author: MOTLEY, Chief Judge.

text:
    The DREXEL BURNHAM LAMBERT GROUP INC., Plaintiff, v. A.W. GALADARI and A.W. Galadari Commodities, Defendants.
    No. 84 Civ. 2602 (CBM).
    United States District Court, S.D. New York.
    May 20, 1985.

      Richards O’Neil & Allegaert by Charles E. Dorkey, III, and Paul J. Hanly, Jr., New York City, for plaintiff.
    Gaston Snow Beekman & Bogue by Carlton R. Asher, Jr., New York City, for defendants.
   OPINION

MOTLEY, Chief Judge.

In this diversity action, plaintiff Drexel Burnham Lambert Group, Inc. (Drexel) sues to collect for default on a Note for approximately $19 million of which approximately $12 million remains unpaid. Defendants, a major Middle Eastern banker and businessman and his company, executed the Note to cover losses on their commodities account with Drexel. This matter is before the court on plaintiff’s motion for summary judgment and defendants’ motion to dismiss on three different grounds. For the reasons set forth below, plaintiff’s motion is denied and defendants’ motion is granted.

FACTS:

The following facts appear to be uncontested. Defendant Galadari is a citizen and resident of Dubai, United Arab Emirates, where he is a major invester and businessman. Among his other activities, defendant has engaged in the buying and selling of commodities on United States exchanges. In connection with these commodities trading activities, Galadari and co-defendant A.W. Galadari Commodities maintained an account with Drexel Burn-ham Lambert International, N.V. (Drexel International). When defendants’ accounts had accumulated approximately $19,465,-00.00 in losses, Drexel International sought security for the debt, and on or about September 14, 1982 defendants negotiated, executed, and delivered in New York a secured promissory note in the principal amount. Defendants consented, through the Note, to have the Note’s terms construed under New York law under the jurisdiction of this court. As collateral, defendants pledged, inter alia, 6,068,640 shares of stock in the Union Bank of the Middle East Ltd. (UBME).

Drexel International assigned the Note to Drexel on or about October 28, 1982, six weeks after the Note was executed and 17 months before the commencement of the present action. The terms of the Note required monthly payments in London or at another location specified by Drexel of $3 million with the final payment including accrued interest due on May 2, 1983. Defendants made partial payments totally approximately $7 million but have paid no principal since July, 1983 and no interest since March, 1984. This action was commenced on April 12, 1984 through service on defendants’ designated agents in New York, and defendant Galadari has also been personally served in Dubai.

On or about April 17, 1984, H.E. Sheikh Maktoum Bin Rashid A1 Maktoum, Crown Prince and Deputy Ruler of Dubai, issued Decree No. 3 of 1984. The Decree establishes a Committee of Receivers to manage defendants’ assets and effect an orderly liquidation and winding down of his affairs. Although plaintiff asserts that this bankruptcy-like process was instituted in direct response to this action in an attempt fraudulently to erase Drexel’s debt, defendant asserts that the appointment of the Committee was simply the latest in a series of actions taken by the government of Dubai to head off economic disaster threatened by the collapse of defendant Galadari’s financial empire, and to ensure the fair settlement of claims against defendants’ assets. In order to stave off a collapse of UMBE, the government purchased defendants’ holdings and took over the bank.

Defendant moves to dismiss this action on three separate grounds: 1) That plaintiff had the Note assigned to it by its subsidiary in a collusive attempt to confer jurisdiction on this court in violation of 28 U.S.C. section 1359; 2) that the act of state doctrine prevents an American court from challenging a decree issued by a foreign sovereign; and 3) that principles of international comity require American courts to defer to the comprehensive liquidation procedure already underway in Dubai.

Plaintiff argues that defendants merely seek to obfuscate a simple case of default on a debt. Plaintiff maintains that the Decree violates American public policy and constitutes a fraudulent attempt to exclude Drexel’s debt in two specific ways: First, by redefining a security interest so as to remove Drexel’s preference, and second, by removing the UBME shares from defendants’ assets and thereby alienating plaintiff’s collateral. Therefore, plaintiff argues that international comity and the act of state doctrine should not be invoked to shield defendants from a legitimate creditor.

As to jurisdiction, plaintiff alleges two valid business purposes for the assignment of the debt by Drexel International, a Netherlands Antilles corporation, to its American parent company. First, plaintiff asserts that given Drexel International’s modest capitalization, carrying such a large Note would hurt the company’s credibility with potential customers. Second, in the event that the debt wasn’t paid, Drexel says that it wanted the parent company to have the American tax advantages of the bad debt.

DISCUSSION:

Jurisdiction

Before addressing any other grounds for dismissal, this court must determine that it has jurisdiction over the subject matter of the instant action. Jurisdiction is here alleged on the basis of diversity, with plaintiff, a Delaware corporation with offices in New York, suing two foreign defendants. However, prior to the assignment of the debt by Drexel International to Drexel, this suit would have been one between two foreign parties, and therefore not within the diversity jurisdiction of this court.

Plaintiff has the burden of asserting complete diversity. However, defendants argue that plaintiff must also bear the burden of rebutting a presumption of collusiveness arising because the debt was assigned by a completely controlled subsidiary to its parent. This presumption has been recognized where a debt is assigned to a subsidiary whose only business is to obtain jurisdiction and sue on the debt. Prudential Oil Corp. v. Phillips Petroleum Co., 546 F.2d 469 (2d Cir.1976). Here, however, the debt was assigned by a legitimate, functioning subsidiary company to its parent for what seem at least facially to be valid business purposes. In light of these purposes, and in the absence of more particularized allegations of improper motive, this court concludes that plaintiff has carried its burden of demonstrating diversity. The assertion that the assignment was made in a collusive attempt to confer jurisdiction is further undercut by plaintiff’s observation that the assignment was made a mere six weeks after execution of the Note but 17 months before the filing of this action. This court therefore has jurisdiction over the present action.

Act of State Doctrine

The court will next consider defendants’ argument that the act of state doctrine requires this court to honor the Dubai decree. Although the act of state doctrine is not jurisdictional, Allied Bank International v. Banco Credito Agricola de Cartago, 757 F.2d 516, 520 (2d Cir.1985), it does preclude a court from examining the validity of a foreign act. Therefore, if it applies in this case, the court would be prevented from deciding whether or not the acts of Dubai deserved the protection of international comity.

The act of state doctrine was originally grounded in principles of sovereign immunity. See Underhill v. Hernandez, 168 U.S. 250, 252, 18 S.Ct. 83, 84, 42 L.Ed. 456 (1897) (“Every sovereign state is bound to respect the independence of every other sovereign state, and the courts of one country will not sit in judgment on the acts of the government of another done within its own territory.”). In its modern incarnation, however, the doctrine focuses on the balance of power between the three branches of our own government, and in particular the danger that the judiciary might interfere with the dominant role of the executive branch in the conduct of foreign affairs. See Banco National de Cuba v. Sabbatino, 376 U.S. 398, 423, 84 S.Ct. 923, 937, 11 L.Ed.2d 804 (1964). The doctrine does not take the form of an absolute or inflexible rule, but rather requires a careful case-by-case analysis to determine if, in a particular situation, the conduct of foreign affairs by the executive branch is likely to be vexed or hindered by judicial review of the acts of a foreign government. Allied Bank, 757 F.2d at 521; Libra Bank, Ltd. v. Banco National de Costa Rica, 570 F.Supp. 870, 877 (S.D.N.Y.1983).

As a general matter, however, the act of state doctrine only applies to acts occurring within the state’s territorial boundries, Allied Bank, 757 F.2d at 521, because it is usually only when the state has the actual power to complete the action at issue within its own borders that the state can be said to have a reasonable expectation of dominion over the matter. Libra Bank, 570 F.Supp. at 883-84. It is, in turn, only when the state has such an expectation that judicial interference with its acts tends to vex our relationship with the foreign government. Id.

[W]hen a foreign government performs an act of state which is an accomplished fact, that is when it has the parties and the res before it and acts in such a manner as to change the relationship between the parties touching the res, it would be an affront to such foreign government for the courts of the United States to hold that such act was a nullity.

Tabacalera Severiano Jorge, S.A. v. Standard Cigar Company, 892 F.2d 706, 715 (5th Cir.), cert. denied, 393 U.S. 924, 89 S.Ct. 255, 21 L.Ed.2d 260 (1968). When either the parties or the res is not within the foreign state’s domain, the state cannot expect such exclusive control.

Because of this extraterritorial limitation, courts in this circuit have declined to apply the act of state doctrine in cases involving interference by foreign governments with debts when the situs of the debt is elsewhere than in the foreign state. See, e.g., Allied Bank, 757 F.2d at 521; Libra Bank, 570 F.Supp. at 882. In its recent Allied Bank opinion, the Second Circuit applied both traditional situs factors and a more specialized act of state analysis in determining that the debt in question had its situs in the United States. “[T]he situs of a debt for act of state purposes ____depends in large part on whether the purported taking can be said to have ‘come to complete fruition within the dominion of the [foreign] government.’ Tabacalera, 392 F.2d at 715-16.” Allied Bank, 757 F.2d at 521.

Under either version of the test, the situs of the debt in the case at bar is other than Dubai. First of all, the alleged “taking,” in this case — the government decree freezing payment of Galadari’s debts — could not “come to complete fruition” in Dubai. It matters not that the decree itself was executed within the borders of Dubai, since the act of state doctrine looks to actual dominion over property rather than to the mere execution of official documents. Libra Bank, 570 F.Supp. at 878. Just as the government of Costa Rica could not extinguish the obligation of Costa Rican banks to make payments in United States dollars in New York, see Allied Bank, 757 F.2d at 521, the government of Dubai cannot demand the absolute deference of the act of state doctrine for its attempts to alter the obligation of defendants to make payments in United States dollars in London.

Moreover, under traditional situs analysis, the situs of Galadari’s debt to Drexel is certainly not Dubai. Defendants negotiated, executed, and delivered the Note in New York, consented to the jurisdiction of this court and to the construction of the Note in accordance with New York law. Although payment was to be made in London, the place of payment was subject to change at Drexel’s discretion. In any event, whether the situs of the debt is London or New York, it is certainly not Dubai. The act of state doctrine, therefore, does not apply to these facts, and the court is free to proceed to a consideration of defendants’ international comity arguments.

