author: SUHRHEINRICH, District Judge.

text:
    Aaron SMITH, Plaintiff, v. Fred YONO and James Haney, individually and in their representative capacities as police officers for the Township of Van Buren, John Orskey, Larry Crider and Verne Taylor, individually and in their official capacities as police officers for Van Buren Township, the City of Belleville, Defendants.
    Civ. A. No. 84-0981.
    United States District Court, E.D. Michigan, S.D.
    April 30, 1985.

      Juan A. Mateo, Southfield, Mich., for plaintiff.
    Donald L. Payton, Southfield, Mich., Bernard P. McClorey, Livonia, Mich., Gerald Hemming, Canton, Mich., for defendants.
   MEMORANDUM OPINION

SUHRHEINRICH, District Judge.

The original complaint in this action was filed on February 20, 1984 in Wayne County Circuit Court. Plaintiff is seeking damages from individual and municipal defendants in connection with injuries received and alleged constitutional deprivations arising out of his arrest and incarceration on February 22, 1982. The matter is presently before the Court on defendants’ motion for summary judgment. The complaint includes four primary counts which allege: (1) deprivation of constitutional rights in violation of 42 U.S.C. § 1983, (2) assault and battery, (3) false arrest and imprisonment, and (4) violation of certain duties and standards enumerated in the Michigan Administrative Rules.

The precise factual background underlying the subject incident is disputed by the parties. Based upon statements of facts submitted by both plaintiff and defendants, as well as affidavits in support of these statements, the basic factual background of the subject incident may, however, be summarized as follows.

Plaintiff Aaron Smith and several of his friends were at the Tin Lizzie Restaurant in Van Burén Township on the afternoon and evening of February 22, 1982. It appears that officers from the Van Burén Township Police Department responded to complaints of disturbances at- the restaurant on two occasions on this date. Officers from the City of Belleville also responded to “back-up” the Van Burén police officers. The City of Belleville police officers, Taylor and Crieder, responded to the second complaint. Officers Yono and Haney, from Van Burén Township, also responded to this second complaint. Subsequently, Officer Yono made the decision to arrest Aaron Smith when Smith attempted to grab or strike Officer Yono from the rear. The parties dispute the amount of resistance which Smith exerted upon his arrest.

Plaintiff’s version of this incident, as outlined in the complaint, alleges that four officers grabbed onto the plaintiff and escorted him out the door of the restaurant. Further, that the officers used excessive force and broke plaintiff’s arm in escorting him out of the restaurant. Plaintiff’s deposition indicates he does not know which of the officers had a hold of his arm. (See plaintiff’s deposition at 44.) The deposition testimony of Officers Yono, Haney and Taylor indicate that Yono had arrested and was escorting Mr. Rorabacher, a friend of plaintiff, toward the door when Mr. Smith was observed grabbing at Police Officer Yono. At this point, Officer Yono directed the City of Belleville police officers, Taylor and Crieder, to arrest Aaron Smith. The Belleville officers assert that they did not have authority to make the arrest in Van Burén Township, but were acting pursuant to Officer Yono’s direction in making the arrest.

Plaintiff further alleges that he complained to the officers arresting him, and when subsequently taken to the Van Burén jail, to officers at that facility, that he had a broken arm and required medical attention. Subsequently, Smith was transported to the Canton Township “lock up” where he was sent for overnight detention. Plaintiff alleges he also informed the officers at the Canton Township facility of his broken arm, and they also refused to allow him treatment. Allegedly, plaintiff was denied access to medical treatment by all defendants. Further, that as a result of the incident plaintiffs arm was indeed broken, and was permanently damaged.

I.

The Court must first consider the potential liability of municipal defendants City of Belleville, Van Burén Township and Canton Township. In this regard, the Court is guided by the recent Michigan Supreme Court decision in Ross v. Consumers Power, 420 Mich. 567, 363 N.W.2d 641 (1985). In Ross, the Michigan Supreme Court thoroughly re-examined governmental immunity as it applies to state agencies and municipalities. Under the guidelines issued in the Ross opinion, the Michigan Supreme Court decided nine pending governmental immunity cases. The governmental immunity analysis included in Ross is applicable to pendent state claims advanced in this action by the plaintiff.

The liability of the municipal defendants based upon state law claims is premised upon a vicarious liability theory. The Ross court summarized potential municipal liability under this theory as follows: “A governmental agency can be held vicariously liable only when its officer, employee, or agent, acting during the course of employment and within the scope of authority, commits a tort while engaged in an activity which is nongovernmental or proprietary or which falls within a statutory exception.” Ross v. Consumers Power, 420 Mich, at 625, 363 N.W.2d 641. The court went on to cite Sherbutte v. Marine City, 374 Mich. 48, 50, 130 N.W.2d 920 (1964), paraphrasing that decision as follows: “The city cannot be held vicariously liable for torts of its police officers committed during the course of an arrest because the officers were engaged in police activity which is a governmental function entitled to immunity.” Ross v. Consumers Power, 420 Mich, at 625, 363 N.W.2d 641. The test which the Supreme Court announced requires satisfaction of three parts to impart vicarious liability upon a governmental agency. The agent must (1) be acting during the course of employment, (2) within the scope of his authority, and (3) while engaged in a nongovernmental or proprietary function.

Here, the alleged wrong occurred while police officers were arresting, “booking”, and incarcerating the plaintiff. Thus, the officers were acting during the course of their employment and within the scope of their authority. Finally, numerous cases hold, and the Court finds, that the performance of police activities is a governmental function. The Supreme Court applied the Ross principles to the matter of Trezzi v. City of Detroit one of the nine companion cases embraced in the Ross decision. In the Trezzi matter, the court determined that police functions were mandated or authorized by state constitution, state statute and city charter, and therefore constituted a governmental function. Ross v. Consumers Power, 420 Mich, at 653, 363 N.W.2d 641.

Plaintiff resists summary judgment in favor of the municipal defendants arguing that the conduct of the individual police officers was nongovernmental. Plaintiffs argument on this point is that the conduct of the officers in using excessive force during the arrest was nongovernmental and beyond the scope of immunity protection. This argument must fail, however, as a clear reading of the Ross opinion militates against such an analysis. In Ross, the Michigan Supreme Court focused upon the activity being engaged in at the time the tort was committed to determine the existence of a governmental function. “However, if the activity in which the tortfeasor was engaged at the time the tort was committed constituted the exercise or discharge of a governmental function (i.e., the activity was expressly or impliedly mandated or authorized by constitution, statute, or other law), the agency is immune pursuant to § 7 of the Governmental Immunity Act.” Ross v. Consumers Power, 420 Mich, at 625, 363 N.W.2d 641 (emphasis supplied). Here, the activity being engaged in by the officers at the time the alleged torts were committed was the arrest of the plaintiff. Thus, as defendants were engaged in police activity at the time the tort was committed, the municipalities are protected by governmental immunity. As such, state law claims against the municipal defendants should be dismissed.

II.

The next issue which must be addressed by the Court is the application of governmental immunity standards to the individual police officers. The Ross governmental immunity test applicable to individual police officers was expressed as follows: “lower level officials, employees, and agents are immune from tort liability only when they are: (1) acting during the course of their employment and acting or reasonably believe they are acting, within the scope of their authority; (2) acting in good faith; and (3) performing discretionary, as opposed to ministerial acts.” Ross v. Consumers Power, 420 Mich, at 633-34, 363 N.W.2d 641.

The key inquiry here is determining whether the police officers were engaged in discretionary or ministerial acts. The Court is guided by the Michigan Supreme Court’s discussion and decision in Ross pertaining to the companion case of Zavala v. Zinser. There the court noted: “The determination of what type of action to take, e.g., make an immediate arrest, pursue a suspect, issue a warning, await back-up assistance, etc., is a discretionary, decisional act entitled to immunity. Once that decision has been made, however, the execution thereof must be performed in a proper manner, e.g. the arrest must be made without excessive force ...” Ross v. Consumers Power, 420 Mich. at 659-60, 363 N.W.2d 641 (emphasis supplied).

Applying these principles, the Court concludes that the determination to arrest plaintiff was discretionary or decisional and the individual officers were entitled to immunity in reaching that decision. The actual execution of the decision, however, is a ministerial act which the officers are required to perform in a nontortious manner. Defendant cites the court to Brewer v. Perrin, 132 Mich.App. 520, 349 N.W.2d 198 (1984). There the Michigan Court of Appeals found that a police officer may use reasonable force when making an arrest. The court noted: “The measure of necessary force is that which an ordinarily prudent and intelligent person with the knowledge and in the situation of the arresting officer would have deemed necessary.” Brewer, 132 Mich.App. at 528, 349 N.W.2d 198. This objective standard is properly measured by the trier of fact and the issue may be disposed of on summary judgment motion based upon the record in this case.

Based upon the guidelines established in Ross, individual police officers employing excessive force in an arrest are not immune from tort liability. The deposition testimony of Officers Yono, Haney and Taylor establishes that Officers Taylor and Crieder were escorting plaintiff from the restaurant at the time the alleged battery took place. (See Depositions of Yono at 22-23; Haney at 29-30; Taylor at 49.) Deposition testimony and an affidavit submitted by plaintiff Smith states that four officers escorted Smith from the restaurant. (Smith Deposition at 41; Affidavit at 1.) Upon this record, summary judgment on the assault and battery count as to the individuals officers, Yono, Haney, Taylor and Crieder, would be inappropriate.

For reasons similar to those discussed above and pertaining to the assault and battery count, the individual officers may not be dismissed as to plaintiffs claim as to false arrest and false imprisonment. Governmental immunity does not protect the individual officers from the false arrest and imprisonment claim. The elements of a false arrest require that the arrest be made without probable cause. See Lewis v. Farmer Jack Division, Inc., 415 Mich. 212, 327 N.W.2d 893 (1982). The Michigan Court of Appeals has articulated the standard for false arrest as follows: “A police officer acting in good faith with probable cause within the scope of his authority is not liable for false arrest or false imprisonment ...” Blackmen v. Cooper, 89 Mich.App. 639, 280 N.W.2d 620 (1979). In short, false arrest would require a showing of a lack of good faith, or bad faith, on the part of an officer. This is consonant with the three part immunity test established in Ross. The record established in the case, therefore, requires that summary judgment be denied. While little evidence has been brought forth by the plaintiff tending to prove bad faith on the part of the arresting officers, it cannot be said that no issue of material fact remains. Therefore, the individual police officers may not be dismissed on summary judgment motion as to plaintiffs state law claim of false arrest and false imprisonment.

For the same reasons as stated above, the Court concludes that allegations in Count IV may not be dismissed as to the individual police officers on summary judgment motion. Issues exist pertaining to the good faith of the police officers in attending to the plaintiff while a detainee consistent with the provisions embraced in the Michigan Administrative Rules. Many of the alleged breaches of duty and negligent behavior of the police officers included in this Count of the complaint and relating to plaintiffs treatment while incarcerated are based upon ministerial decisions not protected under the governmental immunity statute.

