text:
    Mark BARKLEY, Individually and for and on behalf of a Class of voters Similarly Situated v. Thomas P. O’NEILL, Jr., Individually and as Speaker of the House of Representatives of the 99th Congress of the United States, et al.
    No. EV 85-164-C.
    United States District Court, S.D. Indiana, Evansville Division.
    Sept. 13, 1985.

      Lawrence J. Halloran, Nat. Rep. Congressional Committee, Washington, D.C., Theodore Lockyear, Lockyear & Kornblum, Evansville, Ind., for plaintiff.
    Michael L. Murray, Asst. Counsel to Clerk, U.S. House of Representatives, Washington, D.C., for defendants.
   MEMORANDUM ORDER

BROOKS, District Judge.

This matter is before the Court upon the motion of the defendants to dismiss this action pursuant to Rules 12(b)(1) and 12(b)(6) Federal Rules of Civil Procedure. The Court having considered the motion and supporting memoranda, the opposition of the plaintiff thereto as well as the oral arguments of counsel, and now being duly advised in the premises finds, for the reasons set forth below, that the motion should be granted.

Plaintiff, Mark Barkley, on May 22,1985, brought this action individually and as a representative of a class of voters similarly situated against certain named Democratic representatives, who were members of the House Committee or Task Force, both in their individual capacity and as members and representatives of other Democratic members of the United States House of Representatives. In addition, plaintiff named as defendants both individually and in their official capacity, Thomas P. O’Neill, Jr., Speaker of the House of Representatives; Jim Wright, Democrat Majority Leader of the House; Thomas Foley, Democrat Majority Whip of the House; and Benjamin J. Guthrie, Clerk of the House. On August 13, 1985, plaintiff filed an amended complaint the allegations of which do not differ in any material respect from the original complaint.

Essentially, what plaintiff seeks by way of his amended complaint is to have the Court declare the actions of the defendants in refusing to count thirty-two (32) absentee ballots of the plaintiff and plaintiff class members to be unconstitutional, invalid and a deprivation of the rights, privileges and immunities secured to plaintiff and plaintiff class members by the Constitution of the United States, as well as a denial of due process and equal protection as guaranteed by the Fifth Amendment to the Constitution. Plaintiff also seeks an order declaring that the ballots of the plaintiff and plaintiff class members be opened and the votes for the appropriate candidate recorded and that such results be transmitted by the defendant Guthrie, Clerk of the House, to the House itself.

Defendants in response to plaintiff’s original complaint filed on August 1, 1985, a Motion to Dismiss for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted pursuant to Rules 12(b)(1) and 12(b)(6) Federal Rules of Civil Procedure respectively. By Supplemental Memorandum dated August 16, 1985, defendants incorporated the arguments made in their original memorandum in support of their motion to dismiss as applicable to the amended complaint.

The facts underlying this dispute and the allegations of plaintiff’s complaint are familiar and may be briefly summarized as follows.

Plaintiff, along with the plaintiff class members, voted by absentee ballot in the November 6, 1984, general election for the Office of Representative in Congress for the Eighth Congressional District of Indiana. On December 13, 1984, the Secretary of State of Indiana certified Richard D. McIntyre as the winner of the election which said certificate was signed by the Governor of Indiana and forwarded to the defendant Guthrie.

On January 3, 1985, however, prior to McIntyre being administered the oath of office, the House passed House of Representatives Resolution Number 1 (“House Resolution-1”) which referred the election in the Eighth Congressional District to the Committee on House Administration for inquiry. The Committee thereafter determined to conduct its own recount and appointed a Task Force consisting of defendants Panetta and Clay and Rep. William Thomas of California to supervise the recount. The Task Force, in the course of conducting the recount, discovered a number of absentee ballots and ballot envelopes which did not comply with verification and authentication requirements of Indiana law in that they were not notarized. Of these, fifty-two (52) absentee ballot envelopes which had been opened on election night and the ballots therefrom intermingled with other absentee ballots were found. The Task Force determined that these ballots should be counted since they were indistinguishable from the other absentee ballots with which they had been intermingled. Another nine (9) sealed unnotarized absentee ballots which had been sent to the precincts were discovered in Spencer County. These ballots were also counted after the Task Force determined they should be opened and included in the recount totals. In addition to these sixty-one (61) ballots, another thirty-two (32) unnotarized absentee ballots, those of the plaintiff and plaintiff class members, were found in the possession of the County Clerks in Lawrence, Orange, Greene and Daviess counties.

On April 19, 1985, Task Force members Panetta and Clay voted not to count these latter thirty-two (32) ballots based upon perceived differences between these ballots and the other unnotarized absentee ballots which the Task Force had previously counted. Subsequently, on April 30, 1985, the House Committee voted to approve the Task Force decision not to count the ballots of the plaintiff and plaintiff class members. On May 1, 1985, the House of Representatives, acting upon the recommendations of the Task Force and the House Committee, voted to seat Francis X. McCloskey as the representative from the Eighth District.

Plaintiff, in his Amended Complaint, has alleged that his ballot as well as the ballots of the plaintiff class members were identical to the other unnotarized absentee ballots counted by the Task Force, but that their ballots were not counted. It is further alleged that the actions of the various defendants in failing to count the thirty-two (32) ballots and in approving the decisions of the Task Force and House Committee deprived plaintiff and the plaintiff class members in an unconstitutional manner of their vote, their right to due process and equal protection and that furthermore such actions constitute invidious, arbitrary and unjustified discrimination between their ballots and other like ballots, which were counted, thereby placing plaintiff and plaintiff class members in a position of constitutionally unjustifiable inequity vis-a-vis other voters in the Eighth District.

In their motion to dismiss defendants, relying primarily upon the recent Seventh Circuit decision in McIntyre v. Fallahay, 766 F.2d 1078 (7th Cir.1985), argue that the Court does not have jurisdiction over the subject matter of this suit and that plaintiff has asserted a claim for relief which cannot be granted because the matter involved is a nonjusticiable political question.

Plaintiff has asserted several basis for jurisdiction in this case. Among them is Title 28 United States Code § 1331 which provides that “The district courts shall have original jurisdiction of all ‘civil actions’ arising under the Constitution, laws, or treaties of the United States.” The Court is not of the opinion that there can be any dispute that plaintiffs cause of action in this case “arises under the Constitution or laws of the United States.”

In his complaint, plaintiff has set forth various claims, alleging that the actions of the defendants have violated his and the plaintiff class members rights to due process and equal protection as protected by the Fifth Amendment, and that by discriminating between plaintiff’s and the plaintiff class members’ unnotarized absentee ballots and other unnotarized absentee ballots defendants have violated Section 1971(a)(2)(A) of Title 42 United States Code, which pertains to voting rights. At oral argument on the motion, counsel for plaintiff indicated that the focus of the complaint is upon the discriminatory treatment of the ballots of the plaintiff and plaintiff class members. Such allegations are in the opinion of the Court sufficient to set forth a ease (or at least a claim) “arising under the Constitution or the laws of the United States.” Therefore, “the subject matter is within the federal judicial power defined in Art. Ill § 2, and so within the power of Congress to assign to the jurisdiction of the District Courts.” Baker v. Carr, 369 U.S. 186, 82 S.Ct. 691, 7 L.Ed.2d 663 (1962). Accordingly, the Court finds that it has subject matter jurisdiction over this action.

However, as Judge Green noted in her memorandum opinion in McIntyre v. O’Neill, et al., 603 F.Supp. 1053 (D.C.C. 1985), “Merely because a court has determined that it has jurisdiction over an action, this does not end its inquiry as to whether it may address the merits of the case. A court must also determine whether the action is justiciable or, more specifically ... whether the matter involves a political question which should not be resolved by a Federal Court. See Metzenbaum v. FERC, 675 F.2d 1282, 1287 (D.C. Cir.1982).” In the case sub judice the Court feels compelled to find that plaintiffs complaint presents a nonjusticiable political question.

As the Supreme Court noted in Baker v. Carr, supra, “In determining whether a question falls within (the political question) catagory, the appropriateness under our system of government of attributing finality to the action of the political department ... (is a) dominant consideration () ____ The nonjusticiability of a political question is primarily a function of the separation of powers.” Id. 369 U.S. at 210, 82 S.Ct. at 706.

In determining whether a case involves a political question, it is necessary for the Court to find that one of the following “formulations” exist:

a textually demonstrable constitutional commitment of the issue to a coordinate political department; or a lack of judicially discoverable and manageable standards for resolving it; or the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion; or the impossibility of a court’s undertaking independent resolution without expressing lack of the respect due coordinate branches of government; or an unusual need for unquestioning adherence to a political decision already made; or the potentiality of embarrassment from multifarious pronouncements by various departments on one question.

And unless one of these “formulations” is present in the case, there should be no dismissal for nonjusticiability on the grounds of a political question’s presence. Baker v. Carr, at 217, 82 S.Ct. at 710. In considering the above “formulations” this Court finds that the first and fourth “formulations” are pervasive in this case.

Article I, Section 5, Clause 1 of the Constitution provides that: “Each House shall be the Judge of the Elections, Returns, and Qualifications of its own members____” Numerous courts have found that the judgment of election to office of congressmen resides within that House of Congress. Rayner v. The Chicago Board of Election Commissioners, No. 78C5116, slip op. (N.D.Ill. Mar 14, 1979), aff'd mem. 636 F.2d 1222 (7th Cir.); Manion v. Holzman, 379 F.2d 843 (7th Cir.), cert. denied 389 U.S. 976, 88 S.Ct. 479, 19 L.Ed.2d 470 (1967); Johnson v. Stevenson, 170 F.2d 108 (5th Cir.1948) cert. denied 336 U.S. 904, 69 S.Ct. 491, 93 L.Ed. 1069 (1949). That such judgment includes the right to determine which ballots should be counted cannot be seriously questioned. McIntyre v. Fallahay, supra (“The House is not only ‘Judge’ but also final arbiter. Its decisions about which ballots count, and who won, are not reviewable in any court”) Thus, the Court finds that the issues which plaintiff seeks to have this Court resolve fall squarely within a “textually demonstrable constitutional commitment of the issue” to the House and thus is a nonjusticiable political question.

Additionally, the Court finds that the resolution of the issues presented by plaintiffs Amended Complaint would be impossible without the Court expressing a lack of respect for the decisions of a coordinate branch of government. Here the House has specifically determined, pursuant to its authority as “(j)udge(s) of the Elections, Returns, and Qualifications of its own members____”, which votes are to be counted. What plaintiff requests of this-Court is to declare that decision invalid for a number of reasons. To do so would require this Court, in effect, to substitute its judgment for that of the Task Force; the House Committee, and the House of Representatives. This the Court cannot and should not do.