International Comity

In Canada Southern Railway Co. v. Gebhard, 109 U.S. 527, 539, 3 S.Ct. 363, 371, 27 L.Ed. 1020 (1883), the Supreme Court held that the “true spirit of international comity” required American courts to defer to a Canadian bankruptcy procedure that blocked the pursuit of individual claims. In Clarkson Co. v. Shaheen, 544 F.2d 624, 631 (2d Cir.1976), the Court of Appeals held similarly, and added that allegations of fraud interposed to defeat comity must be demonstrated by “clear and convincing evidence.” These cases establish a presumption that American courts should defer to bankruptcy proceedings in other countries which are essentially fair. Under New York law as well, foreign decrees and proceedings will be given respect under principles of international comity in the absence of significant countervailing public policy reasons, even if the result under the foreign proceeding would be different than under American law. Watts v. Swiss Bank Corp., 27 N.Y.2d 270, 279, 265 N.E.2d 739, 744, 317 N.Y.S.2d 315, 322 (1970). See also Intercontinental Hotels Corporation v. Golden, 15 N.Y.2d 9, 13, 203 N.E.2d 210, 211, 254 N.Y.S.2d 527, 529 (1964) (international comity applies unless it would require “approval of a transaction which is inherently vicious, wicked, or immoral, and shocking to the prevailing moral sense”). Therefore, even when the act of state doctrine does not apply for reasons of extraterritoriality, quasi-judicial proceedings in foreign states are entitled to presumptive respect.

Plaintiff argues that the Dubai receivership procedure, unlike the American-style bankruptcy procedures approved in previous cases, is so unfair and inconsistent with American law and policy as to be beyond the scope of international comity. The court disagrees. Unlike the unilateral foreign expropriations and repudiations of debt which, when beyond the scope of the act of state doctrine, have been accorded little respect in American courts, Allied Bank; Libra Bank, the Dubai procedure is consistent with the basic premises and policies of American and British bankruptcy law. Faced with a national crisis over the acute liquidity problems of defendants, Dubai undertook to freeze all debt payments, centralize the management of defendants’ affairs, and effect an orderly liquidation of defendants’ assets. Such a procedure is certainly not facially unfair, and evidence submitted of censorship in Dubai regarding news of the receivership, while suggesting attitudes towards free press guarantees quite different from our own, does not automatically suggest inherent unfairness in the Dubai proceedings.

Plaintiff’s more specific arguments for the fundamental unfairness of the Dubai proceedings fail to convince the court. The only specific evidence that the Dubai proceedings were initiated or shaped in direct response to this lawsuit is contained in the affidavit of Thomas Hill, a lawyer for Drexel, who relates the hearsay statement of David Murrell, a partner in Peat, Mar-wick, Mitchell & Co., British Chartered Accountants who had advised the Committee of Receivers. Hill claims that Murrell told him that the receivership decree was issued in direct response to the present lawsuit and in an attempt to exclude Drexel’s debt. In an affidavit filed in response, however, Murrell categorically denies that he made such statements. That the Decree includes a definition of a security interest that excludes plaintiff’s collateral does necessarily mean that it was designed solely in response to this suit, and it does not make the receivership proceeding inherently unfair. International comity is not reserved for foreign proceedings that obtain results identical to those under American law.

Plaintiff further argues that the government, in taking over UBME and removing the pledged bank stock from the universe of available Galadari assets, created an unfair preference which harmed plaintiff. Defendants argue, more pursuasively, that the government takeover of the bank was necessary to avoid national financial disaster and dissipation of all of defendants’ assets, and point out that the cash value of the stock was paid into the receivership estate. Moreover, defendants suggest that plaintiff would not even have a security interest under American law because Galadari lacked the authority to pledge the assets in question on behalf of A.W. Galadari Commodities.

Plaintiff seeks to build a case out of definitional discrepancies between the Dubai decree and American bankruptcy law, but it is clear that in its basic premises and goals, the Dubai proceeding is consistent with American law and policy. Absent more pursuasive and particularized evidence that the Dubai proceedings are fraudulent or in some way fundamentally unfair, these foreign proceedings are entitled to deference from American courts. Defendants’ motion to dismiss this case on the ground of international comity therefore is granted. Plaintiff’s motion for summary judgment is denied.


source: Caselaw Access Project

author: TASHIMA, District Judge.

license: Public Domain

text:
    Dolores LANGFORD, Dyvon Randale Small, a minor by Dolores Langford, his guardian ad litem, Plaintiffs, v. Daryl GATES, Chief of Police of the Los Angeles Police Department, Detective James M. Dumelle, Officer C. Uribe, of Los Angeles, DOES 1 through 100, inclusive, Defendants.
    No. CV 85-1926 AWT.
    United States District Court, C.D. California.
    May 22, 1985.
    Paul Hoffman, Mark D. Rosenbaum, Joan W. Howarth and Pete Navarro, Los Angeles, Cal., for plaintiffs.
    Gary R. Netzer, Lewis N. Unger, Pamela Victorine, Donna B. Weisz, Los Angeles, Cal., for defendants.
   MEMORANDUM OPINION AND ORDER OP REMAND

TASHIMA, District Judge.

This is an action, originally filed in state court, challenging certain conduct of the Los Angeles Police Department (“LAPD”) as violative of the Fourth, Fifth, Ninth and Fourteenth Amendments of the United States Constitution and of similar provisions of the California Constitution. The practice challenged is the LAPD’s use of an armored personnel carrier equipped with a 14-foot steel battering ram (the “motorized battering ram”), to “storm” residential structures suspected as places of unlawful narcotic activity (“rock houses”). The motorized battering ram is alleged to have been used to drive a hole through the exterior wall of rock houses to gain access thereto. At the same time explosive grenades are thrown into the rock house “to create an explosive noise and light.” It is further alleged that the LAPD intends to continue these practices in the future.

The action was brought by five plaintiffs. Three, a mother and her two minor sons (the “individual plaintiffs”), were, according to the complaint, visiting a friend’s home when the motorized battering ram and grenade were used upon it in the manner described. The remaining two plaintiffs are alleged to be local taxpayers (the “taxpayer plaintiffs”), who sue under the state taxpayer’s action statute, Cal.Code Civ.Proc. § 426a. Based on the asserted violation of federal and state constitutional rights, the individual plaintiffs seek damages and all plaintiffs seek declaratory and injunctive relief.

The defendants are the Chief of the LAPD, Daryl F. Gates, two officers of the LAPD, the City of Los Angeles and 100 Doe defendants. All named defendants joined in a petition removing this action to federal court, pursuant to 28 U.S.C. § 1441(a). The petition asserts that this Court has original jurisdiction over the action under 28 U.S.C. §§ 1331 & 1343(a)(3) because it is based, in part, on 42 U.S.C. § 1983 for federal constitutional deprivations; in addition, that several of the claims are purported to be based directly on certain provisions of the United States Constitution. Shortly after removal defendants made a motion to dismiss which, although ostensibly based on F.R.Civ.P. 12(b)(6), is, at least in part, an attack on this Court’s subject matter jurisdiction under Rule 12(b)(1). To quote from defendants’ motion:

First, all claims for equitable relief should be dismissed without leave to amend as plaintiffs have not and cannot state facts to invoke the constitutional jurisdiction of the federal courts under Article III of the United States Constitution.

Within a few days thereafter, plaintiffs made application to remand all state law claims to state court. At the hearing on the remand application, the Court raised sua sponte the issue of whether removal was proper in the first instance. That issue, as well, has now been fully briefed by the parties. For the reasons explained below, I conclude that removal jurisdiction exists; however, that all but one of the “claims” should be remanded to state court.

As explained below, there is no original subject matter jurisdiction with respect to most of plaintiffs’ claims. This is undisputed. First, it is clear that no federal jurisdiction exists over the claim of the taxpayer plaintiffs under the circumstances alleged here. The taxpayer plaintiffs do not allege that they have suffered actual injury from use of the motorized battering ram or grenade or that they are threatened by such conduct in the future. Thus, they have not demonstrated that each of them “has sustained or is immediately in danger of sustaining some direct injury as a result of its [the statute’s] enforcement, and not merely that he suffers in some indefinite way in common with people generally.” Doremus v. Board of Educ., 342 U.S. 429, 434, 72 S.Ct. 394, 397, 96 L.Ed. 475 (1952). They have, therefore, failed to demonstrate a sufficient personal stake in the outcome of the suit to support standing. Id. Since the taxpayer plaintiffs have failed to establish a “nexus” between their status as taxpayers and the claim sought to be adjudicated sufficient to assure a personal stake in the outcome of the litigation to satisfy the Article III “case or controversy” requirement, they lack standing to challenge the LAPD’s spending for the purposes alleged. Flast v. Cohen, 392 U.S. 83,102-03, 88 S.Ct. 1942, 1953-54, 20 L.Ed.2d 947 (1968) (federal taxpayers suit).

The position of the individual plaintiffs with respect to their claim for equitable relief is similarly deficient. City of Los Angeles v. Lyons, 461 U.S. 95, 101-07, 103 S.Ct. 1660, 1664-68, 75 L.Ed.2d 675 (1983), teaches that Article III power may be invoked only on a showing of a “real and immediate threat” that plaintiffs will again be subjected to such conduct. No such allegation is made here and plaintiffs admit that none can be made in good faith. Thus, there is no case or controversy with respect to the individual plaintiffs’ prayer for injunctive relief. Id

The damage claim of the individual plaintiffs under 42 U.S.C. § 1983, however, is clearly within the original, and thus removal, jurisdiction of the federal courts. 28 U.S.C. §§ 1343(a)(3) & 1441(a) & (b). The question presented, then, is whether § 1441’s reference to a “civil action” requires that the entire action be within the court’s original jurisdiction in order for the action to be removable. There has been surprisingly little judicial gloss on the term since the 1948 revision of the Judicial Code brought the term into being. I find the view expressed in Charles D. Bonnano Linen Serv., Inc. v. McCarthy, 708 F.2d 1 (1st Cir.1983), persuasive. The change from the previously existing “any suit” to “any civil action” was cosmetic only and there is no indication of any legislative intent to overrule prior judicial construction of the term under which each cause of action was considered to be a separate suit. Id. at 11. See also Pacific Railroad Removal Cases, 115 U.S. 1, 23, 5 S.Ct. 1113, 1124, 29 L.Ed. 319 (1885) (“suit” under Act of Mar. 3, 1875, 18 Stat. 470). Thus, I conclude that the § 1983 damage claim should be treated as a separate “action” under § 1441(a) & (b); therefore, that it was removable.

