author: SKINNER, District Judge.

text:
    NEWELL CO., Plaintiff, v. Michael J. CONNOLLY, et al. and Wm. E. Wright Co., Defendants.
    Civ. A. No. 85-3541-S.
    United States District Court, D. Massachusetts.
    Sept. 25, 1985.

      Paul W. Johnson, Peter S. Terris, Palmer & Dodge, Boston, Mass., for plaintiff.
    Carolyn V. Wood, Asst. Atty. Gen., Com. of Mass., Henry J. Wolkoff, Jeffrey B. Storer, Ropes & Gray, Boston, Mass., for defendants.
   MEMORANDUM ON MOTION FOR PRELIMINARY INJUNCTION

SKINNER, District Judge.

In this action the plaintiff corporation seeks to enjoin the defendants from enforcing the Massachusetts Anti-Takeover statute, M.G.L. c. HOC, with respect to Wm. E. Wright Co., a Delaware corporation with its principal place of business in West Warren, Massachusetts. M.G.L. c. HOC, § 1 defines “target company” as “a corporation, organized under the laws of or having its principal place of business in the commonwealth, whose securities are or are to be the subject of a take-over bid”. Wm. E. Wright Co. fits this definition of a target company.

The plaintiff has purchased substantial amounts of the stock of Wm. E. Wright Co. on the open market, without a tender offer, in part in the over-the-counter market and in part by private purchases from New York investors among others. As a result of its most recent purchase by private sale, it now owns 35% of the 2,111,910 shares of Wm. E. Wright Co. The common stock is held by some 1,600 persons, the residence of whom does not appear of record.

M.G.L. c. HOC is designed to prevent the takeover of target companies by open market purchases (“creeping tender offers”) without extensive filing with the secretary of the commonwealth. The requirements of the statute are triggered by the acquisition of more than 10% of the outstanding stock of the target company. The plaintiff has been in violation of M.G.L. c. HOC since May 30, 1985.

In the course of these proceedings, the defendant Michael Unger, who is the official in the office of the secretary charged with enforcement of c. HOC, has represented that he has no 'present intention of enforcing the statute against the plaintiff. Similarly, the defendant Wm. E. Wright Co. has represented to the court that it has no present intention of applying to the secretary for enforcement of the statute.

The plaintiff has made all the filings required by § 13 of the Securities Exchange Act of 1934, 15 U.S.C. § 78m.

The considerations governing the entry of a preliminary injunction, as outlined by the Court of Appeals in Agency Rent-A-Car, Inc. v. Connolly, 686 F.2d 1029, 1034 (1st Cir.1982), are as follows:

1. Likelihood of success on the merits.
2. Likelihood of immediate irreparable harm.
3. The balance between harm to the plaintiff in the absence of the injunction and harm to the defendant which might result from entry of the injunction.
4. The effect on the public interest from either the granting or denial of the injunction.

I will take up these elements in order.

1. Likelihood of Success on the Merits.

The plaintiff asserts that c. HOC is unenforceable because it is preempted by §§ 14(d) and (e) of the Securities Exchange Act of 1934, 15 U.S.C. § 78n(d) and (e), commonly referred to as the Williams Act. The Williams Act regulates tender offers, but does not regulate the takeover of corporations by open market purchases (except for required filings under § 13). The plaintiff also asserts that the state statute conflicts with the Commerce Clause of the United States Constitution.

The Court of Appeals of this circuit has held that the sanction provisions of the state statute are not preempted by the Williams Act: Agency Rent-A-Car, Inc. v. Connolly, supra. In Edgar v. Mite Corp., 457 U.S. 624, 102 S.Ct. 2629, 73 L.Ed.2d 269 (1982), three justices of the Supreme Court thought that a similar anti-takeover statute in Illinois was preempted by the Williams Act. Two justices thought otherwise, and four passed the question. In my view, the sanction provisions are those most in conflict with the Williams Act, and it is unlikely that the court of appeals would find the filing and disclosure provisions of the statute any more in conflict with the Williams Act than state Blue Sky laws are in conflict with the registration requirements of the Securities Act of 1934. Whatever the state of the law may be on the national scene, the law in this circuit probably precludes the entry of judgment for the plaintiff on this point.

In Edgar v. Mite Corp., supra, the Supreme Court held that an Illinois anti-takeover statute similar to M.G.L. c. 110C was in conflict with the Commerce Clause because of its impact on interstate commerce in the trading of securities. The Court held that protection of local shareholders was a legitimate state interest, but because the statute was broad enough to affect out-of-state transactions, it was held invalid. There is no local ownership requirement in the Massachusetts statute. It applies even if there are no local shareholders to be protected. M.G.L. c. HOC clearly by its terms imposes substantial restrictions on the trading of securities in the national market. In fact, several of the transactions which constitute violations of c. HOC in this case were purchases from shareholders who were residents of the state of New York. The potential for delay and indeed for rescission by sellers of stock for a period of up to three years is likely to create a level of uncertainty in the national market for this stock which in my opinion is an impermissible burden on interstate commerce.

Accordingly, in my opinion, the plaintiff is likely to succeed on the merits on its argument that c. HOC conflicts with the Commerce Clause of the United States Constitution. Edgar v. Mite Corp., supra. Telvest v. Bradshaw, 697 F.2d 576, 579-82 (4th Cir.1983); Martin Marietta Corp. v. Bendix Corp., 690 F.2d 558, 559 (6th Cir. 1982); National City Lines v. LLC Corp., 687 F.2d 1122, 1133 (8th Cir.1982); Mesa Petroleum Co. v. Cities Service Co., 715 F.2d 1425, 1428 (10th Cir.1983).

2. Likelihood of Immediate Irreparable Harm.

The defendants strongly deny the likelihood of immediate irreparable harm because they have declared they have no present intention of enforcing the statute. This is initially a persuasive argument. Plaintiff points out, however, that the defendants have not waived any rights or abjured any reliance on the Massachusetts statute. They have only promised to give the plaintiff 48 hours’ notice before proceeding. Plaintiff argues that the mere potential for application of the various sanctions contained in the statute is enough to deter corporations from seeking to make tender offers and to deter potential offerees from tendering their stock with the knowledge that their rights may be held in limbo for 45 to 65 days. In support of these propositions they offer the affidavit of Jeffrey C. Broomberg, an investment banker specializing in mergers and acquisitions.

Certainly the provisions of c. HOC provide very substantial burdens on a company engaged in a takeover bid, whether by tender offer or otherwise. These include delay, postponement of the bid for a year in the event of certain violations, the possibility of criminal prosecution and the possibility, extending three years into the future, of rescission by the sellers if the act has been violated. I am of the opinion that the battery of restraints contained in c. 110C is likely to cause the plaintiff to abandon a course of action to take over Wm. E. Wright Co. which it is entitled to follow under federal law. This is a valuable right, the loss of which constitutes irreparable harm. I will take judicial notice of the fact that time is of the essence in takeover cases and note that in many of the cases cited herein the bidding company withdrew its tender offer as a result of delays occasioned by the state statutes involved. The existence of the statutory remedies, particularly in view of the fact that plaintiff is concededly in violation of the statute at the present time, constitutes imminent irreparable harm. Mesa Petroleum Co. v. Cities Service Co., 715 F.2d 1425, 1428 (10th Cir. 1983).

3. The Balance Between Harm to the Plaintiff and Harm to the Defendant.

The harm to the plaintiff has been described above as the loss of a valuable right to take over a target company in accordance with applicable federal law. It is difficult to identify harm to the defendants arising from the entry of the injunction. The state officials have no interest in the matter except to safeguard the public interest, a matter to be considered in the next section of this opinion. Whether the target corporation will benefit or lose from change of ownership is impossible to predict. In the event of the grant of an injunction, Massachusetts stockholders may lose rights to participate at the most favorable price given to any stockholder, and may lose the benefit of more detailed filing of information. On the other hand, if plaintiff withdraws, the stockholders may lose forever a chance to sell their shares at a more favorable price than that ordinarily available in an unstimulated market. Cf. Martin Marietta Corp. v. Bendix Corp., supra, 690 F.2d at 568. In my opinion, the balancing considerations are best subsumed under the rubric of the balancing of the public interest discussed in the next section.

4. Balancing of the Public Interest.

The Supreme Court has pointed out the benevolent function of corporate takeovers in keeping management competitive and on its toes. Congress has “expressly embraced a policy of neutrality” in the Williams Act. Martin Marietta Corp. v. Bendix Corp., supra. The restrictions imposed, and the sanctions available for violation thereof, in the Massachusetts statute clearly have the effect of dampening the curative effect of takeovers. The stated state policy of protecting local investors can hardly be said to be countervailing in the absence of any assertion by the company that a significant number of its shareholders are residents of Massachusetts. In my opinion, the public interest favors the granting of the preliminary injunction. Id., at 568.

5. Necessity of Fact Finding.

In reversing grants of preliminary injunctions against enforcement of state takeover statutes, the courts of appeals of the First and Fourth Circuits have stated that injunctions should not be entered except after a plenary trial and opportunity to develop all the facts. Agency Rent-A-Car v. Connolly, supra; Telvest v. Bradshaw, 618 F.2d 1029 (4th Cir.1980). In the Fourth Circuit ease, by the time the case returned to the court of appeals three years later, the plaintiff had long since abandoned its takeover bid. 697 F.2d 576. Similarly, there were no further proceedings after the court’s decision in Agency Rent-A-Car, and the takeover bid was abandoned. While the court of appeals’ preference for a full record is salutary in most cases, delay pending plenary fact finding is not a practical response to a takeover situation. Judicial proceedings involving corporate takeovers aptly illustrate the aphorism that no decision is a decision. Furthermore, the defendants here have pointed to no relevant facts which are in dispute. I have respectfully considered the admonition of the court of appeals in Agency Rent-A-Car, but nevertheless conclude that in this case immediate relief is warranted.

Accordingly, on September 20, 1985, I entered a preliminary injunction enjoining the defendants from invoking the provisions of M.G.L. c. 110C.

