author: JAMES R. MILLER, Jr., District Judge.

text:
    Jerome C. and Vera B. DORSEY v. UNITED STATES.
    Civ. A. No. M-84-3676.
    United States District Court, D. Maryland.
    Oct. 7, 1985.

      Louis G. Hutt, Jr. and Lester Adams, Columbia, Md., for petitioners.
    Catherine C. Blake, U.S. Atty., and Larry D. Adams, Asst. U.S. Atty., Baltimore, Md., S. Martin Teel, Jr., Michael J. Salem, and Frederic J. Baker, Tax Div., U.S. Dept, of Justice, Washington, D.C., for respondent.
   MEMORANDUM AND ORDER

JAMES R. MILLER, Jr., District Judge.

On September 12,1984, Internal Revenue Agent Gregory Szczeszek issued a summons to the Mercantile Safe Deposit and Trust Co. seeking the records of Jerome and Vera Dorsey, persons whose tax liabilities he was assigned to investigate (Paper No. 3, Affidavit of Szczeszek). Pursuant to 26 U.S.C. § 7609, Jerome and Vera Dorsey, on October 2,1984, initiated this action to quash that summons (Paper No. 1).

The respondent, United States, has filed a motion to dismiss the Dorseys’ petition to quash the summons (Paper Nos. 3 & 5). The petitioners have replied (Paper No. 4). No hearing is necessary to decide the issue. Local Rule 6(G).

Legal Analysis

When a third-party summons is issued by the IRS, the taxpayer is entitled to intervene and petition the court to quash the summons. 26 U.S.C. § 7609(b). Specific procedures and time limits have been imposed on the intervenor. Specifically, the pertinent statute states:

“Notwithstanding any other law or rule of law, any person who is entitled to notice of a summons under subsection (a) shall have the right to begin a proceeding to quash such summons not later than the 20th day after the day such notice is given in the manner provided in subsection (a)(2). In any such proceeding, the Secretary may seek to compel compliance with the summons.
If any person begins a proceeding under subparagraph (A) with respect to any summons, not later than the close of the 20-day period referred to in subparagraph (A) such person shall mail by registered or. certified mail a copy of the petition to the person summoned and to such office as the Secretary may direct in the notice referred to in subsection (a)(1).”

26 U.S.C. § 7609(b)(2).

It is not disputed that the plaintiffs filed their petition within the 20 day time period. The respondent, however, argues that the petitioners did not mail a copy of their petition within 20 days to “such office as the Secretary may direct in the notice referred to in subsection (a)(1).”

The summons issued pursuant to subsection (a)(1) contains two addresses. The first is the business address of Special Agent Szczeszek — P.O. Box 1402, Baltimore, MD 21203. The second is the place for appearance — Fallon Federal Building, 31 Hopkins Plaza, Room 717, Baltimore, MD 21201.

The petitioners contend that a copy of the petition was mailed to “the office of the Internal Revenue Service responsible for issuing the administrative summons.” (Paper No. 4 at 1). It was not addressed to Special Agent Szczeszek specifically (Paper No. 4 at 3), but it was addressed to “Director of Internal Revenue, Internal Revenue Service, 31 Hopkins Plaza, Baltimore, MD 21203.” (See Return Receipt, before Paper No. 4 in file).

The respondent claims that because the petition was not addressed to Special Agent Szczeszek specifically, this court does not have jurisdiction to hear the petitioner’s claim.

Several courts have held that compliance with the 20 day time limit set forth in § 7609(b)(2)(A) is a jurisdictional prerequisite to filing suit. See, e.g., Riggs v. United States, 575 F.Supp. 738, 742 (N.D.Ill.1983); Williams v. United States, 52 AFTR 2d 1183-5255 (S.D.Ind.1983) (Paper No. 3, attachment); Grisham v. United States, 52 AFTR 2d it 83-5319 (S.D.N.Y.1983). That conclusion rests on the reasoning that any waiver of sovereign immunity requires strict compliance with statutory procedure. See, e.g., Riggs v. United States, 575 F.Supp. at 741.

That same reasoning has been applied in cases in which the plaintiff failed to follow the notice requirements set forth in 26 U.S.C. § 7609(b)(2)(B). For example, in Yocum v. United States, 586 F.Supp. 317 (N.D.Ind.1984), a case in which (1) the petitioners notified the summoned bank merely by letter that a petition to quash had been filed; (2) the petitioners failed to serve the petition on the IRS, the court concluded that § 7609(b)(2)(B) “must be strictly construed” against the petitioners. Id. at 318. Because the “[petitioners did not do what section 7609(b)(2)(B) requires [,] [t]he petition [was] dismissed.” Id. at 319.

A similar result occurred in McTaggart v. United States, 570 F.Supp. 547 (E.D.Mich.1983). In McTaggart, the petitioner did not mail a copy of the petition to “the office directed by the Secretary.” The court strictly applied the law and dismissed the taxpayer’s petition for failure to comply with the requirements of the statute. Id. at 551. Also, in Fogelson v. United States, 579 F.Supp. 573 (D.Kansas 1983), the petitioner telephoned the “persons summoned” to inform them of his action to quash, but failed to mail a copy of the petition to them. The court dismissed the petition concluding that because “[t]he United States may not be sued without its consent and the terms of its consent defines [the] court’s jurisdiction,” it had no jurisdiction to hear the case. Id. at 574.

In each of those cases, the petitioner failed to mail a copy of the petition to the appropriate person. In this case, the petitioners did mail a copy to the office of the Director of the Internal Revenue Service in Baltimore.

The statute requires that a copy of the petition be mailed “to such office as the Secretary may direct” in the notice of summons he sends pursuant to § 7609(a)(1). That notice directs that the third-party appear before Special Agent Gregory Szczeszek at “Fallon Federal Building, 31 Hopkins Plaza, Room 717, Baltimore, Maryland 21201.” It gives as Mr. Szczeszek’s business address: “P.O. Box 1402, Baltimore, Maryland 21203.”

Obviously, a post office box is not an office. The office the Secretary directed that the petition be mailed to is the Fallon Federal Building, 31 Hopkins Plaza, Room 717. The petition was mailed to that office. It was not mailed, however, to the attention of Special Agent Szczeszek specifically.

The defendant apparently argues that the “general • directions” sent out to the petitioner at the time the summons was issued further define the office to which the petition should be mailed. Those directions, included in Form 2039-C (Rev. 12-83) (Paper No. 3, Ex. 2), set forth the sections of the Internal Revenue Code and the Federal Rules of Civil Procedure applicable to filing a motion to quash. They also include the following instruction:

“4. You must also, within 20 days from the date of this notice, send a copy of your petition to quash by certified or registered mail to (a) the person summoned, and (b) the Internal Revenue Service at the address shown on the summons to the attention ■ of the Internal Revenue Service officer before whom the summoned person is to appear.” (Emphasis supplied).

The question is whether the petitioners’ failure to follow that instruction precludes this court from exercising jurisdiction over this matter. Although courts generally hold that Internal Revenue Service “rulings, determination letters, opinion letters, information letters, and Revenue Rulings ... [have] some weight,” Davis, 5 Administrative Law Treatise § 29:20 at 425 (2nd ed. 1984), the instruction included in the “general directions” appears to be none of those. It is, however, part of a document required by law to be mailed to potential petitioners when a third-party summons is issued. Specifically, 26 U.S.C. § 7609(a)(1) requires that the notice mailed to such petitioners contain “an explanation of the right under subsection (b)(2) to bring a proceeding to quash the summons.” As such it contains the Internal Revenue Service’s interpretation of the mailing requirements set out in 26 U.S.C. § 7609(b)(2)(B).

Although that document, in the opinion of this court, is not entitled to great weight, it is entitled to some weight in deciding this issue. The Secretary is required under subsection (b)(2)(B) to state to which office the petition must be mailed. The Secretary in providing directions to potential petitioners has done so quite clearly.

When the United States consents to suit, “the terms of its consent to be sued in any court define that court’s jurisdiction to entertain the suit.” See, e.g., United States v. Sherwood, 312 U.S. 584, 586-87, 61 S.Ct. 767, 769-70, 85 L.Ed. 1058 (1941). “Any doubts as to consent or jurisdiction of the court should be resolved in favor of the United States.” Ginsberg v. United. States, 707 F.2d 91, 92-93 (4th Cir.1983).

Congress in 26 U.S.C. § 7609(b)(2)(B) has given the Secretary explicit authority to direct the petitioner regarding the mailing of a petition to quash to the IRS. The Secretary has exercised that authority by requiring that the petition be mailed “to the attention of the Internal Revenue Service officer before whom the summoned person is to appear.” The petitioners herein had notice of that requirement set forth in Form 2039-D (Rev. 12-83) which was mailed to them along with the third-party summons. That requirement appears reasonable to this court. It assures that the agent responsible for the investigation and the summonses issued during the investigation receives notice expeditiously of petitions to quash those summons.

For all those reasons, this court finds that the petitioners’ failure to follow the Secretary’s directions deprives this court of jurisdiction to hear their claim.

Accordingly, it is this 7th day of October, 1985, by the United States District Court for the District of Maryland, ORDERED:

1) That the motion for summary judgment of the United States is GRANTED.

2) That the Clerk mail a copy of this Memorandum and Order to counsel for the parties.

      . "(a) Notice.—
      (1) In general. — If—
      (A) any summons described in subsection (c) is served on any person who is a third-party recordkeeper, and
      (B) the summons requires the production of any portion of records made or kept of the business transactions or affairs of any person (other than thev person summoned) who is identified in the description of the records contained in the summons,
      then notice of the summons shall be given to any person so identified within 3 days of the day on which such service is made, but no later than the 23rd day before the day fixed in the summons as the day upon which such records are to be examined. Such notice shall be accompanied by a copy of the summons which has been served and shall contain an explanation of the right under subsection (b)(2) to bring a proceeding to quash the summons.”

      . The United States has moved for summary judgment on the issue herein. Although the petitioners have provided no supporting documentation in their opposition to the respondent’s motion for summary judgment, there exists only one relevant material fact — whether the petition was addressed to Szczeszek. Both parties agree that it was not. The record before the court reveals that the petition was mailed to the “Director of Internal Revenue" in Baltimore. Therefore, because no material facts are disputed, consideration of the issue on summary judgment appears appropriate.

      . Form 2039-c was mailed to the petitioner along with the summons. (See Paper No. 1, Attachment).


source: Caselaw Access Project

author: RUSSELL E. SMITH, District Judge.

license: Public Domain

text:
    Richard A. SUMMERS, Plaintiff, v. Margaret M. HECKLER, Secretary of Health and Human Services, Defendant.
    No. CV 84-179-M-RES.
    United States District Court, D. Montana, Missoula Division.
    Oct. 8, 1985.
    Larry E. Riley, Garlington, Lohn & Robinson, Missoula, Mont., for plaintiff.
    Carl Rostad, Asst. U.S. Atty., Great Palls, Mont., for defendant.
   OPINION AND ORDER

RUSSELL E. SMITH, District Judge.