III.

The final portion of plaintiffs complaint which the Court must consider, pursuant to this motion, are allegations that both municipal and individual defendants violated plaintiffs civil rights. Plaintiff seeks redress for deprivation of his right to be free from unreasonable search and seizure, his right to be free from illegal and corporal punishment and his right to adequate medical attention.

Failure to provide adequate medical attention may give rise to an action pursuant to § 1983 for violation of Eighth Amendment rights. In Estelle v. Gamble, 429 U.S. 97, 104, 97 S.Ct. 285, 291, 50 L.Ed.2d 251, 261 (1976), the Court framed the test for an Eighth Amendment violation as follows:

We therefore conclude that deliberate indifference to serious medical needs of prisoners constitutes “unnecessary and wanton infliction of pain.” Gregg v. Georgia, [428 U.S. 158], supra at 182-83, 49 L.Ed.2d 859, 96 S.Ct. 2909 (joint opinion), prescribed by the Eighth Amendment. This is true whether the indifference is manifest by prison doctors in their response to the prisoners’ needs or by prison guards in intentionally denying or delaying access to medical care or intentionally interfering with the treatment once proscribed. Regardless of how evinced, deliberate indifference to a prisoner’s serious illness or injury states a cause of action under § 1983____
In order to state a cognizable claim, a prisoner must allege acts or omissions sufficiently harmful to evidence a deliberate indifference to medical needs.

Estelle v. Gamble, 429 U.S. at 104-06, 97 S.Ct. at 291-92, 50 L.Ed.2d at 260-61.

Plaintiff alleges that he repeatedly requested medical attention while in police custody from Van Burén and Canton Township police officers, and was denied proper medical attention. (See Smith Deposition at 47.) Based upon pleadings and supportive materials submitted to the Court thus-far, it cannot be said that no genuine issue of material fact remains regarding the individual officer’s liability on this count.

Plaintiff also alleges deprivation of constitutional rights protected under § 1983 by reason of an unlawful arrest and excessive force used during his arrest. (See Complaint at 3.) Again, the claims of the plaintiff have not been sufficiently rebutted to warrant disposition on summary judgment motion.

Finally, plaintiff seeks to hold municipal defendants Canton Township, Van Burén Township and the City of Belleville liable under the § 1983 claims enumerated above. In this analysis, the Court is guided by the principles enumerated in Monell v. Dept. of Social Services of the City of New York, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978). In Monell, the Supreme Court held that municipalities may be sued under § 1983 for the implementation of an unconstitutional policy, statute or custom. Local governmental units may not be held liable solely on a theory of respondeat superior. Id. at 691, 98 S.Ct. at 2036. See also, Brandon v. Holt, — U.S. ---, 105 S.Ct. 873, 83 L.Ed.2d 878 (1985); Marchese v. Lucas, 758 F.2d 181 (6th Cir.1985).

Plaintiff’s complaint alleges that the municipal defendants “should have known of the vicious, violent, wanton and malicious propensities of the defendant officers, including their propensity to, either alone or in concert, violate the rights of citizens, detainees or arrestees held in their custody ... [and further that the defendant municipalities] failed to adequately train, supervise or discipline the defendant officers.” (Complaint at ¶ 19, 20 and 21.) Plaintiff has supplied the Court with few or no facts to support allegations embraced in the pleadings. In its response brief in opposition to summary judgment, plaintiff argues that the type and amount of training a police officer receives necessary to avoid an inference of police misconduct is properly a jury question. Rymer v. Davis, 754 F.2d 198, 201 fn. 1 (6th Cir.1985). Where a question of fact regarding the adequacy (or inadequacy) of police training exists, the Court agrees the issue would properly be reserved for jury determination. Here, however, plaintiff has advanced no facts upon which a finding that inadequate police training existed or that the municipal defendants should have known about violent propensities of the officers. Indeed, plaintiff has failed to even allege in what fashion the officers were trained and how that training was defective.

In Fecteau v. Unknown Officers and Agents of Clinton Twp., 596 F.Supp. 580 (E.D.Mich.1984), the court was confronted with a similar issue. There, plaintiff filed a complaint alleging local governmental responsibility for police officer misconduct. In evaluating the merits of a motion to dismiss, the court stated:

The Court believes that it is necessary that in addition to allegations concerning a single incident involving the plaintiff, the plaintiff must plead some facts which indicate the particular manner in which the governmental entity adopted an impermissible policy____ The Court believes that this policy effectuates the policies of F.R.Civ.P. 8(a)(2) for without such pleadings, defendants would not have fair notice of what the plaintiff’s claim is and the grounds on which it rests. Moreover, the Court is of the opinion that this requirement serves to provide a mechanism for identifying Section 1983 claims early in the course of litigation____

Fecteau v. Unknown Officers and Agents of Clinton Twp., 596 F.Supp. at 583.

The Court agrees with Judge Harvey’s reasoning in Fecteau. Plaintiff will be given the opportunity to provide the Court with facts in support of its § 1983 claim against the defendant municipalities. This factual showing should illustrate the particular manner in which the municipalities adopted impermissible policies or failed to properly train the officers.

IV.

In conclusion, and for the reasons stated above:

(1) Defendants’ Motion for Summary Judgment in favor of municipal defendants City of Belleville, Van Burén Township and Canton Township as to all state law claims included in the complaint is GRANTED.
(2) Defendants’ Motion for Summary Judgment in favor of individually named police officers shall be DENIED as to all counts.
(3) Defendants’ Motion for Summary Judgment as to alleged § 1983 violations against municipal defendants shall be GRANTED, without prejudice, however, to enable plaintiff to submit to the Court factual evidence illustrating the particular manner in which the municipalities adopted impermissible policies. Said evidence shall be submitted to the Court within ten days of this Order.

An appropriate order in conformance with this opinion shall be entered.


source: Caselaw Access Project

author: HUDSPETH, District Judge.

license: Public Domain

text:
    UNITED STATES of America, Plaintiff, v. Jacob MARTIN, Armando Gomez-Leon, Jr., Martin Gomez-Leon, Victor Manuel Chavira and Raymond Gomez-Leon, Defendants.
    No. EP-85-CR-24.
    United States District Court, W.D. Texas, El Paso Division.
    May 6, 1985.

      Thomas J. McHugh, Asst. U.S. Atty., El Paso, Tex., for plaintiff.
    Frank T. Ivy, Austin, Tex., for Jacob Martin.
    Joseph (SIB) Abraham, Jr. and Charles Roberts, El Paso, Tex., for Armando Gomez-Leon, Jr. and Martin Gomez-Leon.
    Stanley Serwatka, El Paso, Tex., for Victor Manuel Chavira.
    Scott Segall, El Paso, Tex., for Raymond Gomez-Leon.
   ORDER DENYING DEFENDANTS’ MOTION TO SUPPRESS EVIDENCE

HUDSPETH, District Judge.

The five Defendants in this case were arrested on February 3, 1985 in the garage of a home at 3425 Tascosa in El Paso, Texas. When arrested, they were in the act of loading several hundred pounds of marihuana into the back of a Dodge van. Asserting that they were the victims of an illegal search and seizure, all Defendants have moved to suppress the marihuana as evidence in their trial.

In late January 1985, Agents of the Drug Enforcement Administration received information from a confidential informant that Defendant Jacob Martin had rented storage space at National Self-Storage, Inc. in El Paso, Texas, and that he was storing approximately 500 pounds of marihuana in that storage facility. Armed with an administrative subpoena, DEA Agents went to the National Self-Storage facility at 9447 Diana Drive in El Paso, and examined records which indicated that storage space had been rented in the maiden name of Martin’s wife on January 26, 1985. Accompanied by the manager of the storage facility, the agents went to Storage Space No. E-75 and detected the distinctive odor of marihuana emanating from the door of the storage room. Surveillance was then established on the storage facility during all hours that it was open for the conduct of business.

On Sunday morning, February 3, 1985, DEA Agents on surveillance duty observed Defendants Jacob Martin and Victor Chavira drive a pickup truck into the storage facility and back it up to the door of Space No. E-75. As agents watched, Martin and Chavira proceeded to remove a number of full plastic garbage bags from the storage room and load them into the pickup. The agents knew from experience that marihuana is frequently packaged and transported in garbage bags of this type. After filling the bed of the pickup with the garbage bags, Martin and Chavira covered them with a tarpaulin so that they were not visible. At approximately 9:45 a.m., Martin and Chavira drove the pickup away from the storage facility and they were followed to the residence at 3425 Tascosa. Martin and Chavira were joined at the residence by a third man, who assisted them in opening the garage and backing the pickup truck inside. Since the garage door was left up, agents on surveillance were able to see Martin and Chavira unloading the garbage bags from the pickup inside the garage. A few minutes later, two new vehicles arrived at the residence: a green Chevrolet Nova and a yellow Dodge van. The occupants of these vehicles entered the garage through the open door. The agents then observed the pickup truck being moved to the other side of the garage, and the Dodge van being backed up to the open door. The van came to rest with the rear of the vehicle actually inside the garage door, and all five men were still inside the garage. Although the presence of the van made it more difficult to see inside the garage, agents on surveillance looking under and around it were able to see that the five men in the garage were loading the garbage bags in boxes of some type, and placing the boxes in the back of the Dodge van. Concluding that the marihuana was being loaded in the van for delivery elsewhere, the agents decided to seize the marihuana and arrest the Defendants. However, they were immediately faced with a practical problem, to wit: how to get into the garage without endangering their own safety or allowing the Defendants to escape. Direct entry through the garage door was not possible because it was effectively blocked by the presence of the Dodge van. Furthermore, it was not practical for the agents to announce their presence and demand that the Defendants surrender for at least two reasons. First, one or more of the Defendants might have escaped through the back of the house. Second, the agents had information that Martin had been heavily armed at the time of a previous arrest for drug violations. In light of the situation, therefore, Special Agent Seib of the DEA took a third course of action. He tried the front door of the house, and found that it was unlocked. Stepping inside, he observed a door into the garage no more than six feet from the front door of the house. He stepped through this door and advised the five Defendants that they were under arrest.

It is clear from the outset that four of the five Defendants have no standing to challenge the search of the garage or the seizure of the marihuana. A defendant’s Fourth Amendment rights cannot be violated by a search unless he has a legitimate expectation of privacy in the area searched. Rakas v. Illinois, 439 U.S. 128, 99 S.Ct. 421, 58 L.Ed.2d 387 (1978). While an ownership or possessory interest in the premises is not necessarily required, the mere legitimate presence on the searched premises by invitation or otherwise is not sufficient to create a protectable expectation of privacy. Rakas v. Illinois, supra at 142-43, 99 S.Ct. at 429-30; United States v. Meyer, 656 F.2d 979, 981 (5th Cir.1981), cert. denied — U.S. ---, 104 S.Ct. 507, 78 L.Ed.2d 697 (1983). Defendants Armando Gomez-Leon, Jr., Martin Gomez-Leon, Victor Manuel Chavira and Raymond Gomez-Leon have failed to show any interest in the premises at 3425 Tascosa which would confer upon them any standing to object to its search. Their motions to suppress evidence must be denied.