      . But see S-G Securities, Inc. v. Fuqua Inv. Co., 466 F.Supp. 1114 (D.Mass.1978) in which it was held that the defendant’s press releases brought the takeover bid within the reach of the Williams Act, a situation not present here.


source: Caselaw Access Project

author: J. THOMAS GREENE, District Judge.

license: Public Domain

text:
    NAVAJO NATION; Navajo Nation, as parens patriae for Jeremiah Halloway, Cecelia Saunders, Bessie Begay, Plaintiffs, v. DISTRICT COURT FOR UTAH COUNTY, FOURTH JUDICIAL DISTRICT, STATE OF UTAH; Honorable David Sam; Dan and Patricia Carter, Defendants.
    Civ. No. C85-317G.
    United States District Court, D. Utah, C.D.
    Sept. 30, 1985.

      Craig J. Dorsay, Window Rock, Ariz., for plaintiffs.
    Stephen J. Sorenson, Utah Atty. Gen. Office, Salt Lake City, Utah, and Richard B. Johnson, Howard, Lewis & Sorenson, Provo, Utah, for defendants.
   MEMORANDUM DECISION IN FURTHERANCE OF ORDER GRANTING SUMMARY JUDGMENT

J. THOMAS GREENE, District Judge.

This matter came on regularly for hearing on August 29, 1985, on plaintiffs’ Motion for Summary Judgment, the Motion for Summary Judgment of defendants District Court for Utah County, Fourth Judicial District, State of Utah, and Honorable David Sam; and the Motion to Dismiss or in the Alternative, for Summary Judgment of defendants Dan and Patricia Carter. Craig J. Dorsay of the Navajo Nation Department of Justice appeared on behalf of the plaintiffs, Stephen J. Sorenson of the Utah Attorney General’s office, appeared on behalf of defendants District Court for Utah County, Fourth Judicial District, State of Utah and Honorable David Sam, and Richard B. Johnson of Howard, Lewis & Sorenson appeared on behalf of defendants Dan and Patricia Carter. Having reviewed extensive memoranda of law and exhibits which were filed with the Court, and having heard extensive oral arguments of all counsel, the Court granted the defendants’ Motions for Summary Judgment and denied the plaintiffs’ Motion for Summary Judgment. Having further reviewed all matters and being fully advised, the Court now sets forth its Memorandum Decision as was contemplated at the time the oral orders were rendered. This Memorandum Decision is incorporated into the orders made on August 29, 1985.

FACTUAL BACKGROUND

This action arose out of an adoption proceeding in the District Court for Utah County, Fourth Judicial District, State of Utah. Jeremiah Halloway, the subject of the proceeding, was born on May 14, 1977, to plaintiff, Cecilia Saunders, a full-blooded Navajo, a member of the Navajo Tribe and a domiciliary of the Navajo Reservation. Jeremiah lived the first six months of his life with his mother, after which he was under the care of his maternal grandmother, Bessie Begay. In March of 1980, a maternal aunt removed Jeremiah from the reservation with the oral consent of the mother and took him to Utah for adoptive placement with defendants Dan and Patricia Carter. In May of 1980, the natural mother appeared in the District Court for Utah County and executed a Consent to Adoption after which defendants Dan and Patricia Carter then filed a petition for adoption. Defendant Judge David Sam ordered counsel for defendants Dan and Patricia Carter to give notice seeking the consent of the Navajo Tribe before proceeding with the adoption, and notification was given approximately five months later to plaintiff Navajo Nation. Some two years after the petition for adoption was filed, in May of 1982, the Navajo Nation appeared in the lawsuit as intervenor and filed a motion to dismiss the proceeding and transfer jurisdiction to the tribe on the basis of the Indian Child Welfare Act of 1978 (ICWA), Pub.L. No. 95-608 (codified at 25 U.S.C. § 1901 et seq.). After a hearing on the matter, on July 14, 1982, defendant Judge David Sam awarded temporary custody to Dan and Patricia Carter, and ruled that the domicile of the child was that of the adoptive parents, that good cause existed for the State Court to retain jurisdiction, and that the requirements of the ICWA had been satisfied. The State Court gave the parties additional opportunity to present further evidence on the domicile issue, and after receiving that evidence, entered an order dated October 6, 1988, reaffirming its finding that the child’s domicile was that of the adoptive parents and that good cause existed under the ICWA for the State Court to retain jurisdiction. The Court also ruled that there had been an abandonment of the child.

On October 12, 1984, the District Court of the Navajo Nation for Window Rock found that, pursuant to Navajo common law and statute, the domicile of Jeremiah had at all times remained within the boundaries of the Navajo Reservation and that the Navajo Tribe had exclusive jurisdiction under tribal statutes, common law and the ICWA to determine the custody of Jeremiah Halloway. Just prior to the date set for trial on termination of the parental rights, the Navajo Nation filed a Motion for Full Faith and Credit and to Dismiss in the state court proceedings, based upon the ruling of the Navajo District Court that it had exclusive jurisdiction over the adoption proceedings and that the Fourth District Court was without jurisdiction. At the beginning of the trial on October 22, 1984, the State Court denied the motion as untimely, and went ahead with the trial on the termination of parental rights. On January 28, 1985, defendant Judge David Sam entered his decision, finding:

(1) That the evidence (including expert testimony) established beyond a reasonable doubt that to return Jeremiah to his Indian custodians would result in serious emotional or physical damage to him;
(2) That active efforts have been undertaken to attempt the rehabilitation of the Indian family and have failed; and
(3) That the biological mother knowingly and voluntarily abandoned the child as defined in Utah Code Annotated 78-3a-48(1).

The State Court therefore granted the petition for adoption, and on February 28, 1985, the Navajo Nation filed a Notice of Appeal of Judge David Sam’s decision to the Utah Supreme Court. That appeal presently is pending and being pursued by all parties. On March 15, 1985, plaintiffs filed the instant action in the United States District Court for the District of Utah.

The action before this Court contains fifteen separate claims for relief based on alleged violation by the defendants of the ICWA and the United States Constitution. Six claims seek recovery under 42 U.S.C. § 1983, alleging violation of civil rights; eight claims seek declaratory relief under 28 U.S.C. § 2201, alleging that the exercise of state jurisdiction was void; and one pendent claim alleges that the placement of Jeremiah with the adoptive parents violated the Interstate Compact on Placement of Children, Utah Code Ann. § 55-8b-l, et seq. The plaintiffs also seek monetary relief against all defendants for violation of civil rights, and declaration of their rights under the ICWA, the United States Constitution and state law.

INDIAN CHILD WELFARE ACT

The Indian Child Welfare Act was enacted in 1978 to remedy perceived inequities in adoption standards for Indian children. The Act represents congressional recognition of the interest of Indian Tribes in the preservation of their valuable heritage. Background and cultural differences between society generally and the Indian nations had greatly influenced social and adoptive agencies to increase the numbers of Indian children being placed in foster and adoptive homes. A general misunderstanding of Indian culture compounded the numbers of Indian children being separated from their families. In 1978, after recognizing that greater than one-fourth of all Indian children were separated from their families and placed in foster homes, adoptive homes or institutions, Congress declared that “[t]he wholesale separation of Indian children from their families is perhaps the most tragic and destructive aspect of American Indian life today.” H.Rep. No. 1386, 95th Cong., 2d Sess., 9, reprinted in 1978 U.S.Code Cong. & Ad.News 7530, 7531. Therefore, in 1978, Congress enacted ICWA, the purpose of which was

to protect the best interest of Indian children and to promote the stability and security of Indian tribes and families by establishing minimum Federal standards for the removal of Indian children from their families and the placement of such children in foster or adoptive homes or institutions which will reflect the -unique values of Indian culture and by providing for assistance to Indian tribes and organizations in the operation of child and family service programs. which is in most respects antithetical to their traditions. Furthermore, the cultural diversity among Indian tribes is unquestionably profound yet often not fully appreciated in our society

Id. at 1. This Court is aware of and shares that concern. As one court stated:

Each individual is an amalgam of the predominant religious, linguistic, ancestral and educational influences existent in his or her surroundings. Indian people, whether residing on a reservation or not, are immersed in an environment
Preservation of Indian culture is undoubtedly threatened and thereby thwarted as the size of any tribal community dwindles. In addition to its artifacts, language and history, the members of a tribe are its culture. Absent the next generation, any culture is lost and necessarily relegated, at best, to anthropological examination and categorization.

Matter of M.E.M., 195 Mont. 329, 635 P.2d 1313, 1317 (1981). This Court is cognizant of the responsibility to promote and protect the unique Indian cultures of this and other states. This Court also is aware, however, that the ICWA and principles of equity require that the interests of the individual also must be protected, not in derogation of the Act but in compliance with its specific provisions.

In order to further Congress’ desire to promote the welfare of Indian children, families and culture, the ICWA lays jurisdiction over Indian child adoption proceedings in the tribe or the state respectively, depending on the domicile of the child. The Indian tribe has exclusive jurisdiction over any child custody proceeding involving an Indian child who resides or is domiciled within the reservation. 25 U.S.C. § 1911(a) (1982). A state court has jurisdiction over foster care placement or termination of parental rights of Indian children not domiciled or residing within the reservation, but the Act requires the state court to transfer the proceeding to the tribe upon petition of either parent, the custodian or the child’s tribe, absent good cause to the contrary or objection of either parent. Id. § 1911(b). The Act also requires that the United States, every state and territory and every Indian tribe “give full faith and credit to the public acts, records, and judicial proceedings of Indian tribes applicable to Indian child custody proceedings to the same extent that such entities give full faith and credit to the public acts, records, and judicial proceedings of any other entity.” Id. § 1911(d).

