author: PETTINE, Senior District Judge.

text:
    Stacey O’BRIEN, et al. v. TOWN OF WESTERLY HOUSING AUTHORITY.
    Civ. A. No. 84-0125 P.
    United States District Court, D. Rhode Island.
    Jan. 17, 1986.

      John W. Dineen, of R.I. Legal Services, Providence, R.I., for plaintiffs.
    George Comolli, Westerly, R.I., for defendant.
   MEMORANDUM AND ORDER

PETTINE, Senior District Judge.

The plaintiffs have moved for the award of attorney’s fees and costs. The defendant Town of Westerly Housing Authority (WHA) sets forth the issues to be answered by objecting on the following grounds: “the plaintiff did not prevail under existing law”, the “defendants’ actions [were] not required by law,” and an award of attorney’s fees would be unjust.

For reasons hereinafter stated each of the defendant’s objections are rejected. The Court finds the plaintiff is entitled to a fee and the matter is set down for an evidentiary hearing on January 30, 1986 at 9:30 A.M. to determine the amount of the entitlement.

1. Background

The background of this case was all detailed in my Opinion and Order of January 16, 1985, wherein the plaintiff sought injunctive and declaratory relief and the defendant WHA moved to dismiss the action. In order to present a chronological sequence of events in this opinion, for ease of the reader, that opinion will be quoted at length here:

“The case came before the Court as a class action in which the plaintiffs alleged that the defendant, Westerly Housing Authority (WHA) was unlawfully promoting a policy of mid-term terminations of Section 8 Existing Housing leases in violation of tenants’ rights to Due Process and their rights under the United States Housing Act, 42 U.S.C. § 1437f. The WHA moved this Court to dismiss the action for want of proper federal jurisdiction on the grounds that subsequent agreements between the parties had mooted the action.”

Beginning in July of 1982, the named plaintiff ... Stacey O’Brien, leased a rental apartment on the second floor of 19 Beach Street, Westerly, Rhode Island, from Raymond and Gladys Ugone. Several months after she moved in, O’Brien became eligible for Section 8 Existing Housing certificates under the United States Housing Act, 42 U.S.C. § 1437f. The Section 8 program is administered in Westerly by the WHA. Under the program, the tenant pays 30% of his or her adjusted income toward rent and utilities, and the WHA pays the balance directly to the landlord using federal funds provided by the United States Department of Housing and Urban Development [HUD].

Pursuant to the program, O’Brien entered into a contract with the WHA and the Ugones whereby the parties agreed that the WHA would make subsidy payments to the Ugones during the term of O’Brien’s lease. The contract incorporated a one year lease running from October 1, 1982, through September 30, 1983. Subsequently, the same parties entered into a ‘Contract Renewal or Continuation’ of the original contract, to run from October 1, 1983 through September 30, 1984. The renewal contract embodied the same terms as the original agreement, except that the rent was adjusted upward for the upcoming year.

On December 29, 1983, prior to the expiration of the renewal term, the Ugones conveyed the rental premises to Richard and Mildred Morrison, also defendants in that action. O’Brien alleged that on December 31, 1983, the Morrisons informed her by letter of their intention to terminate the rental agreement as of January 31, 1984. The letter purportedly stated that the WHA had informed the Morrisons that the conveyance of the property had rendered O’Brien’s lease null and void, and relying on that information, they were instructing O’Brien to quit the premises.[] The named plaintiff further alleges that WHA discontinued its Section 8 payments to the landlord after the December 1983 payment without giving her either notice or an opportunity to contest the termination.

Based on the foregoing events, O’Brien commenced the present action against the WHA on March 15, 1984. She claimed that in authorizing and participating in the midterm termination of her Section 8 benefits, WHA violated her federally protected right to due process and her rights under 42 U.S.C. § 1437f. Accordingly, O’Brien sought injunctive and declaratory relief, damages, costs, and reasonable attorney’s fees. On May 11,1984, the named plaintiff moved for class certification pursuant to Federal Rule of Civil Procedure 23(c)(1). The members of the proposed class were to consist of unnamed individuals who were presently or would be in the future, tenants participating in the WHA’s Section 8 program. The motion was granted by this Court on May 29, 1984.

On May 15, 1984, O’Brien moved for a preliminary injunction requiring the WHA to notify the Morrisons that, contrary to their prior advisement, the lease remained valid notwithstanding the conveyance of the property, and that they could validly receive subsidy payments from the WHA if they would choose to accept them. The plaintiff requested that the WHA be further enjoined to reinstate O’Brien’s one year lease and subsidy contract, and to refrain from any termination without affording the plaintiff prior written notice and a hearing. After the filing of this motion, the parties entered into negotiations to attempt to resolve the preliminary injunction issues. As a result, they formulated a stipulation which was filed and entered by this Court on June 19, 1984. The stipulation provided as follows:

1. Richard W. and Mildred M. Morrison (The Morrisons) have accepted assignment from Raymond Ugone of all rights to receive Section 8 Existing Housing Payments under plaintiff O’Brien’s lease at 19 Beach Street, Westerly, Rhode Island.
2. The Westerly Housing Authority (WHA) agrees to resume payments on behalf of Stacey O’Brien, treating the Morrisons in all respects as having replaced Raymond Ugone as the owner.
3. The Morrisons agree to promptly execute the dismissals of both eviction complaints which had been filed against Stacey O’Brien in the Fourth Division District Court of the State of Rhode Island.[]
4. Based on paragraphs 1-3, supra, plaintiff Stacey O’Brien agrees that the preliminary injunction motion pending in this litigation may be passed, since it appears that the threat of irreparable harm is no longer present.

WHA, as defendant in this action, then contended that “the stipulation entered into by the parties had afforded O’Brien all the relief she requested in her original complaint, thereby rendering the action moot.”

The WHA’s motion to dismiss was denied. It argued that the stipulation resolved the preliminary injunction and thus effectively terminated any case or controversy under Article III of the United States Constitution. I held a continuing case or controversy did exist; the declaratory judgment issue remained alive since WHA had not withdrawn its policy and had expressly declined to enter into a settlement agreement concerning future policy.

The parties then reached an agreed stipulation of facts which was filed March 12, 1985. Summary judgment motions were filed by both parties but were never resolved by the Court because the parties reached a settlement and I entered an order accordingly on August 6, 1985.

2. Prevailing Party

a) Defendant’s Contention

The defendant argues that the August 6, 1985 order does not speak to any of the significant issues raised in the litigation and, therefore, that the plaintiff cannot be said to have prevailed on any issue; that is, it was not decided whether the plaintiffs were entitled to a Declaratory Judgment that the defendant’s “actions, inaction and policy, in terminating the Section 8 Lease and contract mid-term, without good cause, and without notice or hearing, and advising the property owners that the Tenant Section 8 Housing Lease is null and void was in violation of Plaintiff’s rights under [the Housing Act] and Due Process.” Defendant’s Memorandum p. 1.

They concede, as they must, that the August 6 order provides for written notice in advance of terminating a rental subsidy but point out that the order is of no account; the WHA had already instituted such a notice practice before the order took effect. The defendant claims that if the notice set forth in the August 6 order is an “achievement” it must be placed in its proper perspective by comparing such “achievement” with what was sought for in the complaint and not realized: “(1) the order did not address the due process question; (2) the order was strictly limited to the operation of the WHA; and (3) the plaintiff did not receive a declaratory judgment against the WHA.” Defendant’s Reply Memorandum p. 2. In short, it is the defendant’s position that what the plaintiffs got was, comparatively speaking, not significant; “all that the WHA is required to do now that it did not do before this suit is to send a two (2) week notice of termination of housing assistance payments where there is a non-assignment of the HAP contract. This requirement simply formalizes an otherwise existing system through which the WHA would provide oral notice to a tenant facing a suspension of housing assistance payments and provide assistance in finding new housing.” Defendant’s Reply Memorandum p. 5.

The foregoing was offered in support of defendant’s position that there must be a causal connection between the lawsuit and what was achieved; WHA also claims that the notice practice was not required by law and argues, in almost identical fashion, that when the new landlord settled the trespass and ejectment action, an assignment of the HAP contract was made. Ergo, WHA no longer had reason to deny making payments to the new landlord and so it readily agreed to the August 6, 1985 order providing for the written notice, “the importance of which pales in comparison to what was sought.”

The defendant additionally argues that, “[e]ven if it could be said that some narrow notion of ‘benefit’ to the Plaintiffs exists, Plaintiffs would still have to pass the legal test in order to prevail. According to Nadeau, [.Nadeau v. Helgemoe, 581 F.2d 275 (1st Cir.1978)] ‘[i]f it has been judicially determined that Defendant’s conduct, however beneficial it may be to Plaintiffs’ interest, is not required by law, then defendants must be held to have acted gratuitously and Plaintiffs have not prevailed in a legal sense.’ 581 F.2d at 281.”

The defendant argues that here it indeed acted gratuitously and not as required by law; there was no due process violation because the State Court eviction proceeding provided “extensive adjudicatory” process. It cites Swann v. Gastonia Housing Authority, 675 F.2d 1342 (4th Cir.1982); Jeffries v. Georgia Residential Finance Authority, 503 F.Supp. 610 (N.D.Ga,, 1980), affd, 678 F.2d 919 (11th Cir.1982), cert. denied, 459 U.S. 971,103 S.Ct. 302, 74 L.Ed.2d 283 (1982). The defendant highlights Jeffries :

... [T]he State Court proceeding meets the requirements of due process and allows the Section 8 tenant to adequately present his case to a State Court judge prior to a threatened eviction. At the same time, the State Court proceedings and the institution of State Courts are already available and existing. Id. at 621.

Finally the defendant states that the landlord sent the plaintiff a thirty (30) day notice of termination; WHA orally informed the plaintiff that payments would be discontinued for nonassignment of the lease, and that at a minimum the plaintiff received a seven day notice of the institution of the State Court eviction proceedings.

b) Plaintiffs Contention

The plaintiff reasons that she has prevailed because O’Brien was able to finish out her entire lease term and the requirement in the order of advance notice of an impending halt in subsidy payments is a significant benefit to the class. The plaintiff claims that because of this notice requirement the “tenant can contact the housing authority and the landlord and determine the reason for the threatened payment halt.” In addition, the tenant now has time to seek legal advice “concerning the tenant’s rights to an ongoing lease and subsidy in the absence of good cause to evict.” Plaintiffs Memorandum at p. 2.