Defendant Jacob Martin, on the other hand, took the witness stand at the hearing on this motion to suppress evidence and testified that he had “subleased” the house and garage from the legal lessee, one Johnny Henderson, and had paid Henderson the sum of $200.00 for the right to use the house and garage for a period of one week. This testimony is sufficient to confer upon Martin the right to object to the search of the garage and the seizure of the marihuana.

No warrant was obtained by the agents prior to their seizure of the marihuana and the arrest of the Defendants. It is well-settled law that the warrantless entry into a home for the purpose of either arrest or search is prohibited by the Fourth Amendment unless both probable cause and exigent circumstances are present. Welsh v. Wisconsin, 466 U.S. 740, 104 S.Ct. 2091, 2093, 80 L.Ed.2d 732 (1984); Payton v. New York, 445 U.S. 573, 583, 100 S.Ct. 1371, 1378, 63 L.Ed.2d 639 (1980). In determining whether or not probable cause exists for a search by law enforcement officers, the Court must consider the totality of the circumstances. Illinois v. Gates, 462 U.S. 213, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983); United States v. Mendoza, 722 F.2d 96 (5th Cir.1983). In this case, the Court finds that the informer’s tip as supplemented by the officers’ own investigation and personal observation furnished the probable cause necessary to search the van and the garage. The Court also finds that exigent circumstances existed which justified the failure of the officers to obtain a warrant in advance. The marihuana was in the process of being loaded into a movable vehicle, which was likely to be driven away at almost any given moment. Carroll v. United States, 267 U.S. 132, 45 S.Ct. 280, 69 L.Ed. 543 (1925); Chambers v. Maroney, 399 U.S. 42, 90 S.Ct. 1975, 26 L.Ed.2d 419 (1970). Furthermore, Agent Seib was justified in gaining entrance to the garage through the front door of the house, because any other course of action would have exposed the agents to danger if any of the Defendants were armed. This was exactly the kind of “emergency or dangerous situation” that the Supreme Court describes as “exigent circumstances.” To hold that Agent Seib violated the Fourth Amendment by taking a six-foot walk through the vestibule of an empty house to gain access to the garage under these circumstances would amount to a classic elevation of form over substance. Because the Court finds that both probable cause and exigent circumstances existed to justify this warrantless entry, the Defendants’ motion to suppress evidence must be denied.

Defendant Martin also complains about the search of the records of National Self-Storage, Inc. without his consent. Martin has no standing to object to this inspection of the storage company’s records. See United States v. Payner, 447 U.S. 727, 100 S.Ct. 2439, 65 L.Ed.2d 468 (1980); United States v. Miller, 425 U.S. 435, 96 S.Ct. 1619, 48 L.Ed.2d 71 (1976).

It is therefore ORDERED that the Defendants’ Motion to Suppress Evidence in the above-styled and numbered cause be, and it is hereby, DENIED.


author: LEVAL, District Judge.

text:
    Josefina GONZALEZ, et al., Plaintiffs, v. ST. MARGARET'S HOUSE HOUSING DEVELOPMENT FUND CORPORATION, et al., Defendants.
    No. 84 Civ. 1697(PNL).
    United States District Court, S.D. New York.
    May 6, 1985.

      Norman Siegel, MFY Legal Services, Inc., New York City (Rose Ann Magaldi, New York City, of counsel), Kalman Finkel, Attorney-in-Charge, Civ.Div., The Legal Aid Society, John E. Kirklin, Director of Litigation, Civil Appeals & Law Reform Unit, New York City (Helen Hershkoff, Scott A. Rosenberg, New York City, of counsel), Estroff, Waldman & Poretsky, Jonathan D. Siegfried, Mark Olinsky, New York City, for plaintiffs.
    Rudolph W. Giuliani, U.S. Atty., S.D. N.Y., New York City (Richard W. Mark, Asst. U.S. Atty., New York City, of counsel), for defendants U.S. Dept, of Housing and Urban Development and Samuel R. Pierce, Jr., as Secretary of U.S. Dept, of Housing and Urban Development.
    Carter, Ledyard & Milburn, New York City (Louis L. Stanton, Vincent MonteSano, Donald F. Simone, New York City, of counsel), for defendant St. Margaret’s House Housing Development Corp.
   MEMORANDUM AND ORDER

LEVAL, District Judge.

Plaintiffs are elderly tenants challenging the imposition by the defendant of a mandatory meal service charge as a condition of occupancy at St. Margaret’s House Housing Development Fund Corporation, a low income housing project with 249 units in New York City. They move under Fed. R.Civ.Pro. 15(a) for leave to amend the complaint to include a claim of illegal tying under § 1 of the Sherman Act. Plaintiffs have previously amended the complaint twice.

Plaintiffs claim illegal tying, in that the tying product is subsidized rental apartments, while the tied product is the mandatory meal service plan. Occupancy at St. Margaret’s is conditioned on the occupant’s purchase of meal service.

As to the issue of market power, plaintiffs argue that decent, affordable rental housing for the elderly and handicapped in lower Manhattan is very scarce. (Because of HUD subsidies, no occupant pays more than 30% of his adjusted income for housing.) The alleged anticompetitive effect is twofold. Other providers of prepared foods and meal services are foreclosed from competing for the food dollars of the St. Margaret’s occupants. The occupants are foreclosed from choosing the source of their food.

Finally, plaintiffs contend the tying arrangement has a “not insubstantial” effect on interstate commerce. Yentsch v. Texaco, Inc., 630 F.2d 46, 57 (2d Cir.1980) (Oakes, J.) (citing Fortner Enterprises, Inc. v. United States Steel Corp., 394 U.S. 495, 501, 89 S.Ct. 1252, 1257, 22 L.Ed.2d 495 (1969).

They point to the occupants’ aggregate expenditure of $300,000 annually on mandatory meal service, arguing that these meals might have been consumed at another establishment and might have involved different foods, thereby affecting the movement of food stuffs in commerce. See McLain v. Real Estate Bd. of New Orleans, Inc., 444 U.S. 232, 241-43, 100 S.Ct. 502, 508-09, 62 L.Ed.2d 441 (1980). Also they point to federal financial support used in building the kitchen and cafeteria in which the meal plan is operated, and to federal funds used to build the St. Margaret’s apartment building.

Leave to amend is to “be freely given when justice so requires.” Fed.R.Civ.Pro. 15(a). Foman v. Davis, 371 U.S. 178, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962). Absent a frivolous or patently insufficient claim, it is not the function of the court on a motion to amend to examine the substantive merits of plaintiffs’ claim. Lerman v. Chuckleberry Publishing Inc., 544 F.Supp. 966, 968 (S.D.N.Y.1982) (Werker, J.). Liberality in granting leave to amend is encouraged where no prejudice or disadvantage is suffered by the opposing side. If it were simply a matter of amending the complaint to allege an additional cause, I would freely permit it (notwithstanding the weakness of plaintiffs’ argument that this practice has a sufficient effect on interstate commerce to implicate the antitrust laws).

But prejudice to the adverse party may be a valid ground for refusal to allow an amendment. Zenith Radio Cory, v. Hazeltine Research, Inc., 401 U.S. 321, 330-31, 91 S.Ct. 795, 802, 28 L.Ed.2d 77 (1971). The unusual posture of the parties will result in serious' prejudice to the defendant if the motion is granted. The addition of such an antitrust claim will broaden tremendously the evidentiary issues and the need for extensive third-party discovery. It will cause great delay. Delay works a serious detriment to St. Margaret’s for the following reason: Plaintiffs have refused to pay the mandatory meal charges during the pendency of this action. Defendant’s attempts to enforce their contractual obligation to pay meal charges in state court through summary proceedings were blocked on plaintiffs’ application through a stay by reason of the pendency of this action. Thus, the plaintiffs have achieved a position whereby they are withholding payment throughout the pendency of the action while insulating themselves from judicial review of the lawfulness of such withholding. They have, in effect, achieved a preliminary injunction without a bond and without demonstrating entitlement to a preliminary injunction under the standards of Jackson Dairy, Inc. v. H.P. Hood & Sons, 596 F.2d 70 (2d Cir.1979).

Nancy Serpico, Administrator of St. Margaret’s House, states in her affidavit that St. Margaret’s meal plan has suffered deficits each year since 1981, ranging from $44,877 to $124,524 a year. Ms. Serpico indicated that the failure of plaintiffs to pay the meal charges has resulted in growing deficits which may force the termination of the program. Such a termination would be to the detriment of all the residents in St. Margaret’s who have not joined in this action and willingly take part in the mandatory meal program. The impact on defendant of the plaintiffs’ tactic has been exacerbated by a letter from a plaintiff to other St. Margaret’s residents encouraging them to join in the strike by not paying the mandatory meal charge. (Serpico Affid., II7.)

The rule of liberality of amendment does not contemplate such circumstances. If amendment is permitted the defendant will be irremediably harmed by the delays that will result from the litigation of the antitrust action. There is no practical likelihood of defendant recovering the back meal charges from the non-paying residents if defendant prevails in the action. Throughout the pendency of the action, plaintiffs are treating themselves to the benefits of ultimate victory in the lawsuit which defendant will, as a practical matter, be unable to recoup if plaintiffs lose. On the other hand, if plaintiffs win, they will be able to recover of the defendant. It is simply unfair to the defendant to burden the litigation with a time consuming antitrust claim requiring extensive third-party discovery while plaintiffs take the fruits of unearned victory in the meantime. Furthermore, given the weakness of the claim of substantial effect on commerce, the harm to defendant would be for a cause that plaintiffs have little likelihood of vindicating.

Leave to amend the complaint is accordingly denied.

SO ORDERED.

      . I recognize that plaintiffs represent they will be ready in no more than 90 days to proceed to trial on the antitrust claim. Two problems remain. Plaintiffs may well underestimate the difficulty and time involved in doing the third-party discovery involved in the antitrust claim. Also plaintiffs’ readiness is not the only issue. Plaintiffs may not deprive defendant of the opportunity to prepare adequately to defend such a claim, which is likely to consume a substantially longer period.

      . I might well permit the amendment if plaintiffs reversed their payment strike and undertook to make defendant whole during pendency of the litigation.


author: MISHLER, District Judge.

text:
    Stephanie WITTEN, (Stephanie Whitten), Plaintiff, v. Winston E. PITMAN, Defendant. UNITED STATES of America, Plaintiff, v. SEVENTY ONE THOUSAND THIRTY DOLLARS IN UNITED STATES CURRENCY, Defendant.
    Nos. 82-0505-Civ (JE)(JM), 82-6175-Civ (JE)(JM).
    United States District Court, S.D. Florida.
    May 10, 1985.
    Kogen & Kogen, P.A., Miami, Fla., for Stephanie Witten; Max B. Kogen, Miami, Fla., of counsel.