The Act necessarily contemplates the state court’s involvement in Indian child adoption proceedings. Indeed, the ICWA grants concurrent jurisdiction in state and federal courts over adoption proceedings brought under its provisions. 25 U.S.C. §§ 1911, 1921 (1982); 28 U.S.C. § 1360(a) (1982). “Where the Act applies, the state court has a duty to exercise its jurisdiction over actions brought thereunder, since to decline jurisdiction in such a case would violate the supremacy clause of the federal [Cjonstitution.” E.A. v. State, 623 P.2d 1210, 1215 n. 13 (Alaska 1981) [citing Testa v. Katt, 330 U.S. 386, 67 S.Ct. 810, 91 L.Ed. 967 (1947); Mondou v. New York, New Haven & Hartford Ry. Co., 223 U.S. 1, 32 S.Ct. 169, 56 L.Ed. 327 (1912)]. A state court therefore has a right and a need to determine its own jurisdiction in Indian child adoption cases brought before it, and a judge making such a determination clearly would be acting within the scope of his judicial capacity, regardless of the propriety of his ruling on the jurisdictional question.

JURISDICTION IN INDIAN CHILD ADOPTION PROCEEDINGS

Jurisdiction in such proceedings is based upon a determination of the domicile of the child. That question was squarely before the state District Court, which took cognizance of the issue and made its determination after fully hearing evidence and arguments of the parties. That Court found that the child’s domicile was in Utah with the adoptive parents, and that transfer of the proceedings to the tribal court would not be in the best interests of the child. Those findings are currently on appeal before the Utah Supreme Court.

Plaintiffs ask this Court to render a declaration of their rights under the ICWA and the United States Constitution, contending that these are additional issues not raised in the state court proceedings. But those claims presented here as alleged constitutional and statutory infringements will live or die on a determination of the issue of domicile, an issue that was fully presented and litigated in the state proceeding which is now pending before the Utah Supreme Court. Reversal on the domicile issue in state court basically would give the plaintiffs the declaratory relief they seek in this Court. On the other hand, affirmance would open the avenue of redress before the Supreme Court of the United States on the constitutional issues. It would be premature and inappropriate for this Court to enter rulings of any kind in the present posture of this litigation.

CLAIMS FOR DECLARATORY RELIEF

[2-4] Because the issue of domicile was fully litigated in the state court proceeding, and now the question of the propriety of the State Court’s application of law and determination of domicile is pending before the state’s highest court, this Court exercised its discretion under the Declaratory Judgment Act by dismissing plaintiffs’ claim for declaratory relief. It is appropriate for federal courts to deny a declaratory judgment under 28 U.S.C., Section 2201 where the issues raised are likely to be fully adjudicated in an action pending in state court at the time the declaratory judgment action is filed in federal court. Moore’s Federal Practice 110.220, at 2387-88 (1985) [citing Miller v. Miller, 423 F.2d 145 (10th Cir.1970).] The United States Supreme Court has recognized and upheld exercise of discretion by district courts in such circumstances, ruling that a district court is under no compulsion to exercise jurisdiction, and recognizing that:

The decision in such circumstances is largely committed to the discretion of the District Court____ (and) ... that such deference may be equally appropriate even when matters of substantive federal law are involved in the case. (Footnote omitted.)

Will, U.S. District Judge v. Calvert Fire Insurance Co., 437 U.S. 655, 98 S.Ct. 2552, 57 L.Ed.2d 504 (1978) cited in Jicarilla Apache Tribe v. United States, 601 F.2d 1116, 1130-31 (10th Cir.1979). See also, State Farm Mut. Auto Ins. Co. v. Scholes, 601 F.2d 1151, 1155 (10th Cir.1979), and Arizona v. San Carlos Apache Tribe of Arizona, 463 U.S. 545, 103 S.Ct. 3201, 77 L.Ed.2d 837 (1983), wherein the Court affirmed district court orders granting motions to dismiss federal actions seeking adjudication of water rights, where concurrent state court actions had previously been initiated. The issue of domicile and whether it was appropriate for the state court to assume jurisdiction over the adoption proceedings in this case is precisely the question presented before the Utah Supreme Court. This Court does not sit as an appellate court for state decisions, and declaratory judgment should not be used to re-examine what has been adjudicated in another forum. 1A J. Moore, W. Taggart & J. Wicker, Moore’s Federal Practice ¶ 0.220, at 2388 n. 7 (1985). See American Benefit Life Ins. Co. v. United Founders Life Ins. Co., 515 F.Supp. 800, (W.D.Okl. 1980), and cases cited therein.

All parties had full and complete opportunity to be heard in the state court proceedings. It would not be in the interests of judicial economy, federal-state comity or the avoidance of piecemeal and duplicative litigation for this Court to act upon plaintiffs’ claims for declaratory relief or the Section 1983 claims.

SECTION 1983 CLAIMS

The United States Supreme Court has held that rules of res judicata and collateral estoppel are applicable to Section 1983 actions, where a final judgment on the merits of an action has been rendered in state court and the same issues that were or could have been raised in that action are later sought to be raised in a federal action. Allen v. McCurry, 449 U.S. 90, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980). The Court stated in the Allen case:

The federal courts have traditionally adhered to the related doctrines of res judicata and collateral estoppel. Under res judicata, a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action____ Under collateral estoppel, once a court has decided an issue of fact or law necessary to its judgment, that decision may preclude relitigation of the issue in a suit on a different cause of action involving a party to the first case____ As this Court and other courts have often recognized, res judicata and collateral estoppel relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources and, by preventing inconsistent decisions, encourage reliance on adjudication.

Id. at 94, 101 S.Ct. at 414 (citations omitted).

To allow relitigation of the question of the child’s domicile, and ultimately the appropriateness of the state court’s taking jurisdiction of the case for purposes of the Section 1983 claims now asserted, would be to deny the state court system the full faith and credit to which it is entitled, and would violate principles of res judicata and collateral estoppel. In the recent case of Migra v. Warren City School District Board of Education, 465 U.S. 75, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984), the Supreme Court stated:

It is now settled that a federal court must give to a state-court judgment the same preclusive effect as would be given that judgment under the law of the state in which the judgment was rendered.

Id. 465 U.S. at 81, 104 S.Ct. at 896, 79 L.Ed.2d at 61. Utah follows the general principles of res judicata and collateral estoppel as discussed above. See Penrod v. Nu Creation Creme, Inc., 669 P.2d 873 (Utah 1983); Bernard v. Attebury, 629 P.2d 892 (Utah 1981). This Court finds that the basis for the plaintiffs’ claims for violation of civil rights under Section 1983 was fully litigated on the merits in the state proceeding and this Court is bound by the State Court’s decision.

FULL FAITH AND CREDIT: DECISION OF THE DISTRICT COURT OF THE NAVAJO NATION -

As observed above, the decision of the District Court of Utah is entitled to full faith and credit. But plaintiffs ask this Court to find that the decision of the District Court of the Navajo Nation for Window Rock that the Navajo Tribe had exclusive jurisdiction over the adoption proceeding and that Jeremiah was domiciled on the reservation was entitled to full faith and credit by the State District Court. The determination by the District Court of the Navajo Nation was made some four and one-half years after the Consent of Adoption was given by the child’s mother in open court in the District Court of Utah, and after extensive evidence was presented on the domicile issue following a substantial period of total inaction and inattention to the matter by the plaintiff Navajo Nation.

There is no question that the ICWA requires universal recognition of the acts, records and judicial proceedings of any Indian Tribe. The Act states:

The United States, every State, every territory or possession of the United States, and every Indian tribe shall give full faith and credit to the public acts, records, and judicial proceedings of any Indian tribe applicable to Indian child custody proceedings to the same extent that such entities give full faith and credit to the public acts, records, and judicial proceedings of any other entity.

25 U.S.C. § 1911(d). This statute does not require, however, that the public acts, records, and judicial proceedings of any Indian tribe be accorded greater weight than the public acts, records, and judicial proceedings of a state. Indeed, an Indian tribe is bound to give full faith and credit to the public acts, records, and judicial proceedings of a state. Where the state court acts within the scope of its judicial capacity to determine personal jurisdiction and that issue is fully litigated, the State court clearly would not be required to relinquish jurisdiction based upon the court order of a sister state over a year later. The same is true of the subsequent Tribal Court Order.

JUDICIAL IMMUNITY

Although we need not reach the question of judicial immunity, this Court finds it appropriate to address this point as an additional basis for dismissal of the claims against defendant Judge David Sam. This Court holds that Judge Sam is absolutely immune from any claim for damages, and that injunctive and declaratory relief against him would serve no purpose.

A. Claims for Monetary Relief

It is a firmly established principle in our judicial system that judges are immune from liability for acts committed within their judicial capacity. The reason for this judicial immunity, as outlined in Bradley v. Fisher, is that judges must be free to act upon their own convictions, without concern of personal consequences to themselves. 13 Wall. 335, 80 U.S. 335, 20 L.Ed. 646 (1871). Although judicial immunity is not without limitations, “a judge is entitled to judicial immunity if he has not acted in clear absence of all jurisdiction and if the act was a judicial one. An act is judicial if it is a function normally performed by a judge and the parties dealt with the judge in his judicial capacity ... A judge is entitled to immunity even if he acted with partiality, maliciously, or corruptly.” Martinez v. Winner, 771 F.2d 424, 434 (10th Cir.1985) [citing Stump v. Sparkman, 435 U.S. 349, 359, 98 S.Ct. 1099, 1106, 55 L.Ed.2d 331 (1978); Bradley v. Fisher, 13 Wall. 335, 348, 80 U.S. 335, 348, 20 L.Ed. 646 (1871) ]. Although there is danger that some wrongs may go unredressed as a result of the application of judicial immunity, our system of justice has found it more tolerable for a few wrongs to go unredressed than for the courts to be constantly harassed by suits brought by disappointed litigants. Id. at 436. The questions presented before this Court are whether the alleged wrongful conduct of Judge David Sam occurred outside of Judge Sam’s judicial capacity or function and whether Judge Sam acted in clear absence of all jurisdiction. It is clear from the facts that at all times for which wrongful conduct is alleged Judge Sam was acting in his judicial capacity and that all his acts were judicial ones. Additionally, as has been thoroughly discussed, the ICWA contemplates state courts making determinations of personal jurisdiction in Indian child adoption proceedings and taking jurisdiction in appropriate cases. The state court’s jurisdiction under the Act to determine its own jurisdiction constituted judicial action on the part of Judge Sam. Determination of the issues as to domicile and personal jurisdiction certainly was not in clear absence of all jurisdiction, and at the very least constituted a colorable claim of jurisdiction. Therefore, this Court rules that as to the claims for monetary relief, defendant Judge Sam is absolutely immune.

b. Claims for Injunctive and Declaratory Relief

Although the United States Supreme Court recently found that judicial immunity is not a bar to prospective injunctive relief against a judicial officer, nor to the award of attorney’s fees under 42 U.S.C. § 1988 in cases where prospective injunctive relief is granted, Pulliam v. Allen, 466 U.S. 522, 104 S.Ct. 1970, 80 L.Ed.2d 565 (1984), the question presented here is whether this case is appropriate for collateral prospective relief. Unlike the respondents in Pulliam, who sought to enjoin a state Magistrate from requiring bond for a nonincarcerable offense, the plaintiffs in his case do not seek the prospective enjoining of an ongoing unconstitutional practice, but rather seek to reverse a final judgment which resulted from evidentiary hearings in a specific case. The plaintiffs’ request is more in the nature of appellate review of the State Court decision. Therefore, this Court finds that the narrow exception to the doctrine of judicial immunity as articulated in the Pulliam decision does not apply to the facts of this case, and the claims for declaratory and injunctive relief against defendant David Sam are dismissed.