This is an appeal from a final decision of the Secretary denying Social Security benefits. There are two issues presented: The first issue relates to the duties of the Secretary in evaluating pain in cases of claimed disability; the second is whether the plaintiff is disabled under 20 C.F.R. Pt. 404, Subpt. P, App. 1, § 1.02 (1985).

On the first issue the Administrative Law Judge (ALT) found, after a hearing, that the plaintiff was disabled because of back difficulties and rheumatoid arthritis, coupled with pain. The Appeals Council reversed, and the question is whether there is substantial evidence to sustain the decision of the Appeals Council.

In reaching its conclusion, the Appeals Council reviewed the extensive physical examinations of the plaintiff, noted the many normal findings in them, and concluded as follows:

The medical evidence shows that the claimant has no damage to his joints due to arthritis. He has a fairly full range of motion of his back, neck, shoulders, elbows, wrists, and fingers without evidence of heat or significant swelling. There is no evidence of any damage to nerves and/or muscles. The claimant is able to stand, walk, and use his arms without significant difficulty. The findings of record do not support the claimant’s allegations of constant, severe, debilitative pain.
The medical record fails to reveal the existence of a condition that would significantly impinge upon the claimant’s capacity to perform basic work-related activities. Accordingly, a finding of “not disabled” is warranted.

The Appeals Council also found, inter alia, as follows:

3. The claimant has the following impairments: generalized back pain with polyarthralgias and positive RA latex test.
4. The claimant’s subjective complaints are inconsistent with the medical evidence of record which does not reflect the degree of severity alleged.

This case is governed by 42 U.S.C. § 423(d)(5)(A), which reads in pertinent part:

An individual’s statement as to pain or other symptoms shall not alone be conclusive evidence of disability as defined in this section; there must be medical signs and findings, established by medically acceptable clinical or laboratory diagnostic techniques, which show the existence of a medical impairment that results from anatomical, physiological, or psychological abnormalities which could reasonably be expected to produce the pain or other symptoms alleged and which, when considered with all evidence required to be furnished under this paragraph (including statements of the individual or his physician as to the intensity and persistence of such pain or other symptoms which may reasonably be accepted as consistent with the medical signs and findings), would lead to a conclusion that the individual is under a disability. Objective medical evidence of pain or other symptoms established by medically acceptable clinical or laboratory techniques (for example, deteriorating nerve or muscle tissue) must be considered in reaching a conclusion as to whether the individual is under a disability.

I think that under this section the Secretary is required to consider subjective evidence of pain once an abnormality has been shown which could reasonably be expected to produce pain. Whether an abnormality could reasonably be expected to produce pain is a fact question. Once that question is decided in the affirmative, then, as I see it, the law requires the Secretary to determine as a question of fact whether the subjective evidence of pain may reasonably be accepted as consistent with the medical signs and findings shown by all of the evidence.

I reach this conclusion because, unless the second use of the words “medical signs and findings” adds something to the meaning of the section, the words are simply redundant. In addition, their second use is preceded by the word “the,” which lends credence to the idea that all, and not just some, of the medical signs and findings must be considered.

The plaintiff testified to his pain, and if that testimony is believed, plaintiff is totally disabled. There was corroboration of plaintiff’s testimony. The ALJ found plaintiff to be credible. This is a case in which there was an abnormality which could and did cause pain. The severity of the pain was discounted solely because the Secretary did not believe the severity of the pain was consistent with plaintiffs overall medical condition. Under my interpretation of the statute, the fact-finder may weigh the subjective evidence of pain against the inferences that may be drawn from all of the medical evidence and find that the pain is not as severe as the subjective evidence shows it to be. This is certainly a departure from the rule announced in Polaski v. Heckler, 585 F.Supp. 1004 (D.Minn.1984), and if in this weighing process the fact-finding power of the Secretary is accorded respect, the rule may achieve results different from those reached in cases such as Sayers v. Gardner, 380 F.2d 940 (6th Cir.1967). In its Finding No. 4, the Appeals Council did exactly what the law permits it to do. While the facts are susceptible of another interpretation, I am unable to say that there is not substantial evidence supporting the findings of the Appeals Council.

The record contains a report by the plaintiffs treating physician and a report by a state-employed rehabilitation counsel- or that the plaintiff is totally disabled because of the pain which he suffers. Such reports are not conclusive. Lombardo v. Schweiker, 749 F.2d 565 (9th Cir.1984). 20 C.F.R. § 404.1527 (1985).

Neither the AU nor the Appeals Council made specific findings as to the existence of an impairment listed in 20 C.F.R. § 404.-1520(d) (1985). There is no doubt, as found by the Appeals Council, that the plaintiff is afflicted with rheumatoid arthritis, and the arthritic condition is corroborated by laboratory tests provided in 20 C.F.R. Pt. 404, Subpt. P, App. 1, § 1.02 B (1985).' The record does not, however, disclose the swelling, the tenderness involving multiple joints, and the signs of joint inflamation required by § 1.02 A.

The decision of the Appeals Council is affirmed.

      . As amended by Pub.L. No. 98-460, § 3(a)(1) and (3), 98 Stat. 1799 (1984), applicable to all determinations made prior to June 1, 1987.

      . This case is not the same as Mark v. Celebrezze, 348 F.2d 289 (9th Cir.1965), where plaintiff’s activities cast doubt upon the credibility of his complaints of pain.


author: GUNN, District Judge.

text:
    MIDDLETON ENTERPRISES, INC., Plaintiff, v. Frederick CHURM, et al., Defendants.
    No. 84-2112C(6).
    United States District Court, E.D. Missouri, E.D.
    Oct. 8, 1985.

      Edwin Fryer, St. Louis, Mo., for plaintiff.
    Jeffrey T. Demerath, St. Louis, Mo., Richard S. Vermeire, Denver, Colo., for defendants.
   MEMORANDUM

GUNN, District Judge.

This action is brought by a lender against the unconditional guarantors of a promissory note. It appears from the record that the maker of the note, Resource Industries, Inc. (Resource), through its agent Frederick Churm, solicited a “bridge loan” from plaintiff Middleton Enterprises, Inc. (Middleton) in the amount of $1,000,000 in April and May 1982. The company was in shaky financial condition at that time, and allegedly sought the funds to tide it over until an initial public offering of its stock could be effected. See additional affidavit of Gregory B. Hackert attached to defendants’ memorandum in opposition to motion for summary judgment. The parties signed a written loan agreement on June 3, 1978. Along with this agreement, the named defendants signed an agreement “irrevocably guaranteeing] full payment of the [underlying] obligation together with all interest, penalties, costs and attorneys’ fees.” See promissory note and guaranty attached to plaintiff’s motion for summary judgment.

The public offering never came to pass, and Resource submitted to Chapter 11 proceedings in the United States Bankruptcy Court for the District of Colorado in 1984. Prior to the commencement of bankruptcy proceedings, Resource had apparently not made any payments on the note, although the first installment was due on July 31, 1982. Defendants Gregory B. Hackert and Jeffrey Modesitt made payments in their capacity as guarantors until the amount due on the note was reduced to $770,700. Plaintiff has sued for this amount, plus interest, costs and attorneys’ fees.

Defendants have sought to avoid guarantor liability on the note on the alternative grounds that the guaranty was not supported by adequate consideration or that they were “coerced” into signing the guaranty agreement. Both defenses are constructed on allegations that Middleton and Resource had entered into a binding oral contract for the loan prior to the time the agreement was reduced to writing and the guarantor signatures were procured. The Court finds that the record does not support these allegations, and considers both defenses to be without merit.

Looking first to the express terms of the guaranty agreement, the Court notes that it stipulates “for valuable consideration given.” While this cannot be deemed a self-proving assertion, the Court accepts the inclusion of the recitation as prima facie evidence that the contract was supported by adequate consideration. Gover v. Empire Bank, 574 S.W.2d 464, 468 (1978) (recitation that agreement entered “for value received” creates presumption sufficient to support guaranty agreement “if not overcome by persuasive evidence to the contrary”). Additionally, Missouri law, which controls in this case by virtue of an agreement to that effect in the contract, see Promissory Note, 116, recognizes that reliance on the promise of guaranty may represent adequate consideration. Tullis & Associates, Inc. v. Gover, 577 S.W.2d 891 (Mo.App.1979), see also 38 Am.Jur.2d Guaranty § 45 (1964). Plaintiff in this case extended funds to Resource in reliance on the guaranty of defendants. The Court concludes that such reliance constitutes consideration to support the contract.

Defendants argue that Middleton, at the time of demanding the signatures of guaranty, had already entered into a binding oral contract to make the loan to Resource. If this were found to be the case, the loan would not have been made in reliance on the guaranty, and the guaranty would fail for lack of consideration.

Since a finding that such an oral contract exists turns largely on the intentions of the parties, see Collins v. Swope, 605 S.W.2d 538 (Mo.App.1980), it is ordinarily not an issue appropriate to summary disposition. See Kisco Co. v. Verson Allsteel Press Co., 738 F.2d 290, 294 (8th Cir.1984) (“district court correctly viewed the evidence before it as creating a factual question as to whether the parties had intended to reduce their agreement to writing before being bound”); Sweetarts v. Sunline, Inc., 423 F.2d 260 (8th Cir.1970). The Court’s reluctance in the instant case to determine whether the parties intended to be bound by prior oral agreement has been dispelled, however, by deposition testimony of the principal defendants tending to show that agreement had not been reached as to material terms of the contract (in particular, as to interest and security) prior to its reduction to writing. See depositions of Gregory Hackert, Frederick Churm, Jeffrey Modesitt, Ronald Butz, Mary Butz and Leslie Modesitt, attached as exhibits to plaintiffs supplementary memorandum in support of motion for summary judgment. It is fundamental that an oral contract will not be found unless the parties have reached an understanding as to all the essential terms of the agreement. Kisco Co., Inc. v. Verson Allsteel Press Co., 564 F.Supp. 154, 157 (E.D.Mo.1983); Priest v. Oehler, 328 Mo. 590, 41 S.W.2d 783 (1931). This standard has not been met in the present case. The record therefore establishes that the parties entered into the underlying contract and the guaranty agreement contemporaneously. The execution of the loan agreement in reliance on the guaranty constitutes adequate consideration for the latter.