      Stanley Marcus, U.S. Atty., S.D. Fla., Robert Rosenberg, Asst. U.S. Atty., Miami, Fla., for the U.S.
   Memorandum of Decision and Order

MISHLER, District Judge.

On October 4, 1981, U.S. Customs Agents assigned to the U.S. Customs Service at Nassau, Bahamas, seized the sum of $71,030 that was in the purse of Stephanie Witten claiming that the said sum was being brought into the United States in violation of 31 U.S.C. § 1101 (as amended 31 U.S.C. § 5316) and subject to forfeiture under 31 U.S.C. § 1102 (as amended 31 U.S.C. § 5317). The money was seized from Ms. Witten’s handbag while she was in the U.S. Customs Service area at the airport of Nassau, Bahamas before she boarded an Eastern Airlines flight to Ft. Lauderdale. At the time of seizure, Witten had been precleared for boarding and was in the U.S. Customs waiting lounge awaiting her flight.

On March 16, 1982, Witten filed a complaint against the District Director of the Customs Service, as an agent for the U.S. Customs Service (Case No. 82-0505 CivJE), charging him with: (1) conversion, (2) violating her right to due process in failing to either promptly return the money or initiate a civil forfeiture proceeding, and (3) conducting an unreasonable search in violation of her Fourth Amendment right.

The government filed a complaint for forfeiture in rem on March 25, 1982 (Case No. 82-6175-Civ-JE). Ms. Witten filed her claim as the rightful possessor of the money (Case No. 82-0505-Civ-JE).

The court consolidated the cases, for trial and they were tried to the court without a jury. The court finds:

On April 23, 1974, the United States and the Government of the Commonwealth of the Bahamas signed an agreement granting the United States the right to maintain a Customs Office in the Bahamas to examine passengers who “are subject to preclearance, for the purpose of establishing and enforcing penalties for violations of [its customs, immigration, agricultural and public health] laws and regulations upon arrival in the United States.” Agreement Between the Government of the United States of America and the Government of the Commonwealth of the Bahamas on Preclearance, Art. VI, April 23, 1974.

In July, 1981, Ms. Witten was living in Ft. Lauderdale, Florida with John Edward Poulsen. In 1974, Mr. Poulsen had been convicted before a British court in London of possessing hashish and had served a year in jail. During the summer of 1981, Ms. Witten visited London, Denmark and Thailand with Poulsen. She returned to the United States from Thailand in August, 1981. On October 2, 1981, Ms. Witten left the United States to go to the Bahamas to meet Poulsen, who was flying there from England. On October 3, 1981, U.S. Customs in Nassau, Bahamas were advised that British Customs in London had informed the Drug Enforcement Administration (“DEA”) that Poulsen had entered the United Kingdom carrying in excess of $70,-000 in cash and that he might be traveling with a white female companion named either Stephanie Whitaker or Stephanie Sweeting. DEA was informed that Poulsen and his traveling companion were suspected of having visited a “source country” and would probably enter the United States through Customs preclearance at Nassau, Bahamas on either October 2nd or 3rd.

On October 3rd, Poulsen arrived at the hotel, at which Ms. Witten was staying in Nassau, with $71,030 in currency. Both Poulsen and Witten had airline tickets for Eastern Airlines Flight 6694 which was scheduled to leave the Bahamas for Ft. Lauderdale, Florida on October 4th. Before she left the hotel for the airport on October 4th, Ms. Witten placed four envelopes in her handbag containing $29,850, $10,320, $25,550 and $4,810, respectively. Ms. Witten was aware of the money in her handbag at the time she left the hotel. The money was the proceeds of illegal transactions conducted by Poulsen. Ms. Witten was aware of the illegal transaction or transactions that produced the large sum of cash.

On the way to the airport Poulsen and Ms. Witten discussed means of avoiding detection in clearing Customs. It was agreed that they would enter different preclearance lines for examination by Customs inspectors. Ms. Witten appeared at the preclearance line of Customs Inspector David Hardman. She submitted a Customs Form 6059-B which, inter alia, asked whether she was carrying more than $5,000 in currency. She had marked the form “no” in response to that question (question 11). Hardman then asked her whether she was carrying more than $5,000 with her into the United States, to which she answered, “no.” At the time she submitted the form and at the time she answered in the negative, she was aware that she had $71,030 in four envelopes in her handbag. She intentionally and deliberately lied to Hardman. Ms. Witten was permitted to proceed to the U.S. Customs waiting lounge for boarding of the flight.

At about the time Hardman was preclearing Ms. Witten, Poulsen approached another preclearance line. He was recognized as the individual who was suspected of carrying in excess of $70,000 in cash and who was supposedly traveling with a female companion who was carrying heroin. When this information was brought to the attention of Customs Supervisory Inspector Bennett D. Kennedy, he checked with an Eastern Airlines employee and learned that Poulsen was traveling with Ms. Witten. Inspector Kennedy noticed that Poulsen and Ms. Witten separated and used different lines at the inspectors’ examining tables and purposely did not appear before the inspectors at the same time. He noticed that Ms. Witten was extremely nervous.

Inspector Kennedy directed Hardman to bring Ms. Witten to the Customs Office for an inspection of her baggage. Inspector Kennedy assigned Kathy Rodenburg, a Customs Officer, to examine Ms. Witten’s baggage. A search of Ms. Witten’s handbag revealed the four envelopes containing $71,030 in United States currency. An additional $510 was found in a bank book which Ms. Witten carried.

The money was Poulsen’s money. Poulsen used Ms. Witten as his courier, believing that the risk of detection was thereby lessened.

DISCUSSION

1. Border Crossing

Ms. Witten claims that the U.S. Customs area which was located on foreign soil was not a point of entry into the United States. The customs area set aside for inspection of travelers entering the United States from the Bahamas, pursuant to the treaty, is the only place at which such persons submit to inspection before landing in the United States. In determining whether the entry into the Customs area constituted a border crossing into the United States, we turn to 18 U.S.C. § 7(3) which defines “territorial jurisdiction” (as used in Title 18) as: “Any lands reserved or acquired for the use of the United States, and under the exclusive or concurrent jurisdietion thereof ..-. for the erection of a -... needful building.”

We note that 18 U.S.C. § 7(3) grants “special” territorial jurisdiction in criminal matters where the situs of the crime is outside the United States. See United States v. Erdos, 474 F.2d 157 (4th Cir.), cert. denied, 414 U.S. 876, 94 S.Ct. 42, 38 L.Ed.2d 122 (1973). We believe that ratification of the treaty between this country and the Commonwealth of the Bahamas was a grant to the United States of “special” territorial jurisdiction in carrying out the purpose of 31 U.S.C. § 1101. Consequently, Ms. Witten’s entry into the Customs area at the Nassau, Bahamas airport constituted a “border crossing” into the United States.

2. The Search and Seizure

It is clear that border searches may take place “not only at the border itself but at its functional equivalent as well.” Almeida-Sanchez v. United States, 413 U.S. 266, 272, 93 S.Ct. 2535, 2539, 37 L.Ed.2d 596 (1973).

The challenge to the validity of the search is premised on Ms. Witten’s claim, which we reject, that the search of her person and property was not a border search and thus required a warrant. From there Ms. Witten claims that the warrant-less search violated her Fourth Amendment right against unreasonable search and seizure.

A border search “is a longstanding, historically recognized exception to the Fourth Amendment’s general principle that a warrant be obtained.” United States v. Ramsey, 431 U.S. 606, 621, 97 S.Ct. 1972, 1981, 97 S.Ct. 1972 (1977). The right to conduct a border search without a warrant is based on the “right of the sovereign to protect itself by stopping and examining persons and property crossing into this country.” Id. 431 U.S. at 616, 97 S.Ct. at 1978; United States v. Mosquera-Ramirez, 729 F.2d 1352 (11th Cir.1984); United States v. Vega-Barvo, 729 F.2d 1341 (11th Cir.1984); United States v. Hidalgo-Gato, 703 F.2d 1267 (11th Cir.1983). Under all the circumstances the search and seizure of the money was reasonable. See United States v. Glaziou, 402 F.2d 8, 12 (2d Cir.1968), cert. denied, 393 U.S. 1121, 89 S.Ct. 999, 22 L.Ed.2d 126 (1969) (border searches “are restricted by requirement that they be reasonable”). Therefore, the search of Ms. Witten and seizure of the money was not a violation of her Fourth Amendment rights.

3. The Delay in Filing the Forfeiture Claim

Claimant asserts that the delay of 5V2 months in filing the forfeiture claim violated her right to due process citing United States v. $8,850 in United States Currency, 461 U.S. 555, 103 S.Ct. 2005, 76 L.Ed.2d 143 (1983). The argument is that the delay deprived her of a meaningful hearing and thus deprived her of her right to due process. In $8,850, the Court noted “we have not previously determined when a post-seizure delay may become so prolonged that the dispossessed property owner has been deprived of a meaningful hearing at a meaningful time.” Id. 461 U.S. at 562, 103 S.Ct. at 2011. The Court in $8,850 analogized the due process claim to the right “to a speedy trial once an indictment or other formal process has been issued” and invoked the four-part balancing test as set forth in Barker v. Wingo, 407 U.S. 514, 92 S.Ct. 2182, 33 L.Ed.2d 101 (1972) to determine if a due process violation had occurred. Id. 461 U.S. at 564, 103 S.Ct. at 2012.

The claimant has the burden of establishing the violation of her right to due process under Barker. In weighing the four part test under Barker, the court finds that the claimant failed to sustain her burden. Customs formally advised the claimant of its forfeiture claim on October 14, 1981. The claimant waived her right to petition for remission or mitigation on October 25, 1981. The delay from the time of waiver by the claimant to the time of filing the forfeiture complaint was approximately five (5) months. The claimant failed to assert her right to the money until she filed a complaint in this court on March 16,1982. The government instituted its action nine (9) days later. Moreover, the court’s finding that the money belonged to Poulsen and not to Ms. Witten disposes of her claim of prejudice due to delay'.

Witten’s complaint in Case No. 82-0505-Civ-JE is dismissed.

Forfeiture of the sum of $71,030 is granted the government in Case No. 82-6175-Civ-JE.

A judgment in the consolidated action will be filed.

This memorandum of decision and order contains findings of fact and conclusions of law required under Rule 52(a) Fed.R.Civ.P.

      . 31 U.S.C. § 1101 (as amended 31 U.S.C. § 5316) provides that anyone who knowingly brings more than $5,000 into the United States at one time must file a report which contains the information required in Customs Form 6059-B. 31 U.S.C. § 1102 (as amended 31 U.S.C. § 5317) authorizes seizure and forfeiture when such report "contains a material omission or misstatement.”

      . The court rejects her testimony that Poulsen had amazing luck in his gambling activities, as incredible.

      . Since Judge Eaton had apparently ruled, after an evidentiary hearing, that Ms. Witten had standing to assert a claim, we do not readdress the issue but rather consider Ms. Witten’s claim on the merits.