As noted, defendants have moved to dismiss all equitable claims. They contend that the taxpayer plaintiffs’ lack of standing under Doremus and the individual plaintiffs’ lack of standing under Lyons is not jurisdictional, but results in a failure to state a claim. They are mistaken. It is clear that Article III standing “involves ... constitutional limitations on federal-court jurisdiction.” Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 2205, 45 L.Ed.2d 343 (1975). Therefore, the proper course is remand, not dismissal. California v. Beltz Travel Serv., Inc., 379 F.Supp. 948 (N.D.Cal.1974). Having concluded that all equitable claims should be remanded, it would be improper to address further the motion to dismiss the equitable claims. Pelleport Investors, Inc. v. Budco Quality Theatres, Inc., 741 F.2d 273, 279 n. 3 (9th Cir.1984).

Having determined that removal jurisdiction exists over the § 1983 damage claims of the individual plaintiffs, it follows that this Court has pendent jurisdiction over the state law damage claims for asserted violations of the California Constitution. The state and federal claims for violation of parallel provisions of the state and federal constitution “derive fom a common nucleus of operative fact.” UMW v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966). However, because all equitable claims are being remanded to state court, judicial economy and comity are better served by having the state courc adjudicate state created rights. Therefore, as a matter of discretion, all state law damage claims also will be remanded to state court. Id. at 726, 86 S.Ct. at 1139.

In summary, I conclude that all claims for equitable and declaratory relief were removed improvidently and without jurisdiction. 28 U.S.C. § 1447(c). With respect to the state law damage claims, I exercise my discretion under Gibbs to abstain from hearing them.

IT IS ORDERED that all claims and causes of action, except the claim of the individual plaintiffs for damages under 42 U.S.C. § 1983, are REMANDED to the Superior Court of the State of California for the County of Los Angeles. Each party shall bear his, her or its own costs on removal and remand. Defendants are granted 30 days within which to answer the § 1983 claim.

      . Even if the standing problem were to be overcome, this Court would still lack subject matter jurisdiction. The taxpayer plaintiffs’ claims are all asserted under state law. Cal.Code Civ.Proc. § 426a. Thus, to entertain their claims would require recognition of the pendent party doctrine. However, this Circuit has been persistent in its refusal to exercise such jurisdiction. Carpenters Southern Calif. Admin. Corp. v. D & L Camp Constr. Co., 738 F.2d 999 (9th Cir.1984).

        . There is, in fact, no separate "claim" for equitable relief. Rather, the complaint sets forth five “causes of action” for asserted violations of various provisions of the state and federal constitutions. It seeks equitable and declaratory relief for all plaintiffs and damages for the individual plaintiffs. I refer to the “claims" for equitable relief only for the sake of simplicity.

      . As stated, plaintiffs also seek declaratory relief under state law. This, however, does not affect the analysis of removal jurisdiction. Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 103 S.Ct. 2841, 2849-52, 77 L.Ed.2d 420 (1983).

      . This analysis makes it unnecessary to determine whether the § 1983 damage claim is a "separate and independent” claim under 28 U.S.C. § 1441(c) from the non-removable claims for equitable relief. See American Fire & Casualty Co. v. Finn, 341 U.S. 6, 14, 71 S.Ct. 534, 540, 95 L.Ed. 702 (1951); Schwartz v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 424 F.Supp. 672 (N.D.Cal.1976). Even assuming that the § 1983 damage claim is a separate and independent claim, thus making the "entire case” removable, the joined "non-removable” claims, i.e., those for equitable relief, would have to be remanded for lack of subject matter jurisdiction. At least in the context of this case, I conclude that § 1441(c) was not intended to and does not expand the subject matter jurisdiction of the federal courts to embrace actions otherwise barred by Article III.

      . Although the complaint contains direct allegations of federal constitutional violations, the individual plaintiffs disclaim any attempt to state damage claims directly under the Constitution. See Ward v. Caulk, 650 F.2d 1144, 1147-48 (9th Cir.1981). I, therefore, construe the federal damage claim as a claim pursuant to § 1983 only. So construing the claim, the motion to dismiss the § 1983 claim is denied.


author: TERRENCE WILLIAM BOYLE, District Judge.

text:
    G. Sandra FISHER, Plaintiff, v. Graham ELMORE, Executor of the Estate of Alma Belch Bryant, et al., Defendants.
    No. 83-62-CIV-3.
    United States District Court, E.D. North Carolina, Fayetteville Division.
    May 22, 1985.

      James B. Craven, III, Durham, N.C., for plaintiff.
    Miles B. Fowler, Clinton, N.C., Rodney A. Guthrie, Fayetteville, N.C., for defendants.
   ORDER OF SUMMARY JUDGMENT

TERRENCE WILLIAM BOYLE, District Judge.

This cause comes on to be heard before the undersigned United States District Judge upon the cross-motions of the parties for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. The plaintiff has objected to a memorandum and recommendation by the United States Magistrate recommending that summary judgment be allowed for the defendants. The court has reviewed the entire record and for the following reasons sustains the plaintiffs objection to the proposed order of August 22, 1984 and allows summary judgment for the plaintiff.

The magistrate’s order of August 22, 1984 correctly sets out the undisputed material facts in this case. To briefly review those facts, this case is brought by the plaintiff on diversity jurisdiction in this court. Plaintiff, a devisee under the will of Alma Belch Bryant, sues the executor of the will, Graham Elmore, and the Trustees of the State Baptist Convention of North Carolina, Inc., who are the residuary legatees of the will. The dispute arises over proceeds from the sale of timber which are now held by the Executor, pending resolution of the contest between these two beneficiaries of the will.

Prior to her death on February 27, 1983, Alma Bryant owned a tract of timberland in Sampson County, North Carolina. On February 22,1983, Mr. Elmore, as power of attorney for Mrs. Bryant, signed a timber purchase and sales agreement with Flowers Timber and Land Company, Inc., (Flowers). By the terms of this agreement, Flowers could cut the timber on a 40.38 acre tract of land until September 1, 1985. Depending upon the type and amount of timber actually cut, Flowers would pay a unit price for the various kinds of timber as set out in the agreement. There is no evidence that any payment was made prior to the actual cutting. The express language of the agreement provides that no payment was due until the timber was cut. Then payment was due on a weekly basis according to the cut.

Following Mrs. Bryant’s death Flowers commenced cutting and thereafter, during March and April, 1983, paid $17,747.82 to Mr. Elmore as executor. He is holding these funds together with accrued interest, pending the determination of this action.

This court sitting in diversity jurisdiction must apply the substantive law of North Carolina. North Carolina General Statutes § 25-2-107(2) treats this agreement as a contract for the sale of goods. As such title passes when the goods were identified to the contract, the seller having already completed her performance, N.C. G.S. 25-2-401, 25-2-501. This court determines, that as a matter of law, the timber purchase and sales agreement, when read in its entirety, did not identify the goods at the time of the contract, February 22,1983, but explicitly left the identification of these goods to occur at such time as the buyer entered, cut, harvested and removed the pulp wood or logs prior to September 1, 1985.

The provisions of North Carolina General Statute 25-2-501(1) determine the manner of identification. Under the undisputed facts in this case, the buyer had to reduce the subject goods to his possession by cutting the timber before any payment was due. The buyer was under no compulsion to cut the first log nor was the buyer under any compulsion to cut any particular type of log. The buyer had the right to clear cut all of the standing timber including the pulpwood, hardwood and saw timber but until such time as this right was exercised, the seller had no entitlement to payment. If the buyer was delinquent in any payment, the contract could be immediately terminated and the buyer would have no further rights to continue cutting the timber. It is manifest that the buyer had to select the timber and reduce it to its possession before any obligation arose to pay the seller and this event was the identification contemplated by the parties in the contract which, by operation of law, determined when title passed pursuant to N.C. G.S. 25-2-401.

The comments to N.C.G.S. 2-501 plainly state that lumber or growing timber is not a crop within the meaning of sub-paragraph (c) of that section and the comments further state that where the “buyer (has the power) to select the goods” this is an explicit agreement which displaces the rules of paragraphs (a), (b) and (c) of N.C. G.S. 25-2-501(1).

Gillispie v. Great Atlantic & Pacific Tea Co., 14 N.C.App. 1, 187 S.E.2d 441 (1972) appears to be the leading North Carolina authority on interpretation of N.C. G.S. § 25-2-401(2). The holding in that case is authoritative for this court. The plaintiff in Gillispie was a purchaser of soft drinks in a grocery store. The court held that under the UCC, the time of payment was not determinative of when a sale takes place. A completed delivery by the seller is sufficient to consummate the sale under N.C.G.S. 25-2-401(2).

The court went on to state at page 6,187 S.E.2d 441, supra, “The presence of the drinks on the shelves in the defendant’s self-service store constituted an offer for sale and delivery at a stated price. If plaintiff took the drinks into his possession with the intention of paying for them at the cashier’s counter, there was no further act of delivery necessary on the part of the seller. All that remained was for the plaintiff to pay for the drinks, an act delayed until he reached the cashier’s counter primarily for the convenience of the seller.”

Applying that very clear reasoning to the facts at hand, we see that the plaintiff’s decedent, by entering into the timber purchase and sales agreement with Flowers in effect put the “drinks on the shelves”. At this point in the contractual relationship Mrs. Bryant, as seller, had agreed that all of the standing timber on the described parcel of land was for sale and it was for sale “at a stated price” just as the drinks in the Gillispie case were marked with a price on the shelf. However, just as the patron in the store must lift the drink or drinks off the shelf and reduce them to his possession before the title was exchanged, so here, Flowers had to “enter, cut, and harvest” the logs before they were reduced to its possession and title was thereby effected. At that point all that remained for Flowers to do was to pay for the logs just as the patron in Gillispie had to pay for the drinks when he reached the cashier’s counter.

To suggest that Flowers had title to all of the growing timber prior to entering onto the property for cutting or harvesting any of it under these facts, would be the same as suggesting that the patron in the self-service store in Gillispie had title to all of the drinks on the shelves simply because he had the capacity to buy them all and they were all offered for sale.