One additional question that is implicit in the plaintiffs’ arguments is whether Section 1983 somehow overcomes the common law doctrine of judicial immunity. That point was thoroughly addressed in the recent case of Martinez v. Winner, 548 F.Supp. 278 (D.Utah 1982), aff'd. 771 F.2d 424 (10th Cir.1985). That case involved alleged intentionally wrongful and conspiratorial violations of the Civil Rights Act by a judge. Martinez asked the Court to find an exception in such conduct to the common law doctrine of judicial immunity. Chief Judge Jenkins of the District Court for Utah in the initial decision in Martinez pointed out that in Pierson [v. Ray, 386 U.S. 547, 87 S.Ct. 1213, 18 L.Ed.2d 288 (1967)], the United States Supreme Court held that the common-law doctrine of judicial immunity was not abridged by the enactment of the Civil Rights Act of 1871 as codified in 42 U.S.C. § 1983, and that “State judges are thus immune from suit under § 1983 for their ‘judicial’ acts.” 548 F.Supp. at 292.

This Court finds no basis in law or in fact for plaintiffs’ claims against defendant David Sam for monetary or prospective injunctive relief.

For the foregoing reasons, defendants’ Motions for Summary Judgment are granted, and plaintiffs’ Motion for Summary Judgment is denied.

IT IS SO ORDERED.


author: MILTON L. SCHWARTZ, District Judge.

text:
    FRONTIER ENTERPRISES, INC., etc., et al., Plaintiffs, v. AMADOR STAGE LINES, INC., etc., et al., Defendants.
    Civ. No. S-83-940 MLS.
    United States District Court, E.D. California.
    Oct. 2, 1985.

      William L. Jaeger, Broad, Schulz, Larson & Wineberg, San Francisco, Cal., for plaintiffs.
    James Duryea, Jr., San Francisco, Cal., for defendants.
   MEMORANDUM AND ORDER

MILTON L. SCHWARTZ, District Judge.

Defendants’ motion to dismiss or, in the alternative, for summary judgment was heard on April 6, 1984, and thereafter submitted. The court has considered all of the briefs and other written materials presented by the parties, including recently filed supplemental briefs, as well as the oral arguments made at the April 6, 1984 hearing, and now renders it decision.

In their complaint, plaintiffs allege that defendants have contracted, combined, and conspired to unreasonably restrain interstate commerce in violation of section 1 of the Sherman Act, 15 U.S.C. § 1, and have monopolized, attempted to monopolize, and combined and conspired to monopolize interstate trade and commerce in violation of section 2 of the Sherman Act, 15 U.S.C. § 2. Two separate lines of commerce are allegedly involved in this case: motor carrier passenger service between the Sacramento area and Northern Nevada, and tour broker service for tours which include such transportation. Plaintiffs claim that defendants “filed repetitive, overlapping and baseless protests, administrative appeals and judicial appeals, and initiated court litigation, without regard to merit, against anyone seeking ICC [Interstate Commerce Commission] authority to compete with defendants in the Sacramento area,” (Complaint ¶ 21) and that defendants also “abused their monopoly in motor carrier passenger service for group casino tours in order to fix the prices paid by consumers for such tours, to gain unfair competitive advantages, and to extend their monopoly power into the above unregulated tour broker businesses through price squeezes, refusals to deal, restrictive tariffs____” (Complaint 1121)

Defendants seek dismissal or summary judgment as to those claims concerning the special tariff and the protests and subsequent litigation concerning the applications of plaintiffs Quality Coach Lines, Inc. (“Quality”) and Vaca Valley Bus Lines, Inc. (“Vaca Valley”) for certificates of public convenience and necessity. They argue (1) that the above described allegations fail to state a claim upon which relief can be granted, (2) that this court lacks subject matter jurisdiction, and (3) that there are no triable issues of material fact.

Specifically, defendants contend that the allegations concerning the special tariff are “defective” because (1) the Interstate Commerce Commission (“ICC”) found the tariff to be reasonable, nondiscriminatory and not to unreasonably restrain competition and plaintiffs cannot relitigate the issue of reasonableness under a Sherman Act theory in this court; (2) the district court has no jurisdiction to entertain a collateral attack on an ICC decision; and (3) since the ICC approved the special tariff, defendants are immune from antitrust liability for using the tariff. With respect to the allegations regarding “sham protests,” defendants urge that the ICC and the Ninth Circuit have found merit to their protests and that plaintiffs are precluded, under the doctrine of collateral estoppel, from relitigating that issue in this forum. The court will address the arguments concerning the special tariff first.

Plaintiffs allege that on January 1, 1981, defendants began using a “special tariff” under which the rates charged to plaintiff Frontier Enterprises, Inc. (“Frontier”) and other tour agents were 25 percent lower than the regular published rates of defendant Amador Stage Lines, Inc. (“Amador”). Additionally, the tariff provided that “all fares sold under this tariff are net noncommissionable, and all travel arrangements must be provided by Amador Stage Lines, Inc.” Plaintiffs allege that defendants used this “special tariff” for three reasons: (1) to drive tour agents and brokers, such as Frontier, out of the casino group tour business by depriving them of broker and casino commissions; (2) to subject tour agents and brokers to a price squeeze; and (3) to fix and standardize prices for casino group tours.

Before addressing the merits of the parties’ arguments, the court must decide whether to treat defendants’ motion as one for dismissal or summary judgment. As previously noted, defendants seek dismissal or summary judgment on the ground that the complaint fails to state a claim upon which relief can be granted (a Fed.R.Civ.P. 12(b)(6) motion) and that this court lacks subject matter jurisdiction (12(b)(1)). The court may, when considering a 12(b)(1) motion, look to matters outside the pleadings. If, however, on a 12(b)(6) motion the court is presented with and does not exclude matters outside the pleadings, “the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56.” Fed.R.Civ.P. 12(b). In this case, the court has considered matters outside the pleadings, some of which are not subject to judicial notice. Therefore, except to the extent it addresses subject matter jurisdiction the motion will be treated as one for summary judgment.

As the Ninth Circuit stated in National Industries v. Republic National Life Insurance Co., 677 F.2d 1258, 1265-66 (9th Cir.1982), summary judgment should be granted

if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c). For this purpose, all permissible inferences from the evidence must be drawn in favor of the non-moving party. Castaneda v. DuraVent Corp., 648 F.2d 612, 617 (9th Cir. 1981).
The moving party has the burden of demonstrating the absence of a genuine issue of material fact, regardless of where the ultimate burden of proof would lie at trial. Long v. Bureau of Economic Analysis, 646 F.2d 1310, 1320-21 (9th Cir.), vacated on other grounds, 454 U.S. 934, 102 S.Ct. 468, 70 L.Ed.2d 242 (1981); Bieghler v. Kleppe, 633 F.2d 531, 533 (9th Cir.1980); Weisberg v. United States Dept. of Justice, 627 F.2d 365, 368 (D.C.Cir.1980). It is not enough for the moving party to present evidence that is legally sufficient to support a judgment in its favor or, put another way, evidence upon which a reasonable trier of fact could rationally base a verdict in its favor. That formulation of the standard would ignore that a reasonable trier of fact might also construe the same evidence to support a different result. Contradictory inferences may be drawn from undisputed evidentiary facts. Neely v. St. Paul Fire & Marine Ins. Co., 584 F.2d 341, 345 (9th Cir.1978). However, summary judgment should be granted when the evidence in support of the motion would, if uncontradicted, entitle the moving party to a directed verdict were the case to proceed to trial. Bieghler, supra, 633 F.2d at 533; British Airways Board v. Boeing Co., 585 F.2d 946, 951 (9th Cir.1978), cert. denied, 440 U.S. 981, 99 S.Ct. 1790, 60 L.Ed.2d 241 (1979); Neely, supra, 584 F.2d at 344-45. Accordingly, the movant’s evidence should demonstrate as a matter of law the absence of genuine issues of fact to present to the fact-finder. Garter-Bare [Co. v. Munsingwear, Inc.], supra, 650 F.2d [975] at 979 [ (9 Cir.1980) ]; Neely, supra, 584 F.2d at 344-45.
If that burden is satisfied, then the party opposing the motion must present sufficient evidence supporting a claimed factual dispute so as “to require a jury or judge to resolve the parties’ differing versions of the truth at trial.” First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 289, 88 S.Ct. 1575, 1592, 20 L.Ed.2d 569 (1968); British Airways Bd., supra, 585 F.2d at 952; Neely, supra, 584 F.2d at 344. The non-moving party may not rest upon the mere allegations of its pleadings to resist an adequately-supported motion for summary judgment. Castanada, supra, 648 F.2d at 617.

The court is aware that summary judgment is not favored in antitrust cases particularly where motive and intent are at issue. Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962); Coca-Cola Co. v. Overland, Inc., 692 F.2d 1250, 1257 (9th Cir.1982). Such relief, however, is not precluded in antitrust cases and, when properly used, is a valuable means of preserving scarce judicial resources. Coca-Cola, 692 F.2d at 1257.