      . 31 U.S.C. § 1101 (as amended 31 U.S.C. § 5316) provides in pertinent part:
      [A] person or an agent or bailee of the person shall file a report ... when the person, agent or bailee knowingly____
      (a)(2) "receives monetary instruments of more than $5,000 at one time transported into the United States from or through a place outside the United States.”

      . The four factors under Barker are: length of delay, reason for delay, the defendant’s assertion of her right and the prejudice she suffered as a result of the delay.

      . The Court in United States v. $8,850 referred to "the value of allowing the Government time to pursue its investigation." 461 U.S. at 564, 103 S.Ct. at 2012. In reversing the Ninth Circuit Court of Appeals which found a violation of due process in an 18-month delay, the Court remanded the case and held that the claimant "has not asserted or shown that the delay prejudiced her ability to defend against the forfeiture." Id. 461 U.S. at 569, 103 S.Ct. at 2015.


author: MANOS, District Judge.

text:
    Daniel R. and Patricia C. McCarthy, Plaintiffs, v. UNITED STATES of America, Defendant.
    No. C78-1480.
    United States District Court, N.D. Ohio, E.D.
    May 15, 1985.
    Sheldon M. Sager, Stewart I. Mandel, McCarthy, Lebit, Crystal, Kleinman & Co., L.P.A., Cleveland, Ohio, for plaintiffs.
    John Siegel, U.S. Atty., Cleveland, Ohio, Jason Green, Trial Atty., Tax Div., Dept, of Justice, Washington, D.C., for defendant.
   MEMORANDUM OF OPINION

MANOS, District Judge.

On November 6, 1978, plaintiffs, Daniel R. and Patricia C. McCarthy, filed the above-captioned case against the United States of America challenging income tax deficiencies assessed and collected by the Internal Revenue Service (IRS) for fiscal years 1973 and 1974. Jurisdiction is invoked pursuant to 28 U.S.C. § 1346(a)(1). The case is currently before the court on cross-motions for partial summary judgment. For the following reasons, the plaintiffs’ cross-motion is denied and the Government’s cross-motion is granted.

This case involves the tax treatment of a professional baseball franchise purchased by a partnership. On March 22, 1973, an Ohio limited partnership purchased the New York Yankees baseball franchise. The plaintiff, Daniel R. McCarthy, owns a three (3) percent interest in this partnership and thus was required to include his pro rata share of the partnership’s gains or losses on his individual tax returns. For fiscal years 1973 and 1974, plaintiffs took amortization deductions for legal and accounting fees incurred in acquiring the franchise. The IRS denied these deductions. Plaintiffs paid the deficiencies assessed by the IRS and filed timely claims for refund. See 26 U.S.C. § 6511(a). The IRS denied the refund claims and this suit followed. See 26 U.S.C. § 6532(a).

The Government argues that the plaintiffs are not entitled to an amortization deduction for Mr. McCarthy’s pro rata share of the partnership’s attorney and accountant fees which were incurred in acquiring the New York Yankees franchise. This court agrees.

(a) Period of limitation on filing claim. —Claim for credit or refund of an overpayment of any tax imposed by this title in respect of which tax the taxpayer is required to file a return shall be filed by the taxpayer within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever of such periods expires the later, or if no return was filed by the taxpayer, within 2 years from the time the tax was paid. Claim for credit or refund of an overpayment of any tax imposed by this title which is required to be paid by means of a stamp shall be filed by the taxpayer within 3 years from the time the tax was paid.

Legal and accounting fees paid in connection with the acquisition of real or personal property are nondeductible capital expenditures. Woodward v. Commissioner of Internal Revenue, 397 U.S. 572, 575, 90 S.Ct. 1302, 1305, 25 L.Ed.2d 577 (1970); Cagle v. Commissioner of Internal Revenue, 539 F.2d 409, 415 (5th Cir.1976); Lanrao, Inc. v. United States, 422 F.2d 481, 484 (6th Cir.), cert. denied, 398 U.S. 928, 90 S.Ct. 1816, 26 L.Ed.2d 89 (1970); Goodfrey v. Commissioner of Internal Revenue, 335 F.2d 82, 85 (6th Cir.1964). In Woodward, supra, the United States Supreme Court discussed the proper tax treatment for such fees;

Since the inception of the present federal income tax in 1913, capital expenditures have not been deductible. See Internal Revenue Code of 1954, § 263. Such expenditures are added to the basis of the capital asset with respect to which they are incurred, and are taken into account for tax purposes either through depreciation or by reducing the capital gain (or increasing the loss) when the asset is sold. If an expense is capital, it cannot be deducted as “ordinary and necessary,” either as a business expense under § 162 of the Code or as an expense of “management, conservation, or maintenance” under § 212.

397 U.S. at 574-75, 90 S.Ct. at 1304-05 (footnote omitted). See also Benedict Oil Co. v. United States, 582 F.2d 544, 548 (10th Cir.1978) (legal fees in acquiring asset are capital expenditures which are off-' set against the gain on the asset’s sale); Lanrao, Inc., supra, 422 F.2d at 484 (same). Thus, the legal and accounting fees incurred by the partnership in acquiring the franchise are capital expenditures which may not be amortized. Such fees, being capital in nature, must be added to the cost basis of the franchise and can only be used to compute gain or loss upon the subsequent sale of the franchise.

Accordingly, the Government’s cross-motion for partial summary judgment is granted and the plaintiffs’ cross-motion is denied.

IT IS SO ORDERED.

      . 28 U.S.C. § 1346(a)(1) provides:
      (a) The district courts shall have original jurisdiction, concurrent with the United States Claims Court, of:

        (1) Any civil action against the United States for the recovery of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected, or any penalty claimed to have been collected, or any penalty claimed to have been collected without authority or any sum alleged to have been excessive or in any manner wrongfully collected under the internal-revenue laws; ____

      . Mrs. Patricia C. McCarthy is a party to this suit since she filed a joint return with her husband, Daniel R. McCarthy.

      . 26 U.S.C. § 6511(a) provides:

      . 26 U.S.C. § 6532(a)(1) provides:
      (a) Suits by taxpayers for refund.—
      (1) General rule. — No suit or proceeding under section 7422(a) for the recovery of any internal revenue tax, penalty, or other sum, shall be begun before the expiration of 6 months from the date of filing the claim required under such section unless the Secretary or his delegate renders a decision thereon within that time, nor after the expiration of 2 years from the date of mailing by certified mail or registered mail by the Secretary or his delegate to the taxpayer of a notice of the disallowance of the part of the claim to which the suit or proceeding relates. •


author: BATTISTI, Chief Judge.

text:
    Dr. John VODILA, Plaintiff, v. Roderick CLELLAND, et al., Defendants.
    No. C83-1512-A.
    United States District Court, N.D. Ohio, E.D.
    May 17, 1985.
    Jay F. McKirahan, Columbus, Ohio, for plaintiff.

      David J. Kovach, Asst. Atty. Gen., Cleveland, Ohio, for defendants.
   ORDER

BATTISTI, Chief Judge.

Plaintiff filed the instant action against Defendants Roderick Clelland, Dorothy Demharter, Juan Ghersi, Dr. Donald Cotton Jr., Dorothy Cooper and William Spiker on April 6, 1983. Defendants filed a Motion to Dismiss, or In the Alternative, For a More Definite Statement on June 2, 1983. This Court referred this case to Magistrate Charles R. Laurie for general pretrial supervision on October 25, 1983. Magistrate Laurie filed his Report and Recommendation on February 14,1984. For the reasons set forth below, this Court adopts the Magistrate’s Report and Recommendation and grants Defendants’ Rule 12(b)(6) Motion to Dismiss for failure to state a claim upon which relief can be granted.

I.

Plaintiff was employed as a dentist by the Department of Mental Retardation and Developmental Disabilities for the State of Ohio. On July 20, 1983, he was dismissed from his position at Masillon State Hospital pursuant to an order signed by Defendant Clelland, who is superintendent of that institution. The dismissal order “alleged neglect of duty, failure of good behavior, insubordination, incompetence, misfeasance, malfeasance, and nonfeasance.” A 15-page “Bill of Particulars” was attached.

Plaintiff’s Complaint, brought pursuant to 42 U.S.C. §§ 1983, 1985, 1988, and the First and Fourteenth Amendments, charges that he was denied due process of law because he was not afforded any type of hearing to refute the charges against him prior to his dismissal. In addition, plaintiff claims that defendants have denied him his protected liberty interests by impugning his good name and reputation. In addition, plaintiff contends that his First Amendment rights have been chilled in a “Hobson’s Choice of whether to grant or refuse access to [his personnel file] by possible other employers.” Plaintiff seeks reinstatement with back pay, compensatory and punitive damages in the amount of one million dollars against each individual defendant, and attorney’s fees and costs.

II.

DUE PROCESS CLAIMS

This Court has reviewed the Magistrate’s Report and Recommendation in light of the Supreme Court’s recent decision in Cleveland Bd. of Education v. Loudermill, — U.S. ---, 105 S.Ct. 1487, 84 L.Ed.2d 494 (1985). Since the Magistrate’s Report and Recommendation was filed nearly a year before the Loudermill ruling, this Court must be sensitive to any changes in Fourteenth Amendment jurisprudence effected by that case. Loudermill held that the Due Process Clause requires a pretermination hearing before an individual (in that case, a public employee) is deprived of a significant property or liberty interest. This Court concludes that the Magistrate’s recommendation to dismiss Plaintiff’s complaint is consistent with the analysis and principles of Loudermill and is correct.

A. PROPERTY INTEREST

Whether an individual is entitled to Due Process protection depends on the existence of a valid property or liberty interest. In Loudermill, the Court reiterated that property interests are defined by “independent sources such as state law” and found that the Ohio Revised Code § 124.11 created such a property interest when it defined the respondents as “classified civil service employees” who could not be dismissed “except for misfeasance, malfeasance, or nonfeasance in office.” — U.S. at ---, 105 S.Ct. at 1491.

In the instant case, however, the Magistrate correctly found that Ohio Re-vised Code § 124.11(A)(13) defines dentists in the employ of the department of mental health as “unclassified civil servants” and that under state law, as Plaintiff concedes, an unclassified civil servant has no property interest in continued employment. Since Plaintiff has failed to establish a protected property interest, his 14th Amendment Due Process claim must be dismissed.