Defendants’ assertion that they signed the guaranty agreement under duress also fails to state a cognizable defense. The Court notes initially that Middleton’s refusal to extend credit without the guaranty reflects a cautious evaluation of and insurance against risk rather than coercion. While the defendants in all likelihood felt apprehensive about taking on personal liability in such an amount, and further felt pressured to sign the guaranty by Middleton’s refusal to make the loan without such security, defendants’ evaluation of the need for financing and calculation of the risk undertaken must be deemed to be matters of business judgment. They do not represent actions taken after total overbearing of the will by Middleton. See Matter of Smith, 15 B.R. 691, 694 (Bkrtcy.Mo.1981) (to prove duress under Missouri law, party must show it acted under constraint or compulsion sufficient to overcome will of person of ordinary firmness which force induced them to comply with demand to which they would not have yielded had they been permitted to act of their own volition).

Further, even if the Court were to find coercion in the procuring of the guaranty, coercion does not render a contract void, but merely voidable. The party seeking avoidance must repudiate the contract. See Weisert v. Bramman, 358 Mo. 636, 216 S.W.2d 430 (1948). “Silence and acquiescence for a considerable period thereafter, action in accord with it, and acceptance of benefits under it, amount to a ratification.” Id. 216 S.W.2d at 435. Defendants in this case enjoyed the benefit of the contract and effectively ratified the agreement by making payments, in their capacity as guarantors, for eighteen months. See Exhibit A attached to plaintiff’s motion for summary judgment and affidavit of John G. Zinser, comptroller and assistant secretary of Middleton. They never sought to avoid the contract, and first claimed duress when called to defend this action. The Court concludes that defendants’ apparent ratification of the agreement estops them from raising the defense of coercion now.

Since neither of the defenses asserted by defendants can withstand scrutiny of the record, the Court finds this action reduced to a simple legal action for recovery from guarantors of the amount remaining due on a promissory note. Viewing the evidence in the light most favorable to the non-moving party, Rule 56, F.R.C.P.; Buller v. Buechler, 706 F.2d 844, 846 (8th Cir.1983), the Court finds that no “genuine issues of material fact” remain, and plaintiff is entitled to judgment as a matter of law.

Judgment to be entered for plaintiff in the amount remaining due on the promissory note plus prejudgment interest, costs, and attorney’s fees to be determined by the Court on review of post-judgment motions.

      . Defendants have also sought to escape liability on the assertion that plaintiff comes before the Court with “unclean hands.” This argument is based on plaintiff’s alleged misrepresentation to the Bankruptcy Court of the amount owed it as creditor of Resource. Neither party disputes that the debt owed to Middleton was filed as a claim for $1,000,000 on the bankrupt estate although the unpaid balance on the note had been reduced by $229,300 through payments by Hackert and Modesitt as guarantors. The parties have offered differing explanations for this entry of an excessive claim; this dispute over responsibility, however, does not affect resolution of the issue before this Court. The proceedings in bankruptcy have no bearing on the absolute liability assumed by defendants as guarantors on the note. 11 U.S.C. § 524(e) (1983) ("discharge of a debt of a debtor does not affect the liability of any other entity on, or the property of any other entity for, such debt”). See also Union Carbide Corp. v. Newboles, 686 F.2d 593 (7th Cir.1982); R.I.D.C. Industrial Development Fund v. Snyder, 539 F.2d 487 (5th Cir.2976); United States v. Kurtz, 525 F.Supp. 734 (E.D.Pa.1981).
      Focusing on the effect of the bankruptcy court plan, defendants have sought to recharacterize this action as one in equity for subrogation. Defendants argue that if they are required to pay on the guaranty they will be subrogated to the creditor's rights to stock scheduled to be issued by the reorganized Resource. While the Court does not dispute that this may be the outcome of plaintiffs recovery from defendants, it rejects defendants’ characterization of the suit as an equitable action. The Court views this suit as a purely legal action for recovery of money owed on a note. "Unclean hands” is not available as a defense in a suit at law, Kay v. Vatterott, 657 S.W.2d 80, 82-83 (Mo.App.1983), therefore defendants’ third asserted defense is without merit.

      . As summary judgment is granted in favor of plaintiff, defendants’ cross-motion is denied. In their motion, defendants sought a declaratory judgment that Middleton would be liable to defendants for indemnification on any claims brought by other creditors of Resource against defendants as subrogees of Middleton for failure fairly to represent its claim to the bankruptcy court. Initially, the Court notes that such claims will not arise if the admitted error is corrected prior to the time the Reorganization Plan goes into effect. Additionally, the Court notes that the request for declaratory judgment falls outside the scope of these proceedings, which, as elaborated above, turn entirely on the contract of guaranty between Middleton and defendants. Issues concerning the reorganization of Resource and liabilities arising therefrom are not before the Court.


author: CALDWELL, District Judge.

text:
    William A. GULICK, II, and Ruby D. Gulick, individually and as Administrators of the Estate of Tricia Lee Gulick, Plaintiffs, v. CHIA S. SHU, M.D., P.C., and Divine Providence Hospital, Defendants.
    Civ. A. No. 85-1029.
    United States District Court, M.D. Pennsylvania.
    Oct. 9, 1985.
    Robert A. Seiferth, Jonathan E. Butter-field, Liebert Short Fitzpatrick & Hirshland, Williamsport, Pa., for plaintiffs.
    Joseph A. Quinn, Jr., Hourigan, Kluger, Spohrer & Quinn, Wilkes-Barre, Pa., for Chia Shu, M.D.
   MEMORANDUM

CALDWELL, District Judge.

I. Introduction and Background.

Defendants, Chia S. Shu, M.D. and Divine Providence Hospital, have filed motions to dismiss the claim of the plaintiff husband, William A. Gulick, II, for negligent infliction of emotional distress. The complaint in this diversity action arises from obstetrical treatment rendered to the plaintiff wife, Ruby D. Gulick, by defendant Shu during the birth of the plaintiffs’ baby, Tricia Lee Gulick, at the defendant hospital. Tricia Lee Gulick died twelve days later, allegedly as a result of Shu’s malpractice in failing to perform a timely caesarean section. Count V of the complaint sets forth a claim for negligent infliction of emotional distress on behalf of the parents “as a result of their child being born with severe birth asphyxia, respiratory distress syndrome, renal failure, seizure disorder, and brain death.” (Complaint, 11 32). Citing Pennsylvania precedent, defendants assert that the husband’s claim must fail as a matter of law.

II. Discussion.

As a federal district court, sitting in diversity, we must consider the decisions of a state’s highest court to be the ultimate authority regarding state law. Ciccarelli v. Carey Canadian Mines, Ltd., 757 F.2d 548 (3d Cir.1985). Decisions of intermediate appellate courts of the state, while not conclusive, are indicia of how the state’s highest court might decide the issue, McGowan v. University of Scranton, 759 F.2d 287 (3d Cir.1985), and a federal court must attribute significant weight to lower state court decisions in the absence of any indication that the highest state court would rule otherwise. Wisniewski v. Johns-Manville Corp., 759 F.2d 271 (3d Cir.1985).

All parties agree that Sinn v. Burd, 486 Pa. 146, 404 A.2d 672 (1979), is the leading case in Pennsylvania on the right of a person to recover emotional distress caused by the tortious infliction of injury upon another. Although claiming at most the allegiance of only three of the members of the Pennsylvania Supreme Court; it has to some extent guided intermediate state appellate courts in subsequent cases, see Herman v. Welland Chemical, Ltd., 580 F.Supp. 823 (M.D.Pa.1984); Brooks v. Decker, 343 Pa.Super. 497, 495 A.2d 575 (1985); Hoffner v. Hodge, 47 Pa.Cmwlth. 277, 407 A.2d 940 (1979), appeal dismissed, 498 Pa. 135, 445 A.2d 104 (1982), as well as some federal district courts. See Amader v. Johns-Manville Corp., 514 F.Supp. 1031 (E.D.Pa.1981); Bliss v. Allentown Public Library, 497 F.Supp. 487 (E.D.Pa.1980).

The main opinion in Sinn, written by Justice Nix, adopted the following test from Dillon v. Legg, 68 Cal.2d 728, 69 Cal.Rptr. 72, 441 P.2d 912 (1968), for determining when a person can recover for emotional distress caused by observing traumatic injury to another:

(1) Whether plaintiff was located near the scene of the accident as contrasted with one who was a distance away from it. (2) Whether the shock resulted from a direct emotional impact upon plaintiff from the sensory and contemporaneous observance of the accident, as contrasted with learning of the accident from others after its occurrence. (3) Whether plaintiff and the victim were closely related, as contrasted with an absence of any relationship or the presence of only a distant relationship.

486 Pa. at 170-71, 404 A.2d at 685 (quoting Dillon, supra, 69 Cal.Rptr. at 80, 441 P.2d at 920).

Defendants contend that the plaintiff husband’s claim for emotional distress must fail because he has not alleged that he directly observed the defendant physician’s conduct causing the injury and also that, in accordance with Justice Eagen’s concurring opinion, he suffered physical injury or a physical manifestation of the emotional distress. Conversely, plaintiffs contend that the court in Sinn never meant to limit recovery for bystander emotional distress to situations exemplified by Sinn, see id. at 173 n. 21, 404 A.2d at 686 n. 21 (Nix, J.), and the facts as alleged in their complaint justify expansion of the-rule to permit recovery here. They also assert that Speck v. Finegold, 497 Pa. 77, 439 A.2d 110 (1981), recognizes a parent’s right to recover for mental distress resulting from the birth of a defective child without physical injury to the parent or the presence of the parent at birth. Finally, citing Little v. York County Earned Income Tax Bureau, 333 Pa.Super. 8, 481 A.2d 1194 (1984), they suggest that the Pennsylvania Superior Court, while limiting recovery of bystander emotional distress in automobile accident cases, has been more expansive in permitting recovery in other contexts.

We agree with plaintiffs that there is no reason for limiting Sinn to its factual setting and that there are also compelling reasons for permitting a parent to recover for his emotional distress upon contemplating an injury to his child occurring outside his presence. Nevertheless, we must be sensitive to the doctrinal trends of the state whose law we apply, see Becker v. Interstate Properties, 569 F.2d 1203 (3d Cir. 1977), cert. denied, 436 U.S. 906, 98 S.Ct. 2237, 56 L.Ed.2d 404 (1978); Herman v. Welland Chemical, Ltd., supra, and Pennsylvania intermediate appellate courts have consistently relied upon Sinn to limit recovery to situations where the person has been present during the traumatic event; 1. e., where he or she has been a bystander. They have declined the invitation to permit recovery for emotional distress without personal observation of the incident.

