’s opponent and exercised his police power to thwart Lacey’s bid for reelection. Plaintiffs seek a declaration that § 106-11 cannot be used to regulate the use of sound equipment during an election and an order enjoining defendants from interfering with plaintiffs’ use of such equipment in the exercise of their first amendment rights. Plaintiffs further request damages for the deprivation of their constitutional rights, attorneys’ fees and certain other relief.

In their motion for summary judgment, defendants note that the complaint does not refer to a specific civil rights statute. They discuss plaintiffs’ claims in light of the requirements of 42 U.S.C. § 1983, and urge that the complaint is deficient in failing to allege that defendants acted under color of law.

Defendants further contend that the Police Department of the Borough of Darby is not a separate entity and cannot be sued. They claim the mayor acted reasonably and in good faith, and is immune from liability. The Borough of Darby, according to defendants, is entitled to summary judgment because plaintiffs have neither alleged nor shown that the Borough has an official policy or custom to stop use of sound equipment in election campaigns. Finally, defendants note that plaintiffs have instituted a state court action against them, and suggest that I abstain and permit this matter to proceed in state court.

Plaintiffs deny that their complaint is based on § 1983. They characterize this action as one for declaratory and injunctive relief, damages and attorneys’ fees to protect rights established by the fourteenth amendment. Plaintiffs concede that the Darby Police Department is not a proper defendant. They continue to press their claims against the remaining defendants, claiming that the mayor is not shielded by immunity in this case and that the Borough of Darby is liable because a Borough ordinance was used to violate plaintiffs’ rights.

II. Discussion

A. § 1983

Defendants contend that this action should be treated as one brought under 42 U.S.C. § 1983. I agree. The Third Circuit has held that adjudication of direct constitutional claims need not be permitted where plaintiffs have an effective remedy under § 1983. Rogin v. Bensalem Township, 616 F.2d 680, 686-87 (3d Cir.1980), cert. denied, 450 U.S. 1029, 101 S.Ct. 1737, 68 L.Ed.2d 223 (1981).

According to the United States Supreme Court:

Allegations of fact sufficient to show deprivation of the right of free speech under the First Amendment are sufficient to establish deprivation of a constitutional right guaranteed by the Fourteenth, and to state a cause of action under the Civil Rights Act, whenever it appears that the abridgment of the right is effected under color of a state statute or ordinance.

Douglas v. City of Jeannette, 319 U.S. 157, 162, 63 S.Ct. 877, 880, 87 L.Ed. 1324 (1943). The “under color of law” requirement of § 1983 is satisfied in this ease by plaintiffs’ allegations that Mayor Saraullo used his official authority to violate their constitutional rights. See, e.g., Thomas v. Sams, 741 F.2d 783 (5th Cir.1984), cert. denied, — U.S. -, 105 S.Ct. 3476, 87 L.Ed.2d 612 (1985); Mines v. Kahle, 557 F.Supp. 1030, 1033-34 (W.D.Pa.1983). Plaintiffs can obtain declaratory and injunctive relief as well as damages in a § 1983 action. There is thus no need to permit an action directly under the first and fourteenth amendments. See DiGiovanni v. City of Philadelphia, 531 F.Supp. 141, 144 (E.D.Pa.1982).

B. Claims Against the Police Department

Plaintiffs concede that the Police Department of the Borough of Darby cannot be named as a defendant in this case. I will therefore grant defendants’ motion for summary judgment in favor of the Police Department.

C. Claims Against Mayor Saraullo

Mayor Saraullo contends that he should not be held liable because he acted in good faith, pursuant to municipal and state laws regulating sound equipment. His purpose was allegedly to stop excessive noise, not to prevent plaintiffs from using sound equipment in a political campaign. Defendants state that the Borough generally permits use of sound equipment if the users agree to keep the volume at a reasonable level. The mayor accordingly gave plaintiffs permission to use their equipment, and sent police to investigate only when he received complaints of excessive noise.

Darby police officers involved in the incident have testified that the mayor directed them to ask plaintiffs to reduce the volume. If plaintiffs refused, the police were to bring them to the police station and attempt to resolve the problem through informal discussion. The officers state that they complied with the mayor’s instructions. Plaintiffs were brought to the station as a matter of convenience and were not placed under arrest. (Depositions of Lieutenant Robert F. Smythe and Officer Dominic Squillace.)

Plaintiffs, in opposing defendants’ motion for summary judgment, deny that there is a Borough ordinance regulating the use of sound equipment in a political campaign. According to the affidavit of Edward Harkin and the depositions of Harkin, Dudash and Lacey, plaintiffs were nevertheless arrested and threatened with future arrests for using sound equipment. Plaintiffs contend that the mayor used his official authority to prevent them from campaigning effectively for a candidate he opposed.

In a case similar to this one, the Third Circuit held that the question of whether individual officials are entitled to summary judgment has two distinct aspects. Losch v. Borough of Parkesburg, 736 F.2d 903, 907 (3d Cir.1984). First, where a plaintiff claims to have been arrested unlawfully, an official can invoke good faith and probable cause as a defense on the merits. An official who reasonably determines that the plaintiff violated a statute has probable cause to arrest, and an arrest based on probable cause is not unlawful even if plaintiff was incidentally exercising first amendment rights. See id. at 907-09; United States v. Occhino, 629 F.2d 561 (8th Cir.1980), cert. denied, 450 U.S. 968, 101 S.Ct. 1487, 67 L.Ed.2d 618 (1981). See also Pierson v. Ray, 386 U.S. 547, 556-57, 87 S.Ct. 1213, 1218-19, 18 L.Ed.2d 288 (1967). Second, the government official may be shielded by the defense of qualified immunity. Id. at 907. The Losch court cautioned that these issues must be considered separately.

This demarcation is analytically confusing, especially in light of Harlow v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982). A different Third Circuit panel, in Deary v. Three Un-Named Police Officers, 746 F.2d 185, 192-93 (3d Cir.1984), apparently found Losch difficult to comprehend and apply. Nevertheless, the ruling in Losch is binding upon me and I will analyze the issues in this case accordingly.

With respect to the first issue, the law is clear that use of sound equipment is protected by the first and fourteenth amendments. Although the right to use such equipment is not absolute, it can be regulated only by narrowly drawn, content-neutral ordinances which do not vest undue discretion in government officials. See, e.g., Kovacs v. Cooper, 336 U.S. 77, 69 S.Ct. 448, 93 L.Ed. 513 (1949); Saia v. New York, 334 U.S. 558, 68 S.Ct. 1148, 92 L.Ed. 1574 (1948); Beckerman v. City of Tupelo, 664 F.2d 502 (5th Cir.1981); United States Labor Party v. Pomerleau, 557 F.2d 410 (4th Cir.1977); Phillips v. Township of Darby, 305 F.Supp. 763 (E.D.Pa.1969); Chester Branch, N.A.A.C.P. v. City of Chester, 253 F.Supp. 707 (E.D.Pa.1966). See also Grayned v. City of Rockford, 408 U.S. 104, 92 S.Ct. 2294, 33 L.Ed.2d 222 (1972).