Plaintiff seeks to refute these arguments by contending that the rights of the voters in this case transcend the rights of the candidates themselves or the power of the House to act as the “(j)udge(s) of the elections, returns and qualifications of its own members____”

It is argued that the House may only make a determination within the bounds of the Constitution and that when, as it is alleged the House has done in the case sub judice, it has acted outside those bounds, such violations must be able to be redressed in Federal Court. The Court finds such arguments unavailing. First of all, it must be recognized that the ballots in question were invalid under State law. Thus, it cannot be said that plaintiff or the plaintiff class members have any right per se to have their invalid ballots counted. Secondly, as Judge Green has already noted in McIntyre v. O’Neill, supra:

The very nature of the political question doctrine demands that a court abstain from interfering with a coordinate branch of government whose responsibility it is to make independent political choices. The doctrine demands that a court not immerse itself in a political matter which is principally in the dominion of a political branch of government. Although plaintiffs have alleged constitutional violations (as well as statutory violations), the Court, in assessing these claims, must balance the strong institutional interests of separation of powers against the alleged constitutional deprivations.

The Court finds on the facts of this case that the alleged constitutional violations must yield to the strong institutional interests. Furthermore the Court agrees that it is illogical to assume that the House’s authority to judge the elections and returns of its members does not include the authority to make determinations on a vote by vote basis, as to what votes are to be counted. To exclude from the House’s authority the ability to determine whether or not specific ballots should be counted would ignore the historical application of the House’s responsibility. Such a function is as much a necessary consequence of the exercise of constitutional power as was the Senate’s ability to refuse to seat a member pending investigation in Barry v. U.S. ex rel Cunningham, 279 U.S. 597, 49 S.Ct. 452, 73 L.Ed. 867 (1929).

Finally, the Court has reservations about the amenability of the Congressional defendants to this suit. Although defendants have only briefly touched on the issue of legislative immunity in their motion to dismiss, the Court nevertheless notes that it would appear that the actions of which plaintiff complains were actions taken by defendants while “acting in the sphere of legitimate legislative activity.” See, Powell v. McCormick, 395 U.S. 486, 89 S.Ct. 1944, 23 L.Ed.2d 491 (1969). In light, however, of its earlier findings, the Court does not deem it necessary to a resolution of this motion to determine whether defendants are in fact cloaked with legislative immunity.

The aftermath of the November 6, 1984, election has been mind boggling. Actions have been prosecuted in two United States District Courts, two Courts of Appeal, the Supreme Court, and before the House of Representatives, and the end of the litigation arising out of this election does not appear in sight. Because the House has settled the question of who will be seated as the Representative of Indiana’s Eighth Congressional District, this Court finds that it would be inappropriate to substitute its judgment for that of the House in determining which ballots should be counted. To do so would be to intimate how the House ought to have decided and is an area into which the Court is reluctant to interject itself.

Accordingly, for the reasons outlined above, the Court finds that defendants’ Motion to Dismiss should be and hereby is GRANTED.

This cause is, therefore, ORDERED dismissed with each party to bear its own costs of the action.


source: Caselaw Access Project

author: RICE, District Judge.

license: Public Domain

text:
    S.C. BLUMBERG, Plaintiff, v. Richard J. JACOB, et al., Defendants.
    No. C 3-82-329.
    United States District Court, S.D. Ohio, W.D.
    Sept. 18, 1985.

      Denis G. Daly, Vice President, Secretary, and Gen. Counsel, Dayco Corp., Dayton, Ohio, for defendant Dayco Corp.
    Sidney Dickstein, Dickstein, Shapiro & Morin, Washington, D.C., for defendant Directors.
    Jacob K. Stein, Paxton & Seasongood, Cincinnati, Ohio, for defendant Richard J. Jacob.
    Henry S. Ruth, Jeanne A. Smith, Saul, Ewing, Remick & Saul, Philadelphia, Pa.,
    Richard D. Greenfield, Donald B. Lewis, Greenfield & Chemicles, Haverford, Pa., for plaintiff.
    David S. Greer, Bieser, Greer & Landis, Dayton, Ohio, for defendant Gordon.
   DECISION AND ENTRY AWARDING ATTORNEYS’ FEES AND COSTS; DECISION AND ENTRY OVERRULING WITHOUT PREJUDICE MOTION OF PLAINTIFF BLUMBERG FOR ADDITIONAL PAYMENT

RICE, District Judge.

The Court previously approved a settlement in this securities class action, and now, this case is before the Court on the Joint Petition of Plaintiff’s Counsel for Fees and Reimbursement of Litigation Expenses (Doc. # 211). Four law firms (“petitioners”), Greenfield & Chimicles; Saul, Ewing, Remick & Saul; Kohn, Milstein, Cohen & Hansfeld; and Sachnoff, Weaver, Rubenstein, Ltd., seek $480,000 in attorneys’ fees as compensation for approximately 2,505 hours spent prosecuting claims on behalf of the class herein, at hourly rates of between $35 and $225 per hour. The petitioners seek a combined lodestar of $304,108. They request the Court to apply a multiplier of approximately 1.6 for all hours expended, whether by attorney or paralegal. Additionally, the petitioners seek reimbursement for out of pocket expenses in the sum of $37,841.51. The Defendants have not opposed this motion.

It hás long been a part of our jurisprudence that attorneys who recover a common fund for the benefit of persons other than their clients are entitled to reasonable attorneys’ fees out of the fund as a whole. See, e.g., Trustees v. Greenough, 15 Otto 527, 105 U.S. 527, 26 L.Ed. 1157 (1882); Central Railroad & Banking Co. v. Pettus, 113 U.S. 116, 5 S.Ct. 387, 28 L.Ed. 915 (1885); Sprague v. Ticonic Nat. Bank, 307 U.S. 161, 59 S.Ct. 777, 83 L.Ed. 1184 (1939); Boeing Co. v. Van Gemert, 444 U.S. 472, 100 S.Ct. 745, 62 L.Ed.2d 676 (1980). In the present case, the petitioners, through the prosecution of this lawsuit, helped create a settlement fund which they value at $1,500,000. They seek compensation from this fund based upon their efforts in creating same.

The Court agrees that without question the petitioners are entitled to reasonable fees for their efforts. The question for this Court is simply what amount is reasonable. In the Sixth Circuit, the factors for a court to consider in making a reasonable award of attorneys’ fees include:

(1) the value of the benefit rendered to the corporation or its stockholders, (2) society’s stake in rewarding attorneys who produce such benefits in order to maintain an incentive to others, (3) whether the services were undertaken on a contingent fee basis, (4) the value of the services on an hourly basis, (5) the complexity of the litigation, and (6) the professional skill and standing of counsel involved on both sides.

Ramey v. Cincinnati Enquirer, Inc., 508 F.2d 1188, 1196 (6th Cir.1974), cert. denied, 422 U.S. 1048, 95 S.Ct. 2666, 45 L.Ed.2d 700 (1975); See also, Smillie v. Park Chemical Co., 710 F.2d 271, 275 (6th Cir.1983). Applying these factors to the present case, this Court concludes, for reasons that follow, that it is reasonable to award compensation to the petitioners for the hours they claim, at the hourly rates they request, without applying a multiplier to any amount claimed. Additionally, the Court concludes that the petitioners are entitled to reimbursement for expenses in the amount they seek.

Courts have traditionally recognized that a multiplier may be applied to either increase or decrease an attorney’s lodestar amount to reflect two factors, the quality of the attorney’s work and the contingent nature of success. See, e.g., Lindy Bros. Building, Inc. v. American Radiator & Standard Sanitary Corp., 540 F.2d 102 (3rd Cir.1976). The quality factor “permits the court to recognize and reward achievements of a particularly resourceful attorney who secures a substantial benefit for his clients with a minimum of time invested, or to reduce the objectively determined fee where the benefit produced does not warrant awarding the full value of the time expended.” Merola v. Atlantic Richfield Co., 515 F.2d 165, 168-69 (3d Cir.1975).

Herein, petitioners acquitted themselves in a completely professional manner; however, the petitioners have not demonstrated to this Court that their performance was so resourceful and efficient that they deserve a multiplier based upon the quality of their work. On the contrary, certain factors convince the Court that even though the petitioners took this case on a contingent fee basis, a multiplier is ^warranted.

Initially, the Court notes that the settlement of this action created a finite, settlement fund of $1,375,000. Attorneys’ fees are to be paid from this fund. Thus, every dollar paid to the petitioners will decrease, on a pro rata basis, the amount that each injured shareholder will receive. While this is not a sufficient justification to reduce an award of attorneys’ fees and costs below an amount that will fully and fairly compensate the petitioners for the time that they have spent in pursuing this litigation and creating the settlement fund, it is a factor to consider in determining whether to apply a multiplier to the amount that will fully and fairly compensate the petitioners for their time. Moreover, the settlement agreement provides that shareholders will receive only a proportionate share of their losses. The Court is not willing to reduce further the proportionate share that each injured shareholder will receive in order to award the petitioner’s a bonus above and beyond the lodestar amount which petitioner seeks.

Additionally, the Court notes that in the memorandum in support of the settlement (Doc. # 210), the petitioners assert that they spent numerous hours attending depositions in Dayco’s New York litigation, Dayco Corp. v. Foreign Transactions Corp., 82 Civ. 3354 (S.D.N.Y.). While the Court does not question the wisdom of attending the depositions conducted in Dayeo’s New York litigation, the Court does question the propriety of compensating attorneys at a rate of up to $225 per hour for doing little more than sitting and listening as another attorney deposes a witness for another lawsuit. Courts have recognized that reasonable hourly rates may differ according to the functions performed by an attorney. In Re Fine Paper Antitrust Litigation, 751 F.2d 562, 583 (3d Cir.1984). Certainly, a lesser hourly rate ought to be charged (and awarded) for the act of attending a discovery deposition as opposed to actively deposing a witness, or for instance, arguing a motion.

There is a more fundamental problem with the application for fees presently under consideration. The application fails to inform the Court with sufficient specificity what each lawyer or paralegal did and when he or she did it. Without this specific information, it is difficult for the Court to assess the amount of reasonable compensation to which the petitioners are entitled. For instance, it is difficult for the Court to ascertain precisely how much time was spent monitoring discovery in other related lawsuits. Additionally, the Court is unable to ascertain whether there was duplication of effort among the petitioners, for instance, whether two attorneys monitored the same deposition. Moreover, because the Court is unable to ascertain from the petitioner’s fee application specifically what the petitioners did, it is not possible to determine whether they are entitled to compensation for the hourly rates they claim, up to the rate of $225 per hour.

For the foregoing reasons, the Court concludes that use of a multiplier, merely because these cases were taken on a contingent fee basis, is not warranted herein. Even though this will result in a significant reduction in the amounts sought, the Court is of the opinion that the petitioners will nevertheless be reasonably compensated for their efforts in these cases. Petitioners will receive compensation for every hour they claim at the hourly rates they request, which are more than generous, as well as their out-of-pocket expenses.