Contrary to plaintiffs’ position, the issue is not an open one in Pennsylvania. We believe we can fairly look to Hoffner v. Hodge, supra, to dispose of the husband’s claim. In Hoffner, the Pennsylvania Commonwealth Court, relying upon Sinn, held that the parents and twin sister of a girl who allegedly suffered from medical malpractice during an operation could not recover for their emotional distress upon learning of the negligent surgery. The court stated:

The exceedingly able and detailed discussion of the law applicable to this case by Chief Justice Eagen, Justice Roberts, and Justice Nix in Sinn makes it unnecessary to discuss the matter here. All three opinions expressed the view that the law in Pennsylvania requires the personal observation of the event. No exception is made for an identical twin who alleges she is present at all times with her twin sister, albeit she is in a different physical location. The traumatic impact from viewing the negligent injury of one’s close relative is wholly absent in this case.

Id. 47 Pa.Cmwlth. at 280-81, 407 A.2d at 942.

Hoffner is indistinguishable from the case at bar and indicates that the plaintiff husband’s claim for emotional distress should be dismissed.

This conclusion is buttressed by other Pennsylvania cases which have required physical presence at the scene in varying circumstances. Hence, plaintiffs’ claim that the Superior Court has required this element only in automobile accident cases must also be rejected. See, e.g. Berardi v. Johns-Manville, 334 Pa.Super. 36, 482 A.2d 1067 (1984); Cathcart v. Keene Industrial Insulation, 324 Pa.Super. 123, 471 A.2d 493 (1984) (wives could not recover for emotional distress at seeing husbands with asbestosis because they had failed to observe an identifiable traumatic incident); Vattimo v. Lower Bucks Hospital, 59 Pa.Cmwlth. 1, 428 A.2d 765 (1981) (parents of son who set fire to his hospital room could not recover for their emotional distress since they were not present at the hospital during the fire), modified on appeal, 502 Pa. 241, 465 A.2d 1231 (1983). Federal district courts considering the issue have also concluded that the person had to personally observe the traumatic event. See generally Herman v. Welland Chemical, Ltd., supra (firemen’s wives could not recover for their emotional distress arising from injuries to husbands while they directed traffic at an accident scene when wives were not present at. the time of the incident); Amader v. Johns-Manville Corp., supra (wife’s claim for emotional distress arising from husband’s asbestosis disallowed); Bliss v. Allentown Public Library, supra.

Plaintiffs’ reliance upon Speck v. Finegold, supra, is misplaced. While abstractly the case does support the broad interpretation placed upon it by plaintiffs, it is easily distinguishable on the facts and the law from the instant one. In Speck, the parents of a defective child sued the physician who allegedly performed a negligent vasectomy upon the husband, and the physician who compounded the error by negligently performing an abortion upon the wife. The Supreme Court held that the parents could recover for their emotional distress in raising a defective child based upon the duties owed them by their two treating physicians. In the instant case, the defendant physician’s allegedly negligent conduct was directed toward the infant. Speck did not deal with bystander recovery and is inapplicable to this case.

We also note that the plaintiff husband has also failed to allege a physical injury or physical manifestation of his emotional distress. This has also been required as part of bystander recovery for emotional distress in Pennsylvania. See Justice v. Booth Maternity Center, — Pa.Super. —, 498 A.2d 950, (Pa.Super.1985) (father of stillborn child could not recover for his emotional distress because, while alleging he was present in the delivery room during the birth, he failed to allege bodily harm).

We will issue an appropriate order.

      . The parties implicitly agree, and we have no reason to decide otherwise, that Pennsylvania law applies to this action.

      . The case cited by plaintiffs in support of this contention, Little v. York County Earned Income Tax Bureau, 333 Pa.Super. 8, 481 A.2d 1194 (1984), is distinguishable because it is not a bystander case.


author: GARRITY, District Judge.

text:
    Carla ERRICHIELLO, Plaintiff, v. ELI LILLY AND CO. et al., Defendants.
    Civ. A. No. 82-1718-G.
    United States District Court, D. Massachusetts.
    Oct. 9, 1985.

      Albert P. Zabin, Schneider, Reilly, Zabin, Connolly & Costello, Boston, Mass., for plaintiff.
    Walter G. Murphy, Murphy and Mitchell, Boston, Mass., for Merck & Co., Inc.
    Elizabeth Fahey, Morrison, Mahoney & Miller, Boston, Mass., for Rexall Drug Co.
    John J.C. Herlihy, Herlihy and O’Brien, Boston, Mass., for Burroughs-Wellcome Co.
    William A. McCormack, Anne J. Dubitzky, Bingham Dana & Gould, Boston, Mass., for Upjohn Co.
    David W. Rosenberg, Hill & Barlow, Boston, Mass., for Abbott Laboratories.
    Marshall Simonds, Goodwin, Proctor & Hoar, Boston, Mass., for Eli Lilly & Co.
    Thomas D. Burns, Boston, Mass., for Kremens-Urban Co.
    Samuel Adams, Joseph J. Leghorn, Warner & Stackpole, Boston, Mass., for E.R. Squibb & Son.
   ORDER ON MOTION FOR SUMMARY JUDGMENT

GARRITY, District Judge.

Defendant Eli Lilly and Company has filed a motion for summary judgment against plaintiff Carla Errichiello as to both counts of her complaint. As grounds therefor, defendant argues that plaintiff’s claims are barred by the Massachusetts statute of limitations governing tort claims and actions for breach of warranty.

The relevant facts are not in dispute. On June 22, 1982 plaintiff filed the instant action against six manufacturers of diethylstilbestrol (DES) alleging that she developed vaginal cancer as a result of in útero exposure to DES, i.e., because her mother took DES while pregnant with plaintiff. Count 1 of the complaint charges the defendants with negligence in the manufacture and marketing of DES. Count 2 charges defendants with breach of certain implied warranties.

The briefs and exhibits submitted by the parties show that plaintiff was diagnosed as suffering from a form of vaginal cancer in July, 1973. At that time, her treating physician informed her parents that the cancer was probably linked to in útero exposure to DES. Plaintiff’s brother and grandmother learned of the suspected link shortly thereafter. Additionally, plaintiff’s medical records and doctor’s reports, prepared between 1973 and 1979, contained references to the causal connection between in útero exposure to DES and plaintiff’s vaginal cancer.

Plaintiff states that although she was informed that she had cancer, she was never told by either her doctors or her family that her cancer was in any way connected with DES. She alleges that she did not learn that her mother had taken DES until her mother told her in July of 1980. Before that time plaintiff never attempted to determine the cause of her cancer or inspect her medical records. She states that she believed that cancer afflicted many people for no apparent reason and thus she never thought to inquire as to the cause of her own cancer. However, plaintiff commenced the present litigation within three years of her discovery of the suspected causal connection between her cancer and DES.

I. The Negligence Claim:

The Massachusetts statute of limitations governing negligence actions provides that “actions of tort ... shall be commenced only within three years next after the cause of action accrues.” M.G.L. c. 260, § 2A. For purposes of resolving the present motion, the crucial question is when the limitation period began to run. Examination of the Massachusetts Supreme Judicial Court’s decisions in analagous areas of tort law leads the court to conclude that the Supreme Judicial Court would apply the cause of action discovery rule to plaintiff’s negligence claim. See, e.g., Olsen v. Bell Telephone Laboratories, Inc., 1983, 388 Mass. 171, 445 N.E.2d 609 (applying discovery rule to action for negligence resulting in insidious occupational disease); Franklin v. Albert, 1980, 381 Mass. 611, 411 N.E.2d 458 (applying the rule to medical malpractice claim). Accord, Fidler v. Eastman Kodak Co., 1st Cir., 1983, 714 F.2d 192.

The discovery rule provides that a cause of action does not accrue within the meaning of the statute of limitations until the plaintiff knows or reasonably should have known that he has been injured as a result of conduct of the defendant. Olsen, supra, 445 N.E.2d at 611-12. The rule requires cognizance of the injury and its cause before the limitations period is deemed to commence running. Implicit is the duty on the plaintiff to exercise reasonable diligence in ascertaining the operative facts and whether the injury is legally compensable. Franklin, supra, 381 Mass, at 619, 411 N.E.2d 458; Fidler v. Eastman Kodak Co., 1st Cir., 1983, 714 F.2d 192, 199. Additionally, under the rule, plaintiff bears the burden of proving such facts as to take the case outside of the impact of the three-year statute of limitations. Franklin, supra, 381 Mass, at 619, 411 N.E.2d 458.

Defendant argues that upon notice of her injury, plaintiff had the duty to exercise reasonable diligence to discover the basis for her claim. In defendant’s view, then, the duty arose in July of 1973 when plaintiff learned she had cancer. Plaintiff contends that the duty- did not arise until July of 1980 when she was informed by her mother that the cancer might be linked to in útero exposure to DES. In the court’s view, the duty to exercise reasonable diligence is incorporated in the discovery rule’s “reasonably should have known” language, and “discovery” encompasses not only notice of the injury, but notice of the likely cause as well. Consequently, a cause of action accrues when plaintiff has knowledge of both her injury and its likely cause or has sufficient facts available such that she reasonably should discover the probable causal relationship between her injury and conduct of the defendant. Once on notice of her injury and its likely cause, plaintiff must ascertain whether the theory of causation supports a legal claim. She has three years to do so.

Application of the discovery rule to the case at bar compels the conclusion that defendant’s motion must be denied with respect to count 1 of the complaint. Summary judgment is appropriate only if “there is no genuine issue as to any material fact, and the movant is entitled to a judgment as a matter of law.” Fed.R.Civ.P., 56(c). The court must look at the record in the light most favorable to the party opposing the motion, indulging all inferences in that party’s favor. Here, there is no dispute between the parties as to the essential evidentiary facts, but only as to the ultimate conclusion to be drawn from those facts: whether plaintiff reasonably should have known prior to July of 1980 that her cancer might be linked to her mother’s ingestion of DES. In the court’s opinion, resolution of this issue does not lend itself to determination as a matter of law. For statute of limitations purposes, a diagnosis of cancer is quite different from an injury sustained in an automobile accident. The development of cancer will not constitute, in many situations, “the happening of an event likely to put the plaintiff on notice of the invasion of legal rights,” Hendrickson v. Sears, 1974, 365 Mass. 83, 89-90, 310 N.E.2d 131, particularly where the injury suffered by plaintiff was allegedly caused by a drug ingested by her mother twenty-one years before plaintiff learned of her cancer.