It is also argued that but for this lawsuit neither O’Brien nor the class would have benefited. The plaintiff’s point is that at the time of the August 6 order the case was very much alive. For the plaintiff, this suit stopped the eviction and reinstituted the subsidy payments which in turn saved the lease. In addition, the August decree applies to all present and future Section 8 participants in Westerly who now know there will be prior written notice before subsidy payments are terminated.

The plaintiff further argues that:

“Even if the litigation were not the sole cause of defendant’s actions, prevailing party status can still exist. In Morrison, supra, [.Morrison v. Ayoob, 627 F.2d 669 (3rd Cir.1980) ], the Third Circuit explained that:

Where there is more than one cause, the plaintiff is a prevailing party if the action was a material factor in bringing about the defendant’s action. To hold otherwise would be inconsistent with the broad remedial purpose of § 1988 because in many cases causation will hinge on the defendant’s motivation. To require some stricter standard of causation would mean that the defendant could hide his true motivation behind what seems a plausible alternate justification. 627 F.2d at 671.

To avoid this rationale, defendant focuses exclusively on the August 1985 consent decree on notice, arguing plaintiff did not gain much. The WHA avoids the fact that the litigation was a catalyst in reversing the WHA position that a one-year lease is rendered null and void by a sale, the very position that started the entire problem. Once that position was reversed, the new owner had no real choice but to accept the resumption of subsidy payments and no longer seek to evict the tenant.”

c) Argument and Conclusions of Law

Facially the defendant presents an appealing point of view. However, I do not find it sound.

In Nadeau v. Helgemoe, 581 F.2d 275 (1st Cir.1978), after discussing the Attorney’s Fees Awards Act in light of its legislative history and various other court rulings, the First Circuit concluded, “that plaintiffs may be considered ‘prevailing parties’ for attorney’s fees purposes if they succeed on any significant issue in litigation which achieves some of the benefit the parties sought in bringing suit.” Id. at p. 278-79.

Engrafted on this principle of dec’".'; nal law, however, are certain circumscronons: “Even if plaintiffs can establish their suit was causally related to the defendants’ action which improved their condition, this is only half of their battle. The test they must pass is legal as well as factual. If it has been judicially determined that defendants’ conduct, however beneficial it may be to plaintiffs’ interests, is not required by law, then defendants must be held to have acted gratuitously and plaintiffs have not prevailed in a legal sense,” Id. at 281; if a constitutional claim is pressed, which is not “frivolous, unreasonable, or groundless ...” and the resolution of such claim is of a significant issue which achieves some benefit to the plaintiff and the class, then it may be said it was required by law.

Specifically I must decide if the plaintiff’s suit was a necessary and important factor, i.e., a causal factor, in achieving the changes undertaken by defendant; I then must decide if the notice mandated by the August 6 order is significant and of some benefit to the class and whether the notice mandated by the order vindicated a non-frivolous constitutional denial to the plaintiff. I find this standard has been satisfied.

The causal connection is clear. But for this lawsuit the defendant would not have provided the additional due process notice they now provide plaintiff and the class. Defendant does not dispute this point.

That the order was significant and of benefit to the class is also apparent. Tough issues were presented in the basic case which need not be decided. However, it is clear we are dealing with one year leases — the defendant concedes this — and that “Section 8 existing housing tenants have a protected property interest in their government subsidized leases because their leases may be terminated mid-year only for cause.” Jeffries v. Georgia Residential Finance Authority, 678 F.2d 919 (11th Cir. 1982). It is equally clear there can be no cavalier conclusion as to the effect a sale of the property may have on such a lease and concomitantly the statutory entitlements of the tenant. Swann v. Gastonia Housing Authority, 675 F.2d 1342, (4th Cir.1982) (“a tenant in this Section 8 Existing Housing Program is assured by statute he will continue in occupancy in the absence of good cause for eviction. It is now beyond question that such statutory entitlements are protected by the due process clause.”); Reltron Gory. v. Voxakis Enterprises, Inc., 57 A.D.2d 134, 359 N.Y.S.2d 276 (1977) (The transfer of the lessor’s reversion is a transfer of the lease and its rights and obligations, regardless of whether there is a formal assignment of the lease.) See also Restatement Property 2d Sections 16.1-16.3; Achtar v. Posner, 189 Md. 559, 56 A.2d 797, 799 (1948); Douglas v. Pratt, 102 R.I. 445, 231 A.2d 486 (1967).

As the plaintiff argues, “[a] landlord knows he can withdraw from the program at the end of the term, even if the tenant has complied with all requirements. The tenant knows that the stability and security interest is protected at least during the one year term unless the tenant breaches. Thus, there is a balance between some flexibility for the landlord and ‘some certainty in that housing’ for the tenant.” See Mitchell v. HUD, 569 F.Supp. 701, 708 (N.D.Ca.1983); Levy v. HUD, No. C84 7983 WWS (N.D.Cal. March 22, 1985).

The point is that notice, as is now required, could prompt the tenant to seek advice to protect the property interest at stake; through counsel the tenant could rely on both state and federal law to contradict WHA’s view, taken here, that a conveyance rendered a lease null and void. Such a position is far from frivolous; for example the plaintiff argues;

“HUD’s regulation in this area leaves open several questions. 24 C.F.R. Section 882.216 (Informal review of hearing). It requires some elements of due process for certain fact situations, but the present case may or may not fit within the regulation. For example a ‘policy issue’ is excluded. 24 C.F.R. Section 882.216(b)(2)(i). The WHA’s view that a conveyance renders a lease null and void could be a policy issue since the WHA’s view did not appear to be limited to O’Brien’s particular fact situation. Issues relating to housing quality standards and changes in tenant family size or family composition are excluded by HUD from due process principles. 24 C.F.R. Section 882.215(b)(2)(ii). Also excluded is the decision to terminate payments to the landlord under Section 882.-211(c) or to deny a tenant’s request to extend the certificate to move to another dwelling. Section 882.215(b)(2)(iii) and (iv). Subsection (c) apparently would apply to the present case. To the extent that HUD regulations purport to authorize a deprivation of the tenant’s property interests without due process, they are invalid, and the WHA cannot seek refuge in them.” Plaintiff’s Summary Judgment Memorandum at p. 29.

That issue is not decided here nor does it have to be. Nadeau, supra, does not require proof that the relief is fully mandated by law where there has been a settlement.

I believe that what has been stated herein sufficiently shows that the plaintiff has met the causal relationship and legal tests, and that having been done the question has been answered, “whether if plaintiffs had continued to press their claim under traditional constitutional theory, their action could be considered ‘frivolous, unreasonable, or groundless,’ or that the plaintiff continued to litigate after it clearly became so.” Nadeau, supra, at 281. I do not believe Nadeau ever intended to return every settled case under § 1983 to its presettlement stage in order to decide an attorney’s fee application; if this were so, then I would have to render an opinion on the declaratory relief requested — in other words, as they say, return to “square 1” and decide the summary judgment motions which were pending at the time of the August 6 order.

Unlike Bush v. Bays, 463 F.Supp. 59 (E.D.Va.1978), cited by the defendant as authority for the proposition that the legal test requires full adjudication of the original complaint to show that the relief was legally required, where the lawsuit played no part in obtaining the relief, here only the plaintiff’s action brought about the ultimate relief. Whatever other way Bush may be read, I do not find it persuasive. Maher v. Gagne, 448 U.S. 122, 100 S.Ct. 2570, 65 L.Ed.2d 653 (1980) clearly tells us that “[njothing in the language of § 1988 conditions the District Courts’ power to award fees on full litigation of the issues or on a judicial determination that the plaintiff’s rights have been violated.” Id. 100 S.Ct. at 2575. “The fact that respondent prevailed through a settlement rather than through litigation does not weaken her claim to fees.” Id.

I conclude that the notice requirement is of material significance and benefit.

3. The Justice of Awarding an Attorney’s Fee

The defendant also argues a fee should not be awarded because the consent order made no mention of a fee, that Legal Services representing the plaintiff was not acting in the capacity of a Private Attorney General and that taking of money from a tax-supported public housing authority does not serve the purposes of the Civil Rights Attorney’s Fees Act.

The defendant feels the fee issue should have been part of the consent order. To the contrary I quite agree with the plaintiff that it would have been improper to do so. It seems to me this point is too well established to warrant extensive discussion. See Lazar v. Pierce, 757 F.2d 435 (1st Cir.1985); “Attorney-Client Conflicts of Interest and Concept of Non-Negotiable Fee Awards under 42 U.S.C. § 1988” 55 U.Colo. L.R. 431 (1984); Benitez v. Collazo, 571 F.Supp. 246, 249-50 (D.P.R.1983).

And the fact that entitlement to fees is not affected by plaintiffs’ representation by a legal services organization has been settled. Blum v. Stenson, 465 U.S. 886, 104 S.Ct. 1541, 1546-47, 79 L.Ed.2d 891 (1984).

Finally, on the question of entitlement there is no merit to the defendant’s argument that a public housing authority enjoys a special status. I agree with the reasoning of Gautreaux v. Chicago Housing Authority, 690 F.2d 601, 612-13 (7th Cir.1982), cert. denied, 461 U.S. 961, 103 S.Ct. 2438, 77 L.Ed.2d 1322 (1983).

In the hearing on January 30, 1986, the plaintiffs may include in their presentation to establish the amount to be awarded, the hours' and costs expended in answering the defendant’s objection in this action to any award being made.

An order will be prepared accordingly.

      . As will be seen in the recitation of the background of this case, the controversy stems from the the discontinuance of Section 8 payments without notice or opportunity to contest the termination. The plaintiff claims this was a violation of due process. The defendant contends, "there is no law or decision which exists ..." requiring such notice.

      . The WHA has a policy of suspending housing assistance payments on the transfer of the rental property absent an assignment of the HOUSING ASSISTANCE PAYMENT CONTRACT (HAP) from the old landlord to the new landlord. This policy is designed to protect Section 8 tenants since without the HAP contract assignment the new landlord is not bound by the Section 8 regulation.