In summary, title to the timber did not pass from Alma Belch Bryant prior to her death. Plaintiff by devise of this property had title to the standing timber when it was severed by Flowers. Therefore, the plaintiff is entitled to the proceeds of this sale. Until the buyer entered upon the land, and cut and removed the timber purchased by Flowers could not be identified. Without such identification to the contract title could not pass.

For the reasons set forth herein summary judgment is allowed plaintiff for $17,-747.82 against the defendant executor together with such accrued interest as may have been earned during the pendency of this action.

The magistrate entered a memorandum and recommendation on September 20, 1984 disbursing certain farm rents and other proceeds held by the estate. This order has been accepted by the parties without objection and this court hereby adopts the order and confirms it accordingly.


author: BERTELSMAN, District Judge.

text:
    NORTHWESTERN NATIONAL INSURANCE COMPANY, Plaintiff, v. James G. OSBORNE, Defendant.
    Civ. A. No. 83-151.
    United States District Court, E.D. Kentucky, Covington Division.
    May 23, 1985.

      Ron Parry, Robinson, Arnzen, Parry & Wentz, Covington, Ky., for plaintiff.
    Robert G. Breetz, Stites & Harbison, Louisville, Ky., for defendant.
   OPINION AND ORDER

BERTELSMAN, District Judge.

Once again the continuing drama of the controversy between the plaintiff, Northwestern National Insurance Company, and its former attorney, James G. Osborne, has come before this court. The reader is referred to the previous Opinion of this court, which appears at 573 F.Supp. 1045 (E.D.Ky.1983), for a complete statement of the facts and background of this legal malpractice action. For ease of reference, the statement of facts in that ease is set forth in the Appendix attached hereto.

This court held on the basis of the facts of record at the time the original Opinion was rendered that the Statute of Limitations had not run. The essence of this court’s rationale in so holding was stated as follows at 573 F.Supp. at 1048:

“... the present law of Kentucky requires the following three elements for the accrual of a cause of action for legal malpractice: (1) a negligent act or omission on the part of the attorney; (2) the occurrence of damage that is not merely speculative as a proximate result of such act or omission; (3) discovery of the negligence and damage by the client. The addition of the prerequisite of the discovery factor by the statute did not negate the sine qua non of damage.”

This court observed in the original Opinion that the approach indicated was in accord with previous Kentucky cases and that this solution provides the best public policy resolution of the difficult problem of when a cause of action for legal malpractice should be deemed to accrue. By requiring that there be some non-speculative damage before the statute begins to run, unnecessary malpractice actions are avoided where the client is content to let the attorney continue to handle the case in an effort to straighten it out.

As the original Opinion observed, sometimes efforts to correct an inadvertent act may take longer than the statutory period. Such rule assures that the client need not sue until such time as the situation has so deteriorated that he feels it necessary to retain another attorney, a judgment has been entered against him, or some other non-speculative item of damage has been incurred.

The court was careful to observe at the conclusion of the previous Opinion that it was expressing no view as to what the situation would be had the client incurred expenses for new counsel at some point in the course of events.

Following the rendition of the original Opinion, the defendant Osborne moved the court for leave to proceed with discovery to determine if any non-speculative damage had occurred earlier than the record indicated at the time of the Opinion. The defendant proceeded with appropriate discovery and that discovery demonstrated that more than one year prior to the commencement of the action, the plaintiff insurance company had retained independent counsel to follow the underlying arson litigation in the state court. The discovery made clear, and it is not now denied, that billable services were rendered by independent counsel on June 7, 1982, when he had a conversation with a representative of Northwestern. Although a statement was not rendered until later, it is now undisputed that a billable telephone conversation was held on June 7, 1982, as the first item of independent counsel’s activities. Subsequently, on November 9, 1982, a bill was rendered in the total amount of $4,209.55, which included this item.

Following these revelations, Osborne, with leave of court, renewed his motion to dismiss on the basis of the statute of limitations. The court granted this motion on January 2, 1985, and by a concurrent judgment dismissed the complaint. The matter is now before the court again on a motion for reconsideration, supported by zealous briefs on behalf of the plaintiff.

Plaintiffs main contentions on this motion are that this court should reconsider its evaluation of Kentucky law and conclude that the Kentucky state courts would follow the rule that the statute of limitations for legal malpractice does not begin to run until the attorney-client relationship has been terminated or at least until the underlying litigation has been concluded. In the alternative, plaintiff asserts that damage should not have been deemed to have been incurred until the first bill by independent counsel was rendered. Plaintiff also argues that the one telephone conversation was an insubstantial item and that substantial damage did not occur until a later time when more services had been rendered by independent counsel. Of course, the time selected by plaintiff as to when such services should be deemed substantial would render timely the filing of this litigation.

The court has carefully re-evaluated all these arguments and once again reviewed the entire record and the authorities. The court remains of the opinion, however, that substantial in the sense of non-speculative damage occurred when independent counsel first rendered billable services and that the Statute of Limitations began to run at that point. Therefore, the motion for reconsideration must be denied.

In the original Opinion, this court addressed and rejected the contention that the view to be favored was that the statute did not begin to run until the attorney-client relationship was ended. It is frequently difficult to tell when this occurs, and in some circumstances it never occurs. This court is strongly of the belief that the best policy will provide some definitive and readily ascertainable date as to when the statute begins to run, and as discussed more fully below such a result is required by the statutory language.

Plaintiffs second contention that rendition of services by independent counsel should be considered incidental and separable from the greater claim that results from the underlying negligence is also without merit, although there is some authority to support it. First of all, there are situations where the bill for independent or substitute counsel may be greater than damages incurred from the underlying negligence. Second, such a rule would be contrary to the Kentucky precedents cited in the original Opinion that a cause of action is deemed to accrue in Kentucky where negligence and damages have both occurred, subject in certain kinds of actions to the additional requirement of discovery of the claim by the plaintiff. The Kentucky case of Caudill v. Arnett, 481 S.W.2d 668 (Ky.1972), specifically holds that failure to appreciate the extent of one’s eventual damages, because the injury initially appears to be slight, is not an excuse for failure to comply with the statute of limitations. See also, 51 Am.Jur.2d, Limitation of Actions §§ 107, 109.

Further, this court believes that the use of the word “occurrence” in KRS 413.245 indicates a legislative policy that there should be some definable, readily ascertainable event which triggers the statute.

There is no doubt that plaintiff could have sued as soon as it had irrevocable non-speculative injury. When it retained independent counsel that it knew was going to render billable services, this event occurred. It could have sued for the expenses of retaining independent counsel even had the underlying litigation been resolved in its favor. The retention of independent counsel was an event solely within the control of the plaintiff, and it certainly cannot deny knowledge of it.

Able counsel for plaintiff argues that to hold that the Statute of Limitations began running upon the retention of independent counsel would mean that every time a client sought an independent opinion from an attorney concerning the handling of a matter by another attorney a suit must be filed. This may sometimes be the case. However, this situation is easily avoided by the client’s going to the allegedly negligent attorney and obtaining a waiver or extension of the statute of limitations until such time as it may be seen if the underlying litigation can be favorably concluded.

Plaintiff’s other contentions may also be seen to be totally unworkable. Suppose independent counsel had rendered an entire day’s worth of services upon being retained, rather than one phone call, and billed $1,000.00 therefor. Would this be substantial? Requiring such an analysis in each case would defeat the salutary and, in the view of this court, overriding policy of the statute that a definitive, readily ascertainable event triggering the statute be discernible. Under plaintiff’s theory, each case would require poring over independent or substitute counsel’s bill to determine when it became substantial.

We must remember that we are dealing with a statute, and that statute has a plain meaning, at least with regard to the issue with which the court is here presented. That meaning is that the statute of limitations should begin to run upon the accrual of and discovery of a “cause of action.” The Kentucky courts had previously defined that term in the cases cited in the original Opinion. Services rendered by independent counsel would without doubt be recoverable damages pursuant to the cause of action for malpractice. No authority has been cited or discovered by this court for the approach of the text previously cited for deeming payment for independent counsel as being separate from the damages for the underlying action. This may be a worthy approach but it is not the approach adopted in KRS 413.245, by which this court is bound. This court is bound by the plain meaning of the statute unless it would lead to absurd results. See Carlotta v. Warner, 601 F.Supp. 749 (E.D.Ky. 1985), and cases therein cited.

When independent counsel was retained a running account was opened. It is venerable lore that a suit may be filed upon a running account at any time without violating the ancient prohibition against splitting a cause of action. Thus, independent counsel could have billed and sued for payment as soon as the first item of billable service had been rendered, whatever its amount. Therefore, Northwestern sustained irremediable, nonspeculative damage at that time.

There was no doubt that independent counsel was being retained to delve into the matter and probably eventually take over the litigation. Osborne was so informed prior to the conclusion of the underlying litigation.

Further, no injustice follows from the approach adopted herein because, as has been said, the retention of independent counsel is a matter solely within the discretion and control of the aggrieved client. If he does not desire to sue within the statutory period, he could seek a waiver of the statute from the allegedly negligent attorney, who if he declines to grant it, has only himself to blame for an unnecessary suit against him.

Hopefully, this matter may now be laid to rest, at least as far as this court is concerned. For the reasons above stated, the motion for reconsideration of the Order dismissing this action must be, and is, DENIED.

APPENDIX

[573 F.Supp. 1045, 1046-1047]

This legal malpractice action was brought by the plaintiff, Northwestern National Insurance Company, against the defendant, James G. Osborne, Attorney at Law, of Covington, Kentucky.

In March 1979, one Mary L. Deitsch brought an action in the Kenton County, Kentucky, Circuit Court against her insurer, Northwestern National Insurance Company, to recover damages for a loss of her home by fire and for wrongful denial of coverage. Northwestern retained Osborne to defend it against Deitsch’s claim.

The litigation did not proceed smoothly. In the course of defending Northwestern, Osborne, at least in the opinion of the state trial court where the Deitsch action was pending, behaved in such a manner as to unreasonably impede the discovery process. The state trial judge felt that extreme sanctions were warranted under Kentucky Civil Rule 37, which is substantially the same as the corresponding Federal Rule.