B. LIBERTY INTEREST

Plaintiff also contends that he was deprived of a liberty interest without due process. In order to establish a protected liberty interest, an individual must demonstrate that: (1) the charges against him are of such nature as to damage his reputation or stigmatize him in the community; (2) that the charges are false; (3) that he was denied a meaningful hearing to clear his name; and (4) that the charges were made public. Codd v. Velger, 429 U.S. 624, 97 S.Ct. 882, 51 L.Ed.2d 92 (1977); Wells v. Doland, 711 F.2d 670, 676 (5th Cir.1983). The Magistrate correctly found that Plaintiff nowhere in his pleadings sets out any factual dispute between himself and his employer leading to the conclusion that plaintiff believes the employer’s charges are false. It is not enough for Plaintiff to state, as he does in his Objections to the Magistrate’s Report and Recommendation (filed March 21, 1984), that it is implicit in his Complaint that he believes the charges are false “when [the Complaint] is read as a whole for purposes of notice pleading.” The Magistrate also noted that Plaintiff nowhere disputed the accuracy of the charges, even in his brief opposing the Motion to Dismiss. Magistrate’s Report at 8. Furthermore, the Supreme Court in Codd v. Velger, 429 U.S. at 628, 97 S.Ct. at 884, explicitly stated that it “was no overly technical application of the rules of pleading” to require an individual asserting a deprived liberty interest to challenge the truth of the charges against him in his pleadings.

In addition, the Magistrate noted that “Plaintiff offers no explanation as to how, when, or to whom publication [of the charges] was made.” Magistrate’s Report at 8 n. 3. Since Plaintiff has failed to meet the publication element of the four-part showing required to establish a liberty interest, the Due Process claims with respect to liberty must also be dismissed. In Loudermill, coincidentally, failure to allege how the false charges were published also led to a dismissal of Loudermill’s liberty claim. — U.S. at ---, n. 13, 105 S.Ct. at 1496 n. 13. Since Plaintiff has failed to meet two of the four elements of his burden, his liberty interest due process claim must be dismissed.

III.

FIRST AMENDMENT CLAIMS

Plaintiff’s allegation that his First Amendment rights have been violated because he is faced with the “Hobson’s Choice” of granting or refusing access to his personnel files is not cognizable and, as the Magistrate correctly noted, should be dismissed. Plaintiff’s First Amendment claim is based on an incorrect and confused reading of two cases. In Larry v. Lawler, 605 F.2d 954 (7th Cir.1978), an employee was rated ineligible for federal employment due to alleged alcoholism and “abusive behavior towards his colleagues.” Id. at 963. Plaintiff in that case made no First Amendment claim. In responding to Plaintiff’s due process claims, the Court found that since the Civil Service Commission only provided Plaintiff with a summary of their investigation into his case (and not the entire record) and then required him to respond in writing which could lead to a three-year debarment from Government service, the Civil Service Commission was depriving plaintiff of a liberty interest without due process of law. The Court therefore vacated the district court’s summary judgment and ordered plaintiff’s records expunged. At no point, however, did the Court state that the mere inclusion of information critical of plaintiff’s performance in his personnel files constituted a violation of the First Amendment.

In Croushorn v. Board of Trustees of University of Tennessee, 518 F.Supp. 9 (M.D. Tennessee 1980), plaintiff contended that defendants had infringed upon his first amendment rights in violation of 42 U.S.C. § 1983. Plaintiff was discharged from his assistant professorship position at the University of Tennessee. Plaintiff claimed he was discharged, inter alia, for criticizing the Commissioner of the Tennessee Department of Human Services in a letter which was publicized in the local newspaper. The Court dismissed this First Amendment claim finding that plaintiff was not terminated for his criticism of a public official. However, plaintiff also alleged that the defendants violated his First Amendment rights by placing letters and other documents in his personnel file regarding his criticism of the public official, specifically letters between the criticized public official and the dean of the University regarding punitive action against plaintiff. The Court found that defendant could be found liable for violating defendant’s First Amendment rights. However, the Court said “When, as here, the potential or naturally expected use of those files will likely have the effect of penalizing the employee for engaging in such protected activity, the first amendment, not the due process clause forms the basis of the complaint.” Id. at 41. The Court specifically stated that the “particular papers would never have been produced, much less inserted in the files [of plaintiff], had not plaintiff engaged in protected conduct. Granger’s [defendant’s] action was thus caused by plaintiff’s speech, and the harm thereby created directly infringes upon plaintiff’s right to engage in such speech.” Id. at 40.

The instant case therefore is distinguishable from Croushorn. Plaintiff in the instant case nowhere alleges that he was discharged for exercising his First Amendment Rights nor that information chronicling his exercise of his First Amendment rights appears in his files. Furthermore, while Croushorn does discuss the “Hobson’s choice of granting or refusing access” of future employers to personnel files, id. at 40, it is done in the context of demonstrating that plaintiff has a real threat of specific future harm. This “Hob-son’s Choice” is not in itself a basis for a First Amendment violation. Once again, the Court stated that plaintiff has been “compelled to decide that in order to avoid any future harm of [discharge] he must refrain from expressing opinions that are contrary to those held by state officials.” Id. at 40. There is no showing by the instant plaintiff that his dismissal in and of itself will chill his right to express himself or be critical of officials of the State. Therefore, the Magistrate is correct in dismissing plaintiff’s failure to state claims.

IV.

The Magistrate’s Recommendations regarding dismissal of the conspiracy, pendent state claims and motion for attorney fees are correct and are hereby adopted.

V.

The Magistrate’s Report and Recommendation is approved and adopted; Defendant’s Motion to Dismiss under Rule 12(b)(6) for failure to state a claim is granted.

IT IS SO ORDERED.

      . Plaintiff did not attach either the Dismissal Order or the Bill of Paraticulars to his complaint and there is no indication that the Magistrate actually reviewed these documents.


author: GETZENDANNER, District Judge:

text:
    Marvin JONES, Plaintiff, v. Margaret HECKLER, Defendant.
    No. 84 C 9433.
    United States District Court, N.D. Illinois, E.D.
    May 20, 1985.

      Mark A. Moynihan, Thomas C. Boyd and Jeffrey D. Schultz, Ltd., Chicago, 111., for plaintiff.
    Gail C. Ginsburg, Asst. U.S. Atty., Chicago, 111., for defendant.
   MEMORANDUM OPINION AND ORDER

GETZENDANNER, District Judge:

Plaintiff Marvin Jones brings this action for review of the decision of the Secretary of Health and Human Services (“Secretary”) to deny his application for benefits under Title II and Title XVI of the Social Security Act. Jurisdiction for review of both denials is predicated on § 205(g) of the Social Security Act, 42 U.S.C. § 405(g) (governs claims under Title II). See Social Security Act § 1631(c)(3), 42 U.S.C. § 1383(c)(3) (governs claims under Title XVI; incorporates § 205(g), 42 U.S.C. § 405(g) into actions under Title XVI). The action is before the court on the Secretary’s motion to dismiss for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted. For the reasons stated below, the motion is granted. Fed.R.Civ.P. 12(b)(6).

Factual History

Jones applied for benefits under both titles on February 9, 1982 and pursued his administrative remedies through a hearing before an Administrative Law Judge (“AU”). The AU issued an opinion on December 15, 1983 granting in part and denying in part Jones’s application. On February 23,1984, Jones filed a request for review by the Appeals Council, admittedly 65 days after receipt of the December 15 opinion. On July 12, 1984, the Appeals Council sent a letter to Jones indicating that the appeal would be dismissed as untimely if he did not articulate “good cause” for the failure to file a timely petition. See 20 C.F.R. 404.911, 416.1411. Jones mailed an explanatory letter on July 17, 1983 and, after determining that the Council had not received it, mailed another such letter on August 21, 1983.

On September 6, 1984, the Appeals Council dismissed Jones’s appeal as untimely filed, noting that Jones had not responded to the Council’s request for a showing of good cause. This action was then filed on October 30, 1984. On January 21, 1985, a member of the Appeals Council, Andrew E. Wakshul, mailed a letter to the lawyer then representing Jones, indicating that additional material had become “associated” with Jones’s file, specifically, the two letters attempting to explain the delay in filing the appeal. In the January 21 letter, Wakshul explained that the Council carefully considered and rejected the arguments presented in those letters. (Jones had argued that a January 24, 1984 letter to him confused him concerning the time in which to appeal. Wakshul noted that that letter could not have confused Jones or tolled his appeal period, since it specifically referred to a previous letter and previous instructions regarding appeal.) The letter concluded that based on a review of Jones’s arguments, the Council found no good cause for vacation of the dismissal and thus the December 15, 1983 decision by the AU was final.

Reviewability

Jones alleges that the AU’s December 15, 1983 opinion is a final decision reviewable by this court under § 205(g). Jones urges reversal of that decision as without basis in law or substantial support in the record. The Secretary contends that the merits of the AU’s opinion cannot be reviewed in this court because of Jones’s procedural default.

Section § 205(g) provides, in pertinent part:

Any individual, after any final decision of the Secretary made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such decision by a civil action commenced within sixty days after the mailing to him of notice of such decision or within such further time as the Secretary may allow.

It is clear that § 205(g) provides the exclusive route for review of the Secretary’s fact or law decisions under Titles II and XVI. See Social Security Act § 205(h), 42 U.S.C. § 405(h); United States v. Sherwood, 312 U.S. 584, 61 S.Ct. 767, 85 L.Ed. 1058 (1941) (United States immune to suit absent consent; terms of consent define court’s jurisdictional boundaries).

The Secretary continues, explaining that § 205(g) provides for consent to suit only after a “final decision” by the Secretary. The Secretary correctly notes that a final decision is one rendered after the claimant has exhausted all administrative remedies available under the Social Security Act. Heckler v. Ringer, 466 U.S. 602, 104 S.Ct. 2013, 2023, 80 L.Ed.2d 622 (1984). Those regulations allow for appeal of an AU’s decision if (1) filed within sixty days of receipt by the claimant of the notice of decision, 20 C.F.R. 404.968(a), 416.-1468(a), or (2) “good cause” is shown for failure to file within the sixty-day period, 20 C.F.R. 404.968(b), 416.1468(b). In the above circumstances, the Appeals Council may deny review or render a decision on the merits. However, an untimely petition, for which no good cause is shown, must be dismissed as untimely.

The Secretary argues that review is limited only to those who have obtained review by the Appeals Council through a timely appeal or an untimely appeal excused because of good cause. However, in the case of procedural default for which no good cause is shown, judicial review is unavailable. Failure properly to follow administrative remedies, in other words, closes the door to judicial review entirely. Jones, on the other hand, argues a version of exhaustion similar to that employed by the federal courts in habeas corpus cases, namely, that the petitioner need only demonstrate that no further administrative remedies are available and not that he or she properly followed all available administrative procedures. Under this analysis, § 205(g)’s sixty-day period would start to run upon dismissal of the untimely appeal to the Appeals Council.

It is clear that the decision by the Appeals Council to dismiss an untimely request for review itself is not reviewable under § 205(g). Watters v. Harris, 656 F.2d 234, 238-240 (7th Cir.1980); Sheehan v. Secretary, 593 F.2d 323, 325 (8th Cir. 1979); Dietsch v. Schweiker, 700 F.2d 865, 867 (2d Cir.1983). This is because a decision to deny review of an untimely appeal may be rendered without a hearing, and hence is not a “final decision ... made after a hearing.” Watters, 656 F.2d 239; see Social Security Act § 205(b), 42 U.S.C. § 405(b); cf. Califano v. Sanders, 430 U.S. 99, 108, 97 S.Ct. 980, 985, 51 L.Ed.2d 192 (denial of motion to reopen previously adjudicated claim not reviewable because may be accomplished without a hearing).