      . The Morrisons commenced a Trespass and Ejectment action against the plaintiff in the Rhode Island District Court for non payment of rent. (WHA did not forward the subsidy payment to the new landlord). After the commencement of these proceedings, an assignment of the HAP contract was made and it was agreed the payments would continue for the duration of the lease; the case was then dismissed.

      . The August 6 order, in pertinent part, reads:
      ORDER
      In this Section 8, 24 C.F.R. § 882.207 et seq. contract, the question before the Court is whether or not it is a violation of due process of law not to give a certificate holder tenant notice of the termination of the Housing Assistance Payment (H.A.P.) contract before or after termination.
      Without resolving this issue and limiting this order strictly to the operation of the Westerly Housing Authority, by agreement of the parties, it is hereby ordered that henceforth, from and after this date, no Housing Assistance Payment will be terminated without first notifying the affected tenant in writing two weeks in advance of said termination. [It should be noted that the WHA had already instituted such action.] This order is entered subject to review by the Department of Urban Development, Regional Counsel and is without prejudice to any motion for modification by the Westerly Housing Authority.

      . While the defendant makes two distinct arguments — that the plaintiff did not prevail under existing law and that the defendant’s actions were not required by law — I will address them together since both relate to whether the plaintiff was a "prevailing" party entitled to attorney’s fees.

      . I would note, however, some of the weaknesses in the defendant’s argument that it acted gratuitously and not as required by Due Process. To begin with, the plaintiff is correct in stating that it is erroneous for the defendant to claim that "a tenant must receive at a minimum a seven (7) day notice of institution of a state court eviction proceeding." R.I.G.L. § 34-18-9(b)(1), in non-payment of rent cases, allows summary proceedings without notice, if the tenant is more than fifteen days in arrears. It is the hearing which is set for the next court day following a seven day answer period; at that point the action has already been started. At any rate, the eviction proceeding does not answer the due process requirement. The plaintiff states it well that, ”[t]he key property issue is the continued payment of the rental subsidy, by the Public Housing Authority, on behalf of the tenant” — the plaintiff was entitled to advance written notice of the halt in those payments. If the landlord does not receive the WHA payments, and fifteen days pass, and the landlord starts summary proceedings for this non-payment of rent, then the first notice the tenant will have is the complaint and summons. This scenario could happen to a tenant who has paid her share of the rent and may not even know there is a problem brewing.
      The eviction hearing will involve the landlord and the tenant; the PHA is not a party. The Court therefore would be unable to order the PHA to resume payments. Thus, the PHA’s denial of due process before the halt in payments is not cured by the later court proceeding. Swann and Jeffries, supra, are inapposite. The defendant fails to recognize that Jeffries found protected property rights in an expectation of continued occupancy and receipt of rents and utility subsidies. 503 F.Supp. at 616-18. Furthermore, Jeffries specifically condemned summary eviction proceedings in state courts; it unequivocally stated that the state court must provide an adequate forum for the constitutional claim. In this case the state court proceeding was totally inadequate. Id. at 621-22. Again, it is a summary proceeding with arrearage of rent as the only issue, it is commenced with no prior notice to the tenant, and there is no equitable right to tender arrearage.- And in this case the plaintiff in the state court proceeding was not at the time a participant in the Section 8 program. Swann also required notice and an opportunity to respond prior to the commencement of the eviction proceeding. Also in Swann the eviction was not a summary proceeding but rather was a full due process hearing where even constitutional issues could be raised. Id. at 1347-48.


source: Caselaw Access Project

author: TODD, District Judge.

license: Public Domain

text:
    Norman Quincy WRIGHT, Plaintiff, v. Jerry McCLAIN, et al., Defendants.
    Civ. No. 85-1157.
    United States District Court, W.D. Tennessee, E.D.
    Jan. 17, 1986.
    Norman Quincy Wright, pro se.
    Robert A. Grunow, Associate Chief Deputy, Atty. Gen., and Jane W. Young, Asst. Atty. Gen., Nashville, Tenn., for defendants.
   ORDER OF DISMISSAL

TODD, District Judge.

Before the Court is Defendants’ motion to dismiss this action for failure to state a claim upon which relief may be granted. For the reasons set forth herein, Defendants’ motion is, GRANTED.

Plaintiff brought this 42 U.S.C. § 1983 action against numerous officials of the State of Tennessee, alleging due process violations' in his parole revocation hearing. In an order entered July 19, 1985, this Court dismissed Defendants Jerry McClain, Director of Paroles for the State of Tennessee, and Pat McCullough, Western Regional Director of the Board of Paroles, from this action, finding that Plaintiff had not alleged any direct participation by them in the events involved in the complaint.

Plaintiff alleges that Defendants Robin Rockett, a hearing officer with the Tennessee Board of Paroles, and Stephen Betts, a parole officer with the Board, violated his rights under the due process clause of the Fourteenth Amendment by allowing hearsay evidence to be admitted into his parole revocation preliminary hearing, by denying him the right to cross-examine adverse witnesses, and by failing to give him a written statement as to the evidence relied upon by the State at his parole revocation hearing.

Defendants assert that Plaintiff’s damage claims arising from conduct at his preliminary parole revocation hearing are barred due to absolute “quasi-judicial” immunity.

Under the rationale of Butz v. Economou, 438 U.S. 478, 98 S.Ct. 2894, 57 L.Ed.2d 895 (1978), the determination of whether an official is to be afforded absolute “quasi-judicial” immunity for his official acts is accomplished through a functional analysis, i.e., a comparison of the functions the official performs with typical judicial functions. Id. at 512-517, 98 S.Ct. at 2913-2916. Defendants now ask this Court to find that parole officials conducting preliminary revocation hearings are sufficiently analagous to judicial officers to warrant absolute immunity from Section 1983 liability.

Although this Circuit has apparently never considered the question, several other courts have held that the analogy is fitting. See, e.g., Trotter v. Klincar, 748 F.2d 1177 (7th Cir.1984); Evans v. Dillahunty, 711 F.2d 828 (8th Cir.1983); Douglas v. Muncy, 570 F.2d 499 (4th Cir.1978); Johnson v. Wells, 566 F.2d 1016 (5th Cir.1978). These courts have found that parole board officials perform tasks functionally comparable to judges when they determine whether to grant, deny or revoke parole, and that a parole board is entitled to absolute immunity for activities related to the “execution of parole revocation procedures.” Anderson v. Boyd, 714 F.2d 906, 909-910 (9th Cir. 1983).

Consistent with this authority, this Court now holds that the evidentiary decisions complained of in this action fall squarely within the scope of parole board officials’ absolute “quasi-judicial” immunity. The fact that these decisions were made during a preliminary hearing to determine if probable cause for revocation of parole existed is of no consequence, because the tasks performed by the hearing officials are still “quasi-judicial” in nature. Although there may be a distinction between the adjudicatory and ministerial functions of parole board officials, decisions regarding evidence at a preliminary revocation hearing are certainly adjudicatory in nature.

Therefore, Defendants are entitled to absolute immunity from Section 1983 liability for the actions complained of in this action. Plaintiff therefore fails to state a claim upon which relief may be granted. This action is, accordingly, DISMISSED.

IT IS SO ORDERED.


author: CAFFREY, Chief Judge.

text:
    Aron D. MARKOFF, Plaintiff, v. Margaret HECKLER, Secretary of Health and Human Services, Defendant.
    Civ. A. No. 84-0193-C.
    United States District Court, D. Massachusetts.
    Jan. 21, 1986.

      David Engle, Mental Health Legal Advisors Committee, Boston, Mass., for plaintiff.
    Richard E. Welch, III, Asst. U.S. Atty., for defendant.
   MEMORANDUM

CAFFREY, Chief Judge.

The plaintiff, Aron D. Markoff, brings this action against the Secretary of Health and Human Services to challenge concurrent decisions by the Secretary denying the plaintiff’s applications for Social Security Childhood Disability Insurance Benefits (hereinafter “CDIB”), 42 U.S.C. § 423, and Supplemental Security Income (hereinafter “SSI”), 42 U.S.C. § 1381a. The plaintiff seeks reversal of the Secretary’s decisions pursuant to 42 U.S.C. §§ 405(g) and 1383(c)(3).

The plaintiff first applied for CDIB, based on the insured status of his father, on October 12, 1979. In his application the plaintiff claimed that he has been continuously disabled since February 28, 1969 when, at age 21, he suffered a psychotic breakdown and twice attempted to commit suicide. The Social Security Administration denied the application on January 7, 1980, and the plaintiff did not appeal.

On January 20, 1982 the plaintiff filed a second application for CDIB and an application for SSI as well. In both applications, he claimed an ongoing disability since his breakdown on February 28, 1969. The Social Security Administration denied both applications initially on April 12, 1982 and denied them again, upon reconsideration, on August 13, 1982. On February 3, 1983 Administrative Law Judge Thomas Bennett (hereinafter “the AU”) conducted a hearing on both the SSI and CDIB claims and, on July 15, 1983, issued decisions on these claims. In his decision on the plaintiff’s SSI claim, the AU evaluated certain medical evidence in the record and concluded that at no time has the plaintiff been under a disability within the meaning of the Social Security Act, and, accordingly, denied the plaintiff’s application. In his decision on the plaintiff’s CDIB claim, the AU said that the January 7, 1980 determination denying the plaintiff’s CDIB claim was final, and that since there was no new and material evidence relating to the CDIB claim, the determination may not be reopened. Despite his avowed decision not to reopen the plaintiff’s CDIB claim, however, the AU evaluated the February 3 hearing testimony and certain medical evidence, made detailed findings of fact relating specifically to the CDIB claim, and concluded that the plaintiff was not entitled to CDIB because he was not under a disability before he attained age 22. The Social Security Administration Appeals Council approved both of the AU's decisions on November 9, 1983.

The plaintiff seeks a reversal of the Secretary’s denial of both his CDIB and SSI claims. The Social Security Act gives this Court authority to review a “final decision of the Secretary [of Health and Human Services] made after a hearing.” 42 U.S.C. §§ 405(g), 1383(c)(3). The Act further provides that “[t]he court shall have power to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying, or reversing the decision of the Secretary, with or without remanding the cause for a rehearing ...” and that “[t]he findings of the Secretary as to any fact, if supported by substantial evidence, shall be conclusive____” 42 U.S.C. § 405(g).