Accordingly, this Court hereby makes the following awards of attorneys’ fees and costs:

(1) The law firm of Greenfield & Chimicles shall receive $271,157 in attorneys’ fees and $35,087.36 in costs;
(2) The law firm of Saul, Ewing, Remick & Saul shall receive $32,556 in attorneys’ fees and $2,669.07 in costs;
(3) The law firm of Kohn, Milstein, Cohen & Hansfeld shall receive $200 in attorneys’ fees and $35.08 in costs; and
(4) The law firm of Sachnoff, Weaver, Rubenstein, Ltd., shall receive $195 in attorneys’ fees.

These awards shall be paid out of the fund created by the settlement of this action.

Next, the Court turns to the Motion for Allowance of Additional Payment to Plaintiff Blumberg (Doc. # 224). In this motion, Plaintiff Blumberg seeks the payment of $10,000 beyond his pro rata of the settlement fund. In his memorandum in support of his motion (Doc. # 225), Plaintiff contends that he is entitled to an additional payment because he has fulfilled the function of a “private attorney general” and that without his efforts and without the obligations he undertook, such as extensive personal liability for litigation expenses and the cost of notifying the members of the class, the settlement fund would not have been created.

Defendant disclaims any interest in this request because the aggregate amount of claims and attorneys’ fees sought will not exceed the amount of the settlement fund. See Doc. # 226.

Under the present circumstances, the Court is unwilling to order an additional award to Plaintiff Blumberg. While the Court is not unmindful of the importance of the role played by persons, such as Plaintiff Blumberg, who initiate actions such as the present which result in class-wide relief, the Court will not further reduce the prorated shares of the members of the class. The risks that Plaintiff Blumberg incurred by initiating this action are ameliorated because counsel undertook this case on a contingent fee basis and because the common fund doctrine allows for the sharing of all costs of litigation.

Therefore, the Court hereby overrules the Motion for Allowance of Additional Payment to Plaintiff Blumberg (Doc. # 224). However, the Court will allow Plaintiff Blumberg to resubmit this application if, after payment of attorneys’ fees and costs, as awarded herein, and the satisfaction of all claims, in accordance with the settlement agreement, there is a residual amount in the settlement fund. If such an application is made, it must be supported with an affidavit which sets forth the specific risks that Plaintiff incurred by initiating this action.

      . The petitioners have included time spent by paralegals in this case without a separate breakdown of that time.

      . The breakdown, by law firm, of this amount is:
      (1) Greenfield & Chimicles $271,157
      (2) Saul, Ewing 32,556
      (3) Kohn, Milstein 200
      (4) Sachnoff, Weaver 195

      . According to the Court’s calculations, the multiplier sought is in fact 1.578.

      . The settlement of this class action provided that the Defendants would not oppose a fee application that did not exceed 35% of the settlement fund.

      . The settlement agreement created a fund of $1,375,000 to compensate certain persons who purchased Dayco securities. To this amount, the petitioners add $125,000 for certain other benefits to the class such as notice and administration of the settlement.

      . The Sixth Circuit has recognized that a reduction in the amount of fees requested because of duplication of effort by counsel is proper. Oliver v. Kalamazoo Bd. of Ed., 576 F.2d 714, 715 n. 2 (6th Cir.1978).

      . Computing the award of attorneys’ fees in this manner is the most efficient manner for the Court to proceed herein. It obviates the need for a hearing at which the Court could more precisely determine what activities each petitioner performed. Such a determination would allow the Court to value the activities of the petitioners accurately, to assess the amount of duplication and to delineate what hours are not compensable at all. By avoiding such a hearing, scarce judicial resources will be conserved; the petitioner will not be required to spend additional, non-compensable hours pursuing fees to which they have a legitimate right, and there will be no further delay in the awarding of the fees to petitioners.

      . Nothing in this Decision and Entry, awarding less in attorneys’ fees than requested by counsel, is meant to impugn either the professional competence or the high ethical standards and integrity of the attorneys involved. Even though the settlement agreement stipulated that a fee of $l'/2 million would not have sparked an objection from the Defendants herein, this Court nonetheless feels duty-bound to review and to scrutinize every fee application that crosses its desk.


text:
    UNITED STATES of America, Plaintiff, v. MID-SOUTH MUSIC CORPORATION, et al., Defendants.
    Civ. A. No. 3:84-0968.
    United States District Court, M.D. Tennessee.
    Sept. 20, 1985.

      Joe B. Brown and Franklin Childress, Nashville, Tenn., Philip West, Joseph M. Jones, Alice J. Davis, Office of Special Litigation, Tax Div., U.S. Dept, of Justice, Washington, D.C., for plaintiff.
    Sam Johnson, Hendersonville, Tenn., for MSM Records.
   MEMORANDUM OPINION

NEESE, Senior District Judge, sitting by Designation and Assignment.

This is an action in the name of the United States, commenced at the request of the Secretary of the Treasury of the United States, to enjoin the defendants Mid-South Music Corporation (Mid-South) and its president Mr. (Robert) Autry Inman and others from engaging further in conduct subject to penalty under 26 U.S.C. § 6700 (relating to penalty for abusive tax-shelters, etc.). 26 U.S.C. § 7408(a). A hearing on such application as to certain defendants was conducted by the Court on June 3-5, inclusive, 1985.

From the stipulated facts, the evidence received on such hearing, the inferences flowing reasonably therefrom, and the entire record, this Court makes the following

FINDINGS OF FACT:

1. The defendant Mr. Inman in December, 1980 organized Mid-South which organized and promoted an investment plan known as the “Mid-South Music Corporation Master Recordings Lease Program” and organized and promoted similar plans in 1981-1983, inclusive.

2. Mid-South and Mr. Inman made in connection with such organizations gross valuation overstatements as to the material matters of the respective correct valuations of master sound recordings.

3. (a) As a dozen examples of such gross valuation overstatements, certain single master sound recordings were thus overvalued as follows after simultaneous or recent sales in the amounts which follow also:

Sale price and date Sale price and date Sale price and date Overvaluation and date(s)

1. $10,000 cash December 23, 1980 $12,500 cash $1,000,000 737,500 note December 12, 1980 December 27, 1980 May 27, 1981

2. $2,500 cash September 29, 1981 $4,000 cash October 5, 1981 $4,200 cash $250,000 to 245,800 note 350,000 October 6, 1981 (sic) October 15, 1981

3. $4,500 cash September 8, 1982 $4,700 cash 495,300 note $4,900 cash 995,100 note September 7, 1982 (sic) September 8, 1982 $1,000,000 September 8, 1982

4. $4,500 cash September 8, 1982 $4,700 cash $4,900 cash 495,300 note 995,100 note September 7, 1982 (sic) September 8, 1982 $1,000,000 September 9, 10, 1982

5. $1,000 cash July 20, 1982 $4,500 cash September 8, 1982 $4,700 cash 495,300 note October 8, 1982

$4,900 cash 995.100 note September 8, 1982 (sic) $1,000,000 September 9, 10, 1982

6. $10,200 cash 239,800 note October 7, 1982 $10,400 cash 489,600 note October 7, 1982 $ 500,000 October 11, 12, 1982

7. $2,500 cash October 1, 1982 $4,500 cash October 6, 1982 $4,700 cash 495,300 note December 7, 1982

$4,900 cash 995.100 note October 8, 1982 (sic) $1,000,000 March 17, 1982 (sic) October 12, 1982_

8. $4,500 cash July 7, 1982 $4,700 cash 495.300 note July 7, 1982 $4,900 cash 995.100 note July 8, 1982 $1,000,000 July 14, 1982 August 2, 1982

9. $2,200 cash November 11, 1982 $2,400 cash 122,600 note November 12, 1982 $2,600 cash 247,400 note November 15, 1982 $ 250,000 November 24, 1982 December 11, 1982

10. $6,500 cash October 6, 1982 $6,700 cash 493.300 note October 7, 1982 $6,900 cash 993.100 note October 8, 1982 $1,000,000 March 18, 1982 (sic) October 13, 1982

11. $20,000 cash December 30, 1983 $30,000 cash December 30, 1983 $30,400 cash 2,469,600 note December 30, 1983 $2,500,000 February 18, 20, 1984

12. $4,500 cash November 16, 1983 $4,700 cash 995,300 note November 28, 1983 $ 250,000 to 1,000,000 February 17, 19, 1984

(b) Each of the foregoing sales (which includes a promissory note as part of its consideration) was not bona fide.

4. (a) This Court DETERMINES that the correct valuations, respectively, of the sound recordings to which there is allusion in 3(a), supra, were as follows:

(1) $12,500 (7) $4,500

(2) $4,000 (8) $4,500

(3) $4,700 (9) $2,200

(4) $4,700 (10) $6,500

(5) $4,500 (11) $20,000

(6) $10,000 (12) $4,500

(b) Each aforementioned overvaluation was in an amount exceeding 200% of the correct valuation of the sound recording involved.

5. (a) Each such gross overvaluation statement was made by Mid-South and Mr. Inman to respective taxpayers in the pertinent investment plan of Mid-South and related directly to the amount of a deduction or credit allowable to the participant under title 26 U.S.C., ch. 1.

(b) Each such overvaluation was in or near the exact amount Mid-South instructed so-called “independent” appraisers to place upon such recording as representing such appraiser’s personal opinion as an expert of the correct valuation thereof.

(1) Mr. William B. Martin, one such purported “independent” appraiser for Mid-South, made no appraisals at all, although his pertinent documentation stated that his estimate of correct valuation constituted his appraisal. Mr. Martin was in privity with Mid-South and Mr. Inman (and was enjoined preliminarily during the hearing herein sua sponte by the Court from misrepresenting further his opinion(s) as appraisals when, in fact, his opinion concerned his estimate of the most productive manner in which to market the content(s) of such recording(s)).

(c) As a course of action, Mid-South paid (by means of increasing by that amount the purported cash consideration relating to each such sale) to the purported purchaser-seller a fee of $200 per transaction.

6. The foregoing non-bona fide sales were made to provide an apparent basis for the gross overvaluation(s) of the recordings by Mid-South as well as an apparent basis for the grossly inflated appraisals thereof, all for the purpose of misrepresenting to investors and prospective investors the correct valuation of the respective recording(s).

7. In such statements, there was no separation of the correct valuation of the recording(s) and the correct valuation of the leasehold-interest therein offered to investors and prospective investors in Mid-South’s investment plan.

8. (a) Mid-South and Mr. Inman promoted an abusive tax shelter within the meaning of 26 U.S.C. § 6700, supra.

(b) Mid-South and Mr. Inman, each, is liable to pay a penalty equal to the greater of $1,000 or 20% of the gross income derived by Mid-South from such abusive activity.

