author: SEAR, District Judge.

text:
    Manuel SANTOS v. RCA SERVICE COMPANY.
    No. 83-3927.
    United States District Court, E.D. Louisiana.
    Feb. 27, 1985.

      John Paul Massicot, New Orleans, La., for plaintiff.
    John O. Charrier, Jr,, New Orleans, La., for defendant.
   MEMORANDUM OPINION

SEAR, District Judge.

Plaintiff, Manuel Santos (“Santos”), filed this action on August 3,1983 to recover for injuries allegedly received while employed by defendant, RCA Service Co. (“RCA”), as a marine electrician. Santos alleges that he was a seaman and a member of the crew of three separate vessels. He claims damages for the negligence of RCA under the Jones Act, 46 U.S.C. § 688 et seq. and for the unseaworthiness of the vessels under the General Maritime Law.

RCA has moved for summary judgment on Santos’ claims. For the purpose of this motion only, RCA concedes that Santos was a seaman. RCA argues, however, that the vessels on which Santos claims to have been injured while a crewmember were public vessels of the United States and that therefore his exclusive remedy is against the United States under the Public Vessels Act, 46 U.S.C. §§ 781-790 and the Suits in Admiralty Act, 46 U.S.C. §§ 741-752.

Santos contends that RCA’s motion for summary judgment should be denied for the following reasons: (1) RCA was an independent contractor with the United States, therefore, the Public Vessels Act and the Suits in Admiralty Act are inapplicable and the Jones Act and the General Maritime Law apply; (2) RCA’s contract with the United States provides that RCA will indemnify the United States for losses on the vessels operated by RCA for the United States, consequently, “the United States and RCA have removed this matter from the exclusivity provisions of the referenced statutes by virtue of the law established by the agreement ... [and] Santos should be entitled to maintain his action directly against RCA as a third-party beneficiary of that agreement”; and (3) Santos has relied on RCA’s failure until now to assert the defense that it was not the proper party defendant and that because he will be prejudiced if RCA’s motion is granted, RCA should be estopped from raising the defense now. Santos argues in the alternative that should RCA’s motion be granted, he should be permitted to amend the jurisdictional basis of his complaint and to add the United States as a defendant.

Summary judgment is appropriate only if the pleadings, affidavits, depositions, and other papers in the record indicate that there is no genuine issue as to any material fact and that movant is therefore entitled to judgment as a matter of law. Fed.R. Civ.P. 56(c); Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 467, 82 S.Ct. 486, 488, 7 L.Ed.2d 458 (1962); Kellerman v. Askew, 541 F.2d 1089 (5th Cir. 1976). Moreover, the burden is on the movant to demonstrate affirmatively the absence of any issue of material fact on all issues raised in the pleadings. Chavez v. Noble Drilling Corp., 567 F.2d 287, 289 (5th Cir.1978); 10A C. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 2727, at 121 (1983).

The following is a summary of RCA’s statement of uncontested material facts submitted pursuant to this District’s Local Rule of Court 3.9: RCA has contracted with the United States to provide services in connection with a project of the United States Navy based on Andros Island, Bahamas. The project involves the testing and evaluation of weapons. The services provided by RCA include the operation of support vessels from which targets are launched and then recovered after the target has been fired upon by United States Navy vessels. The United States Navy owns all but one of the support vessels operated by RCA, and all of the vessels on which Santos claims to have sustained injury. The vessel not owned by the Navy is owned by RCA, and leased to the Navy pursuant to a lease which provides for the transfer of title to the Navy upon expiration of the lease on September 5, 1985. This vessel is used to provide service identical to that of the vessels in the support group owned by the Navy: its primary mission is to launch and retrieve targets. Under RCA’s contract with the United States Navy, RCA “mans, operates, maintains and repairs the group of support vessels.” Santos was employed as a shore-based chief electrician charged with the maintenance of the electrical systems of all of the support vessels. Although he worked aboard the vessels, “his primary work location was in a shop on the shore.”

The Public Vessels Act waives the sovereign immunity of the United States by allowing in personam libels to recover “for damages caused by a public vessel of the United States.” 46 U.S.C. § 781. Such actions are generally governed by the terms of the Suits in Admiralty Act, which waives the United States’ sovereign immunity from in personam libels against merchant vessels of the United States. See 46 U.S.C. § 782. These waivers of sovereign immunity were enacted as an exchange for the statutory bar against arrest or seizure of United States vessels. See United States v. United Continental Tuna Corp., 425 U.S. 164, 171-72, 96 S.Ct. 1319, 1324, 47 L.Ed.2d 653 (1976); Doyle v. Bethlehem Steel Corp., 504 F.2d 911, 912 (5th Cir. 1974); 46 U.S.C. § 741.