The first issue this court must decide is whether it has jurisdiction to review the Secretary’s denial of the plaintiff’s CDIB claim. The Secretary contends that the Aid’s decision not to reopen the January 7, 1980 determination that the plaintiff is not entitled to CDIB is purely discretionary and, therefore, not reviewable by this Court. The initial CDIB determination became final when the plaintiff did not request reconsideration of his claim within the allotted time. See 20 C.F.R. § 404.905. An ALJ’s decision not to reopen a final determination of the Secretary generally is not reviewable by the courts. See Califano v. Sanders, 430 U.S. 99, 108-109, 97 S.Ct. 980, 985-986, 51 L.Ed.2d 192 (1977); Rios v. Secretary of Health, Education and Welfare, 614 F.2d 25, 26 (1st Cir.1980); Matos v. Secretary of Health, Education and Welfare, 581 F.2d 282, 285-286 (1st Cir.1978).

The ALJ’s July 15, 1983 decision on the plaintiff’s January 20, 1982 CDIB claim states that because the plaintiff failed to submit “new and material evidence” since the January 7, 1980 decision on his initial CDIB claim, the case may not be reopened. Notwithstanding the AU’s statement that the January 7, 1980 decision may not be reopened, however, it is clear from the “notice of hearing” sent to the plaintiff regarding the February 3, 1983 hearing before the ALJ and from the ALJ’s July 15, 1983 decision that the ALJ did in fact reopen the case and decide it on the merits. Both the notice of the February 3, 1983 hearing sent to the plaintiff and the ALJ’s decision expressly state that the issue to be decided at the hearing was whether Aron Markoff was under a disability as defined in the Social Security Act and, if so, whether the disability began before he attained age 22. Cf Rios v. Secretary of Health, Education and Welfare, 614 F.2d 25, 26 (1st Cir.1980). In his decision on the plaintiff’s CDIB claim, the AU set forth the five step sequence prescribed by the Social Security Administration Regulations for determining whether a claimant is disabled within the meaning of the Social Security Act. See 20 C.F.R. §§ 404.1520, 404.920. The AU then summarized testimony from the hearing relevant to the merits of the plaintiff’s claim and excerpts from medical reports evaluating the plaintiff’s mental condition. Most importantly, the AU made the following findings of fact: 1) the claimant is the child of the wage earner (his father); 2) the claimant was unmarried at the time his application was filed and is still unmarried; 3) the claimant was dependent on the wage earner; 4) the claimant attained age 22 on February 16, 1970; 5) Prior to attaining age 22, the claimant had no impairment significantly affecting his ability to perform basic work activities; and 6) the claimant is not under a disability which began before he attained age 22. The AU closed his evaluation of Mr. Markoff’s CDIB claim, saying:

On the basis of review of the entire hearing record, the [AU] concludes that the claimant ... is not shown to be precluded from working in jobs in which he could have only one supervisor during an 8 hour work day, only minimal necessity for communication with fellow employees (other than supervisors) and no occasion for contact with the public ... [T]he claimant has the ability to engage in substantial gainful activity and therefore, cannot be found to be disabled for purposes of Title XVI.

It is clear from the content and phraseology of the Aid’s decision that he did in fact reopen the Secretary’s January 7, 1980 determination of Mr. Markoff’s CDIB claim and reconsidered his claim, in light of new testimony and medical evidence, on the merits. I therefore rule that this Court has jurisdiction to review the Aid’s July 15, 1983 decisions on the plaintiff’s CDIB claim as well as his SSI claim. Cf Rein-hart v. Schweiker, 590 F.Supp. 78 ,(W.D. Mich.1984); Brown v. Heckler, 565 F.Supp. 72 (E.D.Wis.1983).

In his decision on Mr. Markoff’s CDIB claim the Aid found that Mr. Markoff was not disabled before reaching age 22, and in his decision on the plaintiff’s SSI claim, the Aid found that the plaintiff has never been disabled within the meaning of the Social Security Act. The Social Security Act defines disability as:

[the] inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months.

42 U.S.C. §§ 423(d)(1), 416(i)(l). The Social Security Administration Regulations, 20 C.F.R. §§'404.1520, 416.920, provide a five step procedure for evaluating disability:

First, is the claimant currently employed? If he is, the claimant is automatically considered not disabled.
Second, does the claimant have a severe impairment? A ‘severe impairment’ means an impairment ‘which significantly limits his or her physical or mental capacity to perform basic work-related functions.’ [See 20 C.F.R. §§ 404.1521 and 404.921] If the claimant does not have an impairment of at least this degree of severity, he is automatically considered not disabled. Third, does the claimant have an impairment equivalent to a specific list of impairments contained in Appendix 1 of the regulations? If the claimant has an impairment of so serious a degree of severity, the claimant is automatically found disabled.
These first three tests are ‘threshhold’ tests. If the claimant is working or has the physical or mental capacity to perform ‘basic work-related functions,’ he is automatically considered not disabled. If he has an Appendix 1-type impairment he is automatically considered disabled. In either case, his claim is determined at the ‘threshhold.’ If, however, his ability to perform basic work-related functions is impaired significantly (test 2) but there is no ‘Appendix 1’ impairment (test 3), the SSA goes on to ask the fourth question.
Fourth, does the claimant’s impairment prevent him from performing work of the sort he has done in the past? If not, he is not disabled. If so, the agency asks the fifth question.
Fifth, does the claimant’s impairment prevent him from performing other work of the sort found in the economy? If so, he is disabled; if not, he is not disabled.

See Goodermote v. Secretary of Health & Human Services, 690 F.2d 5, 6-7 (1st Cir. 1982).

In this case the ALJ found, with respect to both the plaintiff’s CDIB and SSI claims that the plaintiff did not have a “severe impairment.” See 20 C.F.R. §§ 404.1520(c), 416.920(c). In other words, the plaintiff failed to satisfy step two of the disability evaluation procedure. An impairment is not “severe” if it does not significantly limit one’s physical or mental ability to do “basic work activities.” 20 C.F.R. §§ 404.-1521(a), 416.921(a). The regulations expressly provide that “basic work activities” include:

(3) Understanding, carrying out, and remembering simple instructions;
(4) Use of judgment;
(5) Responding appropriately to supervision, co-workers and usual work situations; and
(6) Dealing with changes in a routine work setting.

20 C.F.R. §§ 404.1521(b), 416.921(b).

The findings of the ALJ as to any facts shall be conclusive if supported by “substantial evidence.” 42 U.S.C. § 405(g). The principal question this case raises, therefore, is whether there is substantial evidence to support the AU’s conclusions that the plaintiff did not suffer from a severe impairment before attaining age 22 and did not suffer from sueh an impairment in 1983. Substantial evidence is that which a reasonable mind, reviewing the record as a whole, could accept as adequate to support the conclusion. Rodriguez v. Secretary of Health and Human Services, 647 F.2d 218, 222 (1st Cir.1981); Richardson v. Perales, 402 U.S. 389, 410, 91 S.Ct. 1420, 1431-32, 28 L.Ed.2d 842 (1971).

As a starting point, this Court acknowledges that it is the duty of the Secretary, not the courts, to weigh the evidence, to resolve material conflicts in the testimony, and to decide the case accordingly. Richardson v. Perales, 402 U.S. 389, 91 S.Ct. 1420, 28 L.Ed.2d 842 (1971). Keeping in mind its limited duty in cases of this nature, the Court nevertheless rules that there is neither substantial evidence to support the AU’s findings that the plaintiff did not suffer from a severe impairment in 1983, nor is their substantial evidence to support the AU’s finding that the plaintiff did not have a severe impairment prior to February 16, 1970, when he reached 22 years of age.

It is undisputed in the record that on February 28, 1969, when he was 21 years of age, the plaintiff tried to stab himself in the chest and jump from a third story window. Following these suicide attempts, the plaintiff was hospitalized at the Massachusetts Mental Health Center, an in-patient psychiatric facility. Mr. Markoff’s doctor at the Health Center, Dr. Aaron, diagnosed him as suffering from process schizophrenia with an acute exacerabation. In the plaintiff’s “discharge summary” (from the Health Center), Dr. Aaron wrote that “Mr. Markoff is a young man with a great deal of fragility in a long-term illness” who when admitted to the Health Center “was seen to be ... dissheveled, preoccupied and panicked, ... grandiosely delusional, hallucinatory and confused.” Mr. Markoff began taking strong anti-psychotic medicine in 1969 and was still taking heavy daily doses of anti-psychotic drugs at the time of the 1983 hearing. He was discharged from the Health Center in March, 1970, more than a year after his breakdown.

Each of the psychiatrists who treated or examined Mr. Markoff, with one exception, diagnosed him as schizophrenic. The AU specifically found, in his decision on the plaintiff’s SSI claim, that the plaintiff suffers from “paranoid schizophrenia, chronic,” yet the AU also found that this impairment does not significantly limit the plaintiff’s ability to perform basic work activities. A review of the reports of the numerous doctors who evaluated Mr. Markoff and the testimony of Mr. Markoff and his mother at the hearing reveal that the AU’s conclusion that Mr. Markoff can perform basic work activities is not supported by substantial evidence.

In a February 27, 1979 report, Dr. Cott, who has treated the plaintiff since 1974 with megavitamins, reveals a history of major mental illness in Mr. Markoff’s family. Mr. Markoff’s paternal uncle was institutionalized since age twenty and three other close blood relatives were hospitalized at various times with schizophrenia. Dr. Cott relates that Mr. Markoff has a short attention span, difficulty following sequential orders, and that when under pressure, his memory is impaired and he becomes easily confused. In Dr. Cott’s opinion, the plaintiff has been “completely disabled and unable to function” since his discharge from the Health Center. Three years later, on May 19, 1982, Dr. Cott wrote another evaluation of Mr. Markoff. He stated that

[a]t the present time, [Mr. Markoff] continues to have some difficulty following sequential orders, has a short attention span and when he is under pressure, his memory is somewhat impaired and he becomes easily confused. Because of his condition he is unable to work or in any way to contribute to his own support.

Dr. Cott also said that the plaintiffs ability to relate to co-workers is “impaired.”