9. Since 1983 Mid-South and Mr. Inman offered investors and prospective investors a modified investment plan whereby duplex dwellings were constructed and leased-back, until such practice was stopped by a cease-and-desist order of securities authorities of the state of Tennessee. After disposing of his interest in Mid-South in 1984, Mr. Inman reacquired the same and intends to utilize that corporation in a manner implicating sound recordings after accomplishing “ * * * more research on taxes * * *.” Accordingly, Mr. Inman and Mid-South must be expected to seek some means of “getting around” federal tax laws with questionable investment plans involving sound recordings in the future.

10. The operation of the foregoing abusive tax shelter by Mr. Inman and Mid-South created an unnecessary expense to the United States of $250,000 or more in the investigation of the investments it precipitated in 30 states and 34 IRS districts in the ascertainment, computation and collection of federal income taxes.

11. Further injury to the United States is threatened unless the unlawful conduct of Mid-South and Mr. Inman is restrained. This injury would be virtually irreparable, because courts of law cannot afford an adequate or commensurate remedy therefor to the United States.

This Court has reached the following

CONCLUSIONS OF LAW:

A. This Court has jurisdiction of the subject matter hereof, 26 U.S.C. § 7408(a), (b), and of the parties hereto.

B. (1) Upon findings that conduct subject to penalty under 26 U.S.C. § 6700, supra, has been engaged in and that injunctive relief is appropriate in a civil action under 26 U.S.C. § 7408(a), (b), supra, this Court may enjoin such person(s) from engaging in such conduct or in any other activity subject to penalty under 26 U.S.C. § 6700, supra. 26 U.S.C. § 7408(b).

(2) Any person who assists in the organization of any investment plan and makes and furnishes in connection therewith a gross valuation overstatement as to any material matter is subject to pay a penalty equal to the greater of $1,000 or 20 per cent of the gross income derived by such person from such activity. 26 U.S.C. §§ 6700(a)(l)(A)(ii), (a)(2)(B).

(3) It is unnecessary to a decision herein to consider whether Mid-South and Mr. In-man are subject to penalty under 26 U.S.C. § 6700(a)(2)(A).

(4) “Gross valuation overstatement” means herein any statement as to the value of the master sound recordings implicated if the value so stated exceeds 200 per cent of the amount determined to be the correct valuation and that the value of such recordings was related directly to the amount of a deduction or credit allowable under 26 U.S.C., ch. 1, to any participant. 26 U.S.C. § 6700(b)(1)(B).

C. (1) Any sales of the particular sound recordings implicated herein were proper to be considered by expert witnesses in establishing the respective correct valuations thereof, cf. Jones v. United States, 258 U.S. 40, 48-49, 42 S.Ct. 218, 220[5], 66 L.Ed. 453 (1922), provided the bona fide nature of such sales was shown, Conditioned Air Corp. v. Rock Island M.T. Co., 3 A.L.R.3d 679, 684[7], 253 Iowa 961, 114 N.W.2d 304 (1962), reh. den. (1962), cert. den., 371 U.S. 825, 83 S.Ct. 46, 9 L.Ed.2d 64 (1962).

(2) When the identical article leased is to be returned in the same form, “ * * * the contract is one of bailment, and the title to the property is not changed * * Sturm v. Boker, 150 U.S. 312, 329, 14 S.Ct. 99, 104, 37 L.Ed. 1093 (1893); so that the correct valuation of an article which is leased is less than the correct valuation of full title thereto.

(3) The correct valuation of master sound recordings is the original cost of the materials, labor and skills going into its recording and its value to its owner for a particular use. Cf. Leoncini v. Post, 13 N.Y.S. 825 (1891) (relating to the value of sheet music which had been annotated and transposed).

D. (1) When “ * * * special knowledge will assist the trier of fact to understand the evidence and determine a fact in issue a witness qualified as an expert by knowledge, skill, experience, training or education may testify in the form of an opinion or otherwise * * *.” Rule 702, F.R.Evid.

(2) Where an expert witness testifies without giving any acceptable opinion, the inference is left to be drawn by the trier of fact. United States v. Hill, 655 F.2d 512, 516[4] (3d Cir.1981); Sheldon v. Metro-Goldwyn Picture Corporation, 309 U.S. 390, 407, 60 S.Ct. 681, 687, 84 L.Ed. 825 (1940) (where the trial Court had rejected as a criterion therefor the price assigned motion picture rights because, inter alia, “ * * * the inferences were too doubtful.

E. Injunctive relief against the defendants Mid-South and Mr. Inman and Mr. William B. Martin is appropriate to prevent recurrence of their conduct subject to penalty under 26 U.S.C. § 6700, supra. 26 U.S.C. § 7408(b)(2), supra.

F. “ * * * [A] decree of injunction not only binds the parties defendant but also those * * * in ‘privity’ with them * * Regal Knitwear Co. v. National Labor Rel. Bd., 324 U.S. 9, 13, 65 S.Ct. 478, 481[3], 89 L.Ed. 661 (1953), cited in Golden State Bottling Company, Inc. v. N.L.R.B., 414 U.S. 168, 94 S.Ct. 414, 38 L.Ed.2d 388 (1973). (However, the permanent injunction against Mr. Martin, supra, herein must be limited to the acts enjoined preliminarily by the Court during trial.)

From all which, the Court reaches the following

DECISION:

The application of the plaintiff United States of America hereby is GRANTED, and the defendants Mid-South Music Corporation and Mr. (Robert) Autry Inman, each, will be enjoined from further engaging in conduct subject to penalty under 26 U.S.C. § 6700, supra, and from engaging in any other activity subject to penalty thereunder. 26 U.S.C. § 7408(b).

ORDERS:

The clerk will not prepare, sign, and enter judgment herein at this time, Rule 58(2), F.R.Civ.P. Counsel for the plaintiff will initiate efforts of adversary counsel herein to agree upon the content of an injunctive decree as well as upon the content of appropriate notice and opportunity for hearing in behalf of Mr. William B. Martin. Such will then be submitted for the Court’s consideration and entry of a judgment.

       "The lessee receives the investment tax credit which is passed through from the owner/lessee. This amounts to money deductible from the lessee’s tax bill.”


author: CANNELLA, District Judge:

text:
    Joseph RODONICH, Alex Chotowicky, Wasyl Lawro, and Harry Diduck, Plaintiffs, v. HOUSE WRECKERS UNION LOCAL 95 OF LABORERS’ INTERNATIONAL UNION OF NORTH AMERICA, et al., Defendants.
    No. 82 Civ. 5583 (JMC).
    United States District Court, S.D. New York.
    Sept. 20, 1985.

      Hall & Sloan, New York City (Burton Hall, Wendy Sloan, of counsel) for plaintiffs.
    Sipser, Weinstock, Harper & Dorn, New York City (Richard Dorn, of counsel) for defendant Local 95 and the individual defendants.
    Connerton, Bernstein & Katz, Washington, D.C. (Orrin Baird, Theodore T. Green, of counsel) for defendant Laborers’ Intern. Union of North America.
    Schulman & Altman, New York City (James Altman, of counsel) for defendant Laborers’ Intern. Union of North America.
   MEMORANDUM AND ORDER

CANNELLA, District Judge:

Defendants’ motions for summary judgment and to dismiss for failure to state a claim are granted in part and denied in part. Fed.R.Civ.P. 12(b)(6); 56(b).

Plaintiffs’ cross motion for partial summary judgment is denied. Fed.R.Civ.P. 56(a).

Plaintiffs’ motion to supplement and amend the complaint is granted. Fed.R. Civ.P. 15(a), (d).

FACTS

Plaintiffs commenced this action against the Laborers’ International Union of North America [“LIUNA”], Local 95 of LIUNA, and individual defendants alleging violations of the Labor Management Reporting and Disclosure Act [“LMRDA”], 29 U.S.C. §§ 411(a)(1), (2), (5), 529, 530, the Labor Management Relations Act [“LMRA”], 29 U.S.C. § 185(a), the Racketeer Influence and Corrupt Organizations Act [“RICO”], 18 U.S.C. § 1962, and common law breach of contract. The complaint in essence alleges, among other things, that defendants engaged in a scheme to repress dissent within the union and unlawfully disciplined plaintiffs. Defendants move for summary judgment, claiming that plaintiffs’ actions under the LMRA and LMRDA are barred by the statute of limitations. Defendants also move to dismiss plaintiffs’ LMRA, RICO and common law breach of contract claims for failure to state a cause of action and LIUNA moves alternatively for summary judgment. LIUNA moves for summary judgment with respect to the claims under the LMRDA and moves to dismiss the claims under sections 101(a)(5) and 609 of the LMRDA, 29 U.S.C. §§ 411(a)(5), 529, as failing to state a cause of action. Plaintiffs cross move for partial summary judgment on the LMRA and state law contract claims. Plaintiffs also move to supplement and amend the complaint.

DISCUSSION

I. Statute of Limitations

Defendants, relying on Del Costello v. International Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983), contend that plaintiffs’ claims under Title I of the LMRDA, 29 U.S.C. § 411 et seq. [“Title I”], and Section 301 of the LMRA, 29 U.S.C. § 185(a) [“Section 301”], are barred by the six-month statute of limitations of Section 10(b) [“Section 10(b)”] of the National Labor Relations Act [“NLRA”], 29 U.S.C. § 160(b). Plaintiffs claim that state law statutes of limitations should apply. All parties agree that, if the state statutes apply, plaintiffs’ claims are timely.

The Court, therefore, must determine whether the case is controlled by Del Costello, which applied Section 10(b)’s statute of limitations, governing unfair labor practices, to Section 301/fair representation “hybrid” suits. 462 U.S. at 169, 103 S.Ct. at 2293. In Del Costello, the Court declined to borrow state law statutes because only imprecise state law analogies to these hybrid suits exist. . The Court first noted that section 10(b) provides an appropriate limitations period because Section 301/fair representation claims often involve conduct that amounts to an unfair labor practice. Id. at 170, 103 S.Ct. at 2293. More important to the Court’s analysis was its determination that the six-month statute strikes a proper balance “between the national interests in stable bargaining relationships and finality of private settlements, and an employee’s interest in setting aside what he views as an unjust settlement under the collective bargaining system.” Id. at 171, 103 S.Ct. at 2294, (quoting United Parcel Serv. v. Mitchell, 451 U.S. 56, 70, 101 S.Ct. 1559, 1567, 67 L.Ed.2d 732 (1981) (Stewart, J., concurring)).

The Court cautioned however that its holding:

should not be taken as a departure from prior practice in borrowing limitations periods for federal causes of action, in labor law or elsewhere. We do not mean to suggest that federal courts should eschew use of state limitations periods anytime state law fails to provide a perfect analogy. See e.g., Mitchell, 451 U.S., at 61, n. 3 [1563 n. 3]. On the contrary, as the courts have often discovered, there is not always an obvious state-law choice for application to a given federal cause of action; yet resort to state law remains the norm for borrowing of limitations periods. Nevertheless, when a rule from elsewhere in federal law clearly provides a closer analogy than available state statutes, and when the federal policies at stake and the practicalities of litigation make that rule significantly more appropriate vehicle for interstitial lawmaking, we have not hesitated to turn away from state law.