Under the standards set forth in these cases, Darby Ordinance § 106-11 cannot be used to regulate plaintiffs’ use of sound equipment. First, I have serious doubts as to whether the ordinance even applies to plaintiffs. As plaintiffs note, the ordinance deals only with peddlers, prohibiting them from hawking or crying their wares and from using loudspeakers which annoy the public. The ordinance refers to persons licensed as peddlers; it does not establish a permit system for the use of sound equipment. Neither does it appear to provide a basis upon which participants in an election campaign can be prevented from using sound equipment. See Massachusetts Fair Share, Inc. v. Town of Rockland, 610 F.Supp. 682, 690 (D.Mass.1985) (ordinance restricting the hours in which peddlers can solicit orders for the sale of goods cannot be applied to noncommercial solicitation); Evans v. Fullard, 444 F.Supp. 1334 (W.D.Pa.1978).

If the ordinance does apply to all uses of sound equipment, it is open to challenge on constitutional grounds. Although I express no opinion as to whether the ordinance is constitutional if limited to commercial uses of sound equipment, it is too imprecise to be a valid means of regulating activities such as the plaintiffs’. The first amendment “has its fullest and most urgent application precisely to the conduct of campaigns for political office.” CBS, Inc. v. Federal Communications Commission, 453 U.S. 367, 396, 101 S.Ct. 2813, 2830, 69 L.Ed.2d 706 (1981) (quoting Monitor Patriot Co. v. Roy, 401 U.S. 265, 272, 91 S.Ct. 621, 625, 28 L.Ed.2d 35 (1971)). Such fundamental rights cannot be restrained on the basis of an ordinance which contains no explicit standards for enforcement. As the Supreme Court has stated:

Any abuses which loud-speakers create can be controlled by narrowly drawn statutes. When a city allows an official to ban them in his uncontrolled discretion, it sanctions a device for suppression of free communication of ideas. In this case a permit is denied because some persons were said to have found the sound annoying. In the next one a permit may be denied because some people find the ideas annoying. Annoyance at ideas can be cloaked in annoyance at sound. The power of censorship inherent in this type of ordinance reveals its vice.

Saia, 334 U.S. at 562, 68 S.Ct. at 1150. Plaintiffs are entitled to argue at trial that no reasonable official would have concluded that he could control plaintiffs’ use of sound equipment under § 106-11.

It does not follow, however, that plaintiffs’ use of sound equipment cannot be restrained at all. The mayor has also invoked Pennsylvania’s disorderly conduct statute, 18 Pa.C.S.A. § 5503, which prohibits the intentional or reckless creation of unreasonable noise. The Pennsylvania Supreme Court has construed the statute narrowly and upheld it as constitutional. Commonwealth v. Mastrangelo, 489 Pa. 254, 414 A.2d 54, appeal dismissed, 449 U.S. 894, 101 S.Ct. 259, 66 L.Ed.2d 124 (1980). See also Heard v. Rizzo, 281 F.Supp. 720, 741 (E.D.Pa.) (upholding a predecessor of Pennsylvania’s present disorderly conduct statute), aff'd per curiam, 392 U.S. 646, 88 S.Ct. 2307, 20 L.Ed.2d 1358 (1968). According to the supreme court, the statute proscribes “unlawful behavior which in and of itself disturbs the public order and tranquility.” Mastrangelo, 489 Pa. at 261, 414 A.2d at 58 (quoting Comment, Public Disorder Offenses Under Pennsylvania’s New Crimes Code, 78 Dick.L.Rev. 15, 30 (1973)). The statute “may not be used to punish anyone exercising a protected First Amendment right.” Id.

The fact that plaintiffs were using sound equipment in the exercise of first amendment rights, however, is not in itself dis-positive. “[CJonduct which constitutes a breach of the peace is not immune from state regulation simply because it occurs in connection with first amendment activity.” Milwaukee Mobilization for Survival v. Milwaukee County Park Commission, 477 F.Supp. 1210, 1219 (E.D.Wis.1979). See also Adderley v. Florida, 385 U.S. 39, 44, 48, 87 S.Ct. 242, 245, 247, 17 L.Ed.2d 149 (1966); Cox v. Louisiana, 379 U.S. 559, 574, 85 S.Ct. 476, 485, 13 L.Ed.2d 487 (1965). In Mastrangelo itself, the person challenging the statute was convicted of disorderly conduct in effect because of the manner in which he expressed his opinion. The court held that the shouting of epithets at a meter maid did not constitute the exercise of a constitutional right. Mastrangelo, 489 Pa. at 262, 414 A.2d at 58.

Similarly, if plaintiffs were intentionally or recklessly making unreasonable noise, their use of sound equipment could be restrained under the disorderly conduct statute even though they were exercising first amendment rights. Commonwealth v. Weiner, 230 Pa.Super.Ct. 245, 247-50, 326 A.2d 896, 897-98 (1974).

Even if plaintiffs did not in fact violate the disorderly conduct statute, the mayor is not necessarily liable for any infringement of their constitutional rights. If, as the mayor claims, he reasonably believed plaintiffs were broadcasting at an excessively high volume, he was entitled to have police investigate. He claims he hoped to reach a reasonable accommodation and sent police to discuss the problem, not to arrest plaintiffs for using sound equipment. Even an arrest, however, would have been justified if police had probable cause to believe plaintiffs were violating the disorderly conduct statute. See Losch, 736 F.2d at 907-09; Weiner, 230 Pa.Super.Ct. at 247-50, 326 A.2d at 897-98.

Plaintiffs, however, have submitted evidence contradicting defendants’ version of the facts. The mayor is thus not entitled to summary judgment with respect to the merits of plaintiffs’ claims. Plaintiffs may attempt to prove at trial that they were peacefully exercising their first amendment rights and that the mayor used his official position to prevent them from doing so. Losch, 736 F.2d at 908-09.

Mayor Saraullo has also invoked the defense of qualified immunity, under which “government officials performing discretionary functions generally are shielded from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.” Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 2738, 73 L.Ed.2d 396 (1982). The inquiry is an objective one; a defendant’s subjective state of mind is not relevant. Id. at 815-19, 102 S.Ct. at 2736-39. The defendant has the burden of pleading and proving qualified immunity. Id. at 815, 102 S.Ct. at 2736.

In Losch, the Third Circuit interpreted Harlow to require that courts “look not to the clarity of the violation allegedly perpetrated, but at the clarity of the law at issue.” Klitzman, Klitzman & Gallagher v. Krut, 591 F.Supp. 258, 265 (D.N.J.) (interpreting Losch), aff'd, 744 F.2d 955 (3d Cir.1984). The plaintiff in Losch claimed defendants had brought criminal charges against him in retaliation for his exercise of first amendment rights. Defendants invoked the defense of qualified immunity. The Third Circuit held that the sole inquiry relevant to the qualified immunity issue was “whether Losch had clearly established rights to petition the government in the manner that he did and to be free of malicious prosecution for that exercise.” Losch, 736 F.2d at 910. Because the law is clear that a citizen may not be penalized for exercising first amendment rights nor arrested without probable cause, the court rejected defendants' claim to qualified immunity. According to the court, the question of whether defendants acted reasonably and in good faith in filing charges against plaintiff pertained only to their defense on the merits of plaintiff’s § 1983 claim, not to the issue of qualified immunity. Id.

Under the circumscribed analysis mandated by Losch, Mayor Saraullo is not shielded by the qualified immunity defense. As the Losch court held, the law protecting citizens from an official’s use of his position to “launch a private vendetta” or to penalize the exercise of constitutional rights is clearly established. Id. In determining whether the mayor is entitled to qualified immunity I cannot, according to the Third Circuit, consider whether he could reasonably have believed that his actions did not violate plaintiffs’ rights. Id.