Dr. Goldfarb evaluated the plaintiff on July 2, 1982 and stated that Mr. Markoff “gets confused and has difficulty organizing his thoughts” and is very concerned with the end of the world. In Dr. Goldfarb’s opinion, Mr. Markoff “most likely ... is not functional in the job world.” Dr. Goisman evaluated Mr. Markoff on June 21, 1982. Dr. Goisman diagnosed the plaintiff as paranoid schizophrenic and said that the plaintiff has a “delusional belief that he can predict the future” and that the plaintiff’s illness has caused “social isolation, poor employability, and a bad self-image.” Dr. Goisman also said that the plaintiff responds to supervision “with difficulty,” “would be very anxious about work pressure,” and that the plaintiff's delusions could interfere with his. ability to relate to co-workers and use common sense.

Michael Jablon, a Doctoral Psychology Intern at Boston University who was the plaintiff’s primary therapist in late 1982 and early 1983, wrote this evaluation of Mr. Markoff on February 2, 1983:

Aron is an extremely anxious person who, under stressful situations has great difficulty functioning. He has poor concentration, somewhat looseness of association, severe pressure of speech, and delusioned beliefs concerning his ability to predict future events. Another problem is Aron’s inability to maintain good grooming habits.
Taken all together, his ability to be selected for work is minimal because of the combination of his appearance and his lack of interpersonal skills. And the possibility of maintaining a job, in my opinion, is slight because very small amounts of stress cause anxiousness, confusion and losses of memory.

Dr. Cacciola, the only doctor who did not diagnose Mr. Markoff as schizophrenic, said that Mr. Markoff has a severely impaired ability to deal with his feelings which causes constant anxiety and tension in any new or uncertain situation. With respect to Mr. Markoff’s future, Dr. Cacciola said:

I am not particularly hopeful about improvement in this man’s emotional functioning even if he enters into some kind of psychotherapy, for the treatment of his emotional difficulties is a very long and difficult one. It would take many years of helping him confront and deal with unacceptable feelings before he would establish control over his emotional functioning.

The only medical evaluations the ALJ relied upon in his decisions on the plaintiff’s CDIB and SSI claims were evaluations done by Dr. Mikkelson and Dr. Robbins, each of whom met with Mr. Markoff on only one occasion. Dr. Mikkelson’s primary diagnosis was chronic paranoid schizophrenia which, he said, “began insidiously at age 12 and has become progressively worse since that time.” Dr. Mikkelson did find that Mr. Markoff was “not acutely psycotic or thought disordered at the time of the interview” and that Mr. Markoff’s vocational training program and psychiatric treatment appeared “to be providing him with a certain degree of support and stability.” However, the fact that Dr. Mikkelson found that Mr. Markoff’s psychoses did not markedly interfere with Mr. Markoff’s interview or mental testing with Dr. Mikkelson is not, in light of the record as a whole, substantial evidence which could support a conclusion that Mr. Markoff’s impairment does not significantly limit his mental ability to do basic work activities. See 20 C.F.R. §§ 404.921(a), 404.1521(a).

Dr. Robbins’ evaluation is even less persuasive as support for the ALJ’s conclusion-. The ALJ relied upon the following language in Dr. Robbins’ report:

Generally, his intellectual functions have not deteriorated. However, it is clear that his poor attention span and short term memory difficulties relate to his preoccupation with his internal fantasy life rather than any organic deficit. I would say from a purely cognitive standpoint he could function in the open marketplace. However, the severity and chronicity of his underlying emotional difficulties suggest that he is extremely vulnerable to psychotic thinking and hence would continue to require antipsychotic medicine and a very supportive, structured, undemanding work setting in order to function.

The AU also relied upon Dr. Robbins’ assessment of ability to do work related activities which said that “although under too much stress the claimant will become disorganized and probably psychotic, in a supportive, structured, stable work setting the claimant may be able to carry out routine mechanical jobs without difficulty.”

These statements by Dr. Robbins do not in any way support a finding that Mr. Markoff is in fact capable of performing basic work related activities, which include: the use of judgment; responding appropriately to supervision, co-workers and usual work situations; and dealing with changes in a routine work setting. See 20 C.F.R. §§ 404.921(b), 404.1521(b). The Court notes that Dr. Robbins’ assessment of ability to do work related activities also says that “[ujnder customary work pressures [Mr. Markoff] may become extremely anxious and unable to pay attention” and that “[u]nder times of stress [Mr. Markoff] can become psychotic which would severely affect his judgment and understanding of day-to-day events.” Dr. Robbins report said that Mr. Markoff requires “emotional distance and social isolation to maintain control over internal disorganization” and that “[t]his limitation is chronic.”

A review of the record not only reveals a lack of substantial evidence to support the ALJ’s finding that Mr. Markoff does not suffer from a severe impairment, but also shows that each of the plaintiff’s attempts to work in the past have met with failure. In Mr. Markoff’s most recent attempt to work, he was fired after two days from his part time position wrapping sandwiches because he could not wrap the sandwiches quickly or tightly enough. Mr. Markoff said in his hearing testimony that his inability to successfully maintain simple, part-time work is due to his becoming nervous, agitated, and confused whenever he is confronted with work pressure. The ALJ’s decisions do not address the plaintiff’s repeated unsuccessful attempts to work, although courts have held and good sense dictates that such attempts may be seen as evidence of disability. See Kapp v. Secretary of Health and Human Services, CA 82-0344-F (D.Mass. 2/20/85); Hutchinson v. Schweicker, 535 F.Supp. 962, 967 (S.D. Ohio 1982).

For the above reasons, I rule that the ALJ’s decisions on the plaintiff’s SSI and CDIB claims that the plaintiff failed to satisfy his burden with respect to step two of the sequential disability evaluation procedure should be vacated. I also rule with respect to both of the plaintiff’s claims that he has shown by substantial evidence that he has a functional psychotic disorder which meets the requriements of 20 C.F.R. Part 404, Subpart P, Appendix 1, § 12.03. In other words, the plaintiff has satisfied his burden with respect to step three of the disability evaluation process. The administrative record clearly shows that the plaintiff has suffered from schizophrenia continuously since February 28, 1969 and that this disorder has manifested itself in agitations, delusions, psychomotor disturbances, and inappropriate affect. The record also clearly shows that as a result of his schizophrenia the plaintiff has been markedly restricted in his daily activities and interests and has had a seriously impaired ability to relate to other people.

Because the plaintiff clearly has satisfied his burden with respect to the first three steps of the disability evaluation procedure, I rule that both the AU’s decision on the plaintiffs SSI claim and his decision on the plaintiffs CDIB claim should be reversed and vacated and rule that the plaintiff is entitled to Title II benefits retroactive to October 12, 1978, 42 U.S.C. § 402(]')(1)(A), 20 C.F.R. 404.621(a)(l)(i), and Title XVI benefits from January 20, 1980, the date he filed his SSI claim. 42 U.S.C. § 1382(c)(5)(A) and (B); 20 C.F.R. § 416.-501.

Order accordingly.

      . The Court expresses no opinion as to whether a district court may be able to review an ALJ's decision not to reopen a case where the claimant challenges the Secretary’s decision on constitutional grounds. See Califano v. Sanders, 430 U.S. 99, 109, 97 S.Ct. 980, 986, 51 L.Ed.2d 192 (1977).

      . The plaintiff’s application for CDIB is based on the insured status of his father.

      . Dr. Cacciola diagnosed Mr. Markoff as having a "borderline personality with obsessive compulsive defenses,” and said he suffers from "status post psychotic decompensations.”

      . The ALJ found that Mr. Markoff "has never engaged in substantial gainful activity [and] has no significant work history.”

      . 12.03 Functional psychotic disorders (mood disorders, schizophrenias, paranoid states). With both A and B:
      A. Manifested persistence of one or more of the following clinical signs:
      1. Depression (or elation); and
      2. Agitation; or
      3. Psychomotor disturbances; or
      4. Hallucinations or delusions; or
      ■ 5. Autistic or other regressive behavior; or
      6. Inappropriateness of affect; or
      7. Illogical association of ideas;
      B. Resulting persistence of marked restriction of daily activities and constriction of interests and seriously impaired ability to relate to other people.


author: SACHS, District Judge.

text:
    Frank C. MAUDE, et al., Plaintiffs, v. GENERAL MOTORS CORPORATION, Defendant.
    No. 85-1626-CV-W-6.
    United States District Court, W.D. Missouri, W.D.
    Jan. 22, 1986.

      Frederick H. Riesmeyer, II, Spradley & Wirken, Kansas City, Mo., for plaintiffs.
    Paul Scott Kelly, Jr., Gage & Tucker, Kansas City, Mo., for defendant.
   MEMORANDUM AND ORDER

SACHS, District Judge.

The principal question in this diversity case is whether § 407.405, RSMo, as enacted in 1974 and amended in 1975, contains a rule of general applicability requiring ninety days’ written notice before cancellation of a Missouri franchise, regardless of the shorter period allowed in a franchise agreement. Some three years ago, I cryptically stated that this was so. Earley Ford Tractor, Inc. v. Hesston Corp., 556 F.Supp. 544, 547 (W.D.Mo.1983). On further consideration, after full briefing and argument, I again so conclude.

Because defendant General Motors Corporation (GM) failed to give the requisite notice in attempting to cancel a franchise to plaintiffs, an individual (Maude) and his dealership corporation, GM will be required to reinstate the relationship and, if appropriate, give the requisite statutory notice. ABA Distributors, Inc. v. Adolph Coors Co., 542 F.Supp. 1272, 1298-99 (W.D.Mo. 1982) (Oliver, Senior District Judge).

The pertinent facts are not in controversy. Maude filed this litigation in December 1985, complaining of the purported cancellation of a franchise in May 1985, his termination as the preferred or primary applicant in August, and the presently pending approval of a competing applicant, Harness, for a Chevrolet-Cadillac dealership in Warrensburg, Missouri. Maude had been scheduled to succeed a failed dealership but was frustrated in May 1985, in acquiring the dealership real estate because bankruptcy proceedings were initiated. Maude was unable to establish title to. the real estate until October. Meanwhile, GM, apparently tired of the delay, had attempted to cancel the franchise to Maude and now favors the new candidate, who surfaced in August.