The provision of the Suits in Admiralty Act of which RCA seeks to avail itself is tht which provides that the remedies created by the Act are exclusive:

where a remedy is provided by this chapter it shall hereafter be exclusive of any other action by reason of the same subject matter against the agent or employee of the United States____

46 U.S.C. § 745. The statutory language limiting the exclusivity provision to agents or employees of the United States has not been frequently construed, but when it has, it has been construed broadly. For example, in Doyle v. Bethlehem Steel Corporation, 504 F.2d 911 (5th Cir.1974), the plaintiff had appealed the district court’s decision granting one defendant’s motion for summary judgment on the ground that plaintiff’s exclusive remedy under § 745 was against the United States. The defendant had been engaged by the United States Navy “to manage and conduct the business of the Government with respect to the operation of certain Navy tankers.” Id. at 912. Plaintiff argued on appeal that there was a material issue of fact as to whether the defendant was an agent because the vessel on which he was injured was not specifically mentioned in the defendant’s contract with the United States. The Court of Appeals observed that the contract was entitled ‘‘Contract for Operation of U.S. Navy Tankers,” and found that deposition testimony established that defendant operated the tanker on which plaintiff was allegedly injured for the United States Navy. Consequently, the Fifth Circuit affirmed the district court.

In this case, RCA has stated as uncontested fact that it “mans, operates, maintains and repairs the group of support vessels” pursuant to its contract with the United States. Indeed, its contract obligates it to:

[o]perate, maintain and support the [weapons testing project], including the furnishing of all necessary support, labor, services and materials as may be required for the successful conduct of testing programs at this Center ...

Applying the Fifth Circuit’s analysis in Doyle v. Bethlehem Steel Corp., supra, to these facts entitles RCA to summary judgment if the vessels are public vessels within the meaning of 46 U.S.C. § 781 or are “owned by, possessed by, or operated by or for the United States” within the meaning of 46 U.S.C. § 74). See Trautman v. Buck Steber, Inc., 693 F.2d 440 (5th Cir. 1982) (citing Reed v. The Yaka, 373 U.S. 410, 83 S.Ct. 1349, 10 L.Ed.2d 448 (1962)). RCA has stated as an uncontested fact that all of the vessels on which Santos claims to have been injured are owned by the United States. Thus, RCA has carried its burden in demonstrating that it is entitled to judgment as a matter of law. See Petition of United States (U.S.N.S. Mission San Francisco), 367 F.2d 505, 509 (3d Cir.1966), cert. denied sub nom., Black v. United States, 386 U.S. 932, 87 S.Ct. 953, 17 L.Ed.2d 805 (1967).

Even if the Navy had not owned the vessels, RCA could still be entitled to summary judgment if the vessels were public vessels, or were operated by RCA for the United States. Although there are few decisions interpreting the meaning of public vessel in the Public Vessels Act, those decisions suggest that a vessel with a military function are public vessels within the meaning of that Act. See United States v. United Continental Tuna Corp., supra, 425 U.S. at 167 n. 1, 96 S.Ct. at 1322 n. 1 (“naval destroyer is beyond question a ‘public vessel’ ”); Bradey v. United States, 151 F.2d 742 (2d Cir.1945) (vessel carrying coal belonging to army and bound for port to load munitions for war before sailing for theater of war is public vessel), cert. denied, 326 U.S. 795, 66 S.Ct. 484, 90 L.Ed. 483 (1946); Geo. W. Rogers Const. Co. v. United States, 118 F.Supp. 927 (S.D.N.Y. 1954) (vessel chartered to the United States and carrying fuel for Navy vessels held to be a public vessel); Roeper v. United States, 85 F.Supp. 864 (E.D.N.Y.1949) (vessel used for the transportation of personnel and military supplies is a public vessel). In this case, all vessels in the support group were involved in the testing and evaluation of naval weapons, which would seem to be as much a military function as carrying military personnel or supplies. Thus, the support vessels operated by RCA on which Santos claims to have been injured were public vessels within the meaning of the Public Vessels Act.

Even if the vessels are not public vessels, however, they were operated for the United States within the meaning of 46 U.S.C. § 741. The Fifth Circuit has found that “control by the United States is the crucial element in determining whether a case falls within the jurisdiction provided by [46 U.S.C.] § 741.” Trautman v. Buck Steber, Inc., supra, 693 F.2d at 444. In that case, the Fifth Circuit apparently adhered to the following definition of control:

[I]t would seem to the court that extensive operation or direction of the vessel by government personnel would be required to make the vessel operated ‘by the United States’ and something closer to a time charter where the Government directs the vessel’s overall functions even though the owner may control the operation of the vessel’s personnel and equipment rather than a single purpose contract entered into with an independent contractor would be required to make the vessel ‘operated for the United States.’