The court turns first to the question of whether it has subject matter jurisdiction over this case. According to 28 U.S.C. § 2321:

Except as otherwise provided by an Act of Congress, a proceeding to enjoin or suspend, in whole or in part, a rule, regulation, or order of the Interstate Commerce Commission shall be brought in the court of appeals as provided by and in the manner prescribed in chapter 158 of this title.

The Hobbs Act provides, in pertinent part, that the court of appeals’ jurisdiction under section 2321 is exclusive. 28 U.S.C. § 2342. See also Pullman-Standard, a Div. of Pullman, Inc. v. I.C.C., 705 F.2d 875 (7th Cir.1983). The only exception to this general grant of jurisdiction is found at 28 U.S.C. § 1336(a), which provides that district courts have exclusive jurisdiction to review ICC orders “for the payment of money or the collection of fines, penalties and forfeitures.” City of New Orleans v. Southern Scrap Material, 704 F.2d 755, 759-60 n. 18 (5th Cir.1983); Island Creek Coal Sales Co. v. I.C.C., 561 F.2d 1219 (6th Cir.1977); Southern Pac. Transp. Co. v. California Coastal Comm’n, 520 F.Supp. 800 (N.D.Cal.1981). Defendants argue that the allegations contained in paragraphs 24 and 26 of plaintiffs’ complaint constitute a collateral attack on an order of the ICC. Plaintiffs’ response is that section 2321 governs only direct review of ICC orders and that they are not seeking such review. They also note that none of the cases cited by defendants hold that an antitrust suit against a regulated carrier constitutes a collateral attack on an ICC order.

Defendants acknowledge that none of the cases cited in their moving papers “squarely holds that an antitrust suit against a regulated carrier might constitute a collateral attack on an ICC order.” (Memorandum of Points and Authorities in Reply to Plaintiffs’ Opposition to Summary Judgment, p. 14). They then cite REA Express, Inc. v. Alabama Great Southern Railroad Co., 343 F.Supp. 851, 859 (S.D.N. Y.1972), aff'd on appeal, 412 U.S. 934, 93 S.Ct. 2774, 37 L.Ed.2d 393 (1973), as so holding. This court finds REA distinguishable and, therefore, not controlling. In REA, plaintiff was challenging only the alleged illegal issuance of securities, the very act approved by the ICC. Here, plaintiffs are challenging, inter alia, defendant Amador’s overall rate structure which the ICC did not examine.

Although the court does not have the power to issue an order which would, in effect, suspend or enjoin an ICC order, it does have jurisdiction to question the validity and scope of an ICC order. Seaboard Air Line Railroad Co. v. Daniel, 333 U.S. 118, 122-23, 68 S.Ct. 426, 428-29, 92 L.Ed. 580 (1948); Southern Pac. Transp. Co., 520 F.Supp. at 808. Based on the present record, the court is not persuaded that this action is one which is required to be brought in the court of appeals. Accordingly, this court will retain jurisdiction pending a later decision, if any, that any relief which might be granted would effectively enjoin or suspend the ICC’s order.

Defendants’ second contention is that they cannot be subjected to liability under the antitrust laws for using Special Tariff 52A because the ICC specifically approved the tariff as being in the public interest.

Plaintiffs’ response is: (1) the special tariff cannot be considered in isolation but must be viewed in the context of the broad conspiracy alleged in plaintiffs’ complaint; (2) the ICC did not approve the special tariff as being in the public interest but simply ruled there had been no violation of 49 U.S.C. §§ 11101, 10761 or 10741(a); and (3) numerous courts have found antitrust liability involving conduct ostensibly approved by the ICC following hearings. These contentions will be addressed sequentially.

Whether defendants’ conduct is exempt from application of the antitrust laws by virtue of the ICC’s actions is a question of law. Gordon v. New York Stock Exchange, Inc., 422 U.S. 659, 688, 95 S.Ct. 2598, 2614, 45 L.Ed.2d 463 (1975); Mt. Hood Stages, Inc. v. Greyhound Corp., 555 F.2d 687, 695 (9th Cir.1977), cert. denied, 449 U.S. 831, 101 S.Ct. 99, 66 L.Ed.2d 36 (1980). The court must consider several general principles in its approach to the question. Conduct is not immunized merely because it falls within the jurisdiction of a regulatory agency. Cantor v. Detroit Edison Co., 428 U.S. 579, 596-97 n. 36, 96 S.Ct. 3110, 3120-21 n. 36, 49 L.Ed.2d 1141 (1976). Nor is immunity implied simply because the applicable regulatory standard requires the agency to give weight to antitrust policy. Otter Tail Power Co. v. United States, 410 U.S. 366, 93 S.Ct. 1022, 35 L.Ed.2d 359 (1973). As the Supreme Court stated in Gordon, 422 U.S. at 682, 95 S.Ct. at 2611 (1975): “Repeal of the antitrust laws by implication is not favored and not casually to be allowed. Only where there is a ‘plain repugnancy between the antitrust and regulatory provisions’ will repeal be implied.”

The court has carefully considered the authorities cited by the parties and the orders issued by the ICC with the above guidelines in mind and has concluded that defendants are not immune from antitrust liability.

Defendants suggest that the mere fact the ICC approved the special tariff as being “in the public interest” entitles them to immunity. The court disagrees. The ICC’s conclusion must be viewed in light of the issues it was addressing. Here it appears the ICC was considering three very narrow issues.

Defendants attempt to distinguish three cases cited by plaintiffs (Borough of Ellwood City, Pennsylvania v. Pennsylvania Power Co., 570 F.Supp. 553 (W.D.Pa.1983); City of Kirkwood v. Union Electric Co., 671 F.2d 1173 (8th Cir.1982), cert. denied, 459 U.S. 1170, 103 S.Ct. 814, 74 L.Ed.2d 1013 (1983); and City of Mishawaka, Indiana v. Indiana & Michigan Electric Co., 560 F.2d 1314 (7th Cir.1977), cert. denied, 436 U.S. 922, 98 S.Ct. 2274, 56 L.Ed.2d 765 (1978)), on the ground that those cases involved the interaction of two regulatory rates, which neither a federal nor state agency had full authority to regulate, whereas here “the conduct at issue was entirely within the jurisdiction of the ICC.” (Memorandum of Points and Authorities in Reply to Plaintiffs’ Opposition to Summary Judgment, p. 12.) Defendants have not submitted any authority, however, which indicates that the ICC had the jurisdiction to, and did in fact, consider the overall conspiracy being alleged here, or even the alleged price squeeze involving the special tariff. Nor have defendants responded to plaintiffs’ contention that Amador’s counsel told the ICC Joint Board (1) that the issue whether the special tariff was anti-competitive was not before the board; (2) that Frontier could only seek damages for the alleged unlawful rates in a federal court action; and (3) that Amador’s motive was not an issue. In view of the above, the court cannot find that the ICC’s “approval” of Special Tariff 52A was so broad as to entitle defendants to immunity from liability under the antitrust laws.

Defendant Amador’s next contention is that it is immune from antitrust liability under the “Keogh ” doctrine, a rule first articulated by the Supreme Court in Keogh v. Chicago & Northwestern Railway Co., 260 U.S. 156, 43 S.Ct. 47, 67 L.Ed. 183 (1922), to the effect that a regulated entity may not charge rates for its services other than those properly filed with the appropriate federal regulatory authority. Applying that rule to the facts of the case before it, the Keogh court held that a shipper could not recover antitrust damages based on an illegal combination of carriers to fix rates where the rates had been approved by the ICC.

Amador claims that this case is “on squares” with Keogh and therefore, because the ICC approved Special Tariff 52A, Amador cannot be held liable for antitrust damages for using the tariff. See also Ellingson Timber Co. v. Great Northern Railway Co., 424 F.2d 497 (9th Cir.), cert. denied, 400 U.S. 957, 91 S.Ct. 354, 27 L.Ed.2d 265 (1970).

Plaintiffs argue that the Keogh doctrine is not applicable in this case for several reasons. First, in the case sub judice, unlike Keogh, there is no adequate remedy available to plaintiffs under the Interstate Commerce Act. Second, plaintiffs are competitors of defendants, not just customers. (In both Keogh and Ellingson, plaintiffs were customers of the defendants.) Third, the tariff is only part of a larger anticompetitive scheme. Fourth, this case involves a price squeeze. Finally, the damages claimed herein are not speculative, as was the case in Keogh.

The court need not address all of plaintiffs’ arguments since it is satisfied that Keogh is not applicable in this case for the reason that plaintiffs are competitors of defendants. City of Kirkwood v. Union Electric Co., 671 F.2d 1173 (8th Cir.1982), cert. denied, 459 U.S. 1170, 103 S.Ct. 814, 74 L.Ed.2d 1013 (1983); Essential Communications Systems, Inc. v. American Telephone & Telegraph Co., 610 F.2d 1114, 1121 (3rd Cir.1979) (“[Cjompetitors are not the intended beneficiaries of that rule of public utility regulation.”); Pinney Dock & Transport Co. v. Penn Cent. Corp., 600 F.Supp. 859 (N.D.Ohio 1983).

The next argument advanced by defendants is that because the ICC approved Special Tariff 52A plaintiffs are collaterally estopped from relitigating issues relating to it. Plaintiffs contend that collateral estoppel does not apply because (1) the ICC’s decision concerned three narrow issues which are not relevant herein, and (2) plaintiffs were denied due process during the ICC hearing. Plaintiffs also point out that in the state court action between Amador and Frontier, Amador’s motion for summary judgment based on collateral estoppel was denied.