Counsel met with the court shortly after suit was filed and GM agreed to take no action establishing Harness as a dealer until the matter could be presented in orderly fashion. A preliminary injunction hearing was scheduled for January 18, 1986. The parties proceeded with commendable speed to conduct discovery and enter into stipulations. At the suggestion of the court both parties moved for partial summary judgment, based on the present record, to resolve pertinent legal questions under Counts I and II of the complaint with finality, insofar as they govern injunctive relief under Count V of the complaint. It is therefore possible to conclude that there are no facts material to such relief that remain in controversy and that injunctive relief should be summarily granted to plaintiffs.

The parties have stipulated to the following (omitting document identification):

1. On or about December 6, 1984, plaintiff, F.C. Maude, executed a Real Property and Asset Purchase Agreement with Central Missouri Chevrolet-Cadillac, Inc. formerly Dick Holm Chevrolet-Cadillac, Inc.
2. The Real Property and Asset Purchase Agreement was contingent upon Mr. Maude or his designee being approved as a Chevrolet and Cadillac dealer in Warrensburg, Missouri, within 90 days of the date of the Agreement.
3. Shortly following the signing of the aforesaid Agreement, Mr. Maude contacted the Chevrolet Zone Office in Overland Park, Kansas, to discuss the possibilities of his becoming a dealer in Warrensburg, Missouri.
4. On December 20, 1984, Mr. Maude submitted an application for a General Motors Corporation Dealer Sales and Service Agreement.
5. A proposal dated January 17, 1985, was prepared by Chevrolet Motor Division, Kansas City Zone Office, for submission to the Central Office of Chevrolet proposing to change the dealer in Warrensburg, Missouri, from Dick Holm Chevrolet-Cadillac, Inc. to Pete Maude Chevrolet-Cadillac, .Inc. The proposal was recommended by the Zone Manager on the same date.
6. On February 4, 1985, the plaintiffs were informed that their application and proposal to become a Chevrolet-Cadillac dealer in Warrensburg, Missouri, had been approved.
7. On February 7, 1985, the plaintiff, Pete Maude Chevrolet-Cadillac, Inc., and General Motors Corporation entered into a General Motors Corporation Dealer Sales and Service Agreement appointing Pete Maude Chevrolet-Cadillac, Inc. as a Chevrolet-Cadillac dealer in Warrens-burg, Missouri.
8. On February 28, 1985, Chevrolet sent out a notice to all interested General Motors offices that Dick Holm Chevrolet-Cadillac, Inc. had been terminated as the dealer in Warrensburg, Missouri, on February 6, 1985, and that Pete Maude Chevrolet-Cadillac, Inc. was appointed the dealer on February 7, 1985.
9. A closing of the Real Property and Asset Purchase Agreement did not occur by March 6, 1985, the last date called for in the Agreement for a closing.
10. Between February 7, 1985, and March 6, 1985, the plaintiffs sold parts and performed some service work at the dealership location at 123 East Gay Street, Warrensburg, Missouri.
11. On or about March 6, 1985, the plaintiffs declared the seller in breach of the Real Property and Asset Purchase Agreement, at which time seller caused the dealership location to close for business.
12. No business was conducted at the dealership location subsequent to March 6, 1985, and throughout the remainder of calendar year 1985.
13. The plaintiff, Pete Maude Chevrolet-Cadillac, Inc., did not conduct the dealership’s customary sales and service operations at any time after February 7, 1985, through and including May 8, 1985.
14. Chevrolet wholesale personnel observed the dealership building at 123 East Gay Street, Warrensburg, Missouri, for seven consecutive business days during the period of March 11 through March 18, 1985, and they found the dealership building closed.
15. On March 13, 1985, Harris H. Wilder, an attorney for plaintiffs, wrote a letter to C.C. MacLean, Business Manager of the Chevrolet Zone Office in Kansas City, informing him that the proposed sale and purchase of assets from the former dealer had not been consummated and outlining alternate plans for the plaintiff to acquire the assets including the real estate where the dealership was to operate according to the Dealer Sales and Service Agreement.
16. On April 4, 1985, Mr. E.D. Kibler, Jr., Zone Manager of the Chevrolet Zone Office in Kansas City, wrote Mr. Wilder in response to his letter of March 13, 1985.
17. The alternate plan of plaintiffs to acquire the real estate where the dealership operations were supposed to be conducted was a purchase by Mr. Maude of a first mortgage on the real estate and foreclosure on the mortgage. Mr. Wilder commenced a notice of foreclosure and a foreclosure sale was scheduled to take place on May 7, 1985.
18. On April 23, 1985, representatives of the Kansas City Zone Office of Chevrolet met with Mr. Pete Maude and his attorney, Mr. Harris Wilder.
19. On May 6, 1985, the day before the, foreclosure sale was to take place, Central Missouri Chevrolet-Cadillac, Inc., d/b/a Dick Holm Chevrolet-Cadillac, Inc., the former Chevrolet-Cadillac dealer in Warrensburg who controlled the dealership premises in question, filed bankruptcy-
20. On May 7, 1985, following a request of Mr. Wilder, Mr. MacLean wrote a letter to the plaintiff Pete Maude Chevrolet-Cadillac, Inc. Mr. Wilder sent a courier to pick up this letter and attempted to introduce it into evidence in a hearing before the Bankruptcy Court on May 7, 1985.
21. The filing of bankruptcy by the former dealer effectively stopped the foreclosure and the plaintiffs were unable to gain possession of the dealership premises on May 8, 1985.
22. On May 8, 1985, both Chevrolet and Cadillac Divisions of General Motors wrote letters to Pete Maude Chevrolet-Cadillac, Inc., sent by Certified Mail, Return Receipt Requested, giving notice that the Dealer Agreements were being terminated immediately upon receipt of the letter.

GM’s purported cancellation of the Maude dealership relies on his failure to operate for seven consecutive business days, in violation of Article IV(A)(2)(i) of the Dealer Agreement. Maude contends, however, that nine months’ notice should have been given, under Article IV(A)(3), requiring such extended notice when there is failure to provide “adequate premises.” Because the adequacy of premises is not in question, but rather the failure to provide any place to operate the business, it appears that notice was given under the correct paragraph of the Dealer Agreement. On the contract issue, therefore, GM prevails.

The second major issue, as phrased in my order setting hearing, was “whether the ninety day statutory requirement under § 407.405, RSMo, is superseded by deregulation as to termination notice periods under § 407.825 (listing unlawful practices by motor vehicle franchisors).” Defendant now strenuously asserts that a second aspect of the statutory question is whether there is any such generally applicable ninety day termination notice requirement in § 407.405, RSMo.

Assuming for the moment that such a period is specified for Missouri franchises in general, it seems clear that the auto dealer franchise legislation enacted in 1980 does not repeal this requirement. Such repeals by implication are disfavored. Wright v. Martin, 674 S.W.2d 238, 242-3 (Mo.App.1984). A review of the 1980 legislation shows that nothing therein purports to establish or reject a mandated termination period. While the scattering of pertinent statutes throughout the Missouri Revised Statutes creates traps for the unsophisticated attorney, this court is not surprised to find such inartful methods of legislating. E.g., Drew v. Chrysler Credit Corp., 596 F.Supp. 1371, 1374 n. 1 (W.D. Mo.1984).

It might be argued that the 1980 legislation was an attempt to codify all pertinent Missouri statutes on automobile dealer franchises, and the omission of a provision requiring particular periods for giving termination notices could arguably be deemed significant. Just as likely, however, one might speculate that the legislators shrank from coping with a controversial subject, or were simply adopting legislation from elsewhere which did not, for one reason or another, establish periods for giving notices of termination. The 1980 statute does not on its face preclude plaintiffs’ reliance on § 407.405, and I therefore turn to that statute.

Oral argument and briefing suggest, moreover, that GM’s most serious contention is that I should rethink the cryptic observation in the Earley Ford case, and hold that § 407.405 does not really establish a ninety day notice period of general applicability. I have reconsidered the issue.

Without belaboring the legislative history of the pertinent sections, through reprinting pertinent paragraphs from the 1974 and 1975 enactments of the General Assembly, the interested reader is referred to the appendix to the Missouri Supreme Court decision in Brown-Forman Distillers Corp. v. McHenry, 566 S.W.2d 194, 198-200 (Mo.Sup. en banc, 1978). The 1974 text also appears in Historical Note to § 407.400, RSMo, 21 VAMS. It seems clear from the text that from the time of initial enactment of the legislation in 1974, a person who has granted a “franchise” has been prohibited from giving less than ninety days’ notice of cancellation (with exceptions to be reviewed later). There has, however, been a change in the statutory definition of franchises, as set forth in § 407.400, RSMo.

The 1974 definition of franchise was quite straight-forward (clearly including motor car dealerships, for example) except that it purported to exclude “persons engaged in sales from warehouses.” The 1975 revision has proved to be confusing, partly because it now contains a 38-line sentence defining the term “franchise.” It seems clear, however, from the italicized portions set forth in the Brown-Forman case, 566 S.W.2d at 199, that the warehouse sales exclusion proved troublesome in the liquor industry, and that it became appropriate to explain what was covered in. that industry. A lengthy statement, applicable only to that industry, was added to the definition. Except for the liquor industry, the coverage of the 1974 act remained intact.

This analysis of the 1975 legislation (the “liquor amendment”) is consistent with an affidavit supplied in 1984 by former state Senator Spradling for use in certain state court litigation. The conclusion I reach is inconsistent, however, with an observation by Senator Spradling that the “intent” of the 1974 legislation was “to deal solely with pyramid sales schemes” and the statute “referred to franchises only in connection with their use in pyramid sales schemes.” The use of an unexplained current opinion is one of the least favored methods of showing legislative history and is generally, I believe, rejected. In this case, moreover, the statement obtained is simply contrary to the text of the 1974 legislation, considered as a whole. The pyramid scheme portion of the 1974 law prohibits such schemes, and declares pyramid scheme contracts void. It is difficult to imagine why there would be a protective notice period enacted in connection with termination of a void agreement.