Del Costello, 462 U.S. at 171-72, 103 S.Ct. at 2294.

In the instant case, this Court must consider Del Costello’s cautionary language carefully. Turning first to plaintiffs’ LMRDA claims, it appears that there is no precise state law analogy. Plaintiff urges that Title I of the LMRDA, which delineates the rights of union members with respect to the union, closely resembles a federal civil rights statute and was intended as a bill of rights for union members. See United Steelworkers v. Sadlowski, 457 U.S. 102, 109-12, 102 S.Ct. 2339, 2344-46, 72 L.Ed.2d 707 (1982). Accordingly, plaintiffs argue that the state statute of limitations applicable in federal civil rights actions should control the current litigation.

Although the Court agrees that Title I bears a resemblance to civil rights statutes, this purported analogue must be analyzed in accordance with the framework established in Del Costello. First, Title I violations, like Section 301/fair representation claims, have an unfair labor practice nexus. See Local Union 1397 v. United Steelworkers, 748 F.2d 180, 183 (3d Cir.1984); McConnell v. Chauffeurs, Teamsters and Helpers Local 445, 606 F.Supp. 460, 463 (S.D.N.Y.1985).

As Del Costello instructs, the relevant interests must also be balanced. See id. 462 U.S. at 171, 103 S.Ct. at 2293. Monarch Long Beach Corp. v. Soft Drink Workers, 762 F.2d 228, 231 (2d Cir.1985). It is important that a limitations period provide an aggrieved union member with a satisfactory opportunity to vindicate his LMRDA rights. In Del Costello the Court rejected a 90-day state law statute as too short a time for an employee to act on his Section 301 rights. See 462 U.S. at 166, 103 S.Ct. at 2291. Nonetheless, the Court chose the six-month period because of the countervailing interest in promoting “stable bargaining relationships.” Id. at 171, 103 S.Ct. at 2294. LMRDA claims, however, do not implicate the collective bargaining process in the same way as Section 301/fair representation claims. Indeed, Section 301/fair representation suits represent a direct challenge to the grievance/arbitration mechanism in the collective bargaining agreement. Id. at 165, 103 S.Ct. at 2291.

In Auto Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 86 S.Ct. 1107, 16 L.Ed.2d 192 (1966), by contrast, the Court recognized that a direct action under the collective bargaining agreement brought by a union against the employer does not involve “those consensual processes that federal labor law is chiefly designed to promote — the formation of the collective agreement and the private settlement of disputes under it.” Id. at 702, 86 S.Ct. at 1111, quoted in Del Costello, 462 U.S. at 163, 103 S.Ct. at 2290. Accordingly, the Court applied the six-year state statute of limitations governing contracts. Similarly, in the present case, the internal union nature of LMRDA complaints impact only tangentially on the collective bargaining concerns expressed in Del Costello. Cf. Monarch Long Beach Corp., 762 F.2d at 231. Although the rapid resolution of labor disputes serves an important national policy, its urgency is not so great when the result of applying the six-month statute might be to thwart the Congressional purpose in enacting the LMRDA, which was to provide union members with a “bill of rights.” United Steelworkers, 457 U.S. at 109, 102 S.Ct. at 2344. Del Costello’s six-month statute is not to serve as a talisman. Del Costello, 462 U.S. at 171, 103 S.Ct. at 2294; see, e.g., Monarch Long Beach Corp. v. Soft Drink Workers, 762 F.2d 228 (2d Cir.1985); O’Hare v. General Marine Transport Corp., 740 F.2d 160 (2d Cir.1984), cert. denied, — U.S. -, 105 S.Ct. 1181, 84 L.Ed.2d 329 (1985). The Court finds that the state three-year statute of limitations applicable in federal civil rights actions most appropriately strikes the balance established in Del Costello because that statute recognizes the need for a reasonable time period within which to vindicate rights similar to those created in Title I. See Bernard v. Delivery Drivers, 587 F.Supp. 524, 525 (D.Colo.1984); Berard v. General Motors Corp., 493 F.Supp. 1035, 1043 (D.Mass, 1980). Accordingly, plaintiffs’ Title I claims are not time barred.

The Court must now consider defendants’ contention that the claims under Section 301 are barred by Del Costello’s six-month statute of limitations. The Supreme Court has established that the union constitution is a contract under federal law. See United Association of Plumbers and Pipefitters, 452 U.S. at 621, 101 S.Ct. at 2550. Accordingly, the statute of limitations issue is controlled by Auto Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 86 S.Ct. 1107, 16 L.Ed.2d 192 (1966), which held that in straightforward suits under Section 301 for breach of the collective bargaining agreement, the state contract limitations period applies. Id. at 707, 86 S.Ct. at 1114. Therefore, the state contract statute must apply in straight-forward suits under Section 301 for breach of a union constitution. Cf. O’Hare v. General Marine Transport Corp., 740 F.2d 160, 167 (2d Cir.1984), cert. denied, — U.S. -, 105 S.Ct. 1181, 84 L.Ed.2d 329 (1985).

Defendants suggest that Del Costello’s treatment of Section 301/fair representation claims militates against this conclusion. However, unlike those claims, suits brought under the union constitution alone do not compromise the grievance/arbitration procedures in the collective bargaining agreement and therefore impact much less upon labor management relations. See Hoosier, 383 U.S. at 702, 86 S.Ct. at 1111. Accordingly, plaintiffs’ claims under Section 301 are governed by the six-year contract statute of limitations and are thus timely.

II. Claims Under Section 301 of the LMRA

The Court turns now to defendants’ assertion that a union member has no cause of action against its union under Section 301 for breach of the union constitution. In a prior decision in this action this Court held that a counterclaim under Section 301 by defendants, including the individual defendants, stated a claim for relief for breach of both the LIUNA and local constitutions. See Memorandum and Order at 11, 82 Civ. 5583 (JMC) (S.D.N.Y. Apr. 15, 1983) [“April Memorandum and Order”]; see also Kinney v. International Brotherhood of Electrical Workers, 669 F.2d 1222, 1229 (9th Cir.1982). The Court sees no reason to disturb its previous holding. Accordingly, plaintiffs state a cause of action under Section 301, at least with respect to Local 95.

Plaintiffs point to no specific provision in the LIUNA constitution, however, to support a Section 301 claim against LIUNA. Plaintiffs seem to argue that there is a breach of a duty, inferred from the LIUNA constitution, that LIUNA decide all appeals fairly. Plaintiffs', in effect, urge this Court to sit as a superreview board of LIUNA’s appellate processes. In light of the strong national labor policy against unnecessary intervention into internal union affairs, see Calhoon v. Harvey, 379 U.S. 134, 140, 85 S.Ct. 292, 296, 13 L.Ed.2d 190 (1964), the Court declines to set such a precedent. Accordingly, plaintiffs’ cause of action against LIUNA under Section 301 is dismissed.

The individual defendants seek to strike plaintiffs’ Section 301 action as against them, arguing that Section 301 does not permit a damage claim against union members or officers. The Court previously ruled that defendants’ counterclaim under Section 301 for damages against plaintiffs was valid. See April Memorandum and Order at 11. Accordingly, the Court, declines to strike the Section 301 claim against the individual defendants.

III. Preemption of State Law Contract Claim

The next issue is whether plaintiffs’ state law claim for breach of contract under the union constitution is preempted by federal law. It has long been established that state courts have concurrent jurisdiction with the federal courts to hear claims for breach of the collective bargaining agreement. However, state courts must apply federal law. See Local 174, Teamsters v. Lucas Flour Co., 369 U.S. 95, 82 S.Ct. 571, 7 L.Ed.2d 593 (1962); Charles Dowd Box Company v. Courtney, 368 U.S. 502, 82 S.Ct. 519, 7 L.Ed.2d 483 (1962). In United Association of Plumbers and Pipefitters v. Local 334, 452 U.S. 615, 101 S.Ct. 2546, 69 L.Ed.2d 280 (1981), the Supreme Court also established that federal courts have Section 301 jurisdiction over actions for breach of a union constitution, id. at 626-27, 101 S.Ct. at 2552-53, and that federal law is to govern suits under § 301, id. at 627, 101 S.Ct. at 2553. Because this decision evinces the Supreme Court’s intention to treat such suits in much the same way as those for breach of the collective bargaining agreement, the inference is that federal law would govern actions for breach of a union constitution in a state court. See also Allis-Chalmers Corp. v. Lueck, — U.S. -, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985). Plaintiffs contend' that, in view of strong Congressional intent that the LMRDA not preempt state law remedies, it would be an egregious error to hold that the common law contract claim is preempted. However, it does not necessarily follow that Congress, by enacting one statute with the expressed intent that it not preempt state law, has not by other legislation carved out an area of state law which it intends to preempt. Indeed, the Supreme Court has found such an area in Section 301. Accordingly, this Court holds that a state tribunal must apply federal law to a claim under a union constitution. Consequently, plaintiffs’ state law contract claim is preempted and is dismissed.

IV. Plaintiffs’LMRDA Claims

Defendant LIUNA next contends that plaintiffs Joseph Rodonich, Alex Chotowicky and Wassyl Lawro have failed to state a cause of action under Section 101(a)(5) or 609 of LMRDA and further contends that, as a matter of law and undisputed fact, it has not violated LMRDA Sections 101(a)(1), 101(a)(2) or 610.

In order for plaintiffs to succeed on these claims, they must show either that Local 95 was an agent of LIUNA, see Boss v. International Brotherhood of Boilermakers, 567 F.Supp. 845, 848 (N.D.N.Y.), aff'd mem., 742 F.2d 1446 (1983), or that LIUNA “instigated, supported, ratified or encouraged” Local 95’s alleged unlawful conduct. See id.; Memorandum and Order at 2, 82 Civ. 5583 (S.D.N.Y. Mar. 10, 1983) [“March Memorandum and Order”]; see also Carbon Fuel Co. v. United Mine Workers, 444 U.S. 212, 218, 100 S.Ct. 410, 414, 62 L.Ed.2d 394 (1979).

Plaintiffs attempt to establish an agency relationship between LIUNA and its local by pointing to various provisions in the LIUNA and local constitutions. The Court finds, however, that these provisions do not suffice. “A local union may remain autonomous and independent notwithstanding the fact that the International retains a degree of supervisory authority.” Boss, 567 F.Supp. at 847. Although the LIUNA and local constitutions permit LIUNA to suspend a local’s charter, an agency relation does not arise as long as the local retains some power. Id. (citing Morgan Drive Away, Inc. v. Teamsters Union, 166 F.Supp. 885 (S.D.Ind.1958), aff'd, 268 F.2d 871 (7th Cir.1958), cert. denied, 361 U.S. 896, 80 S.Ct. 199, 4 L.Ed.2d 152 (1959)). Consequently, plaintiffs’ theory fails.