In determining, first, whether the state court decision has preclusive effect, this court is required by 28 U.S.C. § 1738 to look initially to state preclusion law. Marrese v. American Academy of Orthopaedic Surgeons, — U.S. -, 105 S.Ct. 1327, 84 L.Ed.2d 274 (1985); Kremer v. Chemical Construction Corp., 456 U.S. 461, 481-82, 102 S.Ct. 1883, 1897-98, 72 L.Ed.2d 262 (1982). Under California law, three questions must be answered in the affirmative in order for collateral estoppel to apply. They are: “(1) Was the issue decided in the prior adjudication identical with the one presented in the action in question? (2) Was there a final judgment on the merits? and (3) Was the party against whom the plea [of res judicata or collateral estoppel] is asserted a party or in privity with a party to the prior adjudication?” Hone v. Climatrol Industries, Inc., 59 Cal.App.3d 513, 529, 130 Cal.Rptr. 770 (1976); see also, Aguilar v. Los Angeles County, 751 F.2d 1089, 1092 (9th Cir. 1985); Bernhard v. Bank of America, 19 Cal.2d 807, 813, 122 P.2d 892 (1942). In the state court action there was no final judgment; accordingly, collateral estoppel does not apply and this court is not bound by the state court’s decision.

The court considers next the effect of the decision made by the ICC. It is clear that administrative agency determinations can have collateral estoppel effect. Tipler v. E.I. duPont deNemours and Co., 443 F.2d 125, 128 (6th Cir.1971); see also Martin v. Donovan, 731 F.2d 1415 (9th Cir.1984). In this case the court is satisfied that plaintiffs’ claim of denial of due process is barred by application of collateral estoppel. It is not persuaded, however, based on the present record, that plaintiffs’ claims respecting Special Tariff 52A are barred.

Plaintiffs argue to this court that they were denied due process in the hearing before the ICC because (1) they were cut off on cross-examination or not permitted to present evidence which they deemed important and relevant to their case; (2) Amador’s counsel had a conflict of interest because he had previously represented plaintiff Yaca Valley on matters relevant to the case before the ICC; and (3) Amador’s counsel made references to David Lippincott, president of Frontier, in a highly improper manner. The decision of the review (appellate) board indicates that Frontier raised at least some of these contentions in its appeal from the decision of the joint board (trial tribunal). (The conflict of interest issue was not mentioned in the review board’s order, however. Amador claims that the issue was not raised.) After the review board affirmed the joint board’s decision, Frontier filed a petition for review with the Ninth Circuit, but the parties later stipulated to a voluntary dismissal of that petition. This court finds that plaintiffs have waived their due process arguments, and that they are collaterally estopped from raising them in this litigation. Federated Dept. Stores, Inc. v. Moitie, 452 U.S. 394, 398, 101 S.Ct. 2424, 2427, 69 L.Ed.2d 103 (1981) (“Nor are the res judicata consequences of a final unappealed judgment on the merits altered by the fact that the judgment may have been wrong or rested on a legal principle subsequently overruled in another case.”)

The fact that the court has found that collateral estoppel bars relitigation of plaintiffs’ due process claims does not mean that a similar conclusion must be reached with respect to the ICC’s ruling on Special Tariff 52A. As the Ninth Circuit recognized in Peterson v. Clark Leasing Corporation, 451 F.2d 1291, 1292 (9th Cir. 1971), “[t]he doctrine [of collateral estoppel] applies only to issues that are identical in both actions. Issues are not identical if the second action involves application of a different legal standard, even though the factual setting of both suits be the same.” Just because plaintiffs dismissed their petition for review does not mean that they waived claims with respect to Special Tariff 52A. The court is not satisfied, based on the present record, that the issues decided by the ICC with respect to the special tariff are identical to those being asserted here, nor is it satisfied that the ICC used the same standards as this court would employ in reaching its conclusions. Accordingly, plaintiffs are not barred by the doctrine of collateral estoppel from asserting claims involving Special Tariff 52A.

The court turns next to the “sham” litigation arguments. Plaintiffs allege that defendants brought administrative and judicial actions to harass, deter and injure Quality, Vaca Valley, All-Cal, River City Tours, and Golden State Coaches. Defendants seek dismissal or summary judgment with respect to the allegations pertaining to Quality and Vaca Valley. The court will address the arguments concerning each of the bus lines separately.

Defendants contend that the Ninth Circuit’s decision in Amador Stage Lines, Inc. v. United States, 685 F.2d 333 (9th Cir. 1982), establishes that Amador’s protest against Quality’s application was possessed of “substantial merit” and that that decision “precludes a later, contrary finding in. this case that such a protest was ‘sham’ as alleged by plaintiffs.” (Memorandum of Points and Authorities in Support of Motion to Dismiss Complaint, p. 20.) Defendants concede that Quality ultimately obtained operating authority but argue that this was due to a change in the law.

Plaintiffs characterize the Ninth Circuit’s decision as a “minor procedural victory” for defendants (Plaintiffs’ Memorandum of Points and Authorities in Opposition to Defendants’ Motion to Dismiss, and Defendants’ Alternative Motion for Summary Judgment, p. 49) and claim that, contrary to defendants’ position, they need not demonstrate that the Quality protests were prosecuted without probable cause. Plaintiffs also argue that the ICC ultimately rejected defendants’ Quality protest under both the old and new law.

“Under the Noerr-Pennington doctrine, bona fide efforts to obtain or influence legislative, executive, judicial or administrative actions are immune from antitrust liability [on the basis of the first amendment’s guaranteed right to petition].” Handgards, Inc. v. Ethicon, Inc., 743 F.2d 1282, 1294 (9th Cir.1984), cert. denied, — U.S. -, 105 S.Ct. 963, 83 L.Ed.2d 968 (1985) quoting Clipper Exxpress v. Rocky Mountain Motor Tariff Bureau, Inc., 690 F.2d 1240, 1251 (9th Cir. 1982), cert. denied, 459 U.S. 1227, 103 S.Ct. 1234, 75 L.Ed.2d 468 (1983). “However, the immunity does not extend to so-called ‘sham proceedings,’ which were instituted without probable cause and in complete disregard of the law to interfere with the business relationships of a competitor.” Clipper Exxpress, 690 F.2d at 1251-54. Whether an act is a genuine effort to influence governmental action, or a mere sham, is a question of fact. Aydin Corp. v. Loral Corp., 718 F.2d 897, 903 (9th Cir.1983); Energy Conservation, Inc. v. Heliodyne, Inc., 698 F.2d 386, 389 (9th Cir.1983); Clipper Exxpress, 690 F.2d at 1253. “[W]hile the success or failure of the protests is not singularly determinative of a party’s intent, this Circuit regards such success or failure as indicative of a party’s intent.” Clipper Exxpress, 690 F.2d at 1254. See Ernest W. Hahn, Inc. v. Codding, 615 F.2d 830, 841 n. 13 (9th Cir.1980).

The fundamental question before this court is whether Amador’s purpose in protesting was to win a favorable judgment against Quality or simply to harass it, “and deter others, by the process itself— regardless of outcome — of litigating.” Grip-Pak, Inc. v. Illinois Tool Works, Inc., 694 F.2d 466, 472 (7th Cir.1982), cert. denied, 461 U.S. 958, 103 S.Ct. 2430, 77 L.Ed.2d 1317 (1983). The court is satisfied that there are triable issues of material fact which preclude granting summary judgment on this issue. Amador offered no explanation as to its purpose in seeking a temporary restraining order (TRO) from Judge Ramirez of this court while proceedings were still pending before the ICC. The request for a TRO was denied and the entire action, Civil No. S-82-966 RAR, was later dismissed with prejudice pursuant to the parties’ stipulation. Amador also failed to discuss its “Emergency Petition for Further Enforcement of Court’s Mandate and Mandamus” which the Ninth Circuit denied on February 7, 1983. Finally, the court rejects Amador’s argument that the only reason Quality eventually obtained operating authority was because of a change in the applicable law. In its decision following remand from the Ninth Circuit, the ICC did acknowledge and discuss the applicability of the Bus Regulatory Reform Act of 1982 but it was careful to discuss the issues raised by the Ninth Circuit under the old law.

The court turns next to a consideration of defendants’ conduct with respect to the application of Vaca Valley. Plaintiffs claim that defendants undertook several administrative actions to prevent Vaca Valley from obtaining operating authority, and, further, that Vaca Valley did obtain permanent operating authority on March 29, 1983, one year after its initial application. Defendant Amador argues that it protested Vaca Valley’s application on two grounds: (1) unfitness by reason of past and present operations without the necessary ICC certificates, and (2) common control of Vaca Valley and other entities within the jurisdiction of the ICC; that the ICC found in its favor on both issues. Amador then argues that because Vaca Valley’s procedural due process rights were protected in the ICC proceedings, and because the ICC’s findings as to fitness and common control were material to the administrative determination and supported by substantial evidence, application of the doctrine of collateral estoppel precludes this court from finding that Amador’s protest was “sham.”

Plaintiffs seem to suggest that because Vaca Valley ultimately obtained operating authority, Amador’s protests must be deemed frivolous. Defendants, on the other hand, argue that because the ICC found merit in their contention that Vaca Valley had violated ICC regulations, their actions cannot be deemed “sham,” as a matter of law. The court finds that the evidence before it at this time does not compel the conclusion that the actions taken against Vaca Valley were not “sham.” Since conflicting inferences can be drawn from the evidence presently before the court, defendants’ motion for dismissal or summary judgment must be denied as to the “sham litigation” claim involving Vaca Valley.

In light of the foregoing, IT IS ORDERED that:

1. Defendants’ motion to dismiss for lack of subject matter jurisdiction is denied; and

2. Defendants’ motion to dismiss and/or for summary judgment as to plaintiffs’ claims pertaining to the special tariff and “sham litigation” against Quality and Vaca Valley is denied.


author: MYRON H. THOMPSON, District Judge.

text:
    Michael SEYMOUR, a minor, who sues By and Through his next friend and father, John D. SEYMOUR, and John D. Seymour, Individually, Plaintiffs, v. BELL HELMET CORPORATION, Defendant.
    Civ. A. No. 85-T-618-S.
    United States District Court, M.D. Alabama, S.D.
    Oct. 2, 1985.

      Steadman S. Shealy, Jr., Buntin & Cobb, Dothan, Ala., for plaintiffs.
    Alan C. Livingston, Lee & Mclnish, Do-than, Ala., for defendant.
   ORDER

MYRON H. THOMPSON, District Judge.