Regarding review of the merits of the AU’s decision, courts have found that proper exhaustion of administrative remedies, and not exhaustion accomplished only through procedural default, is an element of a reviewable “final decision.” Such exhaustion is jurisdictional, since it is a requirement of consent to suit under § 205(g). See Sheehan, 593 F.2d at 325 (untimely appeal to Appeals Council after AU’s decision prevents judicial review under § 205(g)); Dietsch, 700 F.2d at 867 (same); Maloney v. Harris, 526 F.Supp. 621, 622 (E.D.N.Y.1980) (same), aff'd, 657 F.2d 264 (2d Cir.1981); see Mathews v. Eldridge, 424 U.S. 319, 327-30, 96 S.Ct. 893, 899-900, 47 L.Ed.2d 18 (1976); Weinberger v. Salfi, 422 U.S. 749, 757, 95 S.Ct. 2457, 2462, 45 L.Ed.2d 522 (1975).

Jones correctly notes that full exhaustion of his Appeals Council remedy is not jurisdictional in the sense that it cannot be waived. Rather, judicial review is predicated on a non-waivable element — that a claim for benefits be presented to the Secretary — and a waivable element — that the established administrative remedies be exhausted. Heckler v. Ringer, 104 S.Ct. at 2023; Mathews, 424 U.S. at 328, 96 S.Ct. at 899; Watters, 656 F.2d at 241. The parties do not dispute that Jones has presented his application to the Secretary, and thus fulfilled the non-waivable jurisdictional prerequisite. Thus, the issue before the court is whether his failure to exhaust waivable administrative procedures has been waived by the Secretary or may be waived by the court.

It is clear that the Secretary has not waived Jones’s failure to exhaust, since his appeal was dismissed as untimely and the Secretary disputes jurisdiction here. The court must determine, then, whether it may waive exhaustion in this case. Such waiver has been allowed in cases presenting colorable constitutional claims on issues collateral to the denial of benefits. See Jensen v. Schweiker, 709 F.2d 1227, 1229 (8th Cir.1983) (challenge to administrative regulation); Dietsch, 700 F.2d at 867 (challenge to Appeals Council’s decision to dismiss appeal as untimely). The Supreme Court has recognized exceptions to the waivable exhaustion requirements for “wholly collateral” issues that do not necessarily raise constitutional claims. Heckler v. Ringer, 104 S.Ct. at 2023. See Mental Health Association of Minnesota, 720 F.2d 965, 969 (8th Cir.1983) (challenge to administrative regulation). Another case explicitly rested waiver on the special eonsiderations present in an action for class-wide relief, even where the issues presented were not “wholly collateral” to the merits of the individual claims. Polaski v. Heckler, 751 F.2d 943, 952-53 (8th Cir.1984).

Jones would be correct if he argued that several of the exhaustion cases are distinguishable from his case. For example, Mental Health and Jensen involved claimants who were in the middle of their administrative procedures and sought to avoid further exhaustion. A decision against assertion of federal jurisdiction would simply defer judicial review and did not foreclose it entirely. Such deferral accomplishes goals, frequently articulated by the Supreme Court, to avoid interference in agency processes and to allow the agency to compile a record for judicial review. E.g., Weinberger v. Salfi, 422 U.S. at 765, 95 S.Ct. at 2466; Heckler v. Ringer, 104 S.Ct. at 2024 n. 12. Other decisions, such as the Watters Court’s denial of review of the merits of a claim that was never presented to an ALT, may be viewed as cases falling outside the explicit statutory language, since the claimant did not obtain a decision “after a hearing.” In this case, Jones did have a hearing.

The Sheehan and Dietsch cases, however, are exactly on point. It is clear that where administrative remedies are unavailable, exhaustion does not simply defer judicial review and does not accomplish the goals described above. Yet, exhaustion as prescribed by the Sheehan and Dietsch cases is directed to achieving other goals, namely, avoidance of claimants’ bypassing administrative remedies and belatedly reopening final decisions. E.g., Sheehan, 593 F.2d at 326-27. Were exhaustion to be waived as a matter of course, claimants could at any time file a late appeal, and upon dismissal resort to the federal courts. Such a perpetual judicial remedy was found by the Supreme Court to frustrate the congressional intent behind § 205(g). Califano v. Sanders, 430 U.S. at 108, 97 S.Ct. at 985. Hence, it makes sense to require a claimant in Jones’s position to demonstrate how he satisfies one, of the recognized exceptions to the waivable exhaustion requirements.

Employing the broadest justification for waiver accepted by the courts, no such justification is offered here. Jones has no collateral issue to present to the court, nor does he assert any colorable constitutional claims. In addition, there is no basis for exercise of mandamus jurisdiction. 28 U.S.C. § 1361; see Dietsch, 700 F.2d at 868. Because failure properly to follow administrative procedures is a prerequisite to suit under § 205(g), review is not available in this court. The court finds that this decision is not a matter of subject matter jurisdiction, which may not be waived. Rather, dismissal is predicated on failure to state a claim upon which relief may be granted. Hence, the court’s grant of the motion to dismiss is accomplished under Fed.R.Civ.P. 12(b)(6).

Conclusion

The Secretary’s motion to dismiss is granted. Fed.R.Civ.P. 12(b)(6). The status hearing presently scheduled for May 20, 1985 is cancelled.

It is so ordered.


author: ELMO B. HUNTER, District Judge.

text:
    Dennis C. FULSOM, Petitioner, v. Terry MORRIS, Respondent.
    No. 85-0333-CV-W-3-P.
    United States District Court, W.D. Missouri, W.D.
    May 24, 1985.

      Dennis C. Fulsom, pro se.
    William Webster, Jefferson City, Mo., for respondent,
   ORDER

ELMO B. HUNTER, District Judge.

Petitioner has filed a petition for writ of habeas corpus pursuant to 28 U.S.C. § 2254 (1976) challenging his 1974 conviction for first degree murder. As his sole ground for relief, petitioner claims that there was insufficient evidence to support a conviction of murder in the first degree. Petitioner states that he will rely on the same set of facts set forth in his previous habeas corpus petition. See Petition at 7.

In his response, respondent urges the Court to dismiss the petition because petitioner has already litigated this exact issue in this Court in a previous petition for writ of habeas corpus. Therefore, respondent submits that the instant petition is successive as defined by 28 U.S.C. § 2254, Rule 9, and Walker v. Lockhart, 726 F.2d 1238 (8th Cir. en banc 1984). Furthermore, respondent contends that the “ends of justice” do not require a reexamination of petitioner’s ground for relief because the decision in Jackson v. Virginia, 443 U.S. 307, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979), fully supports the Court’s decision in Fulsom v. Wyrick, No. 76-CV-407-W-4.

In his traverse, petitioner contends that Jackson v. Virginia, supra, represents an intervening change of law which would justify permitting a redetermination of petitioner’s ground to serve the ends of justice. Petitioner offers no further explanation of how the intervening case of Jackson v. Virginia would result in a different outcome in the instant petition.

Rule 9(b) of the Rules Governing Section 2254 Cases for the United States District Courts states:

(b) Successive petitions. A second or successive petition may be dismissed if the judge finds that it fails to allege new or different grounds for relief and the prior determination was on the merits or, if new and different grounds are alleged, the judge finds that the failure of the petitioner to assert those grounds in a prior petition constituted an abuse of the writ.

Petitioner’s first petition pursuant to Section 2254, Fulsom v. Wyrick, No. 76-CV-407-W-4, alleged two grounds that related to the sufficiency of the evidence to sustain petitioner’s conviction: (1) there was no evidence of deliberation to sustain petitioner’s conviction of murder in the first degree; and (2) there was insufficient evidence to sustain a conviction of murder in the first degree. See Petition in Case No. 76-CV-407-W-4 at 3. Petitioner’s first petition for writ of habeas corpus was denied on the merits on November 18, 1976, by this Court. The United States Court of Appeals for the Eighth Circuit denied petitioner’s request for a certificate of probable cause to appeal on January 14, 1977. The United States Supreme Court denied a petition for certiorari. Fulsom v. Wyrick, 430 U.S. 937, 97 S.Ct. 1565, 51 L.Ed.2d 783 (1977).

Because the same ground as that presented in the instant petition was presented in the prior application and was determined on the merits, petitioner’s current petition for writ of habeas corpus is successive pursuant to Rule 9(b). However, the Court may give controlling weight to the denial of a prior application for federal habeas corpus only if “(1) the same ground presented in the subsequent application was determined adversely to the applicant on the prior application, (2) the prior determination was on the merits, and (3) the ends of justice would not be served by reaching the merits of the subsequent application.” Sanders v. United States, 373 U.S. 1, 15, 83 S.Ct. 1068, 1077, 10 L.Ed.2d 148 (1963) (emphasis added). Therefore, this Court must determine whether the ends of justice would be served by reexamining petitioner’s claim of insufficiency of the evidence giving rise to his conviction for first degree murder. Walker v. Lockhart, 726 F.2d at 1243-1245.

In evaluating the sufficiency of the evidence, the correct standard is that expressed in Jackson v. Virginia, 443 U.S. 307, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979).

The relevant question is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.

Id. at 319, 99 S.Ct. at 2789 (emphasis added in original). Jackson v. Virginia overruled the “no-evidence” test of Thompson v. City of Louisville, 362 U.S. 199, 80 S.Ct. 624, 4 L.Ed.2d 654 (1960), which allowed relief only upon a showing that the state court conviction was totally devoid of evidentiary support.

In the instant matter, petitioner was convicted of murder under the felony-murder doctrine, Mo.Rev.Stat. § 559.010 (1969). The evidence at trial showed that petitioner entered a grocery store and immediately pointed a gun at the proprietor who was standing next to his cash register. One witness testified that she talked with petitioner a few days after the murder. He told her he had gone into the store and asked for a pack of Kools and drew a gun on the proprietor. When the proprietor drew his own gun, petitioner allegedly told the witness that “he didn’t have no other choice but to shoot him.” (Tr. 203). The same witness testified that petitioner told her he had “tried to get the old man around the corner.” (Tr. 202). A boy who worked for the victim testified that the person who entered the store had on yellow trousers and a spitfire cap. (Tr. 162-164). Another witness testified that he saw a man park his car and walk toward the store and later return to the car holding his right sleeve. He also stated that the man wore yellow trousers and a spitfire cap. (Tr. 147-149). The boy who worked for the victim identified petitioner as the man he saw enter the store. (Tr. 164-165).