In the absence of an agency relationship, plaintiff must establish that LIUNA “instigated, supported, ratified, or encouraged” Local 95’s allegedly unlawful conduct. Carbon Fuel, 444 U.S. at 218, 100 S.Ct. at 414; Boss, 567 F.Supp. at 848; March Memorandum and Order at 2. LIUNA maintains that mere affirmance of Local 95’s disciplinary action is not sufficient under this standard. Although the Court agrees that mere affirmance may not create liability, common law agency principles apply. Aguirre v. Automotive Teamsters, 633 F.2d 168, 172 (9th Cir.1980); see Carbon Fuel, 444 U.S. at 217, 100 S.Ct. at 414; NLRB v. Local Union 46, Metallic Lathers, 727 F.2d 234 (2d Cir.1984). An affirmance may, therefore, amount to a ratification if done with full knowledge of all material facts. See Breen Air Freight, Ltd. v. Air Cargo, Inc., 470 F.2d 767, 773 (2d Cir.1972) (common law ratification); see also Petramale v. Local No. 17, LIUNA, 736 F.2d 13, 18 (2d Cir.1984).

Plaintiffs’ claims under Sections 101(a)(1) and 101(a)(2) allege the unlawful discharge of Union officers. Therefore, plaintiffs must also prove with respect to these claims that the discharges were “part of a purposeful and deliberate attempt ... to suppress dissent within the union,” Schonfeld v. Penza, 477 F.2d 899, 904 (2d Cir.1973); see Finnegan v. Leu, 456 U.S. 431, 441, 102 S.Ct. 1867, 1873, 72 L.Ed.2d 239 (1982); Cotter v. Owens, 753 F.2d 223, 230 (2d Cir.1985), and that LIUNA acted with full knowledge of this scheme or actively participated in it.

The Court finds that there is a sufficient question of material fact surrounding the issue of LIUNA’s knowledge and therefore denies LIUNA’s motion for summary judgment on plaintiffs’ LMRDA claims.

LIUNA also argues that plaintiffs Rodonich, Chotowicky, and Lawro have failed to state a cause of action under Sections 101(a)(5) and 609, because the discipline affected only their status as union officers. In Finnegan v. Leu, 456 U.S. 431, 102 S.Ct. 1867, 72 L.Ed.2d 239 (1982), the Court held that these sections, which require due process before discipline may be imposed on union members, protect only membership rights and not a member’s status as union employee. Accordingly, plaintiffs cannot prevail unless they show that membership rights were infringed as a consequence of LIUNA’s affirmance, see Schonfeld, 477 F.2d at 904, and that LIUNA reasonably contemplated this result. See Sands v. Abelli, 290 F.Supp. 677, 683 (S.D.N.Y.1968). The Court finds that there are sufficient factual issues on this question to be resolved at trial.

V. Plaintiffs Cross Motion for Summary Judgment

Plaintiff, in a rather unorthodox fashion, moves for partial summary judgment on its claims under Section 301 of the LMRA and for breach of common law contract. The latter claim has been dismissed. With respect to the Section 301 claim, the Court finds there to be sufficient issues of fact to be resolved at trial.

VI. The RICO Claim

Plaintiffs move to supplement and amend their RICO claims in the complaint. Normally, leave to amend is to be freely given. Fed.R.Civ.P. 15(a). When leave is requested on the eve of trial, however, the Court must consider reasons for the delay as well as possible prejudice to the defendant. See Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962).

In light of the Supreme Court’s recent decision in Sedima, S.P.R.L. v. Imrex Co., — U.S. -, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985), adequate reasons for the delay exist. Moreover, because the original complaint stated a cause of action for RICO, defendants cannot claim surprise. It should be noted that much of the proposed amendment merely incorporates other allegations of the original complaint into the RICO claim, thereby minimizing prejudice. Accordingly, plaintiffs’ motion to supplement and amend the complaint is granted. The Court also finds that, under the liberal pleading requirements, it states a cause of action. Defendants’ motions to dismiss for failure to state a cause of action are denied without prejudice to renewal at trial.

CONCLUSION

Defendants’ motions to dismiss the claims under the LMRA and LMRDA as barred by the statute of limitations are denied. Defendants’ motions to dismiss the common law contract claim are granted. Defendants’ motions to dismiss the claim under the RICO Act are denied. LIUNA is granted summary judgment with respect to plaintiffs’ LMRA claim under the union constitution. LIUNA’s motion to dismiss the LMRDA claims is denied. Local 95 and individual defendants’ motion to dismiss the LMRA claims is denied. Fed. R.Civ.P. 12(b)(6); 56(b).

Plaintiffs’ cross motion for partial summary judgment is denied. Fed.R.Civ.P. 56(a).

Plaintiffs’ motion to supplement and amend the complaint is granted. Fed.R. Civ.P. 15(a), (d).

SO ORDERED.

      . Four circuits have recently concluded that § 10(b)’s six-month statute applies to causes of action under Title I of the LMRDA. See Davis v. United Automobile Workers, 765 F.2d 1510 (11th Cir.1985); Adkins v. Electrical Workers, 119 L.R.R.M. 3594 (6th Cir.1985); Vallone v. Local No. 75, International Brotherhood of Teamsters, 755 F.2d 520 (7th Cir.1984); Local Union 1397 v. United Steelworkers, 748 F.2d 180 (3rd Cir.1984). However, these courts considered only briefly the link between violations of the LMRDA and the collective bargaining process. See e.g., Vallone, 755 F.2d at 521-22 (“interests balanced by Congress in establishing the statute of limitations in Section 10(b) are the same interests at issue in this case"); Local 1397, 748 F.2d at 184 ("dissension within a union naturally affects that union’s activities and effectiveness in the collective bargaining arena”). Moreover, the Second Circuit has made it clear that Del Costello “should be narrowly construed." Monarch Long Beach Corp. v. Soft Drink Workers, 762 F.2d 228, 231 (2d Cir.1985).

      . The Second Circuit has traditionally held that federal civil rights actions in New York are limited by the three year statute of limitations of N.Y. C.P.L.R. § 214(2) (McKinney’s 1972). See Keating v. Carey, 706 F.2d 377, 382 (2d Cir.1983); Pauk v. Board of Trustees of City Univ., 654 F.2d 856, 861-62 (2d Cir.1981), cert. denied, 455 U.S. 1000, 102 S.Ct. 1631, 71 L.Ed.2d 866 (1982). However, in Wilson v. Garcia, — U.S. -, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985), the Supreme Court held that the State statute of limitations in personal injury actions applies. In New York this is the three-year statute of C.P.L.R. § 214(5).

      . In light of the Court’s disposition of the statute of limitations question, it is unnecessary to decide defendants' contentions regarding exhaustion of remedies and borrowing Section 10(b)’s service requirement.

      . Local 95 maintains that Erkins v. United Steelworkers, 723 F.2d 837 (11th Cir.1984), supports application of Del Costello’s six-month statute to Section 301 suits brought under the union constitution. In Erkins, the court initially determined that unfair representation actions, brought alone and not as part of a hybrid claim, are governed by the six-month statute. Id. at 839. It then had to decide whether to infer a distinct duty of fair representation from the union constitution. The Court declined to do so, stating that such would create an anomaly: The duty arising under the constitution would have a six-year statute while the duty implied in law only six months. Id. at 840. Contrary to what Local 95 contends, therefore, Erkins acknowledges that the state law contract statute of limitations would apply to actions based on the union constitution.

      . In International Brotherhood of Electrical Workers v. NLRB, 487 F.2d 1113 (D.C.Cir.1972), the Court found that, although the National Labor Relations Board properly held the International union accountable for the discipline it had affirmed, the Board had no authority to impose monetary liability upon the International for fines that had been collected by the local. Id. at 1128. The Court then in dictum extended its holdings as follows:
      Where the only action taken by a national or international union is in the nature of an appellate review of the action of a local union, and the national or international union exercises its appellate function in good faith

        and in the absence of fraud, the national or international union should not be held answerable in damages to a member who was wrongfully disciplined by the local union. See Annotation, 74 A.L.R.2d 783, 800 (I960); Schouten v. Alpine, 215 N.Y. 225, 109 N.E. 244, 246 (1915). See also Madden v. Atkins, 4 N.Y.2d 283, 174 N.Y.S.2d 633, 151 N.E.2d 73 (1958). Since there is no claim that the International Union in the instant case did not exercise its review function in good faith and in the absence of fraud, we believe that the Labor Board improperly imposed monetary liability upon it.

        Id. at 1129.


author: ROSS T. ROBERTS, District Judge.

text:
    EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, and Taloyre E. Butler, Plaintiff-Intervenor, v. FINANCIAL ASSURANCE, INC., et al., Defendants.
    No. 83-1303-CV-W-O.
    United States District Court, W.D. Missouri, W.D.
    Sept. 24, 1985.

      Robert G. Johnson, St. Louis, Mo., for E.E.O.C.
    Susan Goering, Benson & McKay, Kansas City, Mo., for plaintiff-intervenor Taloyre E. Butler.

      Donald H. Loudon, Morris, Larson, King, Stamper & Bold, and John J. Yates, Gage & Tucker, Kansas City, Mo., for defendants.
   MEMORANDUM OPINION AND ORDERS

ROSS T. ROBERTS, District Judge.

Plaintiff (the Equal Employment Opportunity Commission) and plaintiff-intervenor (Taloyre E. Butler, hereinafter “Butler”) claim that Butler was discharged from her employment as an executive secretary because of her pregnancy, in violation of Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §§ 2000e, et seq. Butler seeks “make whole” relief; the EEOC, at least in its complaint, seeks more general injunctive and affirmative action relief.

I.

IDENTIFICATION OF BUTLER’S EMPLOYER

Although an argument to the contrary can and has been made, the evidence convinces me that Butler was in fact employed by a series of limited partnership entities— defendants Avenue Partners Limited, 2nd Avenue Partners Limited and 3rd Avenue Partners Limited — rather than directly by defendant Financial Assurance, Inc. No matter how the interrelationship between those partnership entities and Financial Assurance might impact the alternative suggestion that all should be treated as a single employer entity for present purposes, see Baker v. Stuart Broadcasting Co., 560 F.2d 389, 392 (8th Cir.1977), a preponderance of the evidence demonstrates that Butler was in fact hired as an employee of the first of those partnership entities, rendered the majority of her services to that and to the succeeding partnership entities, was ultimately paid by those entities, and in most respects was controlled in her work by the general partner of those entities.

This finding in turn creates a threshold question with regard to the court’s subject matter jurisdiction under Title VII, since it is clear that none of the partnership entities — whether taken individually or collectively — ever employed, during any relevant time, more than four employees. The problem arises because Section 2000e(b), in its definition of “employer,” limits Title VIPs application to those who have

fifteen or more employees for each working day in each of the twenty or more calendar weeks in the current or preceding year, and any agent of such a person (emphasis added).