Accordingly, on March 5, 1981, the state trial court granted Deitsch’s motion to strike Northwestern’s answer and hold Northwestern in default for its alleged failure to produce witnesses for deposition and for other alleged violations of the Kentucky Civil Rules governing the discovery process. In the order of March 5,1981, the court assigned the matter for a damages trial on March 10th of that same year, and ordered trial briefs filed on the damages issues. The March 5th order specifically recited that it was not an appealable order.

Osborne continued to represent Northwestern, promptly notified it of the unfortunate events recited above, and undertook to try to get the matter straightened out.

Apparently feeling that he would be better off in the Kentucky appellate court rather than remaining before the same trial judge, Osborne moved that in lieu of holding the damages hearing the trial court certify the March 5 order as appealable. The state trial court granted this motion and on March 10, 1981, an order was entered purporting to certify the order as appealable. As discussed, infra, this court concludes that this certification did not in fact render the Order of March 5, 1981, a final appealable order. Nevertheless, an appeal was taken and heard by the Kentucky Court of Appeals. Discretionary review was denied by the Supreme Court of Kentucky. Later, having retained new counsel, Northwestern settled with Deitsch and filed this action against Osborne. A recapitulation of the specific dates and events follows:

March 5, 1981, Order of default entered.
March 9, 1981, Osborne filed a Motion to Set Aside the Order of Default on behalf of Northwestern and moved the state trial court to strike the portion of its Default Order which provided that it was not an appealable order.
March 10, 1981, the state trial court sustained this motion, struck the language, “THIS IS NOT AN APPEALABLE ORDER,” and stated that the Default Order was “further amended to read that This is a Final and Appealable Order and there is no just cause for delay.”
April 1, 1981, Osborne on behalf of Northwestern filed a Notice of Appeal to the Kentucky Court of Appeals from the Order of March 5, 1981.
February 19, 1982, the Kentucky Court of Appeals (Kentucky’s intermediate appellate court) affirmed, stating that the trial court had acted within its discretion.
June 8, 1982, Northwestern wrote Osborne a letter stating that new counsel would take over the Deitsch litigation
APPENDIX — Continued
“just as soon as the Supreme Court of Kentucky rules on our pending motion for discretionary review regardless of the outcome.” No contention is made that Northwestern incurred any expense with the new firm until after the Supreme Court acted, however.
June 29, 1982, the Supreme Court of Kentucky denied discretionary review.
December 17, 1982, and June 2, 1983, Northwestern settled with Deitsch for $250,000, plus an assignment of part of Northwestern’s claim, if any, against Osborne. (For reasons not clear to this court, there were two settlement agreements).
June 28, 1983, this action was filed by Northwestern against Osborne in United States District Court for the Eastern District of Kentucky.

Osborne moved to dismiss this action on the ground that it was barred by Kentucky’s one-year statute of limitations for malpractice.

      . R. Mallen & V. Levit, Legal Malpractice § 201 (1977).

      . This is the critical statute in this case. It reads:
      "Notwithstanding any other prescribed limitation of actions which might otherwise appear applicable, except those provided in KRS 413.140, a civil action, whether brought in tort or contract, arising out of any act or omission in rendering, or failing to render, professional services for others shall be brought within one (1) year from the date of the occurrence or from the date when the cause of action was, or reasonably should have been, discovered by the party injured. Time shall not commence against a party under legal disability until removal of the disability.”

      . A “cause of action” is traditionally defined as "an aggregate of operative facts giving rise to a right or rights ... which will be enforced by the courts.” C. Clark, Code Pleading, § 19 (1947).

      . C. Clark, Code Pleading § 74 (1947).


author: FOREMAN, Chief Judge:

text:
    Danny MELVIN and Janet Melvin, Individually and as next friend of Shanie Melvin, a Minor, Plaintiffs, v. OLD BEN COAL COMPANY, a corporation, Defendant.
    Civ. No. 84-4343.
    United States District Court, S.D. Illinois, Benton Division.
    May 24, 1985.

      Harold B. Gulley, Jr., West Frankfort, Ill., for plaintiffs.
    William W. Hart, Jr., Hart & Hart, P.C., Benton, Ill., for defendant; Campbell & DiVincenzo, Chicago, Ill., Edmund J. Moriarty, Mark M. Pierce, Stephen J. Birek, Jr., Old Ben Coal Co., Lexington, Ky., of counsel.
    Mark A. LaRose, Asst. Atty. Gen., State of Ill., Springfield, Ill., for Ill. Dept. of Mines & Minerals.
   MEMORANDUM AND ORDER

FOREMAN, Chief Judge:

Before the Court is defendant Old Ben Coal Company’s Motion to Dismiss plaintiffs’ Complaint. Plaintiffs claim that defendant’s longwall mining operation has caused the surface of the land owned and occupied by plaintiffs to subside, thereby resulting in damage to plaintiffs’ dwelling, swimming pool, and outbuildings. Count I of plaintiffs’ Complaint alleges a statutory claim for relief founded on Chapter 96V2, U 7904.02 of the Illinois Revised Statutes. Count II alleges negligence, and Count III alleges willful and wanton misconduct. In Counts IV, V, VI, VII, VIII, and IX, plaintiffs complain that defendant’s conduct caused emotional distress and loss of consortium.

Defendant contends that its mining operations were not subject to H 7904.02 at the time of the alleged violation for three reasons. First, according to defendant, the mine at issue was operating pursuant to an interim permit and therefore was not subject to provisions of the Illinois Surface Coal Mining Land Conservation and Reclamation Act requiring subsidence prevention. Second, defendant argues that 1f 7904.02 does not apply to longwall mining because such technology involves planned subsidence. Third, defendant asserts that the language in plaintiffs’ deed expressly waived the right to recover for any liability resulting from defendant’s coal mining activities.

Congress enacted the Surface Mining Control and Reclamation Act of 1977, P.L. 95-87, 91 Stat. 445, 30 U.S.C. § 1201 et seq., (“SMCRA”), which required that all coal mining operations in the United States be governed by federal coal mining reclamation regulations or, alternatively, by state reclamation laws and regulations which met federal standards and which were approved by the Office of Surface Mining Reclamation and Enforcement (“OSM”). The OSM promulgated federal coal mining reclamation regulations in two stages: (1) Federal Interim Program Regulations, 30 C.F.R. Subchapter B, §§ 710-725 (1977); and (2) Federal Permanent Program Regulations, 30 C.F.R. Subchapters A, C, D, F, G, J-L (1979). Illinois participated in the Federal Interim Program upon OSM approval of the Illinois Interim Coal Mining Reclamation Program, Act of August 11, 1978, P.A. 80-1342, 1978 Ill.Laws 1005. Neither the federal nor the state interim programs mandated subsidence prevention.

After the Federal Permanent Program Regulations were issued, Illinois enacted the Surface Coal Mining Land Conservation and Reclamation Act, Ill.Rev.Stat. ch. 96V2, § 7901 et seq. (1983), (“Illinois Permanent Act”). The Illinois Permanent Coal Mining Reclamation Program, which includes the Illinois Permanent Act and the Surface Coal Mining Land Conservation and Reclamation Act State Program Rules and Regulations, was conditionally approved by the Secretary of the Interior on June 1, 1982. See 30 C.F.R. § 913.10 (1984); 47 Fed.Reg. 23883 (1982). Both the federal and the state permanent programs mandate subsidence prevention. 30 U.S.C. § 1266(b)(1); Ill.Rev.Stat. ch. 96V2, % 7904.02.

Defendant contends that because it is operating under an interim permit and has not yet been issued a permanent permit, it is not required to follow the performance standards for underground mining found in Article IV of the Illinois Permanent Act and in Parts 1810-1828 of the Permanent Program Regulations. Article IV of the Illinois Permanent Act, using substantially the same language found in the federal SMCRA, provides in part:

7904.01. General requirement.
§ 4.01. General Requirement. Each person conducting underground mining operations shall as a minimum comply with all applicable performance standards set forth in this Article. Each permit issued under this Act to conduct underground mining operations shall require as a minimum that such operations meet all applicable requirements set forth in this Article.
7904.02. Subsidence.
§ 4.02. Subsidence. Each operator shall adopt measures consistent with known technology in order to prevent subsidence causing material damage to the extent technologically and economically feasible, maximize mine stability, and maintain the value and reasonably foreseeable use of surface lands, except in those instances where the mining technology used requires planned subsidence in a predictable and controlled manner. Nothing in this Section shall be construed to prohibit the standard method of room and pillar mining.

The Court notes that 1) 7904.01, set forth above, consists of two sentences: one mandates that “[e]ach person” comply with performance standards, and the other mandates that “[e]ach permit issued” shall meet all requirements of Article IV. It appears to the Court that the Illinois General Assembly clearly intended compliance with performance standards set forth in Article IV of the Illinois Permanent Act regardless of whether a permanent permit had been issued under the Act. To find otherwise would require the Court to completely ignore the first sentence in ([ 7904.-01.

The Court further notes that 7904.02 requires “[e]ach operator” to comply with subsidence prevention standards. Defendant would have the Court interpret this language narrowly to mean that only “each permanent permittee” need comply. Had the Illinois General Assembly intended such a narrow reading of this language, it could have expressly limited the applicability of the performance standards to permanent permittees. The Court, therefore, finds that the performance standards found in Article IV of the Illinois Permanent Act, on its face, are applicable to the operations of defendant Old Ben, as well as to the operations of all operators of coal mines in Illinois.

The Illinois legislature did not intend to establish requirements that are more stringent than federal requirements. Ill.Rev.Stat. ch. 96V2, § 7901.02(c). The Court has examined the federal permanent regulation relevant to the instant case regarding subsidence control (30 C.F.R. § 817.121), has compared this regulation to the analogous Illinois regulations (62 Ill. Admin.Code §§ 1817.121, 1817.124), and has determined that the Illinois subsidence control provisions are substantially similar, and not more stringent, than the federal provisions.

Illinois subsidence control measures, including Article IV of the Illinois Permanent Act and §§ 1817.121 and 1817.124 of the Illinois regulations, were applicable eight months after the date of approval of the Illinois program by the Secretary of the Interior. 62 Ill.Admin.Code § 1700.11(f). As the approval date was June 1, 1982, the date the Illinois subsidence provisions were applicable was February 1, 1983. The fourth paragraph of § 1700.11(f) further provides that by February 1, 1983, an oper- • ator is required to “obtain a permit issued by the Department pursuant to the approved permanent program,” subject to certain exceptions.