The mayor’s motion for summary judgment must therefore be denied.

D. Claims Against the Borough

The Borough of Darby seeks summary judgment on the ground that plaintiffs have not shown their rights were infringed pursuant to an official policy or custom. According to the Supreme Court, “a municipality cannot be held liable under § 1983 on a respondeat superior theory.” Monell v. Department of Social Services, 436 U.S. 658, 691, 98 S.Ct. 2018, 2036, 56 L.Ed.2d 611 (1978). “Instead, it is when execution of a government’s policy or custom, whether made by its lawmakers or by those whose edicts or acts may fairly be said to represent official policy, inflicts the injury that the government as an entity is responsible under § 1983.” Id. at 694, 98 S.Ct. at 2037.

Plaintiffs allege that the Borough is liable because defendants used Darby Ordinance § 106-11 to infringe their rights. Plaintiffs are correct that a municipality can be sued for actions implementing a municipal ordinance. Id. at 690, 98 S.Ct. at 2035. As noted earlier in this opinion, however, it is questionable whether § 106-11 could reasonably be applied to plaintiffs’ use of sound equipment. If an ordinance is manifestly inapplicable, the mere fact that officials cite the ordinance in support of their actions should not be a sufficient ground for imposing liability on the municipality. See Bennett v. City of Slidell, 728 F.2d 762 (5th Cir.1984), cert. denied, — U.S. -, 105 S.Ct. 3476, 87 L.Ed.2d 612 (1985).

In this case, however, the ordinance is not the only possible basis for municipal liability. A municipality is also liable for the acts of an official “whose edicts or acts may fairly be said to represent official policy.” Monell, 436 U.S. at 694, 98 S.Ct. at 2037. Mayor Saraullo is such an official. As our court of appeals has stated, “the Mayor of a Pennsylvania borough is its chief law enforcement officer.” Commonwealth of Pennsylvania v. Porter, 659 F.2d 306, 310 (3d Cir.1981), cert. denied, 458 U.S. 1121, 102 S.Ct. 3509, 73 L.Ed.2d 1383 (1982). As such, he is responsible to “preserve order in the borough, [and] to enforce the ordinances.” 53 P.S. § 46029(1). He has “full charge and control of the chief of police and the police force, and he shall direct the time during which, the place where and the manner in which, the chief of police and the police force shall perform their duties.” Id. § 46121. See also Deposition of Louis Saraullo at 4.

The mayor had the final authority to determine whether and to what extent plaintiffs would be permitted to use sound equipment in the Borough of Darby. He also had the power to direct how police would deal with plaintiffs’ activities. The Borough is therefore liable for any violation of plaintiffs’ constitutional rights which may have resulted from the mayor’s exercise of his authority. See, e.g., McKinley v. City of Eloy, 705 F.2d 1110, 1116-17 (9th Cir.1983); Berdin v. Duggan, 701 F.2d 909, 913-14 (11th Cir.), cert. denied, 464 U.S. 893, 104 S.Ct. 239, 78 L.Ed.2d 230 (1983); Black v. Stephens, 662 F.2d 181, 191 (3d Cir.1981), cert. denied, 455 U.S. 1008, 102 S.Ct. 1646, 71 L.Ed.2d 876 (1982).

I recognize that the Third Circuit has held that a municipal “policy cannot ordinarily be inferred from a single instance of illegality.” Losch v. Borough of Parkesburg, 736 F.2d 903, 911 (3d Cir.1984). In Losch, however, the challenged decision was made by the chief of police, who cannot be said to act for the municipality in the sense that the mayor does. See Languirand v. Hayden, 111 F.2d 220, 227 (5th Cir.1983), cert. denied, — U.S. -, 104 S.Ct. 2656, 81 L.Ed.2d 363 (1984). The official acts of the mayor, as the ultimate executive authority in the Borough, in themselves represent municipal policy. Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 448 (2d Cir.1980). The Borough is responsible for the consequences of those acts. Because there is a genuine issue of fact as to whether plaintiffs’ rights were violated, the Borough is not entitled to summary judgment.

E. Abstention

Defendants have suggested that I abstain from adjudicating this matter. Defendants’ memorandum of law does not discuss the basis for their suggestion, and I will reject it. The only form of abstention relevant to this case is that set forth in Railroad Commission of Texas v. Pullman Co., 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971 (1941). Pullman abstention “may be invoked where there is an unsettled question of state law, the resolution of which would affect the decision of a federal constitutional issue, either by obviating the need to decide it or by changing the light in which it must be viewed.” Heritage Farms, Inc. v. Solebury Township, 671 F.2d 743, 746 (3d Cir.), cert. denied, 456 U.S. 990, 102 S.Ct. 2270, 73 L.Ed.2d 1285 (1982).

The “unsettled question of state law” in this case is whether Darby Ordinance § 106-11 applies to plaintiffs’ conduct. In my view, however, the question is not open to much dispute. The ordinance is clearly designed to regulate commercial use of sound equipment, not the type of political activities in which plaintiffs were engaged. Even if the ordinance applies, significant constitutional questions remain to be decided. The benefits of abstention in this case are dubious at best. See Black United Fund of New Jersey v. Kean, 593 F.Supp. 1567, 1571 (D.N.J.1984), rev’d on other grounds, 763 F.2d 156 (3d Cir.1985). On the other hand, the costs of abstention can be especially significant in a case involving first amendment rights. See id. (citing Baggett v. Bullitt, 377 U.S. 360, 379, 84 S.Ct. 1316, 1326, 12 L.Ed.2d 377 (1964); Procunier v. Martinez, 416 U.S. 396, 404, 94 S.Ct. 1800, 1807, 40 L.Ed.2d 224 (1974)). I conclude that abstention is not appropriate in this case.

Conclusion

Summary judgment will be entered in favor of the Darby Police Department, which plaintiffs concede is not an entity subject to suit. As to the remaining defendants, there are genuine issues of material fact to be resolved at trial. Their motions for summary judgment will therefore be denied.

      . Plaintiffs, apparently misconstruing the nature of the mayor’s defense, contend that he is liable as a supervisor because he knew of and participated in the violation of their rights. The mayor has not denied that he was involved in the relevant events. Supervisory liability is therefore not an issue. Plaintiffs’ submissions as a whole, however, do contain certain allegations relevant to the mayor’s defense. Those allegations are set forth in this paragraph.

      . The ordinance provides:

        Hawking and crying prohibited

      No person licensed as a peddler under this Article shall hawk or cry his wares upon any of the streets or sidewalks of the borough, nor shall he use any loudspeaker or horn or any other device for announcing his presence by which the public is annoyed.


author: VERON, District Judge.

text:
    Thomas E. HOLCOMB, etc., and Brenda Kay Holcomb v. ERA HELICOPTERS, INC., et al. Russell BENTLEY v. ERA HELICOPTERS, INC., et al. Suzanne SCHWENKE v. ERA HELICOPTERS, INC., et al.
    Civ. A. Nos. 85-1314, 85-1371 and 85-1372.
    United States District Court, W.D. Louisiana, Lake Charles Division.
    Sept. 23, 1985.