693 F.2d at 444 (quoting JW. Peterson Coal & Oil Co. v. United States, 323 F.Supp. 1198, 1205-06 (N.D.Ill.1970)). In this case the primary function of the vessels was to launch targets for Naval ships to fire upon, and then to retrieve the targets. For such activity to be successful, direction of the vessel’s overall function by the Navy would be necessary. Consequently, the vessel was operated for the United States within the meaning of 46 U.S.C. § 741 and RCA is entitled to summary judgment on Santos’ claim for injuries sustained on them.

Santos has not controverted RCA’s statement of uncontested fact. Instead, he merely states as disputed material facts:

Whether or not RCA was an agent or an independent contractor of the Government ...
Whether or not RCA was solely responsible for the day to day operations on the subject vessels ...
Whether or not the Government had any control over or supervision of the day to day operations of the personnel on the vessels involved in this proceeding.

A party opposing a motion for summary judgment may not, however, rest on mere allegations or denials contained in his pleadings, or “ ‘vague assertions that additional discovery will produce needed, but unspecified facts.... once the movant has made his showing under Fed.R.Civ.P. 56, the opposing party must present “significant probative evidence” that there is a material issue of fact, in the case. Volyrakis v. M/V Isabelle, 668 F.2d 863 (5th Cir.1982); Fed.R.Civ.P. 56(e). If he does not so respond, summary judgment, if appropriate, shall be entered against him. Fed.R.Civ.P. 56(e); Ferguson v. National Broadcasting Company, 584 F.2d 111 (5th Cir.1978). Santos’ statements are mere allegations and are not evidence of a material issue of fact. As such, they do not preclude entry of summary judgment against him.

Moreover, Santos’ statement of contested material fact evidences his misunderstanding of the Suits in Admiralty Act. RCA’s status as an independent contractor or agent, and the identity of the party responsible for the control and day-to-day operations of the vessels are irrelevant to the applicability of the exclusivity provision of 46 U.S.C. § 745. See Petition of United States (U.S.N.S. Mission San Francisco), supra, 367 F.2d at 509-11; Smith v. United States, 346 F.2d 449 (4th Cir.), cert. denied, 382 U.S. 878, 86 S.Ct. 163, 15 L.Ed.2d 119 (1965); Loper v. Trinidad Corp., 1983 A.M.C. 1177, 1178 (E.D.Pa. 1982). The case on which Santos mistakenly relies, Trautman v. Buck Steber, Inc., supra, involved an attempt to sue the United States by a diver injured in an operation to clear the Suez Canal of wrecks. The United States had agreed to assist Egypt in clearing the Canal and had contracted with a salvage company to perform the work. The salvage company entered into a subcontract with the diver’s employer for diving services necessary to clear the wrecks. The issues in that case were (1) whether the barge on which the diver was employed was a vessel “operated by or for the United States” within the meaning of 46 U.S.C. § 741 such that the United States owed the diver a duty of seaworthiness and (2) whether the diver’s employer was an agent of the United States or whether the United States was in sufficient operational control of the diver’s employer’s operations to be liable under the Jones Act. Although that case is relevant to the determination whether a vessel owned by RCA was operated for the United States, it has no bearing on the applicability of 46 U.S.C. § 745 to this case which involves vessels owned by the Navy and which are also properly characterized as public vessels.

Santos’ two remaining arguments are easily disposed of. First, he contends that the indemnification clause in RCA’s contract creates “law established by the agreement” which supplants the Public Vessels Act and the Suits in Admiralty Act and to which he is a third-party beneficiary. This argument is without merit. Congress has defined the circumstances under which suits may be brought against vessels involving the United States. It is not clear that modification of this law at will by parties to an agreement could be permitted under the Supremacy Clause of the Constitution. Moreover, Santos has not cited any authority for the proposition that an indemnity agreement between RCA and the United States modifies the remedies that Congress has specifically provided for him.

Second, Santos asserts that RCA should be estopped from raising the defense that it is not the proper party. RCA, however, has not raised a defense that it is not the proper party. It has instead moved for summary judgment on Santos’ claims on the ground that it is not liable to him under the Jones Act or the General Maritime Law. In any case, Santos has not offered any evidence whatsoever to support his accusation that RCA previously knew that his Jones Act and General Maritime Law claims were invalid but that it waited until the statutory period for filing claims under the Suits in Admiralty Act and the Public Vessels Act had expired before moving for summary judgment. More importantly, Santos cannot claim that he was misled when he could have learned that his claims against RCA were not viable had he done even minimal legal research. See Heckler v. Community Health Services of Crawford, — U.S. —, 104 S.Ct. 2218, 2233 n. 10, 81 L.Ed.2d 42 (1984).