This Court has previously interpreted the transition section of the Illinois Permanent Act, (17909.08, as facilitating an orderly transition from the Interim Act by allowing interim permits continued viability, under certain circumstances, until permanent permit applications are acted upon by the Department of Mine and Minerals. See Phillips v. Old Ben Coal Company, No. 84-4442 (S.D.Ill. Sept. 21, 1984). In Phillips, the Court found that § 1700.11(b) and § 1771.11(a) of the regulations operated to avoid the unreasonable result of forcing operations under interim permits to shut down until permanent permits could be issued. Defendant would now have the Court interpret these provisions to reach the unreasonable result of authorizing it to ignore performance standards merely because the Department of Mines and Minerals is delinquent in processing permanent permit applications.

The permit requirements mentioned above provide:

§ 1700.11(b)
Any person who conducts surface coal mining and reclamation operations on or after 8 months from the date of approval of the State program or implementation of a Federal program shall have a permit issued pursuant to the applicable State or Federal program. However, under conditions specified in Section 1771.11(a), a person may continue operations under a previously issued permit after 8 months from the effective date of the State Act and these regulations.
§ 1771.11(a)
A person conducting surface coal mining operations, under a permit issued or amended by the Department in accordance with the requirements of the interim program, may conduct these operations beyond the prescribed period in Section above, if—
(1) Timely and complete application for a permit under the permanent regulatory program has been made to the Department in accordance with the provisions of the State Act, Parts 1770-1795, and the regulatory program. For the purposes of this Part 1771, a complete application is one on which the applicant has made an apparent good-faith effort to adequately address the portions of the application pertaining to the operation to be permitted.
(2) The Department has not rendered an initial decision with respect to such application; and
(3) The operations are conducted in compliance with all terms and conditions of the interim permit, the requirements of the Act, the State Act, and Parts 1770-1975 of these regulations.

As this Court noted in Phillips v. Old Ben Coal Company, No. 84-4442 (S.D.Ill. Sept. 21, 1984), surface mining includes the surface impact of underground coal mining operations. See Ill.Rev.Stat. ch. 96V2, § 4520(c) (1971); 30 U.S.C.A. § 1291; §§ 1.27, 1.29, 2.6 Illinois Interim Program Regulations. The language in § 1771.-11(a)(3) above expressly requires operators under an interim permit to conduct operations in compliance with the Illinois Permanent Act, which includes U 7904.02 regarding subsidence prevention.

Defendant’s contention that it is exempt from subsidence prevention provisions places great reliance on § 1700.11(c) of the regulations, which provides as follows:

The requirements of Parts 1810-1828 of these regulations shall be effective and shall apply to each surface coal mining and reclamation operation which is required to obtain a permit under the Act, and the State Act on the earliest date upon which the Act, the State Act, and these regulations require a permit to be obtained except as provided in Paragraph (e) of this Section.

Defendant’s logic, in essence, is that because it has been allowed to operate under an interim permit, it is not an “operation which is required to obtain a permit under the Act.” The fact is, however, that defendant is operating under a permit authorized under the Act. See Phillips v. Old Ben Coal Company, No. 84-4442 (S.D.Ill. Sept. 21, 1984). Had defendant not been found to have met the conditions of § 1771.11(a), it may have been forced to shut down all operations for which a permanent permit application had not been processed and approved. To accept defendant’s arguments in the instant case would be inconsistent with the Court’s ruling in Phillips. For the foregoing reasons, the Court rejects defendant’s argument that it is not required to follow performance standards under the Illinois Permanent Program.

Defendant argues that even if the Court finds that its operation under an interim permit requires compliance with the performance standards of the Illinois Permanent Act, defendant has not violated the subsidence prevention provision found at jf 7904.02 because it intentionally planned to subside plaintiff’s property. According to defendant, all subsidence caused by longwall mining is automatically authorized under U 7904.02 because long-wall mining predictably causes subsidence. To accept defendant’s analysis of K 7904.02 would be to render the subsidence prevention provisions in the Illinois Permanent Act ineffective; operators would be required to prevent only accidental subsidence, but could engage in deliberate subsidence at will. The Court will not interpret H 7904.02 to reach such an absurd result.

The interpretation of 1J 7904.02 offered by defendant is not consistent with the regulations promulgated under the Illinois Permanent Program. The following regulations concern subsidence control:

§ 1817.121 Subsidence control: General requirements.
(a) Underground mining activities shall be planned and conducted so as to make use of measures consistent with known technology in order to prevent subsidence causing material damage to the extent technologically and economically feasible, maximize mine stability, and maintain the value and reasonably foreseeable use of such surface lands, except those instances where the mining technology used requires planned subsidence in a predictable and controlled manner. Nothing in these regulations shall be construed to prohibit the standard method of room and pillar mining.
(b) The person engaged in underground mining activities shall comply with all provisions of the subsidence control plan prepared pursuant to 1784.20 and approved by the Department.
§ 1817.122 Subsidence control: Public notice.
The mining schedule shall be distributed by mail to all owners of property and residents within the area above the underground workings and adjacent areas. Each such person shall be notified by mail at least six months prior to mining beneath his or her property and residence. The notification shall contain, as a minimum:
(a) Identification of specific areas in which mining will take place;
(b) Dates of mining activities that would cause subsidence and affect specific structures; and
(c) Measures to be taken to prevent or control adverse surface effects.
§ 1817.124 Subsidence control: Surface owner protections.
(a) Each person who conducts underground mining activities shall adopt all measures approved by the Department under 1784.20 to reduce the likelihood of subsidence, to prevent subsidence causing material damage or reducing the value or reasonably foreseeable use of surface lands, and to mitigate the effects of any such damage or reduction which may occur.
(b) Each person who conducts underground mining which results in subsidence that causes material damage or reduces the value or reasonably foreseeable use of the surface lands shall, with respect to each surface area affected by subsidence—
(1) Restore, rehabilitate, or remove and replace each damaged structure, feature or value, promptly after the damage is suffered, to the condition it would be in if no subsidence has occurred and restore the land to a condition capable of supporting reasonably foreseeable uses it was capable of supporting before subsidence; or
(2) Purchase, the damaged structure or feature for its fair market, pre-subsidence value and shall promptly after subsidence occurs, to the extent technologically and economically feasible, restore the land surface to a condition capable and appropriate of supporting the purchases structure, and other foreseeable uses it was capable of supporting before mining. Nothing in this paragraph shall be deemed to grant or authorize an exercise of the power of condemnation or the right of eminent domain by any person engaged in underground mining activities; or
(c) Each person who conducts underground mining activities will compensate the owner of any surface structure in the full amount of the diminution in value resulting from subsidence, by purchase prior to mining of noncancellable, premium prepaid insurance policy or other means approved by the Department as assuring before mining begins that payment will occur; indemnify every person with an interest in the surface for all damages suffered as a result of the subsidence and, to the extent technologically and economically feasible, fully restore the land to a condition capable of maintaining reasonably foreseeable uses which it could support before subsidence. § 1817.126 Subsidence control: Buffer zones.
(a) Underground mining activities shall not be conducted beneath or adjacent to any perennial stream, or impoundment having a storage volume of 20 acre-feet or more, unless the Department, on the basis of detailed subsurface information, determines that subsidence will not cause material damage to streams, water bodies and associated structures. If subsidence causes material damage, then measures will be taken to the extent technologically and economically feasible to correct the damage and to prevent additional subsidence from occurring.
(b) Underground mining activities beneath any aquifer that serves as a significant source of water supply to any public water system shall be conducted so as to avoid disruption of the aquifer and consequent exchange of groundwater between the aquifer and other strata. The Department may prohibit mining in the vicinity of the aquifer or may limit the percentage of coal extraction to protect the aquifer and water supply.
(c) Underground mining activities shall not be conducted beneath or in close proximity to any public buildings, including but not limited to churches, schools, hospitals, courthouses and government offices, unless the Department, on the basis of detailed subsurface information, determines that subsidence from those activities will not cause material damage to these structures and specifically authorizes the mining activities.
(d) The Department shall suspend underground coal mining under urbanized areas, cities, towns, and communities, and adjacent to industrial or commercial buildings, major impoundments or permanent streams, if imminent danger is found to inhabitants of the urbanized areas, cities, towns, or communities.

An examination of the above regulations makes it clear that j| 7904.02 was not intended to authorize coal mine operators to unilaterally determine that they need not assume responsibility in any way for intentional and deliberate subsidence. Defendant’s analysis of j[ 7904.02 is clearly over-simplistic.

Defendant also asserts that because it had purchased mineral rights from plaintiffs’ predecessor in title, who had waived the right to subadjacent support, defendant cannot be held liable for surface damage. Defendant cites to case law in support of its position dating as far back as 1880, and admonishes the Court not to “set aside a century of undisturbed Illinois law” upholding the validity of such waivers. The Court, however, considers that the Illinois legislature, by enacting the Illinois Permanent Act, has “disturbed” prior Illinois case law on the subject of subsidence control. The legislative declaration found in fl 7901.-02 of the Illinois Permanent Act sets forth the policy of the state as regards the effect of coal mining on lands. This policy expressly includes “protecting the health, safety and general welfare of the people.” Ill.Rev.Stat. ch. 96V2, j[ 7901.02. To the extent that the waiver of surface support conflicts with the policy of Illinois regarding subsidence control, the waiver shall be unenforceable.

The remainder of plaintiffs’ Complaint seeks recovery for emotional distress and loss of consortium. To allow such recovery, however, would be inappropriate under Illinois law. In Rickey v. Chicago Transit Authority, 98 Ill.2d 546, 75 Ill.Dec. 211, 457 N.E.2d 1 (1983), the Supreme Court of Illinois substituted the “zone-of-physical-danger rule” for the prior standard requiring contemporaneous injury or impact. Under the new rule, a viable cause of action exists for a bystander who suffers physical injury or illness resulting from emotional distress even when the bystander did not suffer a physical impact or injury at the time of the tortious act. However, the new rule requires that the bystander “must have been in such proximity to the accident in which the direct victim was physically injured that there was a high risk to him of physical impact.” Rickey, 98 Ill.2d at 550, 75 Ill.Dec. at 215, 457 N.E.2d at 5. In the instant case, the “direct victim” is plaintiffs’ property, not an injured person. The analysis in Rickey would not apply to allow recovery for analysis in Rickey would not apply to allow recovery for emotional distress resulting from damage to property, and plaintiffs explicitly deny that they have asserted a claim for the intentional infliction of emotional distress (plaintiffs’ Memorandum in Opposition to Old Ben Coal Company’s Motion to Dismiss Plaintiffs’ Complaint [Document No. 23], at p. 28). Therefore, the Court is compelled to dismiss Counts IV, V, VI, VII, VIII, and IX of plaintiffs’ Complaint.