      Allen L. Smith, Jr., Plauche, Smith & Nieset, Lake Charles, La., for plaintiff Holcomb, et al.
    John S. Bradford, Thomas G. Henning, Stockwell, Sievert, Viccellio Clements & Shaddock, Lake Charles, La., for plaintiff Bentley & Schwenke.
    Dermot S. McGlinchey, William V. Dalferes, Jr. & Kenneth E. Laborde, McGlinchey, Stafford, Mintz, Cellini & Lang, New Orleans, La., for defendants.
   RULING ON PLAINTIFFS’ MOTIONS TO REMAND

VERON, District Judge.

Plaintiffs, Thomas E. Holcomb, Russell Bentley and Suzanne Schwenke move to remand their respective civil actions to the 38th Louisiana Judicial District, contending that the defendants improperly removed said actions on the basis of diversity of citizenship and federal question jurisdiction. Because all three of these cases arise from the same helicopter crash and involve identical issues of law, the Court has consolidated them for the purpose of deciding whether they are to be remanded. For the reasons set forth below, this Court agrees with the plaintiffs and hereby remands their actions to the state court.

On November 12, 1984, all three plaintiffs were passengers aboard a B-206 Bell Helicopter which crashed into the Gulf of Mexico immediately after taking off from a movable drilling vessel, the Penrod No. 97, located in Gulf waters approximately three miles south of Grand Chenier, Louisiana. At the time of the crash, all three plaintiffs were employees of Schlumberger Offshore Services who had been engaged in serving the Penrod No. 97 and who were being returned to shore by the defendant ERA Helicopters, Inc. (hereinafter “ERA”), which is an air taxi flight service that owned the helicopter manufactured by defendant Bell Helicopter (hereinafter “Bell”), and which employed defendants Robert L. Lannerd (hereinafter “Lannerd”) and Bill R. Richey (hereinafter “Richey”). The defendant Aetna Casualty & Surety Company, apparently improperly identified in the complaint as U.S. Aviation Underwriters, is the insurance carrier for ERA Helicopters. In April, 1985, the respective plaintiffs commenced the present actions by filing petitions in the 38th Louisiana State District Court which were subsequently removed to this Court by the defendants.

The two principal issues to be considered by this Court are whether federal jurisdiction is to be appropriately entertained either (1) on the basis of diversity of citizenship, 28 U.S.C. § 1332, or (2) pursuant to the Outer Continental Shelf Lands Act, 43 U.S.C. § 1331, et seq.

I. DIVERSITY OF CITIZENSHIP

Although it is undisputed that defendants Lannerd and Richie are residents of Louisiana, as are plaintiffs, defendants nevertheless contend that because Lannerd and Richie are employees of ERA, their “legal identity” is hence the same as ERA, a Washington State corporation. This Court finds defendants’ argument to be utterly lacking in merit. It is certainly a well established rule that all plaintiffs must have diverse citizenship from all defendants in order for the Court to entertain jurisdiction under 28 U.S.C. § 1332. Strawbridge v. Curtiss, 3 Cranch (7 U.S.) 267, 2 L.Ed. 435 (1806). Defendants are unable to cite any authority to support their proposition that the requirement of complete diversity is met where the “legal identity,” rather than the domicile, of all plaintiffs is diverse from the legal identity of all defendants. The tenement laid down by Chief Justice Marshall in Strawbridge has never been circumvented before by such considerations, and this Court finds defendants’ attempt to apply by analogy those cases discussing legal identity and the res judicata effect of judgments to be wholly without merit. The Court therefore finds that the requirements for diversity jurisdiction have not been established.

II. OUTER CONTINENTAL SHELF LANDS ACT

In the absence of diversity of citizenship, a claim arising under the Constitution, treaties or laws of the United States must be disclosed upon the face of the plaintiffs’ complaints in order for removal jurisdiction to be properly invoked. 28 U.S.C. § 1441 (b); Phillips Petroleum Co. v. Texaco, Inc., 415 U.S. 125, 94 S.Ct. 1002, 39 L.Ed.2d 209 (1974); Powers v. South Central United Food & Commercial Workers Unions and Employers Health and Welfare Trust, 719 F.2d 760 (5th Cir.1983). The “arising under” provision of federal subject matter jurisdiction has received thorough-going analysis by the courts, and numerous decisions by the United States Supreme Court on this subject have clearly established the rule that in order for a claim to arise under the Constitution, laws, or treaties of the United States, “a right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff’s cause of action.” See, e.g., Gully v. First National Bank in Meridian, 299 U.S. 109, 112, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936). Whether the case presents such a federal question “must be determined from what necessarily appears in the plaintiff’s statement of his own claim in the bill or declaration____” Taylor v. Anderson, 234 U.S. 74, 75-76, 34 S.Ct. 724, 58 L.Ed. 1218 (1914). Thus, this Court is to determine the propriety of its removal jurisdiction solely by considering the matters presented by the plaintiffs in their complaints. Gully, supra, 299 U.S. at 112-13, 57 S.Ct. at 97-98.

Defendants strongly urge this Court that the plaintiffs’ state court petitions present claims arising under the Outer Continental Shelf Lands Act, 43 U.S.C. § 1333 et seq. In support of this contention, defendants argue that the jurisdictional grant of 43 U.S.C. § 1349(b) should be construed broadly in favor of finding jurisdiction in any controversy having even an indirect connection with operations on the outer Continental Shelf. See Fluor Ocean Services, Inc. v. Rucker Co., 341 F.Supp. 757, 760 (E.D.La.1972).

In considering whether the character of the allegations set forth in plaintiffs’ complaints present a substantial federal question, the fact that plaintiffs may have failed to reference federal law is not determinative. This Court may appropriately consider factual allegations asserted in the complaints in determining whether they bring forth a claim or right arising under the Constitution, treaties or laws of the United States. See, e.g., Commonwealth of Puerto Rico v. Sealand Service, Inc., 349 F.Supp. 964, 968 (D.Puerto Rico 1970); Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction 2d § 3722. An examination of the facts presented in the original state court petitions in the case at bar is therefore central to determining whether removal jurisdiction is appropriately vested in this Court pursuant to the Outer Continental Shelf Lands Act [OCS-LA].

The complaint of each of the three respective plaintiffs sets forth that each plaintiff was employed by Schlumberger Offshore Services to service the Penrod No. 97, a movable drilling vessel, at the time of the crash. The complaints utterly fail to reveal any nexus whatsoever between the plaintiffs and a fixed drilling platform. Because the situs of plaintiffs’ work at the time of the helicopter crash is of paramount importance in determining the rights and remedies available to them, this Court finds that the facts presented in the complaints give rise to causes of action which are essentially maritime in nature and which do not fall within the purview of the OCSLA. There is no case of which this Court has been made aware that holds the OCSLA governs the rights and liabilities of the parties where a fixed drilling platform has in no way been involved. As noted by the United States Supreme Court, “[t]he purpose of the Lands Act [OCSLA] was to define a body of law applicable to the seabed, the subsoil, and the fixed structures ... on the outer Continental Shelf.” Rodrigue v. Aetna Casualty & Surety Co., 395 U.S. 352, 355, 89 S.Ct. 1835, 1837, 23 L.Ed.2d 360 (1969). The inapplicability of the OCSLA to floating rig workers has been explained as follows:

The OSCLA covers fixed platform workers, while floating rig workers, even those whose tasks are essentially identical to the tasks performed by fixed platform workers, are treated differently. The reason for the different treatment of fixed and floating rig workers is that floating rigs are treated like vessels while fixed platforms are considered ‘artificial islands.’ Longmire v. Sea Drilling Corp., 610 F.2d 1342, 1348 (5th Cir.1980).