As Santos has no outstanding motion to amend his complaint, it is premature to consider whether such a motion should be granted, much less to consider whether a claim against the United States by amendment would be barred by expiration of the two-year statutory limitations period. The later determination must wait until, and if, the United States is made a party.

      . Indeed, Santos accuses (without providing any evidentiary support) RCA and its counsel of acting with intent to conceal the fact that his claim should have been made against the United States, and delaying its motion for summary judgment until after the statutory period for bringing an action against the United States had expired.

      . Although 46 U.S.C. § 741 was amended in 1960 to delete the language expressly limiting application to merchant vessels, this was not intended to blur the distinction between merchant and public vessels. Instead, it was designed to extend the jurisdiction of the Suits in Admiralty Act to certain admiralty claims that previously had been required to be brought in the Court of Claims. See United States v. United Continental Tuna Corp., 425 U.S. 164, 179-82,96 S.Ct. 1319, 1327-29, 47 L.Ed.2d 653 (1976).

      . The partial copy of the contract attached to RCA’s motion was neither certified nor sworn to. Under Fed.R.Civ.P. 56(e), documents are admissible only if they are authenticated by and attached to an affidavit, and the affiant is a person through whom the exhibits could be admitted into evidence. 10A C. Wright, A. Miller & M. Kane § 2722, at 58-60. Inadmissible documents may nevertheless be considered by the court if they are not challenged. Auto Drive-Away Co. of Hialeah, Inc. v. I.C.C., 360 F.2d 446, 448 (5th Cir.1966); Lawson v. American Motorists Ins. Co., 217 F.2d 724, 726 (5th Cir.1954); Townsend v. Columbia Operations, 667 F.2d 844 (9th Cir.1982); Wright, Miller & Kane, supra at 60. Santos’ opposition contains no challenge to the document attached to RCA’s motion; it can therefore be considered.

      . "This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the Supreme Law of the Land ...” U.S. Const, art. VI.


source: Caselaw Access Project

author: THOMAS F. HOGAN, District Judge.

license: Public Domain

text:
    INDEPENDENT BANKERS ASSOCIATION OF AMERICA, Plaintiff, v. C. Todd CONOVER, Comptroller of the Currency of the United States of America and Dimension Financial Corporation, Defendants.
    Civ. A. No. 84-3201.
    United States District Court, District of Columbia.
    Feb. 27, 1985.

      Leonard J. Rubin, Lucas, O’Brien & Raiser, Washington, D.C., H. Boone Porter, III, Brown, Koralchik & Fingersh, Overland Park, Kan., for plaintiff.
    Richard K. Willard, Acting Atty. Gen., Joseph E. diGenova, U.S. Atty., Sandra M. Schraibman, Shalom Brilliant, Dept, of Justice, Civ. Div., Washington, D.C., for defendant C. Todd Conover.
    Jeffrey S. Davidson, Kirkland & Ellis, Washington, D.C., for defendant Dimension Financial Corp.
   MEMORANDUM OPINION

THOMAS F. HOGAN, District Judge.

The controversy before the Court involves the legal authority of the Comptroller of the Currency (“the Comptroller”) to issue final charters to the Dimension Financial Corporation to operate thirty-one proposed national banks. The plaintiff, Independent Bankers Association of America (“I.B.A.A.”) has challenged the Comptroller’s issuance of preliminary approval to four of the proposed banks on the grounds that “the [Comptroller’s decision] purporting to determine the merits of certain controversies arising under the Bank Holding Company Act (12 U.S.C. § 1841, et seq.) is unlawful” and beyond the authority of the Comptroller.

This controversy over the jurisdiction of the Comptroller arises out of division of federal regulation of the banking industry among several federal agencies. The defendant in this case, the Office of the Comptroller, was established to oversee the regulation of national banks chartered under the National Bank Act. 12 U.S.C. § 1, et seq. Another independent agency, the Federal Reserve Board, has jurisdiction to administer and enforce the Bank Holding Company Act, 12 U.S.C. § 1841, et seq. Although the laws they administer are distinct, these and other federal and state regulators often have overlapping interests and authority.