This cause is before the court on the July 10, 1985, motion of plaintiffs Michael Seymour and John D. Seymour to alter or amend judgment following this court’s July 1, 1985, dismissal of their suit for lack of personal jurisdiction over defendant Bell Helmet Corporation. For reasons that follow, the court concludes that the motion should be denied.

I.

Michael Seymour, a minor, and John D. Seymour, his father, brought this product-liability action against Bell Helmet as a result of injuries Michael suffered in a 1984 motorcycle accident in Florida. The Seymours allege that the helmet Michael was wearing at the time of the accident was “defective” and “unreasonably dangerous” and contributed to his injuries. The helmet was made by Bell Helmet, which is incorporated in a state other than Alabama and has its principal place of business in California. The helmet was purchased in Georgia, although the Seymours are residents of Alabama. Two retail businesses in Alabama apparently sell helmets made by Bell Helmet, but neither retailer is affiliated with the corporation. These allegations and facts were the basis of the court’s original dismissal for want of personal jurisdiction.

After the Seymours filed their motion to amend or alter judgment, further discovery revealed several additional factors of some relevance. First, Bell Helmet has shipped helicopter helmets to Fort Rucker, Alabama in connection with a contract it has with the United States Army. Second, Vetter Products, Inc. became a “division” of Bell Helmet in January 1985. Vetter sells its products directly to dealers, and some of these dealers are located in Alabama. Vetter does not handle Bell Helmet motorcycle helmets, however. Finally, Bell Helmet advertised its products in national publications, some of which, according to Bell Helmet, “surely reached Alabama.”

II.

In a diversity action such as this, the court must apply the law of the forum state to determine if it has jurisdiction over the person of the defendant. Southwire Co. v. Trans-World Metals & Co., Ltd., 735 F.2d 440, 442 (11th Cir.1984). The law of Alabama provides for personal jurisdiction to the limits of due process, Alabama Power Co. v. VSL Corp., 448 So.2d 327, 328 (Ala.1984), and for the exercise of jurisdiction to comport with due process, the defendant must have “certain minimum contacts with [the forum state] such that maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). As this court explained in its original dismissal of this action, a court’s exercise of jurisdiction over a defendant is either specific or general. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 nn. 8 & 9, 104 S.Ct. 1868, 1872 nn. 8 & 9, 80 L.Ed.2d 404 (1984). A court exercises specific jurisdiction when the suit “aris[es] out of or [is] related to the defendant’s contacts with the forum,” 466 U.S. at - n. 8, 104 S.Ct. at 1872 n. 8; general jurisdiction exists when the defendant’s contacts with the forum state do not relate or give rise to the suit, 466 U.S. at 414 n. 9, 104 S.Ct. at 1872 n. 9, but the defendant nonetheless has “continuous and systematic general business contacts” with the state. 466 U.S. at 416, 104 S.Ct. at 1873. The standard for general jurisdiction is more stringent than that for specific jurisdiction. Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 779-80, 104 S.Ct. 1473, 1481, 79 L.Ed.2d 790 (1984); Glater v. Eli Lilly & Co., 744 F.2d 213, 216 (1st Cir.1984).

The Seymours are arguing for the exercise of general rather than specific jurisdiction, for they admit that the helmet was purchased in Georgia and that the accident occurred in Florida. The Seymours have not offered any evidence suggesting that their claims arise from or are related to Bell Helmet’s ties to Alabama.

In its July 1, 1985, order dismissing this lawsuit for lack of personal jurisdiction, this court concluded that mere evidence that retailers sell Bell Helmet helmets in Alabama was not enough under the due process clause to justify the exercise of general jurisdiction over the company. This court observed that

[.Helicópteros held] “that mere purchases, even if occurring at regular intervals, are not enough to warrant a State’s assertion of in personam jurisdiction over a nonresident corporation in a cause of action not related to those purchase transactions.” 466 U.S. at 418, 104 S.Ct. at 1874. Here, sales in Alabama rather than purchases from Alabama are involved. The court must determine whether this matters.
In Glater v. Eli Lilly & Co., 744 F.2d 213 (1st Cir.1984), the First Circuit Court of Appeals held that an Indiana drug company’s sale of drugs and limited advertising in New Hampshire did not establish general jurisdiction over the company in New Hampshire in a suit where the plaintiff’s mother bought and took the company’s drugs in Massassachusetts. 744 F.2d at 217. In Wolf v. Richmond City Hospital Authority, 745 F.2d 904 (4th Cir.1984), the Fourth Circuit Court of Appeals similarly held in a malpractice action that a Georgia hospital’s treatment of and receipt of payments from South Carolina residents, among other contacts, did not establish general jurisdiction over the hospital in South Carolina. 745 F.2d at 909-10; cf. Cubbage v. Merchent, 744 F.2d 665, 672 (9th Cir.1985) (Arizona hospital’s receipt of payments from California residents established specific jurisdiction since “part and parcel of the ... cause of action and an integral part of the entire factual situation” of a malpractice action).
On this basis, the court finds that the contacts of Bell Helmet with Alabama that the Seymours have shown are insufficient to establish general jurisdiction over Bell Helmet in Alabama. The Seymours’ evidence and uncontroverted allegations do not show that Bell Helmet has “continuous and systematic general business contacts” in Alabama. Helicopteros, 466 U.S. at 416, 104 S.Ct. at 1873. They show only that Bell Helmet sells helmets in Alabama through two retail businesses apparently in no way affiliated with Bell Helmet. Such sales do not empower this court to adjudicate the Seymours’ claims.

These observations remain appropriate.

It should be emphasized that the court’s observations and conclusions are limited to instances, such as here, where there is no evidence as to the volume, extent and pervasiveness of a nonresident defendant’s sales in the forum state and there is no evidence as to what percentage of the nonresident defendant’s total sales are in the forum state. Here, the only evidence the Seymours have presented is that two retailers have sold some Bell Helmet helmets in this state. This court does not reach the issues of whether general jurisdiction could be appropriately exercised over a nonresident defendant where there is evidence of substantial and pervasive sales of its product in the forum state or evidence that the forum state is the principal market for its product.

The evidence the Seymours have submitted since the dismissal of this lawsuit and the filing of their motion to amend and alter judgment is also of no help to them. They point to Bell Helmet’s shipment of helicopter helmets to Fort Rucker as evidence that general jurisdiction exists, but it is unclear from the evidence whether the shipment was an isolated event or part of an on-going business arrangement. Assuming that a company’s direct sales in the forum state could constitute “continuous and systematic general business contacts” in some cases, the court cannot say that such contacts are present here because the Seymours have failed to indicate the frequency or value of Bell Helmet’s sales in Alabama. Without some indication of the quality and extent of Bell Helmet’s sales to Fort Rucker, it is impossible to know whether there were any “continuous and systematic” ties to Alabama.

The evidence is similarly vague with respect to Vetter Products, Inc., a “division” of Bell Helmet. First, there is no evidence concerning the quality and extent of Vetter’s contacts with Alabama. Furthermore, there is no indication that Bell Helmet exercises any significant control over Vetter or that Vetter acts in any manner on Bell Helmet’s behalf in Alabama. Cf. Caso v. Lafayette Radio Electronics Corp., 370 F.2d 707 (1st Cir.1966) (defendant corporation not “doing business” under Massachusetts long-arm statute despite presence of wholly-owned subsidiary in Massachusetts that sells defendant’s products because defendant and subsidiary act fairly independently of one another). Unless the Seymours can show that Vetter is closely tied to Bell Helmet, evidence concerning Vetter’s activities in Alabama could only indicate that Vetter — rather than Bell Helmet — is subject to Alabama’s jurisdiction.

Bell Helmet’s national advertising campaign is also of little help to the Seymours, for a company can hardly be said to have “continuous and systematic” contacts with a state simply because its national advertisements happen to reach that state. Indeed, if a state were free to exercise jurisdiction over any company that advertised nationally on the grounds that some of the advertising must have reached that state, virtually every major company would be subject to nationwide jurisdiction.

The Seymours’ contention that jurisdiction in Alabama is appropriate because they themselves are Alabama residents is also without merit. Admittedly, the home state of the plaintiff may be relevant if the nonresident defendant’s activities in that state gave rise to the suit and the defendant chose to act in that state precisely because the plaintiff lives there. See, e.g., Calder v. Jones, 465 U.S. 783, 788-89, 104 S.Ct. 1482, 1486-87, 79 L.Ed.2d 804 (1984). The plaintiff’s home state may also be relevant in determining whether the forum state has a sufficient interest in providing redress for injuries that may arise from the type of forum state activity which the nonresident defendant caused or in which the defendant engaged, such as would justify the state’s exercise of jurisdiction over the defendant. See, e.g., McGee v. International Life Ins. Co., 355 U.S. 220, 223, 78 S.Ct. 199, 201, 2 L.Ed.2d 223 (1957) (California has jurisdiction over foreign corporation that insured California resident in part because state “has a manifest interest in providing effective means of redress for its residents when their insurers refuse to pay claims”).

However, in both Calder and McGee, the plaintiffs residence was simply one among several factors indicating that the nonresident defendant’s contacts with the forum state were sufficient to justify the state’s exercise of personal jurisdiction over the defendant. At all times, the “constitutional touchstone remains whether the defendant purposefully established ‘minimum contacts’ in the forum state.” Burger King Corp. v. Rudzewicz, — U.S. -, -, 105 S.Ct. 2174, 2183, 85 L.Ed.2d 528 (1985). The mere fact that the plaintiff lives in the forum state is not enough to give that state jurisdiction. As the Supreme Court recently reaffirmed in Burger King Corp,,

The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum state____ [I]t is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and privileges of its laws.

— U.S. at —, 105 S.Ct. at 2183, quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239-40, 2 L.Ed.2d 1283 (1958).

Nor does all of the above evidence considered together warrant the exercise of general jurisdiction over Bell Helmet. The Seymours have failed to present a reasonably complete picture of Bell Helmet’s contacts with Alabama; and the incomplete picture that does emerge depicts contacts of a limited and vague nature, contacts which do not reflect a continuous and systematic business presence in the state.