While it is conceded that plaintiff could have discovered the alleged cause of her cancer in 1973 by asking her family or doctors or examining her medical records, the crucial question is whether, under all the circumstances, she reasonably should have discovered the cause prior to July of 1980. Resolution of such a question requires a determination of the reasonableness of plaintiff’s conduct and raises genuine factual issues as to when plaintiff’s cause of action “accrued” within the meaning of M.G.L. c. 260, § 2A. See, e.g., Prescott v. United States, D.Nev., 1981, 523 F.Supp. 918 (material fact issues existed as to when plaintiff should have discovered his possible cause of action for radiation poisoning, precluding summary judgment on statute of limitations defense); Grabowski v. Turner & Newall, D.Pa., 1980, 516 F.Supp. 114, aff’d 651 F.2d 908 (substantial fact issue existed as to when plaintiff knew or should have known injury was caused by exposure to asbestos, precluding summary judgment on statute of limitations defense); Mann v. A.H. Robins Co., Inc., 5 Cir., 1984, 741 F.2d 79 (question whether plaintiff did not know, nor reasonably should have known of cause of her injury was factual question precluding summary judgment on statute of limitations grounds). Accordingly, defendant’s motion for summary judgment is denied with respect to count 1 of plaintiff’s complaint.

II. The Breach of Warranty Claim:

Defendant seeks summary judgment in its favor as to plaintiff’s breach of warranty claim on two separate grounds: (1) the claim is barred by the governing statute of limitations, M.G.L. c. 106, § 2-318; and (2) the transactions giving rise to plaintiff’s claim are governed by the Uniform Sales Act, which provided that a party bringing a breach of warranty claim had to establish privity of contract with the defendant. Massachusetts warranty law is currently modeled after the Uniform Commercial Code, which dispenses with the privity requirement. M.G.L. c. 106, § 2-318.

In Payton v. Abbott Laboratories, D.Mass., 1982, 551 F.Supp. 245, 246, the court held that a cause of action for breach of warranty is available under Massachusetts law to any plaintiff whose physical symptoms first occurred after the effective date of the 1973 amendment to M.G.L. c. 106, § 2-318 abolishing the privity requirement, namely, December 16, 1973. Accord, Hoffman v. Howmedica, 1977, 373 Mass. 32, 364 N.E.2d 1215. Plaintiff concedes that her physical symptoms first occurred no later than July of 1973 when she was diagnosed as suffering from cancer. Accordingly, the court holds that plaintiff’s breach of warranty claim is barred by the decision in the Payton case since plaintiff has not alleged privity of contract with defendant. Hence it is unnecessary to reach the question of whether plaintiff’s claim is also barred by the applicable statute of limitations. Defendant’s motion for summary judgment is granted with respect to count 2 of plaintiff’s complaint.


author: MOYE, Chief Judge.

text:
    LOCAL 1316, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, Plaintiff, v. SUPERIOR CONTRACTORS AND ASSOCIATES, INC., Defendant.
    Civ. A. No. C84-309A.
    United States District Court, N.D. Georgia, Atlanta Division.
    Oct. 9, 1985.
    James T. Langford, Jacobs & Langford, Atlanta, Ga., for plaintiff.
    Ronald L. Mason, Troutman, Sanders, Lockerman & Ashmore, Atlanta, Ga., for defendant.
   ORDER

MOYE, Chief Judge.

This labor management relations action is before the Court on the plaintiff’s motion that the order of 28 August 1985 be reconsidered. That order permitted the defendant’s amended counterclaim to relate back to the date of the original pleading pursuant to Federal Rule of Civil Procedure 15(c). The basis for this motion is that the defendant relied on rule 13(f), pertaining to the establishment of omitted counterclaims by amendment, rather than rule 15(c), pertaining to the relation back of amended pleadings generally. The plaintiff relies on one case, Stoner v. Terranella, 372 F.2d 89, 91 (6th Cir.1967), holding that the remedies provided by the two rules are mutually exclusive and amendments made under rule 13(f) do not relate back to the date of the original pleading. If relation back were not permitted in the instant case, the defendant’s counterclaim would be barred by the statute of limitations.

Although the issue presented by this motion is one of first impression in this circuit, the Stoner decision has been discredited by one of the preeminent commentators, 3 J. Moore, Moore’s Federal Practice 1113.33, at 13-200 n. 7 (“this view seems unduly narrow”), and the weight of recent authority stands firmly against it.

In this regard, the Second Circuit Court of Appeals reasoned as follows:

The Federal Rules are to be construed so as to secure the just determination of every action, Fed.R.Civ.P. 1, and trial courts in this Circuit have accordingly ruled that a counterclaim amended pursuant to Rule 13(f) may relate back to the date of the original answer when the counterclaim arises out of the same transaction that was pleaded in the answer and there is no prejudice to the opposing party’s ability to defend the merits of the counterclaim____ This practice is approved by the leading commentators.

Banco Para El Comercio Exterior de Cuba v. First National City Bank, 744 F.2d 237, 243 (2d Cir.1984). Rule 15(c) provides in pertinent part: “Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading.” This Court agrees that the amendment should relate back if it meets the requirements of rule 15(c). Accord Rohm and Haas Co. v. Dawson Chemical Co., 557 F.Supp. 739, 825-26 (S.D.Tex.1983); Diematic Manufacturing Corp. v. Packaging Industries, Inc., 412 F.Supp. 1367, 1374 (S.D.N.Y.1976). The Sixth Circuit in Stoner held the rule 15(c) “relation back” principle applicable only to amendments made pursuant to rule 15(a) and not to rule 13(f) counterclaim amendments. On this point, the Butler v. Poffinberger court said:

First, there is nothing in the language of Rule 15(c) to indicate that it applies only to amendments under Rule 15(a). Rule 15(c) speaks only of “amendments.” If the Rule was meant to encompass less than all of the amendments authorized by the Federal Rules, one would expect some indication of that fact within the Rule. Secondly, the criteria established by Rule 15(c) can be satisfied by at least some Rule 13(f) amendments.

49 F.R.D. 8, 11 (N.D.W.Va.1970). See generally 6 C. Wright & A. Miller, Federal Practice and Procedure, § 1430, at 159-60 (1971) (“To view the rules as mutually exclusive makes little sense ... in light of the express reference in Rule 13(f) to adding the omitted counterclaim ‘by amendment.’ ”).

In the case at bar, there is no doubt that the defendant’s amendment met this standard. The plaintiff had adequate notice of the transactions forming the basis for the amended pleading. The Court noted in its last order that the amendment essentially restated charges made before the National Labor Relations Board and allegations made under state law in the original counterclaim. It is inconceivable that the plaintiff could be prejudiced in maintaining its defense on the merits, nor has it suggested that this is the case.

The motion for reconsideration is DENIED.


text:
    Allen L. BACON, Plaintiff, v. Margaret HECKLER, Secretary of Health and Human Services, Department of Health and Human Services, United States of America, Defendant.
    No. CV 84-112-M-RES.
    United States District Court, D. Montana, Missoula Division.
    Oct. 10, 1985.

      James C. Bartlett, Hash, Jellison, O’Brien & Bartlett, Kaispell, Mont., for plaintiff.
    Robert J. Brooks, U.S. Atty., Butte, Mont., for defendant.
   OPINION AND ORDER

RUSSELL E. SMITH, District Judge.

This is an appeal from a final decision of the Secretary denying Social Security benefits. The Appeals Council, reversing the Administrative Law Judge, found that the plaintiff was unable to perform his former work but that plaintiff had a capacity for medium work. The Appeals Council found that the kind of work that the plaintiff can do in light of his exertional limitation is not significantly affected by his nonexertional limitations and then concluded that, “[b]ased on the claimant’s exertional limitation only, section 404.1569 and Rules 203.18 and 203.25, Table No. 3 of Appendix 2, Subpart P, Regulations No. 4, would direct a conclusion that the claimant, considering his residual functional capacity, age, education, and work experience, is not disabled.” If it was proper to use the guidelines, the result reached was supported by substantial evidence.

In Heckler v. Campbell, 461 U.S. 458, 103 S.Ct. 1952, 76 L.Ed.2d 66 (1983), the Court upheld the authority of the Secretary to promulgate guidelines. See Gallant v. Heckler, 753 F.2d 1450 (9th Cir.1984). The fact that the guidelines themselves provide that they are to be applied only when they describe a claimant’s abilities and limitations accurately was a factor considered by the Court in approving them. Campbell, 461 U.S. at 462, n. 5, 103 S.Ct. at 1954-55, n. 5.

As found by the Appeals Council, plaintiff has lost 95% of the vision in his right eye, and in his left eye he has corneal anesthesia and diminished tear production. The dryness of the left eye makes it susceptible to infections. When plaintiff’s eye is infected, it produces significant amounts of mucous, which blurs the vision. He must be cautious in wiping the mucous out because of the corneal anesthesia. Plaintiff is required to use antibiotic ointments, which diminish his vision when he uses them. He was advised to, and did, quit a janitorial job because of the irritations to his left eye. When the eye is infected, his vision can be corrected variously from 20/40 to 20/80 after the cornea is irrigated.

Although his sight is impaired, the plaintiff has a vision of more than 20/200 in his better eye and is not legally blind. 42 U.S.C. § 416(i)(l)(B); 20 C.F.R. § 416.-981 (1985). The guidelines do not accurately describe plaintiff’s abilities and limitations. An individual’s capacity to work is in some measure dependent upon such factors as the steadiness with which he can work, the kinds of places in which he can work, and his reliability while at work. Plaintiff's physical impairments involve all of these factors in some degree, and the guidelines established by the rules do not allow for any of them. The guidelines relating to sight (App. 1, § 2.01, Table No. 1) do not deal with the problems created by corneal anesthesia and a diminished tear production.

The regulations do provide:

Also, in these combinations of nonexertional and exertional limitations which cannot be wholly determined under the rules in this Appendix 2, full consideration must be given to all of the relevant facts in the case in accordance with the definitions and discussions of each factor in the appropriate sections of the regulations, which will provide insight into the adjudicative weight to be accorded each factor.

App. 2, § 200.00(e)(2). I find no discussion in the rules of any of the factors relevant here, except as to sight itself, of plaintiffs impairments. For these reasons I conclude that the tables upon which the Appeals Council relied cannot be used here.

Since the plaintiff is unable to perform his past relevant work, the burden is on the Secretary to prove that the plaintiff can engage in other types of substantial gainful work that exist in the national economy. Maounis v. Heckler, 738 F.2d 1032 (9th Cir.1984). In this case that burden was not satisfied by the improper use of the guidelines.

The case is remanded to the Secretary for further action not inconsistent herewith.