The significance of whether a plaintiff is assigned to a fixed platform or a vessel at the time of his injury is well-illustrated by the case of Higginbotham v. Mobil Oil Corp., 357 F.Supp. 1164 (W.D.La.1978), supp. op. 360 F.Supp. 1140 (W.D.La.1973), which involved three workers who died when the helicopter in which they were passengers crashed into the Gulf of Mexico. At the time of the crash, the plaintiff-passengers Higginbotham and Shin were employed primarily as toolpushers on floating drilling rigs, while plaintiff Nation was a toolpusher for a fixed drilling platform. Because of the nature of their assignments, the Court held that Higginbotham and Shin were “seaman” within the terms of the Jones Act and their representatives were entitled to seek the available maritime remedies. Id. at 1174-76. The Court also found that because plaintiff Nation was not assigned to a movable rig at the time of the crash, he was not entitled to seaman’s status and the OSCLA governed his remedies. Id. at 1176-79.

Because it is undisputed that the three plaintiffs in the case at bar were all assigned to the movable drilling rig, the Pen-rod No. 97, and none of the plaintiffs’ work “had furthered the operation of a fixed rig on the shelf,” the Court finds that the three cases fail to present any substantial federal question arising under the OCSLA. Rather, the Court finds the cases to have a robust maritime flavor. As explained by the Fifth Circuit Court of Appeals:

The crash of [a] helicopter, while it [is] being used in place of a vessel to ferry personnel and supplies to and from offshore drilling structures, bears the type of significant relationship to traditional maritime activity which is necessary to invoke admiralty jurisdiction. LeDoux v. Petroleum Helicopters, Inc., 609 F.2d 824, 824 (5th Cir.1980). See also Smith v. Pan Air Corp., 684 F.2d 1102, 1112 (5th Cir.1982).

Moreover, this maritime nexus exists even though the helicopter itself does not qualify as a vessel. Barger v. Petroleum Helicopters, Inc., 692 F.2d 337 (5th Cir.1982).

Despite the Court’s finding that the plaintiffs’ complaints give rise to maritime causes of action, such claims do not “arise under” the Constitution, treaties or laws of the United States so as to be removable under 28 U.S.C. § 1441(b). Superior Fish Co. v. Royal Globe Ins. Co., 521 F.Supp. 437 (E.D.Penn.1981); Chambers-Liberty Counties Navigation District v. Parker Bros. & Co., 263 F.Supp. 602 (S.D.Tex. 1967); 1A MOORE’S FEDERAL PRACTICE 110.167 [3-1] at 463-64. This rule has been established on the basis of the saving to suitors clause of 28 U.S.C. § 1333, which grants plaintiffs the option of bringing in personam maritime suits before the state court. See Romero v. International Terminal Operating Co., 358 U.S. 354, 79 S.Ct. 468, 3 L.Ed.2d 368, reh. denied 359 U.S. 962, 79 S.Ct. 795, 3 L.Ed.2d 769 (1959). Because the plaintiffs in the instant cases elected to bring their maritime causes of actions in the state court, this Court is bound to remand those causes in accordance with the saving to suitors clause of 28 U.S.C. § 1333, in the absence of any substantial independent federal question or diversity of citizenship. For the foregoing reasons, each of the above entitled actions is hereby REMANDED to the 38th Judicial District Court, Parish of Cameron, State of Louisiana, with the costs of removal to be borne by the defendants.

      . See Powers v. South Central United Food & Commercial Workers Unions and Employers Health & Welfare Trust, 719 F.2d 760, 763 n. 1 (5th Cir.1983).

      . The so-called “well-pleaded complaint rule” dictates that "a defendant may not remove a case to federal court unless the plaintiff’s complaint establishes that the case ‘arises under' federal law.” Franchise Tax Board of Calif. v. Construction Laborers Vacation Trust for Southern Calif., 463 U.S. 1, 103 S.Ct. 2841, 2847, 77 L.Ed.2d 420 (1983) (emphasis in original).

      . "... [T]he district courts of the United States shall have jurisdiction of cases in controversies arising out of, or in connection with (A) any operation conducted on the outer Continental Shelf which involves exploration, development, or production of the minerals, of the subsoil and seabed of the outer Continental Shelf, or which involves rights to such minerals, or (B) the cancellation, suspension, or termination of a lease or permit under this subchapter.” 43 U.S.C. § 1349(b)(1).

      . The Fifth Circuit has recognized the jurisdiction of the OCSLA only in those cases involving operations closely connected with fixed platforms on the Outer Continental Shelf. In Barger v. Petroleum Helicopters, Inc., 692 F.2d 337, 340 (5th Cir.1982), cert. denied, 461 U.S. 958, 103 S.Ct. 2430, 77 L.Ed.2d 1316 (1983) and Stansbury v. Sikorski Aircraft, 681 F.2d 948, 951 (5th Cir.1982), cert. denied 459 U.S. 1089, 103 S.Ct. 573, 74 L.Ed.2d 935 (1982), the Court addressed the applicability of section 1333(b) of OCSLA to employees killed in helicopter crashes on the high seas while flying to or from a fixed rig on the Outer Continental Shelf. Stansbury was a foreman for Chevron who travelled both to drilling sites on the land and to fixed platforms on the Continental Shelf in order to supervise and inspect painting work at those sites. In each case the Fifth Circuit Court found that the decedent’s work had furthered the operation of a fixed drilling platform on the Outer Continental Shelf and was in the regular course of extractive operations on the Shelf. Neither death, the Court explained, would have occurred "but for” the extractive operations on the Shelf. See also Herb’s Welding v. Gray, 766 F.2d 898, 900 (5th Cir.1985); Longmire v. Sea Drilling Corp., 610 F.2d 1342, 1348 (5th Cir.1980); In Re Dearborn Marine Service, Inc., 499 F.2d 263 (5th Cir.1974), reh. denied 512 F.2d 1061 (5th Cir.1975), cert. dismissed, 423 U.S. 886, 96 S.Ct. 163, 46 L.Ed.2d 118; Kimble v. Noble Drilling Corp., 416 F.2d 847 (5th Cir.1969), cert. denied 397 U.S. 918, 90 S.Ct. 924, 25 L.Ed.2d 99.
      Defendants nevertheless contend that the decision of Judge Rubin, while sitting on the Federal District Court for the Eastern District of Louisiana in Fluor Ocean Services, Inc. v. Rucker Co., 341 F.Supp. 757 (E.D.La.1972), supports their proposition that the OCSLA jurisdictional grant is to be interpreted broadly. See id. at 760. The Fluor case arose out of a contract in which the plaintiff had agreed to furnish certain barges, equipment and personnel to the defendant for the purpose of raising a fixed drilling platform that had sunk to the seabed floor. The case did not involve an injury to any worker assigned to a vessel, however, and in denying the plaintiff’s motion to remand, Judge Rubin specifically observed that because the court had jurisdiction over the platform while it was engaged in drilling for oil and gas on the Outer Continental Shelf, he would not give the jurisdictional grant a "narrow” reading in order to find that jurisdiction was lost when the structure sank to the bottom of the ocean floor. Id. at 759-60. Defendants are unable to cite any authority explicitly recognizing that the rights and liabilities of the parties are to be determined pursuant to the OCSLA in any situation involving a worker assigned to a vessel that is unattached to a fixed drilling platform.