Accordingly, defendant’s Motion to Dismiss is hereby GRANTED IN PART AND DENIED IN PART. Counts IV, V, VI, VII, VIII, and IX of plaintiffs’ Complaint are hereby DISMISSED; said Motion is hereby DENIED as to Counts I, II, and III.

IT IS SO ORDERED.


author: CARL 0. BUE, Jr., District Judge.

text:
    Lawrence R. ALBERTI, et al. v. Johnny KLEVENHAGEN, Sheriff of Harris County, Texas, et al.
    Civ. A. No. 72-H-1094.
    United States District Court, S.D. Texas, Houston Division.
    May 24, 1985.
    Jim Oitzinger, Houston, Tex., for plaintiffs.
    Roderick Lawrence, Asst. Co. Atty., Houston, Tex., for defendant Com’rs Court.
    Ray Speece, Asst. Dist. Atty., Houston, Tex., for defendant Sheriff.
   ORDER

CARL 0. BUE, Jr., District Judge.

Pending before the Court is plaintiffs’ second motion for contempt in which plaintiffs contend that the Sheriff and Commissioners Court of Harris County have failed to comply with the Court’s Order of December 18, 1984, 600 F.Supp. 443, (hereinafter “the December 1984 Order”) directing the defendants to adhere to its staffing plan and post orders on frequency of observation of inmates. In response to the plaintiffs’ contempt motion, the Sheriff argues that he has attempted to comply with the spirit, if not the letter, of the December 1984 Order and will continue to do so. The County Commissioners contend that they have complied with the spirit of the Court’s Order to provide a constitutionally safe and suitable jail and have no intention to come into literal compliance with the staffing requirements until they are convinced that the staffing levels now existing at the jails are unconstitutional.

While it would serve no useful purpose to present a detailed account of the hearings resulting in the December 1984 Order, the Court is of the view that a brief recapitulation of certain events transpiring since the entry of that order are necessary. On January 4 and January 11, 1985, defendants Klevenhagen and Harris County Commissioners Court, respectively, filed their notices of appeal of the Court’s December 1984 Order on staffing which required full compliance on or about February 16, 1985. On February 5, 1985 and February 14, 1985, defendants Klevenhagen and Harris County Commissioners Court, respectively, filed with this Court their motions to stay the Court’s December 1984 Order pending its appeal. However, this Court denied defendants’ motions on April 9, 1985, 606 F.Supp. 478, and ordered that the defendants show cause at a hearing set for Friday, May 10, 1985 as to why they should not be adjudged to be in contempt. Shortly thereafter, defendants submitted to the Fifth Circuit Court of Appeals motions to stay the December 1984 Order which were denied on April 29, 1985. On May 6, 1985, Associate Justice Byron R. White of the United States Supreme Court denied the defendants’ final application for a stay.

Accordingly, consistent with the Court’s trial docket, a hearing was held in this case May 14, 1985, through May 16, 1985, to consider the narrow issue of defendants’ contempt, if any, of the December 1984 Order. Having examined all of the evidence presented and pursuant to Rule 52(a) FED.R.CIV.P., the Court hereby enters its Findings of Fact and Conclusions of Law detailing the reasons for its conclusion that defendants are in civil contempt of the Court’s Order and that plaintiffs should prevail.

I.

Findings of Fact

1. On or about December 27, 1984, the Commissioners Court, Sheriff Heard, and defendant Klevenhagen, along with legal counsel and others, met in an Executive Session and discussed the Court’s December 1984 Order to determine how they should proceed in light thereof. Although all of the defendants denied knowing how many guards would be required in order to come into compliance with the Order, it was the consensus of those present that the Order should be appealed and that the defendants should fund and hire only sixty-five (65) additional guards for the Harris County jails. By so doing, the defendants knowingly adopted the Cox plan, a course of action which they knew would not achieve compliance with the December 1984 Order. (Testimony of Judge Jon Lindsay; Commissioners Lee, Eckels, Fonteno, Lyons; and Sheriff Klevenhagen).

2. There was no testimony to suggest that defendants attempted to hire and put to work the number of guards necessary to comply with the Court’s staffing plan but were unable to do so within the time period mandated by the Court. Rather, the testimony established that defendants believed that their motions to stay the December 1984 Order would be granted so that compliance therewith would not be required at this time. While realizing that they would not achieve compliance, defendants contended that they were conforming with “the spirit” of the Court’s mandate “to provide a safe and suitable jail.” (Testimony of Judge Jon Lindsay; Commissioners Lee, Eckels, Fonteno, Lyons; and Sheriff Klevenhagen).

3. On January 1, 1985, defendant Klevenhagen took office as the duly elected Sheriff of Harris County. By January 11, 1985, he had before the Commissioners Court a budget addendum request which included sixty-five (65) guard positions as well as forty-nine (49) additional training and support positions. If approved by the Commissioners Court, the Sheriff’s request for guard positions would have resulted in the funding of approximately one hundred fourteen (114) supplemental guards for the housing floors of the Central Jail and Detention Center. (Testimony of Sheriff Klevenhagen, Plaintiffs’ Exhibit No. 13). However, only sixty-five (65) guard positions were approved by the Commissioners Court, and the budget became effective on March 1, 1985. (Testimony of Judge Lindsay; Commissioners Lee, Eckels, Fonteno, Lyons; Sheriff Klevenhagen).

4. The Cox plan, consisting of forty-three (43) deputies and twenty-two (22) sergeants was fully implemented during the first weeks of May, 1985. This implementation results in a “6-6-5” post plan as compared to the Court’s “9-9-7” post plan. (Testimony of Captains Gaines and Anderson. Plaintiffs’ Exhibit No. 28). However, racking-out which was recommended under the Cox plan for general use is employed on very rare occasions and only as a “semi-punitive” measure. (Testimony of Captain Anderson). Additionally, defendants contended that they have, in the last month, implemented the Court’s Order as it applies to inmate observation. As a result, it is represented that visual inspection of all cells is now conducted at least once per hour and is duly recorded. The remainder of the “Post Orders” as developed by the Heard administration are still in effect. (Testimony of Judge Lindsay; Captains Anderson and Gaines).

5. Defendant Klevenhagen contended that he and his staff have developed contingency plans which could be put into action in the event that he is required to comply with the Court’s staffing requirements. He asserted that he has approximately seventy-five (75) applicants who are in the process of or have been screened for the guard positions; that the attrition rate of guards is very close to eight to ten guards per month; that he could transfer, on a temporary basis, additional staff to facilitate the screening process; that he could screen in the neighborhood of one hundred (100) additional reasonably well-qualified guards in eight to ten weeks; and that he would have no problem recruiting successfully for any necessary additional guards. He testified further that once the applicants are screened and the positions are funded by the Commissioners Court, the guards can be placed on the job immediately and given the one week “jail procedures course” as well as “on-the-job training” under the supervision of experienced officers. Within a reasonable time thereafter, the guards can attend the training academy and become certified peace officers. In sum, defendant Klevenhagen took the position that the Harris County jails have the capacity to assimilate into their systems one guard per floor per shift per month or a total of thirty-five to forty newly trained guards per month. Finally, while advancing no supporting facts or figures, Klevenhagen asserted that he is taking steps to reduce the population in the jails. (Testimony of Sheriff Klevenhagen; see also testimony of Captains Anderson and Gaines).

6. In contrast, defendant Commissioners Court has developed or adopted no contingency plan for coming into compliance with the December 1984 Order, although it held a special session to discuss the ramifications of the final denial of its motion to stay by the United States Supreme Gourt. For the most part, the Commissioners contended that they will not comply with the Court’s Order on staffing until they are convinced that the numbers required thereby are constitutionally mandated. (Testimony of Judge Lindsay; Commissioners Lee, Eckels, Fonteno, and Lyons). Moreover, neither the Sheriff nor any Commissioner has considered or put forth a request for additional guards subsequent to the denials of the motions to stay by all courts considering the issue. (Testimony of Judge Lindsay; Commissioners Lee, Eckels, Fonteno, Lyons; Sheriff Klevenhagen). Finally, Judge Lindsay testified that locating sufficient funds to comply with the Order is not a problem. As stated by Judge Lindsay, “money is not the issue.”

II.

Conclusions of Law

The plaintiffs have moved for a finding of civil contempt as to the Sheriff and Commissioners Court for failure to comply with the Court’s December 1984 Order. Failure to comply with an injunctive order issued by a court of competent jurisdiction is actionable as contempt of court. Howat v. Kansas, 258 U.S. 181, 189-190, 42 S.Ct. 277, 280-281, 66 L.Ed. 550 (1921); Kendrick v. Bland, 740 F.2d 432, 439 (6th Cir.1984); accord, Newman v. Graddick, 740 F.2d 1513 (11th Cir.1984); Newman v. Alabama, 683 F.2d 1312, 1318 (11th Cir.1982), cert. denied, 460 U.S. 1083, 103 S.Ct. 1773, 76 L.Ed.2d 346 (1983).

“Broadly speaking, a civil contempt is a failure of a litigant to do something ordered to be done by a court in a civil action...” Walling v. Crane, 158 F.2d 80, 83 (5th Cir.1946). Civil contempt, where appropriate, serves “to preserve and enforce the rights of private parties to suits, and compel obedience to orders and decrees made to enforce the rights and administer the remedies to which the Court has found them to be entitled ...” Mobile County Jail Inmates v. Purvis, 551 F.Supp. 92, 96 (S.D.Ala.1982), affd, 703 F.2d 580 (11th Cir.1983), quoting Palmigiano v. Garrahy, 448 F.Supp. 659, 670 (D.R.I.1978) (citations omitted).