      . This finding is difficult to understand in light of the finding that "[t]he claimant is unable to perform his past relevant work as a maintenance man which work required medium to heavy exertion or as a sawmill laborer, welding shop helper or assembler of oil well bits because these jobs exposed claimant to significant eye irritants.” It is not clear why the eye irritants would affect the capacity to do heavy work and not the capacity to do medium work.


author: LOVELL, District Judge.

text:
    FIRST NATIONAL MONTANA BANK OF MISSOULA, a national banking association, Plaintiff, v. FEDERAL LEASING, INC., a Maryland corporation, and Amperif Corporation, a California corporation, Defendants.
    No. CV 84-180-M.
    United States District Court, D. Montana, Missoula Division.
    Oct. 11, 1985.

      William Crowley, James J. Benn, Boone, Karlberg & Haddon, Missoula, Mont., for plaintiff.
    G. Stewart Webb, Jr., Venable, Baetjar & Howard, Baltimore, Md., Ronald A. Bender, Worden, Thane & Haines, Missoula, Mont., for defendant Federal.
    Michael E. Dempsey & Daniel Smart, Finley, Kumble, Wagner, Heine, Under-berg, Manley & Casey, Beverly Hills, Cal., Donald Snavely, Snavely & Phillips, Missoula, Mont., for defendant Amperif.
   OPINION AND ORDER

LOVELL, District Judge.

This action arises out of the sale to plaintiff (the “Bank”) of a lease between defendant Amperif Corporation (“Amperif”) and the United States Navy. Amperif, a California corporation with offices in California and Maryland, is in the business of manufacturing computer hardware which is leased to the United States Government. The leases are subsequently sold to brokers who sell them to third party investors.

In May, 1979, Amperif and the Navy entered into a lease contract for the provision of certain services and equipment to the Naval Weapons Center located at China Lake, California. The original term of the lease was to expire in June, 1982. On July 31, 1980, Amperif sold the lease to defendant Federal Leasing, Inc. (“Leasing”), a broker of federal government leases. Among the documents executed in consummation of the sale was an Assignment, as required by law, for the purpose of giving notice to the United States. 41 U.S.C. § 15 (1951). In conformity with what appears to be Leasing’s practice, the Assignment was executed by Amperif as assignor and the identity of the assignee was left blank. Several weeks later, the interest was assigned to the Bank by Leasing, and the Bank’s name and address were typed into the Assignment previously executed by Amperif.

Two years later, the lease between Amperif and the Navy was amended, giving both parties additional rights and duties. Again, Amperif transferred its rights to receive payment under the amended lease to Leasing. Leasing in turn assigned these additional rights to the Bank. Disputes between the parties later arose with respect to the obligations of the United States under the amended lease. Amperif and the Bank entered into an agreement in 1983 by which Amperif agreed to exercise its best efforts to remarket the equipment which the government failed to purchase.

Attempts to resolve the matter having failed, the Bank filed suit in September, 1984, alleging various claims of breach of contract, failure of consideration, constructive fraud and others.

Before the Court is Amperif’s motion to dismiss for want of personal jurisdiction. Amperif claims that it at no time transacted any business in Montana, entered into any agreements in Montana, committed any tort in Montana, acquired any property in Montana, or otherwise purposefully availed itself of the protections of the laws of Montana.

In the Ninth Circuit, there is a two-part test to determine whether in person-am jurisdiction exists over a defendant in a diversity case. First, the court must apply the long-arm statute of the state in which it sits. Paccar International, Inc. v. Commercial Bank of Kuwait, 757 F.2d 1058 (9th Cir.1985). Second, the court determines whether application of the statute is consistent with due process. Taubler v. Giraud, 655 F.2d 991 (9th Cir.1981).

Montana’s long-arm statute is contained in Rule 4B, M.R.Civ.P., which has been interpreted liberally in favor of finding jurisdiction in Montana courts. Prentice Lumber Co., Inc. v. Spahn, 156 Mont. 68, 474 P.2d 141 (1970). The Bank contends that Amperif could be subjected to jurisdiction here under any of the factors enumerated in Rule 4B. Assuming the validity of the Bank’s arguments, the court still must determine that exercise of jurisdiction over Amperif would be consistent with due process.

Exercise of personal jurisdiction over a non-resident defendant is consistent with due process in one of two circumstances. First, general jurisdiction will lie if the defendant’s activities in the state are substantial and continuous, even if the cause of action is not related to defendant’s activities in the forum state. Pacific Atlantic Trading Co., v. M/V Main Exp., 758 F.2d 1325 (9th Cir.1985). Second, if the defendant’s activities are not sufficiently pervasive to support general jurisdiction, the nature and quality of the forum-related activities must be evaluated in relation to the specific cause of action to determine whether limited jurisdiction exists. Id.

It is clear that Amperif does not have such systematic and continuous contact with Montana as to subject it to general personal jurisdiction here. Thus, jurisdiction over Amperif must be based on its forum-related activities. The Ninth Circuit has adopted a three-pronged approach for evaluating the defendant’s contacts with the forum to ascertain whether limited jurisdiction exists:

(1) The non-resident defendant must do some act or consummate some transaction within the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws;
(2) The claim must be one which arises out of or results from the defendant’s forum-related activities; and
(3) Exercise of jurisdiction must be reasonable.

Data Disc Inc. v. Systems Tech. Assoc., 557 F.2d 1280 (9th Cir.1977) Under the first Data Disc test, plaintiff here must prove that Amperif has done some act by which it purposefully invoked the benefits and protections of the laws of the State of Montana. The Bank insists that the rule set forth in Scanlan v. Norma Projektil Fabrik, 345 F.Supp. 292 (D.Mont.1972), requires assumption of jurisdiction in this case. Judge Smith held in Scanlan that “due process is not denied when a manufacturer who sells goods intending that they be generally distributed and used in any place where a market may be found is forced to defend those products in the places where the products go.” Id, at 293.

In this case, Amperif entered into a contract with Federal Leasing, by the terms of which Amperif sold all of its interest in and to the Navy lease. Subsequently, the payment rights ended up in the hands of a Montana resident. There are two important distinctions between this transaction and the marketing of a product. First, Amperif is not in the business of manufacturing a product for general distribution in any place where a market may be found. Rather, Amperif is in the business of manufacturing computer hardware for lease to the United States Government. When Amperif sold the Navy lease to Federal Leasing, it sold an intangible right to receive payment. This is distinguishable from the sale of a product on a national market. Second, even if the Bank is correct in its assertion that the assignment was actually between it and Amperif, with Federal Leasing as a middleman, the bare existence of that contract is an insufficient basis for exercise of jurisdiction. Simmons v. State, — Mont. -, 670 P.2d 1372, 1380 (1983); Paccar International, Inc., supra., 757 F.2d at 1063. Even if the court were to hold otherwise, the Bank has not shown that the third element of the Data Disc test is satisfied. Exercise of jurisdiction must be reasonable. With respect to this part of the test, the Ninth Circuit has enumerated seven factors to be applied in determining whether exercise of jurisdiction comports with traditional notions of fair play and substantial justice:

(1) The extent of the defendant’s purposeful interjection into the forum state;
(2) The burden on the defendant of defending in the forum;
(3) The extent of conflict with the sovereignty of the defendant state;
(4) The forum state’s interest in adjudicating the dispute;
(5) The most efficient judicial resolution of the controversy;
(6) Importance of the forum to plaintiff’s interest in convenient and effective relief; and
(7) The existence of an alternative forum.

Insurance Company of North America v. Marina Salina Cruz, 649 F.2d 1266 (9th Cir.1981). The Ninth Circuit cases suggest that the court undertake a factual analysis of each factor.

1. Extent of purposeful interjection into forum state.

This component of the analysis “requires that a defendant must in some way step outside the exclusive protection of his own state and engage in activities touching another sovereignty.” Insurance Co. of North America v. Marina Salina Cruz, supra., at 1272. The Ninth Circuit has interpreted World-Wide Volkswagen v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), as “cautionpng] against using the fortuitous arrival of a product in a given state as the basis for jurisdiction.” Taubler v. Giraud, supra, 655 F.2d at 994. The court has found sufficient purposeful interjection when the non-resident defendant knew that its product was destined for the forum state, and thus could reasonably anticipate injury there. Id., at 994; Raffaele v. Compagnie Generate Maritime, 707 F.2d 395 (9th Cir.1983). In the present case, Amperif had no knowledge at the time it executed the assignment that the lease rights would travel to Montana; as such, it cannot be said to have purposefully interjected itself into this state.

2. Burden on Amperif of defending in the forum.

This factor usually becomes important only where the defendant is a citizen of a foreign country and would be required to travel a great distance to the forum state. Marina Salina Cruz, supra. Regardless of the forum in which this action is tried, two of the parties will be compelled to travel; given the ease of travel within the United States, this factor is not critical.

3. Extent of conflict with the sovereignty of California.

This factor is of greatest importance when the conflict is with a foreign nation. However, the United States Supreme Court has held that one function of the concept of minimum contacts is “to ensure that the States, through their courts, do not reach out beyond their status as co-equal sovereigns in a federal system.” World-Wide Volkswagen, supra, 444 U.S. at 291, 100 S.Ct. at 564, 62 L.Ed.2d at 498. Between the two states, California has a greater sovereign interest in this matter, insofar as the defendant resides and conducts business there, and the situs of the underlying lease is in California.

j. Forum state’s interest in adjudicating the dispute.

The Simmons case provides appropriate treatment of this factor:

Montana courts certainly have an interest in allowing Montana plaintiffs to seek restitution for tortious conduct. [Citation omitted.] However, it can almost always be said that a state has a legitimate interest in protecting legal rights. And this right may not be so compelling “as to outweigh the factors militating against jurisdiction.” [Citations omitted.] Likewise, the Montana forum may provide both convenient and effective relief for plaintiff, especially if a multiplicity of lawsuits can be avoided. But ... this interest of plaintiffs might not be as significant if the plaintiff has the power to select a different forum.

Simmons v. State, supra, 670 P.2d at 1383. This language is particularly apropos here, where Montana clearly has an interest in protecting the legal rights of a Montana bank. Montana’s interest, however, is insufficient to satisfy the requirements imposed by the Due Process Clause.

5. Most efficient judicial resolution.

Given the nature of this case and the possibility of additional parties being named, it seems that a California forum would provide the most efficient judicial resolution of this matter. Since Amperif’s principal place of business is in California, most of the evidence and witnesses are likely to be in California. Any tortious acts committed by Amperif were committed outside the State of Montana. The lease underlying this case involves the Naval Weapons Center located at China Lake, California. Finally, any actions of Amperif within Montana have little or no relation to the Bank’s claim against it. All of Amperif’s contacts with the Bank in Montana were made after difficulties developed with the lease, not at the time of occurrence of the event which formed the basis of this action. See, Thos. P. Gonzalez Corp. v. Consejo Nacional de Produccion etc., 614 F.2d 1247, 1254 (9th Cir.1980).