The above evidence is sufficient to support a finding of the jury that petitioner intended to rob the victim and shot and killed him in the commission of that crime. Because the attempted perpetration of a robbery is the legal equivalent of deliberation, the evidence clearly supports the first degree murder conviction. State v. Lindsey, 507 S.W.2d 1, 4 (Mo. banc 1974). Although there was a difference between the testimony of two of the witnesses as to whether or not petitioner had a beard on the day of the murder, such inconsistencies are proper consideration for the jury in determining the weight to be given the testimony. See, “Magistrate’s Report and Recommendation” in Case No. 76-CV-407-W-4 at 4. A federal court may not substitute its own judgment as to the credibility of witnesses for that of the state courts. See 28 U.S.C. § 2254(d); Maggio v. Fulford, 462 U.S. Ill, 103 S.Ct. 2261, 76 L.Ed.2d 794 (1983); Sumner v. Mata, 455 U.S. 591, 102 S.Ct. 1303, 71 L.Ed.2d 480 (1982); Graham v. Solem, 728 F.2d 1533 (8th Cir.1984). The jury heard the testimony of the various witnesses and chose to resolve the inconsistencies against petitioner. They found that petitioner caused the death of the victim while attempting to rob him.

Viewing the evidence in the light most favorable to the prosecution, the Court concludes that any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. at 319, 99 S.Ct. at 2789; Walker v. Lockhart, 726 F.2d at 1247. Thus, the insufficiency of the evidence argument of petitioner does not, under the ends of justice, justify reexamination of the issue raised for the second time in the instant habeas petition. Therefore, the above-captioned petition for writ of habeas corpus will be dismissed.

Accordingly, for the reasons discussed above, the petition for writ of habeas corpus is dismissed with prejudice.

      . See also 28 U.S.C. § 2244(b) (1976).


author: EARL E. O’CONNOR, Chief Judge.

text:
    Isadore GROSS, Sr., and Myrtle D. Dooley, Plaintiffs, v. FEDERAL DEPOSIT INSURANCE CORP., Defendant and Counterclaimant, v. Isadore GROSS, Sr., G. Lawrence Blankinship, Jr., Gerald W. Hall, Russell C. Hunter, John Scott Moore, Chester C. Owens, Walter R. Peterson, M.D., Michael L. Sanders, Donald D. Sewing, Willard C. Shelton, I.H. Henderson, Sr., Robert Rostell Mansfield, Mary Jane Myers, and Olivia V. Ragland, Counterclaim Defendants.
    Civ. A. No. 83-2253.
    United States District Court, D. Kansas.
    May 29, 1985.

      Charles White Hess, Linde, Thomson, Fairchild, Langworthy, Kohn & Van Dyke, Overland Park, Kan., Albert Thomson, Linde, Thomason, Fairchild, Langworthy, Kohn & Van Dyke, Kansas City, Mo., for plaintiffs.
    J. Eugene Balloun, Shook, Hardy & Bacon, Overland Park, Kan., Frank P. Sebree, Leanne DeShong, Shook, Hardy & Bacon, Kansas City, Mo., for defendants.
    William M. Modrcin, Morris, Larson, King, Stamper & Bold, Kansas City, Mo., James L. Eisenbrandt, Overland Park, Kan., for G. Lawrence Blankinship, Jr.
    Gregory M. Coggs, Kansas City, Kan., for Gerald W. Hall and I.H. Henderson, Sr.
    T. Bradley Manson, Olathe, Kan., Karon D. Ramsey, Kansas City, Mo., for John Scott Moore.
    R. Pete Smith, McDowell, Rice & Smith, Kansas City, Kan., for Chester C. Owens and Willard C. Shelton.
    Steven R. Jarrett, Heavner, Jarrett & Kimball, Shawnee Mission, Kan., G. Edwin Proctor, Jr., Kansas City, Mo., for Walter R. Peterson.
    Robert A. Andrews, Dickerson, Andrews & Townsend, Prairie Village, Kan., for Michael L. Sanders.
    Kenneth P. Soden, Soden & Isenhour, Mission, Kan., for Donald D. Sewing.
    Michael D. Fitzgerald, Van Osdol, Magruder, Erickson & Redmond, Kansas City, Mo., Reid F. Holbrook, Fallon, Holbrook & Ellis, Kansas City, Kan., for Mary Jane Myers.
   EARL E. O’CONNOR, Chief Judge.

MEMORANDUM AND ORDER

Pending in the above-captioned action are numerous motions filed by various parties. Most pertinent at this point, however, is the motion of counterclaim defendant Donald D. Sewing for dismissal of the entire action on the ground that this court lacks subject matter jurisdiction. Because we are hereby granting that motion, the other pending motions are now moot.

This case had its genesis in the failure of the Douglass State Bank of Kansas City, Kansas (the Bank). On September 3, 1983, the Bank Commissioner of the State of Kansas determined that the Bank was insolvent and assumed exclusive custody and control of the Bank’s property and affairs. See K.S.A. 9-1903. On that same date, the Commissioner appointed the Federal Deposit Insurance Corporation (“FDIC/Receiver”) as receiver and liquidator of the Bank. See K.S.A. 9-1907. FDIC/Receiver accepted this appointment pursuant to 12 U.S.C. § 1821(e), which authorizes the FDIC to accept appointment as a receiver “if such appointment is tendered by the authority having supervision of such bank and is authorized or permitted by State law.” Still on September 3, 1983, FDIC/Receiver arranged for the FDIC in its corporate capacity (“FDIC/Corporate”) to purchase certain of the Bank’s assets— including the Bank’s “bad” loans and its claims against the Bank’s former directors and officers.

On September 19, 1983, the plaintiff and his wife (since deceased) filed their complaint in the above-captioned matter. The complaint’s jurisdictional allegations were as follows:

1. The plaintiffs are husband and wife who have deposited funds in savings accounts and by certificates of deposit in The Douglass State Bank of Kansas City, Kansas (“Bank”).
2. The defendant is a corporation formed pursuant to the laws of the United States and has been appointed, and is acting, as receiver of the Bank.
3. The Court has jurisdiction of this action under 28 U.S.C. § 1331, since it is a civil action arising under the laws of the United States. The plaintiffs charge that the defendant has wrongfully “frozen” certain accounts in the Bank in violation of the authority granted to the defendant by Federal laws. 12 U.S.C. § 1813, et seq.

In its “Second Amended Answer and Counterclaim,” FDIC admitted the allegations in paragraphs 1 and 2 of the complaint and, as to paragraph 3, stated that it: “admits that the court has jurisdiction of this action, but denies each and every other allegations set forth in paragraph 3.” In its two-count counterclaim, FDIC alleged that plaintiffs and the other counterclaim defendants breached certain duties of care and loyalty to the Bank, as well as their express and implied contractual duties as directors and/or officers of the Bank. One of the counterclaim defendants, Michael L. Sanders, then filed a “Cross-Claim” against FDIC on the ground that FDIC wrongfully terminated his employment as vice president of the Bank following its appointment as the Bank’s receiver. Altogether, over 120 documents have been filed in this case; and the case has been placed on the court’s June 17th docket.

Obviously, this is a late date at which to be addressing the question of subject matter jurisdiction. However, “[a] court lacking jurisdiction cannot render judgment but must dismiss the cause at any stage of the proceedings in which it becomes apparent that jurisdiction is lacking.” Basso v. Utah Power & Light Co., 495 F.2d 906, 909 (10th Cir.1974) (emphasis in original). In Basso, for instance, an objection to the court’s subject matter jurisdiction was successfully raised for the first time on appeal. Moreover, “lack of [subject matter] jurisdiction cannot be waived and jurisdiction cannot be conferred upon a federal court by consent, inaction or stipulation.” Basso, 495 F.2d at 909. Therefore, FDIC’s “admission” that the court has jurisdiction of this action is of no effect.

In its response to the motion to dismiss, FDIC devotes most of its attention to arguing that this court has jurisdiction over its counterclaims. Such argument ignores the thrust of the motion to dismiss, which is based primarily on an alleged lack of jurisdiction over the initial complaint. If this court lacked jurisdiction to entertain the complaint, any counterclaim dependent thereon would be similarly outside of our jurisdiction.

Insofar as FDIC does address the question of subject matter jurisdiction over the complaint, it relies on the provisions of 12 U.S.C. § 1819 (Fourth). In pertinent part, that statute reads as follows:

Fourth. ... All suits of a civil nature at common law or in equity to which the [Federal Deposit Insurance] Corporation shall be a party shall be deemed to arise under the laws of the United States, and the United States district courts shall have original jurisdiction thereof, without regard to the amount in controversy; ... except that any such suit to which the Corporation is a party in its capacity as receiver of a State bank and which involves only the rights or obligations of depositors, creditors, stockholders, and such State bank under State law shall not be deemed to arise under the laws of the United States.

The Tenth Circuit had occasion in 1961 to construe this statute. In Freeling v. Sebring, 296 F.2d 244, 245 (10th Cir.1961), the court noted:

Congress thus has authorized the F.D. I.C. to act simultaneously in the dual capacity of a federal insurer and as a state receiver and has discerningly provided for federal jurisdiction of claims against it as a federal insurer, while denying federal jurisdiction over claims arising out of its activities as a state agent.

In recent years, the Freeling construction has been accepted by all other circuits that have addressed this question. See, e.g., In Re F & T Contractors, Inc., 718 F.2d 171, 177 (6th Cir.1983); F.D.I.C. v. de Jesus Velez, 678 F.2d 371, 374 (1st Cir.1982); F.D.I.C. v. Sumner Financial Corp., 602 F.2d 670, 679-80 (5th Cir.1979).

Under the facts as alleged, this case clearly falls within the exception and not the general rule. The complaint’s second paragraph stated that the defendant “has been appointed, and is acting, as receiver of the Bank.” (Emphasis added.) In its answer, FDIC admitted without reservation the allegations in that paragraph. Therefore, 12 U.S.C. § 1819 (Fourth) provides no basis for this court’s exercise of subject matter jurisdiction over the complaint.

Although not specifically raised in this case, FDIC/Receivers in other reported cases have attempted to justify federal jurisdiction under the diversity statute, 28 U.S.C. § 1332(a). In those cases, FDIC argued that its principal place of business is in Washington, D.C., and that 28 U.S.C. § 1332(c) therefore renders it a citizen of Washington, D.C. Without ruling on FDIC’s citizenship, the Fifth Circuit in Sumner Financial Corp., supra, rejected FDIC’s ultimate conclusion. The court instead noted:

[W]e believe that § 1819 (Fourth) should be read as a unified, integrated, self-contained whole — i.e., that the grant of jurisdiction and the qualifying proviso are to be read as setting out a complete scheme for federal jurisdiction over cases in which F.D.I.C. is a party. It follows that the limitation on federal jurisdiction stated in the proviso cannot be evaded by predicating jurisdiction on some general jurisdictional grant.

602 F.2d at 677. We agree fully with the analysis underlying the Fifth Circuit’s conclusion, and must therefore conclude that FDIC cannot establish this court’s subject matter jurisdiction over this complaint. We will therefore grant counterclaim defendant Sewing’s motion to dismiss for lack of subject matter jurisdiction.

IT IS THEREFORE ORDERED that this case is dismissed for lack of subject matter jurisdiction. All other pending motions are denied as moot. Each party shall bear his, her, or its own costs.