III.

It is up to the plaintiff to establish personal jurisdiction over a defendant, Bracewell v. Nicholson Air Service, Inc., 748 F.2d 1499, 1503 (11th Cir.1984); Product Promotions, Inc. v. Cousteau, 495 F.2d 483, 490 (5th Cir.1974). Despite the additional discovery, the Seymours have not shown that Bell Helmet’s ties with Alabama meet the “continuous and systematic” standard articulated in Helicópteros. Their motion to alter or amend judgment should therefore be denied.

Accordingly, it is the ORDER, JUDGMENT, and DECREE of the court that the July 10, 1985, motion of plaintiffs Michael Seymour and John D. Seymour to alter or amend judgment be and it is hereby denied, with leave to file, within ten days from the date of this order, a motion to vacate the dismissal and transfer this action to another United States district court.'

       Under 28 U.S.C.A. § 1406(a), a district court without jurisdiction over a defendant has the authority to transfer the action to another district court with jurisdiction over the defendant. See Cox Enterprises, Inc. v. Holt, 691 F.2d 989 (11th Cir.1982) (per curiam); Aguacate Consolidated Mines, Inc. of Costa Rica v. Deeprock, Inc., 566 F.2d 523 (5th Cir.1978).


author: McLAUGHLIN, District Judge.

text:
    UNITED STATES of America, v. Ralph BORELLO, Defendant.
    No. 84 CR 249.
    United States District Court, E.D. New York.
    Oct. 4, 1985.

      Raymond J. Dearie, U.S. Atty., Brooklyn, N.Y. by Edward A. McDonald, Atty-in-Charge, U.S. Dep’t of Justice, Organized Crime Task Force, Laura A. Ward and Alan M. Friedman, Sp. Attys., for the U.S.
    Lipsitz, Green, Fahringer, Roll, Schuller & James, New York City by Herald Price Fahringer, for defendant.
   MEMORANDUM AND ORDER

McLAUGHLIN, District Judge.

Defendant is charged with introducing “adult” films into the United States by means of false statements, in violation of 18 U.S.C. § 542, and smuggling the films into the United States, in violation of 18 U.S.C. § 545. He previously was convicted of both offenses after a jury trial in this district. On June 12, 1985, 766 F.2d 46, however, the Second Circuit reversed his conviction and ordered a new trial.

Defendant now moves to dismiss and/or suppress evidence, asserting that (1) his immunized grand jury testimony taken after the verdict in his first trial bars a retrial; (2) the prosecutor failed to maintain a complete transcript of the grand jury proceedings, in violation of Fed.R.Crim.P. 6(e)(1); (3) the prosecutor improperly identified himself to the grand jury as a member of the Organized Crime Task Force; (4) the prosecutor failed to call certain witnesses before the grand jury; and (5) the delay in prosecuting the case violated defendant’s due process rights. In addition, defendant moves to strike surplusage in the indictment.

On October 2, 1985, this Court ordered that an evidentiary hearing be held regarding defendant’s claims of (a) pre-indictment delay and (b) intentional failure to transcribe grand jury proceedings. Accordingly, decision is reserved on those issues.

In all other respects, defendant’s motions are denied.

Facts

On April 12, 1984, an indictment was filed charging defendant Borello with one count of attempting to introduce films into the commerce of the United States by means of false statements and fraudulent documents, 18 U.S.C. § 542, and one count of intentionally defrauding the United States government by smuggling films, 18 U.S.C. § 545. Defendant was arraigned on April 17, 1984.

On July 24, 1984, the jury found Borello guilty on both counts. On October 12, 1984, the Honorable Henry Bramwell, United States District Judge, sentenced Borello to a five-year term of imprisonment and a fine of $5,000.

On November 29,1984, following his conviction, Borello was subpoenaed to testify before a federal grand jury, pursuant to an order of immunity under 18 U.S.C. §§ 6002 and 6003. Borello moved to quash the subpoena on the grounds that the grant of immunity was not sufficient to safeguard his rights against self-incrimination and was not coextensive with that privilege. The motion to quash was denied by the Honorable I. Leo Glasser, United States District Judge. Accordingly, Borello was compelled to testify concerning the events surrounding the importation of the films.

Thereafter, on June 12, 1985, the Second Circuit reversed Borello’s conviction and remanded the case for a new trial. Defendant filed this omnibus motion on August 23, 1985, and argument was heard on September 3, 1985.

Discussion

Grand Jury/Immunity

Defendant moves for dismissal of the indictment, contending that his compelled grand jury testimony given under a formal grant of immunity bars his retrial for the offenses charged therein. In the alternative, he seeks an order either barring the United States Attorney’s office for the Eastern District of New York from prosecuting the case, or erecting a “Chinese Wall” to prevent anyone exposed to his immunized testimony from participating in the prosecution.

Clearly, however, the mere fact that the defendant testified before a grand jury under an order of immunity does not bar a retrial of this action. See Kastigar v. United States, 406 U.S. 441, 453, 461, 92 S.Ct. 1653, 1661, 1665, 32 L.Ed.2d 212 (1972) (“Kastigar ”). As the Supreme Court noted in Kastigar:

While a grant of immunity must afford protection commensurate with that afforded by the privilege [against self-incrimination], it need not be broader____ The privilege has never been construed to mean that one who invokes it cannot subsequently be prosecuted.

Kastigar, supra, 406 U.S. at 453, 92 S.Ct. at 1661.

Rather, the crucial inquiry is whether the testimony is, in fact, used by the government. United States v. Pantone, 634 F.2d 716, 721 (3rd Cir.1980) (“Pantone”). Accordingly, the government bears the heavy burden of proving affirmatively that the evidence it proposes to use is derived from a legitimate source independent of the compelled testimony. Kastigar, supra, 406 U.S. at 460, 92 S.Ct. at 1664.

In Pantone, the Third Circuit was faced with a scenario remarkably similar to the case before this Court, i.e., immunized grand jury testimony obtained after a first trial conviction but prior to a remand and a second trial. Pantone, supra, 634 F.2d at 717. The Pantone court found that the earlier trial, and its trial transcript, constituted the requisite independent source for any evidence adduced at the retrial. Id. at 721.

Likewise, the transcript of Borello’s first trial constitutes the wholly independent source, as required by Kastigar, for the evidence the government proposes to introduce at Borello’s second trial. It is not at all clear that the government learned anything new from defendant’s grand jury testimony. Nonetheless, the prosecutor has advised the court that the government’s presentation on retrial will not deviate from that in the original case. Moreover, the government acknowledges that it is barred from using Borello’s testimony at the trial, for impeachment purposes or otherwise. See New Jersey v. Portash, 440 U.S. 450, 459-60, 99 S.Ct. 1292, 1297-98, 59 L.Ed.2d 501 (1979).

Thus, in light of the availability of the transcript from the prior trial, and based on the prosecutor’s representations, I conclude that the government has met its burden under Kastigar. Accordingly, the motion is denied.

Grand Jury Proceedings

Defendant also contends that the indictment should be dismissed inasmuch as the prosecutor (a) improperly introduced himself to the grand jury as being a “special attorney with the Department of Justice, Organized Crime Task Force,” and (b) read prior testimony to the grand jury, rather than recalling the witnesses.

Clearly, however, there is a presumption of regularity which attaches to grand jury proceedings and the defendant bears the burden of proving any irregularity. See United States v. Lamoureux, 711 F.2d 745, 747 (6th Cir.1983). Dismissal of an indictment is justified only where necessary to eliminate prejudice to a defendant, or, pursuant to the Court’s supervisory power, to prevent prosecutorial impairment of the grand jury’s independent role. United States v. Hogan, 712 F.2d 757, 761 (2d Cir.1983).

The prosecutor’s brief introductory remark to the grand jury in this case did not rise to the level of prejudice justifying dismissal of an indictment. Nor do I find anything in the record to suggest prosecutorial misconduct. On the contrary, it appears that the prosecutor’s remark was purely a formal, almost ritualistic, pedigree statement made unthinkingly and without any sinister intent.

Likewise, the prosecutor’s failure to recall certain witnesses before the grand jury does not warrant dismissal of the indictment. Although recalling a prior witness before the grand jury, in lieu of merely reading a transcript of the witness’ prior testimony, might be the preferred practice, it is not legally required. United States v. Provenzano, 688 F.2d 194, 203 (3rd Cir.), cert. denied, 103 S.Ct. 492, 459 U.S. 1071, 74 L.Ed.2d 634 (1982).

Moreover, the grand jury in this case was instructed that each of the witnesses whose testimony was read to them was willing and available to testify before the grand jury upon request. The grand jurors never made such a request.

Accordingly, defendant’s motions are denied.

Surplusage in the Indictment

The indictment charges that the defendant falsely represented that the seized motion pictures contained no scene portraying:

... exposure of any human sexual organ, buttocks, or unclothed female breast, no scene portraying sexual intercourse or physical contact with a person’s unclothed or clothed genitals, pubic area, buttocks or a female breast, and no scene portraying any act of deviant sexual conduct____

Defendant, observing that this is not a prosecution for violation of the obscenity laws, moves to strike this language as unnecessary and unfairly prejudicial. Defendant contends that the phrase “sexually explicit materials” would suffice.

Clearly the language in the indictment is relevant and material in that it is precisely the language contained in the “waiver of viewing” form in which the allegedly false statements were made. Moreover, the waiver form is admissible at trial. Thus, the defendant can suffer no prejudice from the existence of this language in the indictment.

Accordingly, the motion to strike is denied.

SO ORDERED.

      . Defendant also has reasserted several claims which were previously rejected by the Second Circuit. To that extent, such claims are denied on the basis of the Second Circuit’s opinion. United States v. Borello, 766 F.2d 46 (1985).

      . Likewise, oral argument has not been heard on defendant’s claims regarding the relationship between Sections 542 and 545 and the propriety of a lesser included offense charge.

      . Defendant was provided with a transcript of his grand jury testimony prior to filing this motion.