The ultimate issue in this case is the applicability of the Bank Holding Company Act (“B.H.C.A.”) to the proposed Dimension banks. If the B.H.C.A. is indeed applicable, jurisdiction to determine the legality of the proposed banks under the B.H.C.A. would be exclusively vested with the Federal Reserve Board. Whitney National Bank v. Bank of New Orleans, 379 U.S. 411, 419-20, 85 S.Ct. 551, 557, 13 L.Ed.2d 386 (1965). More important from a practical standpoint, application of the B.H.C.A. might result in preventing Dimension’s operation of the proposed banks because section 3(d) of the B.H.C.A. generally prohibits a bank holding company from holding banks in more than one state. 12 U.S.C. § 1842(d).

For purposes of the B.H.C.A., the term “bank” is defined as an institution which both “(1) accepts demand deposits that the depositor has a legal right to withdraw on demand, and (2) engages in the business of making commercial loans.” 12 U.S.C. § 1841(c). The I.B.A.A. claims that there is a substantial question whether the Dimension banks are indeed “banks” under this definition, subject to the B.H.C.A. The I.B.A.A. further argues that the authority to decide these questions under the B.H.C.A. is within the exclusive jurisdiction of the Federal Reserve Board and that the Comptroller cannot, as a matter of law, issue final charters to the Dimension banks until the Federal Reserve Board determines the legality of the transaction under the B.H.C.A.

Background

The facts are undisputed. Dimension Financial Corporation (“Dimension”), a Delaware corporation with its principal place of business in Denver, Colorado, is a subsidiary of Financial Investments, Inc. (“FII”), which in turn is a subsidiary of Valley Federal Savings & Loan Association of Hutchinson, Kansas, a federally chartered savings and loan association. In March, 1983, Dimension filed with the Comptroller 31 applications to charter 31 separate wholly-owned national bank subsidiaries.

A short time later, Deerbrook State Bank, a member of plaintiff I.B.A.A., filed a petition with the Board of Governors of the Federal Reserve System, requesting that the Board commence hearings under the B.H.C.A. to examine the legality of the proposed Dimension banks. In June, 1983, the I.B.A.A., on behalf of its members, filed a letter with the Federal Reserve Board concurring with and joining in the petition of Deerbrook State Bank.

At the time, the I.B.A.A.’s argument that the proposed Dimension banks would constitute “banks” under the B.H.C.A. was based largely on an expanded definition of the term “commercial loans” as used in 12 U.S.C. 1841(c). In May, 1983, the Board had put out for notice and comment a proposed revision to Regulation Y (“Reg. Y”), which implements the B.H.C.A. The revisions included this expanded definition of “commercial loan” as including the sale or trading of commercial paper, certificates of deposit, bankers’ acceptances, broker call loans, and federal funds. 48 Fed.Reg. 23520, 23521 (May 25, 1983). Aside from the I.B.A.A., the proposed amendments were not well received. Both the F.D.I.C. and the Comptroller of the Currency expressed their disagreement with the Board’s position; virtually all of the comments received on the proposed redefinition were negative. Nevertheless, on December 29, 1983, the Board incorporated its expanded definition in a final rule amending Regulation Y (“Reg. Y”), 12 C.F.R. Part 225 (1983), 49 Fed.Reg. 794 (January 5, 1984).

Of course, the action of the Board did not go unnoticed by Dimension. By letter of August 26,1983 to the Comptroller, Dimension made a commitment to avoid engaging in the activities defined as “commercial lending” by Reg. Y as long as that definition was in effect.

Meanwhile, proceedings on the Dimension petition continued before the Office of the Comptroller. On April 28, 1983 the Office published notice of its decision to hold public hearings on the applications. 48 Fed.Reg. 19265. The hearings were held on August 8-12, 1983 and the comment period remained open through September 16. Over 90 parties participated and they were generally opposed to the Dimension proposal for a variety of reasons, including the legal issue of Dimension’s status under the B.H.C.A.

On November 15, 1983, the Board, through its general counsel, made its first official comment to the Comptroller on the then-pending Dimension proposal. In a letter to the Chief Counsel to the Office of the Comptroller of the Currency, the general counsel to the Board noted that while it did “not appear appropriate for the Board at this time to take any action on the Deer-brook Bank’s petition,” the purpose of the correspondence was to “inform you that ... there is a substantial question whether the Dimension banks would be ‘banks’ for the purpose of the BHC Act.” The letter went on to state that “neither the Board nor the staff has made any final determination on the status of the Dimension banks under the BHC Act. I expect that any Board action on this issue would take place promptly after the granting of any preliminary charters.... [I]n fact, applicable case law requires that any final charter approval of any Dimension banks be conditioned either on Dimension’s obtaining pri- or approval under the BHC Act to acquire the banks or on a determination by the Board that the BHC Act does not apply to the acquisition.”