6. Importance of the forum to plaintiffs interest in convenient and effective relief.

This factor is adequately disposed of by the language from Simmons quoted above, where the Supreme Court of Montana stated that this interest of plaintiff’s is not as significant if plaintiff has the power to select a different forum.

7. Existence of an alternative forum.

Plaintiff clearly has the power to bring suit in California or in Maryland. Were plaintiff to sue in federal district court in California, all defendants would be subject to the court’s jurisdiction. As evidenced by Exhibit “D” to the complaint, Federal Leasing and Amperif have a continuing business relationship, and a California court would no doubt have personal jurisdiction over Leasing.

The essence of the Bank’s argument here is that Amperif, by allowing its leases to be sold on a national market, could have foreseen that one or more of them would end up in Montana and thus that disputes could arise in Montana. The United States Supreme Court disagrees with this type reasoning:

“Foreseeability” alone has never been a sufficient benchmark for personal jurisdiction under the Due Process Clause ...
If foreseeability were the criterion,..... [ejvery seller of chattels would in effect appoint the chattel his agent for service of process. His amenability to suit would travel with the chattel____
This is not to say, of course, that foreseeability is totally irrelevant, but foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum state. Rather, it is that the defendant’s conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there.

World-Wide Volkswagen, supra, 444 U.S. at 295-97, 100 S.Ct. at 566-67, 62 L.Ed.2d at 500-01. Under the rulings of WorldWide Volkswagen and its Ninth Circuit progeny, due process and considerations of fundamental fairness demand that Amperif be dismissed from this case for lack of personal jurisdiction.

THEREFORE, IT IS HEREBY ORDERED that the motion of Defendant Amperif Corporation is GRANTED, and the complaint is dismissed as to said Defendant for lack of personal jurisdiction.

      . No party has offered an explanation of how the lease found its way to Montana, i.e., whether the Bank sought out such investments or whether Leasing advertised its business on the national market in pursuit of prospective investors.

      . The court does not intend to sanction the practice of executing documents which are left partially blank. However, even though the transaction was not finalized in its entirety until the Bank executed the documents in Montana, Amperif's interest in the lease was relinquished upon consummation of the sale to Leasing.


author: RESTANI, Judge.

text:
    UNITED STATES STEEL CORPORATION, Plaintiff, v. The UNITED STATES, et al., Defendants.
    Court No. 85-07-00954.
    United States Court of International Trade.
    Sept. 16, 1985.

      Law Dept, of U.S. Steel Corp. (J. Michael Jarboe), Pittsburgh, Pa., for plaintiff.
    Richard K. Willard, Acting Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, and Platte B. Moring, III, Civ. Div., U.S. Dept, of Justice, Washington, D.C., for defendants.
    Hale, Russell & Gray, New York City (Louis H. Kurrelmeyer), New York City, for intervenor.
   Opinion and Order

RESTANI, Judge.

This matter is now before the court on defendant’s motion and plaintiff’s cross-motion for summary judgment. At issue is the interpretation placed on § 606 of the Trade and Tariff Act of 1984 by the International Trade Administration of the United States Department of Commerce (ITA). Section 606 allows a party to request that a final determination in a countervailing duty case not be issued until the issuance of a related antidumping duty determination. The purpose of § 606 is to allow hearings on injury to be consolidated before the International Trade Commission (ITC). See Cong.Rep. No. 1156, 98th Cong. 2d Sess. 175-176, reprinted in 1984 U.S.Code Cong, and Ad.News 5220, 5292-93. Section 606 is silent, however, as to the duration of the provisional remedy of suspension of liquidation in countervailing duty cases in which a postponement of the final determination is requested. Plaintiff claims that § 606 mandates that suspension continue until publication of the final determination. In contrast, the government defendant argues that the ITA properly concluded that Congress intended that it remain faithful to the Subsidies Code of the General Agreements on Tariff and Trade (GATT), 31 U.S.T. 513, T.I.A.S. 9619, 55 U.N.T.S. 194, by terminating suspension of liquidation in a countervailing duty proceeding after 120 days.

I

The facts of this case are not in dispute. On December 19, 1984, plaintiff, United States Steel Corporation (USS) filed countervailing duty petitions with the ITA and ITC with regard to certain carbon steel products from Sweden and Austria. On the same day USS also filed antidumping petitions against the Austrian product. The ITA published preliminary affirmative determinations in both countervailing duty investigations on March 20, 1985. 50 Fed.Reg. 11,220, 11,224 (1985). Liquidation was suspended on that date pursuant to § 703 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1671b(d)(1) (1982). The next day, plaintiff made its postponement request for its countervailing duty cases under § 606 of the Trade and Tariff Act of 1984, 19 U.S.C.A. § 1671d(a)(l) (West Supp.1985). The ITA granted the § 606 extension with the expected date of the final antidumping determination being September 26, 1985. On July 18, 1985, however, the ITA, fearing that continuation of suspension would violate GATT, directed the Customs Service to terminate the suspension and begin liquidation. On July 19, 1985, this court granted a temporary restraining order preventing termination of suspension. That order was dissolved upon the court’s denial of plaintiff’s motion for a preliminary injunction. United States Steel Corp. v. United States, 9 CIT-, 614 F.Supp. 1241 (1985). An expedited briefing schedule was issued with respect to the motions now before the court.

II.

USS claims that § 606 is clear and unambiguous in meaning, intent, and application. Plainly on the face of the statute, however, this is not so. The statute provides in full:

Within 75 days after the date of [its] preliminary determination under section 1671b(b) of this title, the administering authority shall make a final determination of whether or not a subsidy is being provided with respect to the merchandise; except that when an investigation under this part is initiated simultaneously with an investigation under part II, [antidumping,] which involves imports of the same class or kind of merchandise from the same or other countries, the administering authority, if requested by the petitioner, shall extend the date of the final determination under this paragraph to the date of the final determination of the administering authority in such investigation initiated under part II.

19 U.S.C.A. § 1671d(a)(l) (West Supp.1985). There simply is no language contained in the provision referring to suspension of liquidation, much less indicating the duration of any suspension.

Plaintiff argues that § 606 was designed to conform to an existing body of countervailing duty law which mandates suspension of liquidation between an affirmative preliminary ITA determination and the final finding in the case. More specifically, plaintiff seeks to draw support from § 703(d)(1) of the Trade and Tariff Act of 1930, as amended, 19 U.S.C. § 1671b(d)(l) (1982), which compels suspensión of liquidation upon a preliminary affirmative determination. Plaintiff stresses that the legislative history of § 703(d) notes that “[t]he requirement that liquidation be suspended upon an affirmative preliminary determination is intended to preserve the status quo during the remainder of the investigation.” S.Rep. No. 249, 96th Cong., 1st Sess. 50, reprinted in 1979 U.S.Code Cong. & Ad.News 381, 436. Plaintiff argues that in drafting § 606 Congress intended to maintain suspension of liquidation regardless of the duration of time between the preliminary ITA determination and the final determination in the case.

Plaintiff’s view that Congress’ desire to maintain the status quo overrides other considerations is not persuasive in light of an examination of all relevant countervailing duty provisions. First, § 703(d) merely states when suspension of liquidation must commence. It does not specify when suspension of liquidation must terminate. Second, that the time for termination is after the expiration of the 120 day period may be determined from a review of the entire statutory framework.

The provision controlling the date of the Commission’s final determination after the ITA issues a preliminary affirmative finding is § 705 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1671d (1982). Section 705(b)(2) calls for a final ITC determination within 120 days after the date the ITA makes a preliminary affirmative finding. Although the legislative history of § 705 does not specifically mention a reason for the 120 day limit, the statute itself and the general legislative history of § 705 are evidence that § 705 was enacted to be GATT consistent. As the legislative history of § 705 states: “After an affirmative preliminary determination in a countervailing duty investigation, Article 2(4) of the Agreement requires simultaneous consideration of whether a subsidy and injury exist. Section 705 would implement this requirement for the United States.” S.Rep. No. 249, 96th Cong., 1st Sess. 57, reprinted in 1979 U.S.Code Cong. & Ad.News 381, 443. Furthermore, § 705(b)(2) provides, alternatively, that the ITC’s final decision may be made withm 45 days of the ITA’s final determination. This, together with the 75 day period provided in § 606 for non-extended cases equals 120 days. Obviously Congress intended to design the statute to adhere to the 120 day limit for provisional remedies. In sum, there is nothing on the face of the provisions implementing the initiation and duration of countervailing duty proceedings, nor in the legislative history of those provisions, which compels the conclusion that absent critical circumstances, Congress intended that a provisional suspension last longer than 120 days.

Plaintiff next calls the court’s attention to § 613 of the Trade and Tariff Act of 1984, 19 U.S.C.A. § 1671b(h) (West Supp.1985). Section 613 concerns upstream subsidy cases. The section extends the time period in which a final determination is to be made to 165 days after a preliminary finding, while explicitly limiting suspension of liquidation to the 120 day time period after the preliminary determination. Plaintiff contends that § 613 is an example of a situation in which Congress explicitly limited suspension of liquidation to 120 days, although time for the final determination may be extended beyond the four month period. Plaintiff argues that § 613 supports the proposition that had Congress intended to limit suspension of liquidation under § 606, the legislature would have made the limit explicit. Therefore, continues plaintiff, the absence of a 120 day limit in § 606 should not be deemed unintentional. See Kentucky ex rel. Hancock v. Ruckelshaus, 362 F.Supp. 360, 365 (W.D.Ky.1973), aff'd, 497 F.2d 1172 (6th Cir.1974), aff'd sub nom, Hancock v. Train, 426 U.S. 167, 96 S.Ct. 2006, 48 L.Ed.2d 555 (1976) (“[W]here a particular provision appears in a statute, the failure to include that same requirement in another section of the statute will not be deemed to have been inadvertent.”); see also Dunlop v. First National Bank of Arizona, 399 F.Supp. 855, 856 (D.Ariz.1975).

While the maxim of construction which plaintiff attempts to invoke has “particular vitality when applied to carefully constructed and intertwined statutory provisions such as those found in [the Tariff Schedules],” Algoma Tube Corp. v. United States, 9 CIT -, Slip Op. 85-89 at 9 (August 28, 1985), it has minimal value in the context of the constantly developing law of unfair international trade practices. The United States’ countervailing duty law was restructured by the Trade and Tariff Act of 1979 and amended again by 1984 legislation in an attempt to cure developing problems. See H.R.Rep. No. 725, 98th Cong., 2nd Sess; see also Holmer & Bello, The Trade and Tariff Act of 1984: The Road to Enactment, 19 Int’l. Law. 287, 291 (1985). The two Trade Acts and their various provisions do not fit together in detail to the same degree as various items within a particular Tariff Schedule. Plaintiff’s contextual analysis is therefore not a dis-positive guide as to the interpretation of § 606.