See Massey v. Emergency Assistance, Inc., 580 F.Supp. 937, 938 (W.D.Mo.1983), aff'd. 724 F.2d 690 (8th Cir.1984); Bonomo v. National Duckpin Bowling Congress, Inc., 469 F.Supp. 467, 470 (D.Md.1979).

Plaintiffs seek to overcome the problem by an argument that the relationship between the partnership entities and defendant Financial Assurance (which is conceded to have had more than fifteen employees at all relevant times) was such that those various entities should be considered as one for purposes of Section 2000e(b). The analysis to be applied in that connection involves the four part test outlined in Baker v. Stuart Broadcasting Co., supra, requiring a review of the following factors: (1) the degree of interrelation between the operations of the entities in question; (2) the degree to which those entities shared common management; (3) the degree of centralized control of labor relations as between those entities; and (4), the degree of common ownership or financial control of the entities. As pointed out in Baker, all four factors must be considered; no one alone is controlling.

In applying that analysis here, I find as follows:

(1) Interrelationship of Operations. Externally, there was little or no relationship between the operation of the limited partnerships — which were engaged solely in oil and gas investment — and the operations of Financial Assurance, which was a life insurance company. Internally, however, there was a significant degree of interrelationship, particularly as concerns Butler’s job as executive secretary for Michael Merriman (the general partner of the partnership entities). The evidence demonstrates, in that connection, the occasional direct sharing of Butler’s services with Financial Assurance (e.g., when Betty Catón, the executive secretary for the president of Financial Services, was absent for several weeks, Butler took over at least some of her duties); Butler’s work, while acting as Michael Merriman’s secretary, on Financial Assurance matters; a sharing of Financial Assurance employee services with the partnership entities (e.g., at least occasional work by Betty Catón for the original partnership; employee solicitation and initial interviewing performed by Ken Meineka); the sharing of an IBM word processor and a telex machine; and the occasional transfer of employees (W.E. Rexroot and Nancy Stiles) between the partnerships and Financial Assurance. In addition, at least the original partnership (Avenue Partners Limited) utilized the Financial Assurance payroll and the Financial Assurance insurance programs. Finally, as may have become obvious from the above, the partnership entities shared office space — in a somewhat undifferentiated fashion — with Financial Assurance, utilized the the Financial Assurance switchboard, and used the same utilities as Financial Assurance, although Financial Assurance was paid rent, and reimbursed for utility useage, on a rather loose basis. After the year 1981, when Avenue Partners took over its own payroll and insurance functions, this internal working relationship became less pronounced but remained significant nonetheless.

(2) Common Management. Financial Assurance was in all practical respects managed at its highest level by Joe Jack Merriman, its president (and defendant Michael Merriman’s father). Michael Merriman was one of the three directors of Financial Assurance — although not an officer, during the time of Butler’s employment — whose actual position with Financial Assurance can perhaps best be described as that of an “heir apparent” who in fact had less than complete interest in the insurance business despite his father’s efforts to cultivate that interest. Michael Merriman did, however, involve himself in some aspects of the Financial Assurance business, and did in fact perform certain work in that connection which went considerably beyond the work ordinarily expected of an “outside” director, although he in no real sense “managed,” at any level, the affairs of the company. At the same time, while Michael Merriman in fact managed the partnership entities, as the general partner of each, he and his father consulted frequently, and in depth, in connection with that business. It also bears noting that Joe Jack Merriman supplied both advice and personal contacts for the solicitation of some of the limited partnership investors, and was authorized to sign partnership checks.

(3) Centralized Control of Labor Relations. The evidence with respect to any “centralized” (i.e., single source) control of labor relations is somewhat limited. In a few instances Michael Merriman undertook to issue or recommend policy directives which covered Financial Assurance employees. He also participated, with his father, in interviewing several higher level Financial Assurance prospective employees, and occasionally did salary reviews on Financial Assurance employees. Further, Butler’s hours of work were originally assigned by a Financial Assurance employee (Meineka); she (and presumably all other partnership employees) were required to sign in and sign out on the same sheet used by Financial Assurance employees; and until Avenue Partners took over its own payroll functions in 1982, her personnel file was maintained by a Financial Assurance employee. In general, however, the duties, pay and other work related matters of Avenue Partners’ employees (including Butler) were established and controlled by Michael Merriman, without interference or direction from Financial Assurance personnel; while the counterpart work related matters of Financial Assurance employees were controlled by Financial Assurance officers and employees. Butler was in fact discharged by Michael Merriman.

(4) Common Ownership or Financial Control. Joe Jack Merriman held, at all relevant times, a 65% stock ownership in Financial Assurance. The remaining 35% of the Financial Assurance stock was divided as follows: 10% to each of Merriman’s three sons, including Michael, and 5% to Merriman’s wife. Both Joe Jack Merriman and Michael Merriman were investors in Avenue Partners (along with 27 other persons); the former held the second largest investment interest at 7.4%, while the latter held a 3.3% interest. Neither Financial Assurance nor any of the Avenue Partners entities held any direct investment in the other.

* * * * * *

As noted, in applying the Baker test all four of the above factors must be considered together; no one alone is controlling. Here, although the question is difficult and the answer elusive, I conclude that the composite picture which emerges is such as to warrant treating Financial Assurance and the three Avenue Partner entities as a single employer entity for present purposes. The problem is admittedly unusual in that the situation which existed actually resulted, in considerable part, not from the business practices and considerations ordinarily encountered with this sort of question, but instead from the fact that Mr. Merriman simply attempted — as many fathers in his situation might do — to interest his son in the family insurance business and to help him in business otherwise. That cannot, however, serve to obscure the fact that there was a significant degree of interrelationship of internal operations, a fairly significant degree of common management as a practical matter, at least an observable degree of centralized control of labor relations in some respects, and a significant (although certainly less than complete) degree of common ownership. I conclude, accordingly, that the requirements of 42 U.S.C. § 2000e(b) are met.

II.

LIABILITY

As mentioned, Butler was employed as an executive secretary for Michael Merriman. She commenced her employment on January 26, 1981. In the first part of March, 1982, she learned she was pregnant.

On April 23, 1982, according to Butler, she advised Michael Merriman of her pregnancy. He allegedly replied, “[w]e can’t have you running around the office with your belly sticking out to here,” and told her that she would have to leave. According to Merriman, on the other hand, Butler first mentioned her pregnancy to him on April 30,1982, accompanying it with the remark that he was thereby prevented from firing her. The only undisputed fact is that Butler was indeed fired, as of May 7, 1982. By Merriman’s account, that discharge had nothing to do with Butler’s pregnancy, but was based instead upon the fact that (a) she could not keep books, (b) had too many personal telephone calls, and (c) was insubordinate and had a personality conflict with him.

The issue, in the final analysis, in large part becomes one of credibility as between Butler and Merriman, taking into account of course the other, collateral evidence which tends inferentially to support one side of that credibility issue or the other. Having given due weight to all that evidence, and in making the credibility determinations that I must, I conclude that Butler’s pregnancy, while perhaps not the sole factor involved in Michael Merriman’s decision to discharge her, was in fact a substantial motivating factor in that decision. Liability under the Pregnancy Discrimination Act amendments to Title VII, 42 U.S.C. § 2000e(k), is thus established.

III.

RELIEF

Under 42 U.S.C. § 2000e-5(g), the court has a rather wide range of relief available in dealing with a Title VII violation. A finding of liability ordinarily creates a right to reinstatement and back pay. Darnell v. City of Jasper, 730 F.2d 653, 655 (5th Cir.1984) (reinstatement); Costa v. Markey, 706 F.2d 1, 6 (1st Cir.1982), cert. den., 464 U.S. 1017, 104 S.Ct. 547, 78 L.Ed.2d 722 (1983) (back pay); and cf. Albemarle Paper Co. v. Moody, 422 U.S. 405, 420 n. 12, 95 S.Ct. 2362, 2373 n. 12, 45 L.Ed.2d 280 (1975). In appropriate circumstances, so-called “front pay” or other monetary relief, necessary to alleviate the effects of the unlawful act or practice, may be awarded as an alternative to reinstatement. See, e.g., Fitzgerald v. Sirloin Stockade, Inc., 624 F.2d 945, 956-57 (10th Cir.1980). Injunctive relief and affirmative action may also be ordered. See 42 U.S.C. § 2000e-5(g). The ultimate object, of course, is to prevent a repetition of the practice and, insofar as possible, to make whole a person who has suffered injury on account of unlawful employment discrimination. Albemarle Paper Co. v. Moody, supra, 422 U.S. at 418-21, 95 S.Ct. at 2372-73.

Although the complaint in the present case seeks reinstatement, plaintiffs now urge that it not be ordered. My own finding is that reinstatement would be quite inappropriate, given the nature of the relationship which must exist between an executive secretary and the executive, and given the high degree of hostility which in fact exists between Butler and the Merrimans. See Spagnuolo v. Whirlpool Corp., 641 F.2d 1109, 1115 (4th Cir.1981), cert. denied 454 U.S. 860, 102 S.Ct. 316, 70 L.Ed.2d 158 (1981); and cf. Meyers v. I.T.T. Diversified Credit Corp., 527 F.Supp. 1064, 1060 (E.D.Mo.1981). In the circumstances present here, I do not believe that conclusion violates the Eighth Circuit’s admonition that reinstatement should be denied “only for reasons which, if applied generally, would not frustrate the central statutory purposes of eradicating discrimination throughout the economy and making persons whole for injuries suffered through past discrimination.” Taylor v. Teletype Corp., 648 F.2d 1129, 1138-39 (8th Cir.1981).

With respect to backpay, plaintiffs have undertaken to calculate the difference between the amount of money Butler in fact earned between May 7, 1982 and November 30, 1984, and the amount she would have earned in defendants’ employ during that same period if her salary increases and bonuses had continued to accrue as in the period of her employment. That differential is $50,598.11. Presumably, if carried forward to today’s date on the same basis, the figure would be $59,831.65. These calculations in turn give rise to three questions: (a) whether it is appropriate, under the proof in this case, to calculate back pay by projecting bonuses and annual salary increases; (b) whether the back pay award should be diminished by virtue of Butler’s alleged failure to mitigate her damage by making appropriate efforts to seek other employment; and (c), whether amounts received by Butler as unemployment compensation should be deducted from any back-pay award.