      . "We find that as a matter of fact that Nation was not assigned to a drilling barge, that he was attached to Mobil’s stationary platform, that as a matter of law his seaman’s status is determined by the situs of his work at the time of his injury and that he was not therefore a seaman on the date of his death.” Higginbotham, supra at 1177; see also Stansbury v. Sikorski Aircraft, 681 F.2d 948 (5th Cir.1982) (Longshoremen Harbor Workers Compensation Act provided exclusive remedy pursuant to the OCSLA wherein the employee was killed in helicopter crash while returning from inspection of employer’s fixed drilling platform on the Outer Continental Shelf).

      . Herb’s Welding, note 4, supra at 900. See discussion at note 4, supra.

      . "The District Courts shall have original jurisdiction, exclusive of the courts of the States, of: (1) Any civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled.” 28 U.S.C. § 1333.

      . Federal jurisdiction is exclusive, however, where the action is an in rem proceeding (e.g., a cause of action against the vessel itself). All other maritime matters are those which "the common law is competent to give” and can be brought in state court, unless some other federal statute has vested exclusive jurisdiction in the federal court. Madruga v. Superior Court of State of California, 346 U.S. 556, 74 S.Ct. 298, 98 L.Ed. 290 (1954).

      . Despite the fact that the complaints of plaintiffs Bentley and Schwenke fail to mention or refer to the saving to suitors clause or the general maritime law, the Court takes notice that such law is necessarily brought into play by the factual allegations of the complaints. See, e.g., Commonwealth of Puerto Rico v. Sealand Service, Inc., 349 F.Supp. 964, 972 (D.Puerto Rico 1970); Wright Miller & Cooper, Federal Practice and Procedure: Jurisdiction 2d § 3722.


author: MORAN, District Judge.

text:
    KARLBERG EUROPEAN TANSPA, INC., Plaintiff, v. JK-JOSEF KRATZ VERTRIEBSGESELLSCHAFT MBH, Defendant.
    No. 85 C 4605.
    United States District Court, N.D. Illinois, E.D.
    Sept. 23, 1985.

      George P. McAndrews, Charles W. Shifley, Gregory J. Vogler, Allegretti, Newitt, Witcoff & McAndrews, Ltd., Chicago, Ill., for plaintiff.
    Detlef G. Lehnardt, Joseph P. Garland, Lehnardt & Miller, P.C., New York City, and Lawrence R. Levin, Wilson P. Funkhouser, Nancy R. Gamburd, Kenneth A. Grady, Levin & Funkhouser, Ltd., Chicago, Ill., for defendant.
   MEMORANDUM AND ORDER

MORAN, District Judge.

This case involves a contract dispute between Karlberg European Tanspa, Inc. (KETS), an American company in the business of selling tanning salon franchises and equipment, and JK-Josef Kratz Vertriebsgesellschaft mbH (JK), a German company which manufactures and sold KETS sun-tanning equipment. JK has moved to dismiss the action for improper venue under Rule 12(b)(3) of the Federal Rules of Civil Procedure. For the following reasons, the court grants defendant’s motion.

I.

The relationship between KETS and JK started in 1982, when JK approached Ann and Stig Karlberg, sole owners of KETS, to establish an American distributorship of its products. After several negotiating sessions in the States, JK went back to Germany and drafted a contract. The contract, in German, was signed by the Karl-bergs on November 8, 1982, even though neither Ann nor Stig Karlberg reads nor understands German. The contract was later translated into English by the Karl-bergs. The 1982 contract contained a forum selection clause and an applicable law clause which the Karlbergs now claim JK included in the contract without their knowledge.

In 1983, before the 1982 distributorship agreement ended, JK again contacted the Karlbergs to negotiate another agreement. Ann Karlberg met with JK officers Udo Sommerkamp and Walter Kratz in Germany in September 1983. They discussed trouble KETS had encountered with the Federal Drug Administration concerning safety requirements for the sun-tanning beds, quotas and sales forecasts for the upcoming year. JK’s lawyers drafted a new agreement which Mr. Sommerkamp and Mr. Katz brought to the States in October 1983. After further negotiation, during which Ann Karlberg made requests for specific changes in the draft contract, the Germans returned to Germany and wrote the final draft. On November 19, 1983, Ann Karlberg signed this agreement which was in German, and on November 24, 1983, she signed an English version.

The current dispute is based on the 1983 distributorship agreement. The contract basically gives KETS exclusive distributorship in the United States of JK’s Soltron products and a discount on any such products, in return for which KETS promised not to distribute any other manufacturer’s sun-tanning products or sell other products to its franchisees. Numerous provisions cover responsibility for advertising, meeting safety regulations, and making repairs on the equipment, as well as terms of supply and inventory. While the core of the contract dispute is how these provisions were implemented over the course of the contract, they are irrelevant to the current motion.

Central to the current motion are the third and second-to-last provisions of the 1983 agreement, which state:

Applicable Law
The laws of the Federal Republic of Germany are to be applied in interpretations of this contract. The German text is binding.
Court of Venue
The courts exercising jurisdiction over the district in which JK is headquartered are responsible for hearing litigation in any and all disputes which may arise from this contract or the individual delivery agreements.

JK argues that these provisions clearly establish that the current contract dispute should be heard in West Germany. KETS argues that venue is proper in Illinois because the forum selection clause is ambiguous and that, even if it is read to name West Germany as the forum, its inclusion in the contract was the result of unequal bargaining power and its implementation would be grossly unreasonable given the circumstances of the two companies.

II.

Before turning to the validity of the forum selection clause we address the issue of its interpretation. KETS argues that the clause is ambiguous because a person (specifically an unsophisticated business person, which Ann Karlberg claims to be) could interpret the phrase, “the district in which JK is headquartered,” as meaning either JK’s American or German offices. To show that JK had offices or headquarters in the United States, KETS submitted incorporation documents for JK subsidiary corporations, filed in Arizona. These documents fail to convince the court that the contract called for venue in the United States. First, the phrase, “JK is headquartered,” plainly refers to JK-Joseph Kratz Vertriebsgesellschaft mbH, the party to the contract and the present defendant, not to JK International, Inc. or any other subsidiary corporation. Second, JK is an international corporation with headquarters in West Germany. Third, West German law controls. Finally, Arizona revoked JK International, Inc. and J.K. of Arizona, Inc.’s corporate status on September 18, 1983, for failure to file an annual report, and no evidence has been presented to show that these companies are or were substantial operating entities during the contract period. From all these indications the court has concluded that the forum selection clause contained in the 1983 Agreement refers all contract disputes to West Germany.