Furthermore, “[i]n determining the purpose of legislation, it is appropriate to consider not only the effect of the legislation itself, but also the history and setting out of which the legislation arose.” Turner v. Littleton-Lake Gaston School District, 442 F.2d 584, 587 (4th Cir.1971). Section 606 is part of a group of provisions of the Trade and Tariff Act of 1984 designed to aid small businesses. See Holmer & Bello, The Trade and Tariff Act of 1984: Principal Antidumping and Countervailing Duty Provisions, 19 Int’l.Law. 639, 645-658 (1985). “One of the enduring themes in the hearings that led up to the 1984 Act was the stated desire to simplify and streamline the administration of the [trade] laws, making them more accessible to small businesses.” Id. at 645. The only clearly intended purpose of the statute appears to be to allow all parties to conserve costs by utilizing one consolidated hearing covering related countervailing duty and antidumping injury proceedings instead of two separate agency adjudications. H.Conf.Rep. No. 1156, 98th Cong., 2d Sess. 175-76, reprinted in, 1984 U.S.Code Cong. & Ad. News 5220, 5292-93.

Plaintiff argues that a 120 day limit on suspension would render § 606 meaningless because a petitioner would not seek an extension if suspension could terminate before final determination is reached. Although some entries may be liquidated if provisional suspension is terminated after 120 days, it is not clear that every petitioner would find the administrative benefits of § 606 to be outweighed by the detriment of the gap in suspension of liquidation.

Moreover, despite the scarcity of legislative history specifically concerning § 606, the overall intent of Congress to adhere to GATT in enacting the 1984 legislation is quite clear. Although the Trade Agreements Act of 1979 did not constitute either Congressional approval or disapproval of the GATT Subsidies Code, S.Rep. No. 249, 96th Cong., 1st Sess. 38-39 (1979), the objective of GATT consistency was embodied in the Act. See Statement of Administrative Action for the Trade Agreements Act of 1979, H.Doc. No. 96-153, 96th Cong., 1st Sess. 2-6 (1979), reprinted in 1979 U.S. Code Cong. & Ad.News 665, 666-68. Similarly, conformity with GATT was an underlying principal in the Trade and Tariff Act of 1984. As the House Report stated:

[A] basic criterion guiding the Committee in including amendments of these laws in the bill was to maintain their consistency with the letter and spirit of the General Agreement on Tariffs and Trade (GATT), particularly with Articles VI and XVI, which govern the use of these remedies, and the Agreement on Antidumping Measures and the Agreement on Subsidies and Countervailing Measures negotiated under the auspices of the GATT and signed by the United States in 1979.

H.R.Rep. No. 725, 98th Cong., 2nd Sess. 5 (1984), reprinted in 1984 U.S.Code Cong. & Ad.News 5127, 5131. See also S.Rep. 249, 96th Cong. 1st Sess. 38 (1979) (“The revisions are all consistent with the [GATT] agreements____”).

Plaintiff, however, argues that this case presents just one example of several situations in which Congress deliberately did not follow the GATT Subsidy Code in promulgating the domestic countervailing duty law. To support that position, plaintiff cites, in particular, article 5, clause 1 of the Subsidy Code which states that “[provisional measures shall not be applied unless the authorities concerned judge that they are necessary to prevent injury being caused during the period of investigation.” 31 U.S.T. 513, T.I.A.S. 9619, 55 U.N.T.S. 194. Plaintiff claims that no such provision is contained in the domestic law. Citing Republic Steel Corp. v. United States, 8 CIT -, 591 F.Supp. 640, 646 (1984), plaintiff asserts that the standard embodied in the Subsidies Code for determination of injury at the preliminary stage is stricter than that contained in the domestic law. Plaintiffs example, however, provides no direct evidence that Congress has ever intentionally decided to violate GATT. Instead, plaintiff merely raises a question of interpretation of the language of GATT. Although Congress chooses language which differs from the often broad language of GATT, the legislature’s choice of words is its attempt to implement in a concrete and specific manner its view of the obligations of the United States stemming from the international trade agreements. This was explained in the Senate Report which stated:

The committee is aware that some major trading partners are concerned that particular elements of this bill do not repeat the precise language of the agreements. This bill is drafted with the intent to permit U.S. practice to be consistent with the obligations of the agreements, as the United States understands those obligations. The bill implements the United States understanding of those obligations.
Our trade laws are, and long have been, subject to administrative and judicial review processes. These processes both lead to and require greater precision in our law than the often vague terms of the agreements or implementing regulations of other countries. Furthermore, unfamiliar terms in the agreements, or terms which may have a different meaning in United States law than in international practice or another country’s laws, need to be rendered into United States law in a way which ensures maximum predictability and fairness.

S.Rep. No. 249, 96th Cong., 1st Sess. 36 (1979). Thus, it appears that Congress would not use inaction or implication in varying domestic countervailing duty law from that envisioned by GATT. The statute at issue, which is silent regarding the length of provisional suspension, should not be interpreted by means of tenuous arguments to yield a construction which would be in contravention of GATT.

Furthermore, “[cjaution must temper judicial creativity in the face of legislative ... silence.” Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 565, 100 S.Ct. 790, 797, 63 L.Ed.2d 22 (1980). In the wake of that silence, the interpretation of the agency charged with administering a statute is entitled to substantial deference. Blum v. Bacon, 457 U.S. 132, 141, 102 S.Ct. 2355, 2361, 72 L.Ed.2d 728 (1982). Deference is appropriate especially when “the administrative practice at stake ‘involves a contemporaneous construction of a statute by the men charged with the responsibility of setting its machinery in motion, of making the parts work efficiently and smoothly while they are yet untried and new.’ ” Frontier Airlines, Inc. v. CAB, 621 F.2d 369, 372 (10th Cir.1980) (quoting Power Reactor Development Co. v. Electricians, 367 U.S. 396, 408, 81 S.Ct. 1529, 1535, 6 L.Ed.2d 924 (1961) quoting Norwegian Nitrogen Products Co. v. United States, 288 U.S. 294, 315, 53 S.Ct. 350, 358, 77 L.Ed. 796 (1933)).

The interpretation of the ITA, the agency charged with implementing § 606 must be afforded great weight. Not only did the ITA conform to the GATT 120 day limit in the case at bar by its actions of July 18, 1985, but it has reduced that interpretation to proposed regulations published on June 10, 1985 at 50 Fed.Reg. 24,207. Although the new regulation is still in the rulemaking process, it obviously reflects the view of the agency. See First Multifund For Daily Income, Inc. v. United States, 221 Ct.Cl. 123, 130-31, 602 F.2d 332, 337 (1979), cert. denied, 445 U.S. 916, 100 S.Ct. 1275, 63 L.Ed.2d 599 (1980) (“The form in which an agency manifests its interpretation of a statute it administers is immaterial; the critical thing is whether there is such an interpretation and how settled it has become”.)

The action by the ITA terminating the provisional suspension of liquidation is in harmony with Congress’ general intent to make domestic law consistent with GATT, and there is no indication of specific intent to vary here from Congress’ general purpose. Accordingly, plaintiff’s cross-motion for summary judgment is denied, defendant’s motion for "summary judgment is granted, and this case is hereby dismissed.

      . The Agreement of Interpretation and Application of Articles VI, XVI, and XXIII of the General Agreement on Tariffs and Trade (commonly known as the GATT Subsidies Code), 31 U.S.T. 513, T.I.A.S. 9619, 55 U.N.T.S. 194, provides in part 3 of article 5: “The imposition of provisional measures shall be limited to as short a period as possible, not exceeding four months.”

      . 19 U.S.C. § 1671b(d)(l) (1982) provides:
      If the preliminary determination of the administering authority under subsection (b) of this section is affirmative, the administering authority—
      (1) shall order the suspension of liquidation of all entries of merchandise subject to the determination which are entered, or withdrawn from warehouse, for consumption on or after the date of publication of the notice of the determination in the Federal Register.

      . Section 703 was also intended to be GATT consistent. The legislative history of § 703(a), as embodied in the Senate Report states:
      Before a countervailing duty investigation is initiated, Article 2(4) of the Agreement requires consideration whether both a subsidy and injury exist. The petition determination by the authority under section 702(c) and the determination by the ITC under section 703(a) will implement that requirement for the United States.
      S.Rep. No. 249, 96th Cong., 1st Sess. 49, reprinted in 1979 U.S.Code Cong. & Ad.News 381, 435.

      . Under 19 U.S.C. § 1671b(e)(2) (1982), when the ITA finds "critical circumstances” it is permitted to order suspension of liquidation of subject merchandise entered on or after the date ninety days before suspension was first ordered. This would, of course, extend the provisional remedy of suspension to a duration of 210 days. Such ninety day extension, however, is expressly authorized in the GATT Subsidies code at article 5 part 9.

      . Further seeking to demonstrate that there was no inadvertence on the part of Congress in enacting § 606, plaintiff directs the court's attention to two letters. The first letter was written by the spokesman of a lobbying group to the Department of Commerce and describes the group's discussions with legislators concerning GATT and § 606. The second letter is a correspondence from Senator John Heinz, the proponent of § 606, to the Secretary of Commerce containing the Senator comments on the proposed regulation that would implement § 606. Like the first letter, Senator Heinz's letter was written after § 606 was enacted. Plaintiff asserts that it offers the letters not to demonstrate the legislative intent regarding suspension of liquidation under § 606, but merely to demonstrate that the suspension issue was not inadvertently overlooked. Plaintiff's argument here, even as to the issue of inadvertence, goes to legislative intent. Such post enactment statements, even those by the author of the legislation, cannot be considered by the court, because the statements cannot demonstrate intent at the time of passage. See Selman v. United States, 204 Ct.Cl. 675, 685 n. 6, 498 F.2d 1354, 1359 n. 6 (1974); (“[N]o member of the legislature, outside of the legislature, is empowered to speak with authority for that body”).

      . Plaintiff seems to have retreated somewhat from its previous concession that its interpretation of § 606 is not GATT consistent. Plaintiffs interpretation, if not an absolute violation of GATT, is close enough so that Congress would have discussed it, if it had been intended.

      . The proposed regulation for § 606 states that if a countervailing duty proceeding is postponed under the statute for the duration of a simultaneous antidumping case, the Secretary of Commerce will:
      End any suspension of liquidation ordered in the preliminary determination not later than 120 days after the date of publication of the preliminary determination, and not resume it unless the ITC publishes a final affirmative determination, or, if the merchandise is from a country not entitled to an injury test for the merchandise, the Secretary publishes a countervailing duty order.
      50 Fed.Reg. 24,225 (1985).