As to the first issue, it is clear as a general matter that a calculation of back-pay should include, in addition to the base salary amount, sums for pay raises the employee could reasonably have expected to receive, together with amounts for sick leave, vacation pay and other fringe benefits. Rasimas v. Michigan Department of Mental Health, 714 F.2d 614, 626 (6th Cir. 1983), and cases cited. It is also clear that any ambiguity or doubt with respect to what the claimant would have received but for the discrimination should be resolved against the discriminating employer. Id. at 628. Here, during her approximate fifteen months of employment, Butler had received salary increases totaling $200, and two bonuses of $550 each. Although this is rather a sparse background from which to project future salary increases and bonuses, particularly since I lack any information as to defendants’ general policies and practices in connection with such things, and while it would obviously be inappropriate to adopt a theory that her increases and bonuses would continue at the same rate ad infinitum, it does not seem unrealistic, given the nature of her position, to accept that they would have continued as she projects for at least the period covered by the award here. I conclude, accordingly, that her general method of calculation is appropriate in this respect.

The issue regarding a failure to mitigate is troublesome. Given Butler’s earlier employment history and qualifications I am, frankly, somewhat uncomfortable with the fact that she did not secure favorable replacement employment prior to October of 1984 — some 29 months after her discharge by defendants. It is required, however, only that the employee make a “reasonable effort” to find other suitable employment, see 42 U.S.C. § 2000e-5(g); Edwards v. School Bd. of City of Norton, Va., 658 F.2d 951, 956 (4th Cir.1981); United States v. Lee Way Motor Freight, Inc., 625 F.2d 918, 937 (10th Cir.1979); and once the employee has produced evidence — as here — that she was unable to find comparable work, the employer has the burden of showing that she did not exert that “reasonable effort.” Edwards v. School Bd. of Norton, Va., supra; United States v. Lee Way Motor Freight, Inc., supra; Di Salvo v. Chamber of Commerce, Etc., 568 F.2d 593, 598 (8th Cir.1978). It is clear that Butler did in fact make efforts to find employment — she visited the State Job Service Office on a number of occasions, seeking job referrals, read and marked newspaper advertisements, contacted personnel agencies and placed her name with at least one, followed up leads obtained in the foregoing ways by contacting prospective employers to determine the nature and incidents of the job, and actually submitted her application (either directly or through the employment agency) to at least Hallmark Cards, IBM, TWA, Fruehauf, Crown Center Hotel, Panhandle Eastern, Interstate Brands, Blue Cross and Blue Shield, Farmland Industries, Armco Steel, Kansas City Life, H & R Block, Guys Foods and Kelly Services. It is likewise clear that she did not refuse any employment offers from these or any other sources. She actually did baby sitting work during part of the time in question. Given these findings, I am unable to conclude that defendants have carried their burden of establishing that Butler did not exert at least a “reasonable effort” to find replacement employment.

The third mentioned issue is even more troublesome. Whether there can or should be a deduction for unemployment compensation received during the period covered by the backpay award is a subject of controversy among the various Circuit Courts, and indeed among various panels within the same circuit. The latest rulings of the Second Circuit, see, e.g., Grant v. Bethlehem Steel Corp., 622 F.2d 43, 47 (2d Cir. 1980), Fifth Circuit, see Merriweather v. Hercules, Inc., 631 F.2d 1161, 1168 (5th Cir.1981), Marshall v. Goodyear Tire & Rubber Co., 554 F.2d 730, 736 (5th Cir. 1977), but see Winn Dixie Stores v. N.L. R.B., 413 F.2d 1008, 1009-10 (5th Cir.1969), and Seventh Circuit, see Syvock v. Milwaukee Boiler Mfg. Co., Inc., 665 F.2d 149, 161-62 (7th Cir.1981) (age discrimination case), Bowe v. Colgate-Palmolive Company, 416 F.2d 711, 721 (7th Cir.1969), all hold that the trial court may properly make such a deduction; while the latest rulings of the Third Circuit, see Craig v. Y & Y Snacks, Inc., 721 F.2d 77, 81-85 (3d Cir. 1983), but see Ostapowicz v. Johnson, 541 F.2d 394, 401 (3d Cir.1976), cert. den., 429 U.S. 1041, 97 S.Ct. 741, 50 L.Ed.2d 753 (1977), Fourth Circuit, see E.E.O.C. v. Ford Motor Co., 645 F.2d 183, 195-96 (4th Cir. 1981), rev’d on other grounds, 458 U.S. 219, 102 S.Ct. 3057, 73 L.Ed.2d 721 (1982), Sixth Circuit, see Rasimas v. Michigan Dept. of Public Health, 714 F.2d 614, 627 n. 13 (6th Cir.1983), but see Satty v. Nashville Gas Company, 522 F.2d 850, 855 (6th Cir.1975), Ninth Circuit, see Kauffman v. Sidereal Corp., 695 F.2d 343, 346-47 (9th Cir.1982), but see Naton v. Bank of California, 649 F.2d 691, 699-700 (9th Cir.1981) (age discrimination case), and Eleventh Circuit, see Brown v. A.J. Gerrard Mfg. Co., 715 F.2d 1549 1550-51 (11th Cir.1983) (en • banc), hold that such deductions may not be made. The Eighth Circuit, apparently, has not yet addressed the question, although a Division of this Court has. See EEOC v. Riss International Corp., 28 EPD ¶ 32,641 (W.D.Mo.1982) (Sachs, J.).

The appropriate analytical starting point is with the Supreme Court’s statement in Albemarle Paper Co. v. Moody, supra, 422 U.S. at 419, 95 S.Ct. at 2372, that the backpay provisions of Title VII were expressly modeled upon the backpay provisions of the National Labor Relations Act. That observation leads in turn to the Court’s earlier decision in National Labor Relations Board v. Gullett Gin Co., 340 U.S. 361, 364, 71 S.Ct. 337, 339, 95 L.Ed. 337 (1951), where it was held, inter alia, that the NLRB

had the power to enter the order in this case refusing to deduct the unemployment compensation payments from back pay, and that in so doing the Board did not abuse its discretion.

Id. at 364, 71 S.Ct. at 339.

By analogy, one might well argue that a similar discretion — either to deduct or to refuse to deduct — is vested in the courts in connection with administering Title VII. Even if that is so, however (for the contrary argument see Brown v. A.J. Gerrard Mfg. Co., supra), I do not believe it would be appropriate to exercise that discretion by way of making such a deduction unless the unemployment benefits received by the employee could, when coupled with an unreduced backpay award, truly be considered as amounting to a double recovery. Such a position, it would seem, is foreclosed by subsequent language in Gullett, holding specifically that a double recovery is not involved in the present kind of situation. I accordingly believe that defendants’ argument here must be rejected.

Butler also seeks prejudgment interest on her backpay award, calculating the amount thereof by way of the interest rate utilized by the Internal Revenue Service in regard to back taxes during the years in question (May 7, 1982 — January, 1983, 20%; January, 1983 — July 1, 1983, 16%; July 1, 1983 — December 1, 1984, 11%). This method of computation is reasonable, and in fact reflects the practice followed by the National Labor Relations Board in making backpay computations. See Florida Steel Corporation, 231 NLRB No. 117 (1977). Prejudgment interest on the backpay award will accordingly be allowed, computed on the basis suggested; but Butler will be required to file, within fifteen (15) days of the date of this opinion, a current computation thereof.

Butler also seeks an award of “front pay.” As noted, see Fitzgerald v. Sirloin Stockade, supra, that sort of monetary alternative to an order of reinstatement can sometimes be appropriate. In the present case, however, Butler sought that kind of relief only for a one year’s period of time. Given the length of time it has taken the court to render its decision in this matter — a period of time which will be covered by the backpay award in any event, with projected pay increases and bonuses included — I believe that backpay award itself will make Butler “whole.” I accordingly decline to order “front pay” relief.

Finally, at least in her pre- and post-trial briefs and in her proposed findings of fact and conclusions of law, Butler seeks relief in the form of a “clear record,” by way of an order requiring that defendants “delete from [her] personnel file any mention that she was fired, and instead show that she resigned voluntarily,” and further requiring that defendants inform any prospective employer “that she was a satisfactory employee who resigned voluntarily.” Plaintiffs cite no authority for such an order; and even if I had that power I would refuse to exercise it. Title VII requires that I make Butler whole, not that I rewrite history. The court’s written opinion in this case is the most that I can do for her in that respect.

Whether the EEOC still seeks the injunctive or other affirmative action prayed for in its complaint is unknown, there being no mention of those subjects in any of its pre- or post-trial filings. There is, however, no indication that defendants have indulged in any similar discrimination in the past, or that they are likely to do so in the future. To the contrary, this case appears to represent an isolated incident. I see nothing to be gained, in those circumstances, by ordering injunctive relief or by attempting to frame any other sort of affirmative action,

IV.

ORDERS

Based upon all of the foregoing, it is

ORDERED that Butler submit to the court, within fifteen (15) days of the date of this opinion, an affidavit which states the amount of her earnings between the date of November 30, 1984 and the date of this opinion; and in addition submit to the court a revised computation of prejudgment interest calculated as provided for herein; and it is further

ORDERED that upon the submission of such items to the court, defendants shall have five (5) days within which to advise the court whether they wish to contest any of the information contained in such submissions; and it is further

ORDERED that upon receipt of Butlers’ said submissions and the lapse of said five (5) day response period, or upon the determination of any issues raised by said response, the court will enter a final judgment in accordance with the terms of this opinion.

      . E.g., reviewing new insurance application cards, typing actuarial certificates, taking the minutes of a management meeting and assisting in a Financial Assurance mass mailing.

      . He was interested in the lapse of Financial Assurance policies, and undertook to review the status of those matters on a monthly basis. He also took an interest in policy applications, and was active in checking upon applications he considered questionable. He was also authorized to sign Financial Assurance checks and in fact, during the major period of Butler’s employment, signed almost half of them.

      . One-half of Michael Merriman’s stock in Financial Assurance (i.e., 5% of the issued stock in the company) was held in a trust of undisclosed nature.

      . Given the existence of direct evidence on the issue (Butler’s testimony regarding Michael Merriman’s statements to her), which I accept and credit, I do not believe it necessary to undertake a McDonnell-Douglas type analysis. In that connection, however, I do note that, on balance, I find the defendants’ evidence concerning Michael Merriman’s purported reasons for firing Butler to be less than persuasive.

      . I am uninformed, of course, as to amounts which Butler has in fact earned between the date of November 30, 1984 and the date of this opinion. Butler will accordingly be ordered to file, within fifteen (15) days of the date of this opinion, an affidavit which accurately reflects those earnings, so that after any response and further development of the record which may be necessary the appropriate adjustments can be made.

      . Although I am presumably bound by it, one might well suggest that the Court's treatment of this point in Gullett was overly broad. See the discussion of the collateral source rule in Naton v. Bank of California, supra. Were I writing on a clean slate I would hold that a "double recovery" — i.e., a recovery which makes the claimant more than whole — in fact does exist in the present sort of circumstance unless the unemployment benefits are subject to recoupment. In Missouri, it appears, they are not, see Belle State Bank v. Industrial Commission Division of Empl. Sec., 547 S.W.2d 841, 849 (Mo.App.1977); or at least I can find no authority for the proposition that they are.