Contrary to the recent statement of views of Senator Spradling, the Missouri Supreme Court has already said, quite correctly, that the 1974 legislation “related to what we believe are ... two types of merchandising practices: ‘pyramid sales schemes and franchise security.’ ” BrownForman Distillers Corp. v. McHenry, suyra, 566 S.W.2d at 197. The present case involves “franchise security.”

The result reached in this litigation has been repeatedly forecast, with one reported exception, by judicial decisions and commentators. Chmieleski v. City Products Corp., 660 S.W.2d 275, 295 (Mo.App.1983); Bain v. Chamylin Petroleum Co., 692 F.2d 43, 48 (8th Cir.1982) (Regan, Senior District Judge); Palmer and Monica, Franchises: Statutory and Common Law Causes of Action in Missouri, 45 Mo.L. Rev. 42, 53 (1980). The only exception appears to be an Eighth Circuit opinion by Senior Circuit Judge Peck of Ohio, who “questioned” the applicability of the law to a beer franchise, apparently erroneously assuming that the 1975 legislation considerably narrowed the coverage of the 1974 legislation. ABA Distributors, Inc. v. Adolph Coors Co., 661 F.2d 712, 715 n. 4 (8th Cir.1981). While I am of course bound to follow the Eighth Circuit, the latest controlling ruling is in Bain.

A post-hearing brief filed this week by GM now raises a constitutional argument. It is said that § 407.413, which is expressly limited to liquor franchises, would be in danger as a “special law” if § 407.405 were construed as being of general applicability. This belated contention has only colorable validity. In any event I would not feel authorized to misconstrue § 407.405 in order to save § 407.413.

It is therefore concluded that Maude was entitled, by statute, to ninety days’ notice, unless his situation falls within one of the statutory exceptions.

Ninety days’ notice is excused when a franchisee is guilty of criminal misconduct, has taken bankruptcy or has taken other specified actions for which immediate termination is authorized. Section 407.405, RSMo. The only conduct asserted by GM that would permit termination without notice is the alleged “abandonment” of the franchise. GM initially asserted there was an abandonment when Maude allegedly “would not or could not come up with the monies which were demanded by the seller” for the premises, or that there was an “involuntary” abandonment when the seller took bankruptcy. Neither of these circumstances can fairly qualify for the statutory exception. Maude continued actively pursuing the dealership opportunity, as it relates to the premises, until he finally obtained the premises in October 1985. The recitation of events to which the parties have stipulated is inconsistent with the contention that there was an abandonment.

Abandonment is largely a question of intention. Russell v. Allen, 496 S.W.2d 290, 294 (Mo.App.1973). The burden is on one claiming an abandonment to establish the condition by clear and unequivocal evidence. Ibid. Nothing has been presented which would permit a trier of fact to infer that Maude had decided neither to use nor retake the franchise. Wirth v. Heavey, 508 S.W.2d 263, 267 (Mo.App.1974). Even if it could be concluded that Maude should have been more generous in his business dealings with the seller, or that bankruptcy had temporarily made it impossible to operate, adopting a theory of constructive abandonment would be inconsistent with the remedial purposes of the legislation.

A statutory violation having been shown, I could be expected to follow Judge Oliver’s view that the appropriate remedy is to reinstate the franchise .until proper notice is given. ABA Distributors, supra. GM urges, however, that I conclude that Maude’s remedy at law is adequate. Most of the cases cited deal with preliminary injunctions, where a plaintiff’s claim is sometimes given quite critical analysis. Even in those cases, however, where damage remedies are uncertain or verge on speculation, relief is often given. Earley Ford, supra. While Maude might be able to establish in this case what his out-of-pocket losses and expenses have been, an equally significant aspect of a franchise is the element of lost profits or prospects. Since Maude did not in fact have an opportunity to exercise the franchise, GM would doubtless argue with some force that a claim for lost profits is speculative. It follows from such a contention that the damages allowed in a lawsuit would not be fully adequate.

It is the general rule in Missouri and ' elsewhere that equitable relief will be granted when a violation of law has been shown, “if the remedy at law is not clear, complete and as practical and efficient to the ends of justice and its prompt administration as the remedy in equity.” Hughes v. Neely, 332 S.W.2d 1, 7 (Mo.Sup.1960). That is surely the ease here, where a damage suit presented to a jury. would not afford as adequate and effective relief as can be achieved by injunction. See, MPI, Inc. v. McCullough, 463 F.Supp. 887, 902 n. 18 (N.D.Miss.1978).

The prayer for relief seeks a prohibition against granting a franchise for the Johnson County, Missouri, area to anyone other than plaintiffs. Article II(I) of the Dealer Agreement provides that GM reserves the right to appoint additional dealers, but “this right will not be exercised without making a survey of marketing factors in the area of a possible new dealership location.” A dealer is entitled to notice of a proposed new dealership and of “an opportunity to present information relevant to the survey.” While none of the parties' apparently anticipate that a Harness dealership will operate in competition with a Maude dealership, the sound way to avoid such competitive activity would be to reinstate the Maude dealership and allow (1) termination pursuant to law, as set forth in this opinion or (2) creation of a Harness dealership in Maude’s territory only upon compliance with Article II(I).

It is therefore ORDERED that defendant refrain from establishing another Chevrolet-Cadillac dealership in plaintiffs’ territory except in accordance with Article II(I) of the dealership agreement of February 7, 1985, or after termination of the plaintiffs’ dealership in accordance with law and with this opinion. Judgment is entered in favor of plaintiffs on Count V.

Jurisdiction is retained to enforce or modify this order.

      . In the alternative, unless precluded by the parol evidence rule, it would seem that Maude was obligated to provide premises within a reasonable time. Views might differ on this subject, and I could not grant summary judgment to Maude as a matter of contract interpretation, on the present record.

      . GM contends that Chmieleski should also be counted as favoring its position. The court in that case simply said that the Missouri statutes regarding franchises are “limited,” and then quoted in full § 407.405, RSMo. As I read the judicial intent, it was to point out that franchisees enjoy only limited protection, such as entitlement to a ninety day notice of termination. If it had been the intent of the court to indicate that the statute only dealt with pyramid sales or only dealt with liquor franchises it seems most unlikely that it would have found it pertinent to quote the statute at length.

      . Still another abandonment theory is presented this week. It is said that the document of February 7, 1985, was abandoned, even though plaintiffs continuously sought to save the franchise. This distinction is unpersuasive. Assuming there was a breach, and an effort to amend, that would not constitute a complete abandonment, as contemplated by the statute.


author: WEXLER, District Judge.

text:
    TOTAL AVIATION SERVICES, INC., Plaintiff, v. UNITED JERSEY BANK, Federal Reserve Bank of Kansas City, Defendants.
    No. CV 83-5343.
    United States District Court, E.D. New York.
    Jan. 22, 1986.

      Burton & Burton, by Bernard L. Burton, Hauppauge, N.Y., for plaintiff.
    James J. Kreig, Princeton, N.J., for United Jersey Banks.
    Thomas C. Baxter, Jr., New York City, for defendant Federal Reserve Bank of Kansas City.
   MEMORANDUM AND ORDER

WEXLER, District Judge.

In this diversity suit, plaintiff Total Aviation Services, Inc. (“Total”), a New York corporation, has sued the United Jersey Bank, a New Jersey corporation, for negligence in failing to process a check deposited by Total with United Jersey Bank. Plaintiff sought leave of the Court to amend the complaint and add the Federal Reserve Bank of Kansas City (“FRB-KC”) as a defendant. Fed.R.Civ.P. 15(a). The motion was granted without opposition. The FRB-KC now moves to dismiss the complaint for: (1) lack of in personam jurisdiction; (2) improper venue; and (3) failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(2), (3), (6). For the reasons stated below, defendant’s motion is granted and the Amended Complaint is dismissed.

FACTS

For the purposes of this motion, the Court will assume familiarity with the facts contained in this Court’s decision of June 4, 1984. In the Amended Complaint, Total alleges that the FRB-KC was negligent when, after receiving notice of non-payment of a check drawn on the Country Club Bank of Missouri, the FRB-KC returned the check to the Country Club Bank instead of sending the check back to United Jersey Bank. Total also alleges that the FRB-KC was negligent when it failed to alert United Jersey Bank promptly of the Country Club Bank’s refusal to pay on the instrument.

The following facts are also pertinent to the motion to dismiss. The FRB-KC, which is part of the nation’s Federal Reserve System, is located in Kansas City, Missouri and has branches in Denver, Oklahoma City, and Omaha. The FRB-KC, as the seat of the Tenth Federal Reserve District, encompasses all or part of seven western and midwestern states. As one of the nation’s twelve Federal Reserve Banks, the FRB-KC was created pursuant to the Federal Reserve Act, as amended, 12 U.S.C. § 222, and has a number of functions related to the nation’s banking system. See Fed’l Reserve Board, The Federal Reserve System, Purposes and Functions (1974). For the purpose of determining whether this Court may exercise in personam jurisdiction over the FRB-KC, however, only two of those functions are relevant to determining whether the FRB-KC has any contacts with the forum state.

The first function is the FRB-KC’s role in formulating monetary policy through its participation in the Federal Open Market Committee (“FOMC”). 12 U.S.C. § 263. The FOMC’s permanent membership of twelve consists of the seven members of the Federal Reserve System’s Board of Governors and the President of Federal Reserve Bank of New York. The four other permanent members are chosen from among the eleven remaining Federal Reserve Bank Presidents, each of whom serve one year terms on a rotating basis. At its meetings, which are held in Washington, D.C. every four to six weeks, the FOMC sets policy with respect to purchases and sales of government securities in the open market. As part of its membership on the FOMC, the FRB-KC has an account on the books of the New York Federal Reserve Bank. For a further discussion of the operation of the FOMC, see FOMC v. Merrill, 443 U.S. 340, 343-37, 99 S.Ct. 2800, 2803-05, 61 L.Ed.2d 587 (1979); Fed’l Reserve Board, The Federal Reserve System, Purposes and Functions (1974). The Federal Reserve System also affects the nation’s economy by setting reserve requirements and the discount rate. 12 U.S.C. § 248.