While the maneuverings continued on the administrative front, the first federal court was asked to rule in this controversy. On July 5,1983 plaintiff, along with others not party to this action, filed a complaint in the United States District Court for the Northern District of Illinois seeking declaratory and injunctive relief against the Comptroller. Deerbrook State Bank, et al. v. Conover, 568 F.Supp. 696 (N.D.Ill., 1983). In that suit, plaintiffs sought to enjoin the Comptroller from holding hearings or otherwise taking action on the Dimension applications until the Board had an opportunity to rule on the B.H.C.A. issues involved. The court denied plaintiffs’ motion for a preliminary injunction on August 9, 1983 on the grounds that the plaintiffs had failed to show a reasonable likelihood of success on the merits and that the harm was “far too speculative to warrant the granting of a preliminary injunction.” Deerbrook State Bank v. Conover, 568 F.Supp. 696, 700 (N.D.Ill., 1983). At the time of that ruling, the Comptroller had not yet conducted hearings on the Dimension proposal and, of course, had not made any preliminary rulings on the merits. Thus, the court found that the requisite irreparable injury had not been demonstrated.

On May 9, 1984, the Comptroller handed down his written decision on the Dimension bank proposal. In his thirty page opinion, the Comptroller granted preliminary approval for a maximum of four Dimension banks and reserved judgment on the remainder of the applications. Decision of the Comptroller of the Currency on the Applications of Dimension Financial Corporation to Charter 31 National Banks in 25 States. The Comptroller held inter alia, that “the most important legal issue posed by the applications is the applicability of the Bank Holding Company Act....” The Comptroller went on to discuss the “very expansive definition of ‘commercial loan’ ” in Reg. Y (promulgated January 5,1984) as well as the November 15, 1983 letter from the Federal Reserve Board General Counsel. See supra page 951. Nevertheless, in light of Dimension’s “commitment” not to engage in any activities within the expanded definition of commercial loan, see supra page 951, the Comptroller concluded that “the applications no longer can be said to pose substantial B.H.C.A. questions.”

The I.B.A.A. responded to the preliminary charter approval by promptly renewing its inquiries at the Federal Reserve Board. In a May 18, 1984 letter, the I.B. A.A., through counsel, requested that the Board “reaffirm its intention to conduct its own investigation to determine whether the manner in which Dimension intends to operate its proposed bank subsidiaries complies with the BHC Act.”

By letter of June 19, 1984, the Board, through its secretary, responded to the I.B. A.A.’s letter. The Board stated that it “intends to conduct a thorough inquiry into whether the proposed Dimension banks will be operated in a manner so as to comply with the Board’s regulations on the bank definition. To this end, the staff plans to hold an informal hearing in order to develop the facts fully for review by the Board.”

Shortly thereafter, on July 2, 1984, the instant case was filed by the I.B.A.A. in the Northern District of Illinois. The complaint, docketed June 3, 1982, sought a declaration that “the Comptroller has no jurisdiction ... to determine legal or factual issues raised by the [Dimension] petition with respect to the Bank Holding Company Act, and that the Comptroller’s purported determination in the Preliminary Charter Approval that Dimension could lawfully acquire the Proposed Bank Subsidiaries ... is unlawful, null, void and of no legal effect.” The I.B.A.A. also seeks an injunction preventing the Comptroller from issuing a final charter or certificate of authority to commence business to any of the Dimension banks until the Federal Reserve Board determines the legality of the proposed banks under the Bank Holding Company Act.

Dimension moved to intervene as a defendant and was granted leave to do so on August 16,1984. The I.B.A.A. had moved for a preliminary injunction, but the Court postponed any ruling while it considered and then granted a motion to transfer to this District from the Northern District of Illinois.

Defendant Dimension has also filed a counterclaim, alleging antitrust violations, on which this Court stayed proceedings. After transfer to this Court, the parties argued and briefed the defendants’ motions to dismiss. Following the December 10th hearing on those motions, the Court took the motion to dismiss under advisement and requested that the parties file their memoranda on the merits of the case in the form of cross-motions for summary judgment. This allowed the Court to consolidate the preliminary motions with its rulings on the merits, see Fed.R.Civ.P. 65(a)(2), and, in the absence of material facts in dispute, provided for a more orderly analysis of the arguments of the parties.