Forum selection clauses are presumptively valid unless the party opposing the clause can “clearly show that enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching.” The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15, 92 S.Ct. 1907, 1916, 32 L.Ed.2d 513 (1972); see also Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., — U.S. -, 105 S.Ct. 3346, 87 L.Ed.2d 444, Trade Reg.Rep. (CCH) par. 66,669 (U.S.1985); Snyder v. Smith, 736 F.2d 409 (7th Cir.1984); Coastal Steel Corporation v. Tilghman Wheelabrator Ltd., 709 F.2d 190 (3d Cir.1983); Hoes of America, Inc. v. Hoes, 493 F.Supp. 1205 (C.D.Ill.1979); Gaskin v. Stumm Handel GmbH, 390 F.Supp. 361 (S.D.N.Y.1975). The “concerns of international comity, respect for the capacities of foreign and transnational tribunals, and sensitivity to the need of the international commercial system for predictability in the resolution of disputes” strongly favor enforcement of forum selection clauses in international contracts. Mitsubishi, supra, — U.S. at -, 105 S.Ct. at 3355, Trade Reg.Rep. (CCH) at 63,149; see also In Re Oil Spill by Amoco Cadiz, 659 F.2d 789, 795 (7th Cir.1981) (“special deference [is] owed to forum-selection clauses in international contracts”).

KETS has a heavy burden of proving that despite the prima facie validity of the clause in the 1983 Agreement, its enforcement should be denied. KETS must show that the contract was invalid due to fraud or overreaching, or that the contractual forum would be “so gravely difficult and inconvenient that [KETS] will for all practical purposes be deprived of [its] day in court.” Bremen, 407 U.S. at 18, 92 S.Ct. at 1917; Coastal Steel Corporation, 709 F.2d at 202.

Turning to the validity of the contract, KETS argues that the contract is invalid for several reasons. KETS insists that it is a small, unsophisticated “mom and pop” operation that was no match in negotiations with JK, and that JK took advantage of its bargaining position to write in the forum selection clause. The court disagrees with KETS’ self-description. At the time of the 1983 Agreement KETS sales were in excess of $2,500,000, and it had 170 franchisees. KETS projected 302 franchisees in 48 states by 1984. In this very contract action, KETS is demanding at least $20,000,000 in damages. KETS is by no means a small local business.

KETS claims it is unsophisticated compared to JK, in that Ann Karlberg did not have a lawyer involved in the negotiations or the signing of the 1983 Agreement, and without a legal expert to advise her she simply did not read or notice the forum selection clause. She also claims that the clause was never discussed in any of the' meetings between KETS and JK. We find these arguments unpersuasive for several reasons. First, basic contract law establishes a duty to read the contract which the Karlbergs cannot escape. See Calamari & Perillo, Law of Contracts, secs. 9-42 to 9-46 (2d Ed.1977); Hoffman v. National Equipment Rental, Ltd., 643 F.2d 987, 991 (4th Cir.1981); Gaskin v. Stumm Handel GmbH, 390 F.Supp. at 366-367 (duty to read upheld even when contract written in German, a language the party could not read or understand).

The contract involved was not a form contract or a contract of adhesion, but rather one freely negotiated between business people. Ann Karlberg had a chance to review the proposed terms and she recommended changes in the draft that were incorporated into the final agreement. The forum selection clause in the final agreement was clearly visible to its signers, being the longest of three provisions on the last page of the agreement, above where the parties signed. See The Bremen, 407 U.S. at 13 n. 14, 92, S.Ct. at 1914 n. 14 (“The forum clause could hardly be ignored.”) Given these facts, KETS’ arguments that it did not negotiate or discuss the forum selection clause and that it was not explained to Ann Karlberg do not “rise to the level of fraud, overreaching, or unconscionability.” Richardson Greenshields Securities v. Metz, 566 F.Supp. 131, 133 (S.D.N.Y.1983).

The cases KETS cites as support for its “contract of adhesion” theory involved significantly different facts. They all involved form contracts with the forum selection clause buried in boilerplate language in fine print. Colonial Leasing Co. of New England v. Pugh Bros. Garage, 735 F.2d 380 (9th Cir.1984); Couch v. First Guaranty Limited, 578 F.Supp. 331 (N.D.Tex.1984); G.H. Miller & Co. v. Hanes, 566 F.Supp. 305 (N.D.Ill.1983); Cutter v. Scott & Fetzer Co., 510 F.Supp. 905 (E.D.Wisc.1981). These cases recognize a qualitative difference between form contracts and freely negotiated contracts specifically tailored by the parties to address their concerns. See e.g., Couch, supra, at 333 (“justice requires that a distinction be drawn between freely negotiated contracts and standard form contracts”); see also Calamari & Perillo, Law of Contracts, sec. 9-44 (1977), (“There has been a tendency ... to treat contracts of adhesion or standard form contracts differently from other contracts. This is particularly true with respect to the duty to read.”).

KETS also argues that, even if the forum selection clause is valid, its enforcement would be so unreasonable as to deprive it of its “day in court.” The Bremen, 407 U.S. at 18, 92 S.Ct. at 1917. First, it should be noted that this language in The Bremen cannot be interpreted to mean that the party opposing the forum selection clause has a right to the same judicial process in the imposed forum that it would have in its chosen forum. This interpretation would make a mockery of the policy behind enforcing these clauses. Thus, the court should only ensure that the opposing party will be treated fairly and have an adequate chance of presenting his case. See Hoes of America, Inc. v. Hoes, 493 F.Supp. at 1209.

KETS argues that litigating in West Germany is unreasonable because most of its witnesses are here, the defective tanning equipment is here, many documents are in English, and discovery is much more limited under the West German court system than it is here. The court finds that none of these factors rise to the level of unreasonableness that would deprive KETS of its day in court. While KETS’ witnesses are here, the $20,000,000 damages KETS seeks surely justifies the expense of traveling to West Germany. See Zima Corp. v. M.V. Roman Pazinski, 493 F.Supp. 268 (S.D.N.Y.1980); Central Contracting Co. v. Maryland Casualty Co., 367 F.2d 341 (3d Cir.1966); Gaskin v. Stumm Handel GmbH, 390 F.Supp. at 369. Much of the evidence seems to be in the form of franchisees’ complaints regarding the quality of the equipment. These complaints were recorded by KETS’ office personnel, so live witnesses will not be essential. Further, most of the communication between KETS and JK was done through Telex, again producing documents that can be introduced into evidence. These documents, although in English, are easily translated into German.

Discovery, especially the taking of depositions, is much more limited in West Germany than in the States. See Shemanski, Obtaining Evidence in the Federal Republic of Germany: The Impact of the Hague Evidence Convention on German-American Judicial Cooperation, 17 Int’l Lawyer 465 (1981). This may make gathering evidence on JK’s manufacturing process and safety precautions difficult. However, this evidence goes more to KETS tort claims of breach of implied warranty of merchantability and breach of implied warranty of fitness for a particular purpose, and are not central to the dispute. How these tort claims will fare under German law is unclear, but it is not this court’s role to guarantee KETS the same probability of success on all its claims. More importantly, KETS, by signing the contract, agreed to trial in Germany under German law, and The Bremen makes clear that the court must enforce such agreements. See Hoes of America, Inc. v. Hoes, 493 F.Supp. at 1209; Central Contracting Co. v. Maryland Casualty Co., 367 F.2d at 344 (it may be assumed that the plaintiff received consideration for the inconvenience of litigating in a foreign forum).