Plaintiffs seeking sanctions for civil contempt are held to proving noncompliance by “clear and convincing” evidence. United States v. Rizzo, 539 F.2d 458, 465 (5th Cir.1976); Newman v. Graddick, 740 F.2d at 1528. Further, “[w]hile the defendants herein are not held to ‘absolute compliance’ with the Court’s order, '... the Court looks to see whether the defendants took ‘all the reasonable steps within their power to insure compliance with the orders,’ ” Mobile County Jail Inmates, 551 F.Supp. at 97, quoting Sekaquaptewa v. MacDonald, 544 F.2d 396, 406 (9th Cir.1976), cert. denied, 430 U.S. 931, 97 S.Ct. 1550, 51 L.Ed.2d 774 (1977). Finally, since willfulness is not an element of civil contempt, the defendants’ intent is not in issue in this case. McComb v. Jacksonville Paper Co., 336 U.S. 187, 191, 69 S.Ct. 497, 499, 93 L.Ed. 599 (1949).

While it appears that the defendants have come into compliance with the Court’s staffing order with respect to the funding and hiring of sergeants as well as the post order requiring hourly visual inspection of each inmate cell, the Court finds that the defendants are not in compliance with the December 1984 Order as it applies to the funding and hiring of deputies, a highly critical requirement of that order. The Court finds further from the evidence presented that there is a high probability and, indeed, a virtual certainty that defendants will persist in their noncompliance unless the Court takes coercive measures. Additionally, the Court is forced to conclude that defendants clearly failed to undertake all “reasonable and necessary” steps towards compliance, and that none of the reasons advanced by the defendants in support of their position relate to an inability to comply. The defendant Commissioners have admitted by their own testimony that they have both the authority and the financial resources to allocate monies in order to fund the necessary deputy positions. This they did not do. While the Court recognizes that the defendant Sheriff does not have such funding authority, it is the defendant Sheriff’s obligation to submit to the Commissioners the necessary requests for guard funding to satisfy the Court order as well as to accomplish the necessary screening, hiring and training after the positions are authorized. No such requests were made by defendant Klevenhagen. In short, the Court, concluding that plaintiffs have satisfied their burden of proof, finds the defendants Sheriff and County Commissioners to be in civil contempt and that coercive sanctions are mandated.

When shaping such sanctions, it has been held that a court should take into account “the character and magnitude of the harm threatened by the continued contumacy”, “the probable effectiveness of [the] suggested sanction in bringing about the result desired,” and “the amount of defendant’s financial resources and the consequent seriousness of the burden to that particular defendant.” See United States v. United Mine Workers, 330 U.S. 258, 303-304, 67 S.Ct. 677, 701, 91 L.Ed. 884 (1947). In light of the motives of defendants for disobedience of the Court’s Order and the facts and circumstances of this case, it is the view of the Court that the following coercive sanctions should be applied:

A.

Defendants will have fourteen (14) days from this date, May 24, 1985, or until Friday, June 7, 1985 at 3 p.m. to purge themselves of civil contempt by accomplishing the following:

1. File a detailed staffing plan with the Court to hire and train and put to work the necessary jail guards in order to meet the requirements of the December 18, 1984 Order. Such staffing plan will be fully accomplished and operational within five (5) months of June 7,1985 or by November 7, 1985. The implementation of the staffing plan will be planned so that increments of approximately twenty (20%) percent of the total guards needed to satisfy the Court Order will be fully trained and at work on the jail floors at the end of each of the five monthly periods; and
2. Deposit in the registry of the United States District Court in Houston ten (10%) percent of a conditional lump sum fine of $250,000 or $25,000; and
3. Deposit in the registry of the United States District Court the additional sum of $30,000 to be expended as needed to pay the fees and expenses of outside monitors. In view of the nature and extent of the contempt of the defendants, additional monitoring will be necessary over the five (5) month period during which the required guards are being hired, trained and put to work. The Court designates the Benton-Stoughton team of penologists whose views the Court relied upon in issuing its December 18, 1984 Order to observe implementation of the staffing plan under the direction of the defendant Sheriff and to advise and report to the Ombudsman, James Oitzinger.

B.

At the 14 day hearing to be held at 2 p.m. on June 7, 1985 the Court will determine the following:

1. Whether the staffing plan set out in A(l) above has been filed; and
2. Whether there has been deposited in the registry of the Court $25,000 or 10% of a conditional lump sum fine of $250,000, as set out in A(2) above; and
3. Whether there has been deposited in the registry of the Court $30,000 to be expended as needed to pay the fees and expenses of outside monitors over a five (5) month period while the staffing plan is being implemented as set out in A(3) above.

Based upon the Court’s determination on June 7, 1985 of the defendants’ course of action in satisfying all of the above requirements in order to purge themselves of civil contempt, the following self-executing sanctions are triggered:

1. If the Court determines that defendants have not filed the designated staffing plan or that defendants have not deposited in the Court registry 10% or $25,000 of a conditional lump sum fine of $250,000 or that defendants have not deposited in the Court registry the additional sum of $30,000 for use as needed for the fees and expenses of the temporary outside monitors, then defendants will be fined $10,000 per day commencing June 7, 1985 until full compliance with the above requirements and full compliance with the December 18,1984 Order are achieved.
2. If the Court determines that defendants have filed the designated staffing plan and that defendants have deposited in the Court registry 10% or $25,000 of a conditional lump sum fine of $250,000 and that defendants have deposited in the Court registry the additional sum of $30,000 for use as needed for the fees and expenses of the temporary outside monitors, then the Court will levy a conditional $7500 a day fine during the five month period that the staffing plan is being implemented (June 7, 1985 to November 7, 1985), said total amount of conditional daily fines not to be paid until November 7, 1985.
A. If on November 7, 1985 the staffing plan is fully implemented with the required guards hired, trained and at work, the conditional fines — the $250,000 lump sum fine including the 10% deposit of $25,000 and as well as the accrued daily fines of $7500 per day — will be waived by the Court and fully returned to defendants. Also, any unused expenditures for the temporary monitors will be returned to the defendants along with an accounting.
B. If on November 7, 1985 the Court ordered staffing plan is not fully implemented and operational, the total conditional lump sum fine of $250,000 and the conditional $7500 daily fines assessed over the five month period totaling $1,125,000 will be immediately due and payable and deposited in the registry where it will be forfeited to the Court and subject to court order. Failure of the defendants to deposit such forfeited conditional fines on November 7, 1985 as ordered will result in a late penalty of $5000 per day until such forfeited fines are deposited. In addition, the defendants will be fined $10,000 a day from November 7, 1985 forward until full compliance with the December 18, 1984 Order is achieved.

III.

Conclusion

This Court has acted to hold these elected officials of Harris County, Texas in civil contempt with great reluctance, and only after conducting several hearings over a period of many months. The history of this litigation reveals the unconscionable period of time that the Harris County Jails have confined inmates while utilizing an inadequate number of security guards. For this Court to do nothing and thereby permit this practice to continue would be a total abdication of the Court’s obligations under the applicable law. The defendants’ indifference to the Court’s December 18, 1984 Order is the most striking and disturbing proof of the defendants’ lack of reasonable diligence. Even after all efforts at the appellate level to stay the enforcement of the December 18, 1984 Order had been exhausted without success, the Commissioners evidenced no willingness to comply. Instead, they chose to rely solely on their own assessment as to what constitutes a safe and suitable jail. Such deliberate inaction strongly influences the Court’s view that defendants have not been reasonably diligent in complying or even attempting to comply with the Court’s mandate.

As a final observation, the following quotation is inserted as a means of underscoring the Court’s stance in this case:

For twelve years this protracted civil rights litigation has proceeded to address in the Court a myriad of issues relevant to the Harris County Jails. It had been hoped by this Court that some termination point might be in the offing. Nothing can do more to delay such a termination than scenarios such as the one addressed in this order. The Court has a duty to ensure that the inmates in the Harris County Jails are not deprived of their constitutional right to be protected from cruel and unusual punishment. While the Court realizes that any resulting potential tax increases or fines will ultimately be borne by the citizens of Harris County, the Court outlines the above procedure in order to serve notice to the defendants that the Court, either coercively or coactively, intends to ensure that the staffing of the county jails comports with what the Constitution requires.

Alberti v. Heard, 600 F.Supp. 443 at 464 (S.D.Tex.1984).

In the event that any of the foregoing Findings of Fact constitute Conclusions of Law, they are adopted as such. In the event that any of the foregoing Conclusions of Law constitute Findings of Fact, they are adopted as such.

      . Rather than reiterating itself, the Court will fully incorporate for all purposes in this Order, the Court's Orders of December 18, 1984 and April 9, 1985.

      . Additionally before the Court is plaintiffs’ first amended motion to add parties in which plaintiffs request the Court to add as parties defendant J.F. Flack, and Henry Kriegel, in their official capacities as Auditor and Treasurer, respectively, of Harris County. The Court will defer a ruling on this motion until it becomes clear that such joinder is required to ensure compliance with the Court’s orders.

      . This would provide forty-three (43) additional deputies and twenty-two (22) additional sergeants to be allocated between the Central Jail and Detention Center.

      . The Cox plan and the December 1984 Order with regard to the number of sergeants required are identical. Given that defendants have ostensibly funded and hired the number of sergeants recommended in the Cox plan, it follows that they are, at present, in compliance in this area with the Court’s plan as well. However, Captain Anderson testified that as of the date of this hearing, he can fully staff only six or seven out of nine floors in the Central Jail according to the Court's Order as it applies to sergeants. Accordingly, the Court will continue to monitor the staffing of sergeants in the jail facilities until compliance is fully assured.

      . “Racking out” is a procedure discussed and recommended by Mr. Cox in his report. This procedure requires that mid to high risk inmates in multiple occupancy housing units be locked out of their sleeping cells during the daytime hours and forced to spend their time in the common dayroom. This procedure allows the guards to observe all inmates from the safety vestibule without the necessity of actually venturing into the dayroom to view the inmates who may be in their sleeping cells. (Plaintiffs' Exhibit No. 30 at pp. i. and 13).

      . The Court's view in this regard is not altered by the fact that Sheriff Klevenhagen was not personally involved in defendants’ compliance efforts until January 1985, as the inevitable succession of officials in public office does not excuse noncompliance. Newman v. Graddick, 740 F.2d at 1517, 1518 (11th Cir.1984); See Ranson v. Brennan, 437 F.2d 513, 516 (5th Cir.), cert. denied, 403 U.S. 904, 91 S.Ct. 2205, 29 L.Ed.2d 680 (1971); FED.R.CIV.P. 25(d)(1).