Finally, it must be noted that recent appellate litigation involving parties to the present action has had some impact on the present case. Reg. Y, which broadened the definition of “commercial loan” and hence broadened the Federal Reserve Board’s jurisdiction, see supra page 951, was challenged before the Tenth Circuit by a group of petitioners including Dimension Financial Corporation. On September 24, 1984, the Court of Appeals for the Tenth Circuit issued its decision in that case. Dimension Financial Corporation v. Board of Governors of the Federal Reserve System, 744 F.2d 1402 (10th Cir.1984). The court held that Reg. Y, at least insofar as it redefined “commercial lending,” 12 C.F.R. Part 225, § 225.2, was invalid and that the Board was enjoined from enforcing or implementing the regulation. Id. at 22. Based on this development, Dimension— joined later by the Comptroller — moved to dismiss this case for lack of subject matter jurisdiction on the grounds that the I.B.A. A.’s claim was now moot. It is to this argument that the Court must now turn.

Mootness

The doctrine of mootness involves circumstances in which a federal court is divested of jurisdiction over an issue because of events subsequent to the filing of a claim. The Supreme Court has recently emphasized the Article III jurisdictional bases of the doctrine, see e.g., Globe Newspaper Co. v. Superior Court, 457 U.S. 596, 102 S.Ct. 2613, 73 L.Ed.2d 248 (1982); Deposit Guaranty Nat. Bank v. Roper, 445 U.S. 326, 100 S.Ct. 1166, 63 L.Ed.2d 427 (1980); County of Los Angeles v. Davis, 440 U.S. 625, 99 S.Ct. 1379, 59 L.Ed.2d 642 (1979). It has been held that a “moot” case is beyond the jurisdiction of the federal courts because of the “case or controversy” requirement, Iron Arrow Honor Society v. Heckler, 464 U.S. 67, 104 S.Ct. 373, 78 L.Ed.2d 58 (1983), or because the opinion in a moot case would be merely advisory. Preiser v. Newkirk, 422 U.S. 395, 95 S.Ct. 2330, 45 L.Ed.2d 272 (1975); North Carolina v. Rice, 404 U.S. 244, 92 S.Ct. 402, 30 L.Ed.2d 413 (1971). Mootness can perhaps best be analyzed as a subclass of Article III standing issues viewed from a perspective that focuses on the time element. See Monahan Constitutional Adjudication: The Who and When, 82 Yale L.J. 1363, 1384, quoted in United States Parole Comm’n v. Geraghty, 445 U.S. 388, 100 S.Ct. 1202, 63 L.Ed.2d 479 (1980).

In their motion, defendants suggest that the Tenth Circuit’s ruling in Dimension that Reg. Y is invalid is the type of intervening event that renders plaintiff’s claim moot. Defendants’ argument in support of this position may be stated in simplistic terms as follows. First, according to the defendants, this is an action in which plaintiff seeks this Court’s aid in getting the B.H.C.A. issue before the Federal Reserve Board so that the Board may apply Reg. Y and declare that the proposed Dimension subsidiaries are “banks” under the B.H.C. A. But — because of the Dimension opinion — the Federal Reserve Board is now precluded from doing what the plaintiff wants: declaring the proposed Dimension subsidiaries to be “banks” within the B.H.C.A. definition. Thus, say the defendants, plaintiff cannot as a matter of law obtain the relief originally sought and this case is moot.

This argument has some appeal. It is self-evident that when a judicial remedy such as an injunction becomes unnecessary, the claim is moot. See Atherton Mills v. Johnston, 259 U.S. 13, 42 S.Ct. 422, 66 L.Ed. 814 (1922) (suit to prevent discharge of minor under statute regulating work by minors becomes moot when plaintiff reaches majority). The same result obtains when the judicial remedy sought becomes not unnecessary but “impossible.” See e.g., Humboldt County v. United States, 684 F.2d 1276, 1283 (9th Cir., 1982) (argument that road closing is premature because area not designated as wilderness is rendered moot when area so designated); H.R. Porter Co. v. Metropolitan Dade County, 650 F.2d 778, 782 (5th Cir.1981) (government contract claim seeking hearing on bid and injunction awarding contract to plaintiff was rendered moot by award of contract to third party).

Another line of cases holds that legislative or judicial modification of an essential element of a claim may render that claim moot. For example, amendment of a statute to allow the activity that the plaintiff claims is unlawful obviously renders the complaint moot. See, e.g., Collins v. Hoke, 705 F.2d 959 (8th Cir.1983). Similarly, invalidation of a statute by a court may render a claim under that statute moot. See Hicklin v. Orbeck, 437 U.S. 518, 98 S.Ct. 2482, 57 L.Ed.2d 397 (1978).