KETS relies heavily on the reasoning in Copperweld Steel Co. v. Demag-Mannesmann-Bohler, 578 F.2d 953 (3d Cir.1978), but the court finds the case nondispositive. In that case, the German designer maintained its own offices in the United States, and the equipment in dispute was made and operated in this country. The court was faced with a dispute that was overwhelmingly domestic in nature. The situation before this court has a much stronger international flavor. Litigating international disputes is always going to be inconvenient for one (or both) of the parties, and we find that the parties allocated this burden in a contract that the court is in no position now to modify.

KETS makes one final argument in an attempt to avoid the forum selection clause, namely that its enforcement would contravene Illinois’ strong public policy of regulating franchisor/franchisee relationships. See Ill.Rev.Stat. ch. 121V2, § 701 et seq. (1984); ECC Computer Centers of Illinois, Inc. v. Entre Computer Centers, Inc., 597 F.Supp. 1182 (N.D.Ill.1984). Even if Illinois law has, for that narrow purpose, a role in the relationship between the parties, there is a problem with this argument: the current dispute is not between franchisor and franchisee, but rather between a distributor and its supplier. The fact that this dispute affects the relationship between KETS and its franchisees is not enough to vitiate the strong policy in favor of forum selection clauses in freely negotiated international contracts.

One last issue raised by KETS needs to be addressed. KETS argues that it should be allowed to continue discovery because we have exercised in personam jurisdiction over JK, citing Greco v. Kremlin, Inc., 101 F.R.D. 503 (N.D.Ill.1984) and In Re Anschuetz & Co., GmbH, 754 F.2d 602 (5th Cir.1985). The court implicitly recognized KETS’ right to discovery while it decided JK’s motion to dismiss by allowing KETS to serve JK with interrogatories. However, in the cases cited by KETS the American court retained jurisdiction and the issue was whether American or foreign discovery rules should apply when one of the litigants is from a country which is a party to the Hague Convention. This issue is not present here, as the court, in dismissing KETS’ action, is giving up all jurisdiction in the case. See Gaskin, 390 F.Supp. at 370; Sanko Steamship Co., Ltd. v. Newfoundland Refining Co., Limited, 411 F.Supp. 285, 286 (S.D.N.Y.), cert. denied, 429 U.S. 858, 97 S.Ct. 158, 50 L.Ed.2d 136 (1976); cf. Wright & Cooper, Federal Practice and Procedure: Jurisdiction, sec. 3846 (1976) (a court loses all jurisdiction when it transfers a case under 28 U.S.C.A. § 1404(a)). Consequently, the court is now powerless to order discovery in the case, and KETS will have to bring its requests to a West German tribunal if it pursues this action in court.

Conclusion

Because we find that the parties entered into a valid contract whose forum selection clause covers the present dispute, we dismiss for improper venue.

      . Defendant also moved to dismiss for improper service under Fed.R.Civ.P. 12(b)(5), but this issue is now moot and the court will not reconsider it.

        . The parties have not addressed the precise issue of whether, under German law, such forum selection clauses are valid. However, in a similar case in which this issue was litigated, Judge Ackerman found that “German courts and legislation would allow the parties” to agree to choice of law and forum provisions. Hoes of America, Inc. v. Hoes, 493 F.Supp. 1205, 1208 (C.D.Ill.1979). We will assume for purposes of this motion that Judge Ackerman is correct.

      . KETS has argued that if the forum selection clause is enforced it extends only to the contract claims. However, the court finds that KETS’ tort claims "arise from the contract” and, as the court in Hoes of America, Inc. v. Hoes stated, "German courts and legislation would allow the parties to [agree to an all-encompassing choice of law and choice of forum provisions] even as to business torts____" 493 F.Supp. at 1208.

      . Other factors considered by the court were: (1) that the facility which was the subject of the action was located in Warren, Ohio and was likely to become the object of an intensive inspection during the trial;
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      (3) that all of the records concerning operation of the plaint were in this country; (4) that all of Copperweld's personnel who operated the plant were in this country; (5) that all of Copperweld’s personnel who negotiated the contract were in this country;
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      (7) that practically all of the activities undertaken in connection with the contract took place in the English language; (8) that almost all of the witnesses were English speaking; and (9) that conducting the litigation in Germany would have required translation with inherent inaccuracies.

        Copperweld Steel Co., 578 F.2d at 965 n. 8.


author: HUGH GIBSON, District Judge.

text:
    Earl R. MYERS v. U.S. GOVERNMENT.
    Civ. A. No. G-85-93.
    United States District Court, S.D. Texas, Galveston Division.
    Sept. 23, 1985.
    Earl R. Myers, pro se.
    Mary Vance, Dallas, Tex., for defendant.
   ORDER

HUGH GIBSON, District Judge.

Before the Court is defendant United States’ motion for summary judgment. Plaintiff has not responded to defendant’s motion.

Plaintiff challenges the penalty of $500.00 the Internal Revenue Service had assessed against him for filing an allegedly frivolous tax return for the year 1988. Title 26 U.S.C. § 6702 affixes a $500.00 penalty against any taxpayer whose tax return “does not contain information on which the substantial correctness of the self-assessment may be judged”, or “contains information that on its face indicates that the self-assessment is substantially incorrect,” where the taxpayer’s conduct is due to a frivolous position or a desire to delay or impede the administration of federal tax law. 26 U.S.C. § 6702.

The evidence supporting the United States’ motion shows that in 1983, plaintiff worked for wages totaling $29,793.,38.

In his complaint, plaintiff alleged that he “filed his 1040 form for the year 1983 as a petition for redress of grievance under the First Amendment of the U.S. Constitution”. He attached to his 1040 form what appeared to be a tax protester’s form on which plaintiff reported his wages as “gross receipt in exchange for labor.” He then claimed the same amount as a deduction for “cost of labor”, thereby wiping out his taxable income and, consequently, tax liability. Plaintiff then demanded a refund of all taxes withheld in 1981, 1982, and 1983.

Although plaintiff’s 1040 form did not appear frivolous on its face, the tax protester’s form appended to the 1040 form clearly represented a frivolous position. Davis v. United States Government, 742 F.2d 171 (5th Cir.1984). The Court finds that this tax protester’s form constitutes part of plaintiff’s tax return despite the fact that this form was labeled “NOT a return”. A request for a tax refund sent to the Internal Revenue Service to which was appended a Form 1040 and W-2 statements were elements of a purported return under the statute prohibiting frivolous filing. Holker v. United States, 737 F.2d 751 (8th Cir.1984). Since the plaintiff’s stated purpose was to obtain a refund, the documents submitted must be deemed purported tax returns, or else the purpose of the penalty statute would be completely undermined. Nichols v. United States, 575 F.Supp. 320 (D.Minn.1983). The Court concludes that plaintiffs’ tax return was based on a frivolous position. Davis, supra. Therefore, the defendant has satisfied its burden of proving that the penalty was justified. Karpowycz v. United States, 586 F.Supp. 48 (N.D.Ill.1984).

The Court finds plaintiff’s remaining allegations — that the penalty violated the Administrative Procedures Act, and the Fifth and Seventh Amendments to the Constitution — to be wholly meritless. See Scull v. United States, 84-2 U.S.T.C. ¶ 9529 (E.D.Va.1984); Ueckert v. United States, 581 F.Supp. 1262 (D.N.Dak.1984).

Accordingly, it is ORDERED, ADJUDGED and DECREED that the defendant’s motion for summary judgment be, and is hereby, GRANTED. Defendant’s motion to dismiss for improper service of process is MOOT.