The second function of the FRB-KC evincing a relationship to New York is its check-clearing system. 12 U.S.C. § 248(o). In its capacity as a clearinghouse, the FRB-KC, as well as all the other Federal Reserve Banks, receives checks and routes them to the banks on which they were drawn. In connection with the routing of checks, each Federal Reserve Bank transfers payment for the checks through accounts that member banks maintain with all other Federal Reserve Banks. Therefore, the FRB-KC sends checks to the New York Federal Reserve Bank and local New York banks, and also sends payment for checks to New York. The FRB-KC is not authorized or licensed to do business in New York, has no New York agent for service of process, performs no banking or governmental functions in New York, has not signed any contracts in New York, has no office or employees there, owns no property in New York, and has no shareholders in New York. Affidavit of James R. Bell, FRB-KC Vice-President of Operations, 1111 6-12.

DISCUSSION

This Court would achieve little by reiterating the numerous and complex decisions concerning the limits imposed by the Due Process Clause on a court’s power to exercise in personam jurisdiction over an out-of-state defendant. Nevertheless, this Court’s own synthesis reveals the following principles. The “minimum contacts” language, established by the Supreme Court in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945) cannot be formularized. Intermeat, Inc. v. American Poultry Inc., 575 F.2d 1017, 1023 (2d Cir.1978). In Burger King v. Rudzewicz, — U.S.-, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985), the Supreme Court recently affirmed its earlier holdings, in particular Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239-40, 2 L.Ed.2d 1283 (1958), where it stated “it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws.” Hanson, 357 U.S. at 253, 78 S.Ct. at 1239-40 (cited with approval in Burger King v. Rudzewicz). The Supreme Court has ruled that the defendant’s purposeful “act” can be a series of acts, International Shoe, or merely a single act. McGee v. International Life Insurance Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957). A court must examine the character and frequency of the act and the circumstances of its commission. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 299, 100 S.Ct. 559, 568, 62 L.Ed.2d 490 (1980). Ever since the Supreme Court replaced the inflexible rule of Pennoyer v. Neff, 5 Otto 714, 95 U.S. 714, 24 L.Ed. 565 (1877) with the modern test of “minimum contacts,” the requirement of physical presence with the jurisdiction has been discarded. International Shoe. See also Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984). The Supreme Court has held repeatedly that a court can exercise in personam jurisdiction over an out-of-state defendant in the absence of physical presence. Burger King, — U.S. ---, 105 S.Ct. 2174, 2184 (citations omitted). The sensible and modern rule of “minimum contacts,” which accomodates the charges brought about by the increasingly national character of personal and corporate affairs, cannot, however, exceed the limits of the Due Process Clause and effectively erase state borders. WorldWide Volkswagen, 444 U.S. at 293-94, 100 S.Ct. at 565; Hanson v. Denckla, 357 U.S. at 250-51, 78 S.Ct. at 1238. The assertion of personal jurisdiction must comport with “fair play and substantial justice.” International Shoe, 326 U.S. at 320, 66 S.Ct. at 160.

Turning to the facts of this case, the Court concludes that the FRB-KC does not have sufficient contacts with New York to allow this Court to exercise in person-am jurisdiction. See Northpark National Bank v. Bankers Trust Company, 572 F.Supp. 520, 521-23 (S.D.N.Y.1983). With respect to the FRB-KC’s monetary function, the FOMC and the acts that it takes through the Federal Reserve Bank of New York are largely unrelated to the FRB-KC’s negligence here. The Court notes that the FRB-KC’s membership on the FOMC has nothing to do with its check-clearing function. Quite simply, the FRB-KC’s membership on the FOMC is insufficient to warrant the exercise of in person-am jurisdiction for a completely unrelated transaction. There is no allegation that anyone from the FRB-KC goes to New York in connection with the FOMC. As noted earlier, the FOMC meets in the District of Columbia. It is not clear whether the President of the FRB-KC was even a member of the FOMC when the negligent acts occurred. The FRB-KC states that its only contacts with New York “are its proportionate interest in the system open market account on the books of the Federal Reserve Bank of New York, and its dollar account on the books of the New York Fed.” Bell Affidavit, 1113. Even if this account could be deemed a “contact” with New York, the FRB-KC’s participation in the FOMC is a governmental function, mandated by statute, and therefore, is not a “purposeful act” under the control of the FRB-KC. 12 U.S.C. § 263(b). The FRB-KC has no choice but to participate financially in the FOMC, does not, in any sense, control the activities of the Federal Reserve Bank of New York, and the New York Federal Reserve Bank cannot be considered an agent of the FRB-KC. See Northpark National Bank, 572 F.Supp. at 522. Therefore, the FRB-KC has not committed a purposeful act that would come within the Due Process Clause. Hanson v. Denckla.

The Court therefore turns to the second function that could give rise to personal jurisdiction, the FRB-KC’s check-processing activities. The FRB-KC’s sole connection with the forum state is that it sends checks to New York for collection and wires payment to New York for other checks. These connections are also insufficient to establish minimum contacts with New York because they too are govern-mentally mandated functions and therefore, the FRB-KC’s check-clearing processes are not the consequence of a purposeful or deliberate act. Hanson v. Denckla. Even the fees generated by this check-processing activity cannot be said to create a relationship with New York, because they do no more than compensate each Federal Reserve Bank for a statutorily mandated act. 12 U.S.C. § 248a.

The inquiry does not, however, end here. In McGee v. Int’l Life Insurance Co., the Supreme Court held that a single act could give rise to the proper exercise of in personam jurisdiction. Plaintiff could argue that the FRB-KC’s negligent acts of failing to notify United Jersey Bank of dishonor and resubmitting the check to the Country Club Bank were, in and of themselves, sufficient to warrant the exercise of jurisdiction. This may be true, but any act or acts committed by the FRB-KC would be with respect to a New Jersey bank and not a New York plaintiff. Even if plaintiff could persuade this Court that the FRB-KC’s one or two acts of negligence would allow the proper exercise of jurisdiction over the FRB-KC, then there would still be no contact with New York because, at best, the FRB-KC was under an obligation to notify a New Jersey bank not a New York plaintiff. The acts of the FRB-KC that would make it subject to in personam jurisdiction in New Jersey do not make the FRB-KC subject to in personam jurisdiction in New York merely because the New Jersey bank had a New York depositor.

Although this is a case of first impression in this District, other federal trial courts have dismissed for a lack of in personam jurisdiction. See, e.g., Titsworth v. Bank of Marshall County, CV. 83-0307P (W.D.Ky. Jan. 9, 1985); Northpark National Bank v. Bankers Trust Co., 572 F.Supp. 520 (S.D.N.Y.1983); Washington Petroleum & Supply Co. v. Girard Bank, CV. 82-1457 (M.D.Pa. May 3, 1983); Investment Co. Institute v. United States, 550 F.Supp. 1213 (D.D.C.1982); Dempster Plaza State Bank v. Valley Bank of Nevada, CV. 80-2611 (N.D.Ill. Sept. 23, 1980).

There is a notable lack of authority supporting Total’s arguments. Plaintiff has not cited a single case where a court exercised in personam jurisdiction over a Federal Reserve Bank outside of the bank’s Federal Reserve District. Defendant has uncovered two, which it distinguishes correctly. Farmer’s and Merchants’ Bank of Catlettsburg, Ky. v. Federal Reserve Bank of Cleveland, 286 Fed. 566 (E.D.Ky.1922); Security Trust & Savings Bank v. Federal Reserve of Minneapolis, 269 F.Supp. 893 (E.D.Mont.1967) (jurisdictional issue not considered). The Court’s own research has revealed only one other instance when a federal court exercised in personam jurisdiction over a Federal Reserve Bank. Flight International Group, Inc. v. Federal Reserve Bank of Chicago, 583 F.Supp. 674 (N.D.Ga.1984). In that case, the Chicago Federal Reserve Bank invited a Georgia air transport company to submit contract bids for air transport of checks. The Chicago bank sent an agent to Georgia to inspect plaintiff’s facilities and, after choosing another air freight company, used Atlanta as a hub for defendant’s check clearing operations. The Georgia company sued the Federal Reserve Bank of Chicago in Georgia. The Court concluded that the Chicago Federal Reserve Bank was subject to in personam jurisdiction in Georgia because of the Bank’s contacts with the forum. 583 F.Supp. at 677. The instant case is distinguishable from Flight International because the Chicago Federal Reserve Bank’s activities in Georgia in connection with its efforts to ship checks to Chicago far exceed the FRB-KC’s connection with New York. Although the Amended Complaint involves an allegation of negligence by the FRB-KC, the Court concludes that the FRB-KC engaged in no purposeful or deliberate act in connection with its check-clearing activities in New York that would satisfy the requirements of the Due Process Clause. World-Wide Volkswagen; Hanson v. Denckla. Therefore the Court concludes that neither the monetary functions nor the check-processing activities of the FRB-KC amount to minimum contacts under the Due Process Clause.

Accordingly, defendant FRB-KC’s motion to dismiss for lack of in personam jurisdiction is granted and the Amended Complaint is dismissed.

The Clerk of the Court is directed to enter judgment for defendant FRB-KC.

SO ORDERED.

      . It is by no means a settled question that a failure by the FRB-KC to send prompt notification to the United Jersey Bank would be insufficient to allow a New Jersey court to exercise in personam jurisdiction over the FRB-KC under the Due Process Clause particularly when the basis of jurisdiction arises from the forum-related activities. See Kimball v. Schwartz, 580 F.Supp. 582, 586 (W.D.Pa.1984) (telephone or mail contacts can support in personam jurisdiction). But see Froning & Deppe, Inc. v. Continental Illinois National Bank & Trust Co., 695 F.2d 289 (7th Cir.1982) (no in personam jurisdiction where bank merely accepts a forged check). That issue is not, however, before this Court and we express no opinion on its validity. Plaintiff may, of course, test this theory by suing the FRB-KC in New Jersey.

      . Plaintiff has requested that if the Court grants FRB-KC's motion, then the Court should preclude the introduction of evidence by the United Jersey Bank of FRB-KC’s negligence. The Court will not decide that issue at this time.
      Furthermore, because the Court bases its decision solely on the Due Process Clause of the United States Constitution it does not reach the issue of whether the FRB-KC would be subject to jurisdiction under the New York long-arm statute. N.Y.C.Prac.L. & R. § 302(a) (McKinney 1982). In addition, the Court does reach the issue of proper venue or failure to state a claim.