However, the Court believes that defendants’ mootness argument in the present case is distinguishable from these lines of cases. In each of the mootness cases above, the intervening event directly affected the ability of the Court to render the relief sought regardless of the merits of the claim. The event had an effect on the controversy that made it unnecessary for the court to consider the merits.

In the present case, there has obviously been an intervening event: a change in the law, Reg. Y, that affects the merits of this controversy. Indeed, defendants’ argument concerning the magnitude of this change is difficult to dispute. Nevertheless, while the invalidation of Reg. Y may have a precipitous effect on plaintiff’s claims, it is not readily apparent that this effect is of the nature of a withdrawal of this Court’s jurisdiction.

Defendants’ arguments regarding mootness were well put, and perhaps it is a matter of slight degree to distinguish the jurisdictional effect of mootness from a similar, significant effect on the merits. See 13A Wright Miller & Cooper, Federal Practice and Procedure § 3533.3 (“a high degree of probability [that there will be no effective relief awarded] is often found, and rightly supports a finding of mootness”).

However, defendants’ arguments ultimately fall short of doing anything more than demonstrating that the invalidation of Reg. Y has weakened the plaintiff’s case. The error in the defendants’ argument lies in their characterization of the issues. This is not a case in which this Court must decide whether the application of Reg. Y would cause the Dimension subsidiaries to be treated as “banks” under the B.H.C.A. If it were, the invalidation of Reg. Y might moot this lawsuit. However, the merits of the Reg. Y issue are not being argued here. Instead, the Court must decide whether an injunction should issue to stay the hand of the Comptroller while the Federal Reserve Board considers the merits of the Dimension proposal. The relief sought is not the application, of Reg. Y, but a declaration of Federal Reserve jurisdiction. Reg. Y affects this Court’s determination of the Federal Reserve Board’s jurisdiction, but it does so on the merits. The invalidation of Reg. Y does not render this Court’s ruling unnecessary or moot.

The “Substantial Issue” Test

As a preliminary matter, the parties would agree that in some circumstances the federal courts have the power and authority to enjoin the Comptroller’s issuance of final bank charters in order to allow the Federal Reserve Board an opportunity to exercise its jurisdiction over B.H.C.A. issues. The seminal case in this area is Whitney National Bank v. Bank of New Orleans, 379 U.S. 411, 85 S.Ct. 551, 13 L.Ed.2d 386 (1965), which held that the Comptroller may not issue a final charter to a proposed bank where “substantial” B.H.C.A. questions exist. The Whitney court based this holding on the premise that as long as a B.H.C.A. issue was pending before the Federal Reserve Board, the applicant would not be “lawfully entitled to commence the business of banking.” 379 U.S. at 426, 85 S.Ct. at 560. The Whitney doctrine has been applied not only in cases where an applicant has submitted an application for Federal Reserve approval, 12 U.S.C. § 1842, but also in cases where no application is pending. See Marshall & Ilsley Corp. v. Heimann, 652 F.2d 685, 699-701 (7th Cir.1981) (federal courts may issue injunction against Comptroller to allow Board opportunity to review B.H.C.A. issues); American Bank of Tulsa v. Smith, 503 F.2d 784, 784-787 (10th Cir. 1974). (Comptroller may be enjoined although no application pending.)

Before the Court turns to the issue of whether such a “substantial” B.H.C.A. issue exists, several preliminary matters should be considered. Plaintiff has supplemented its cross-motion for summary judgment with a Motion for an Order of Referral to the Federal Reserve Board. Under the I.B.A.A.’s proposed order, the Comptroller would be enjoined from issuing final charters until the Federal Reserve Board “first determines that Dimension Financial Corporation can lawfully acquire the proposed bank subsidiaries under the Bank Holding Company Act.” Because the Comptroller’s decision conditions final approval of Dimension’s proposal on Federal Home Loan Bank Board (“F.H.L.B.B.”) approval, the proposed order triggers referral of the B.H.C.A. issues to the Federal Reserve Board on such F.H.L.B.B. approval. If this occurs, the order provides that the Federal Reserve shall file a written report on its “determination” of the B.H.C.A. issues within thirty days.

Prior to applying the “substantial issue” test, several issues relating to this I.B.A.A. motion must be considered.

At the outset, it is clear that a district court has no authority to issue orders mandating action or inaction by the Federal Reserve Board. Although this Court might enjoin the Comptroller, the Board is subject to direct review in the Court of Appeals. 12 U.S.C. § 1848. It is the law of this Circuit that where a statute commits agency action to direct review in the Court of Appeals, any suit that might affect that future jurisdiction is “subject to the exclusive review of the Court of Appeals.” Telecommunications Research and Action Center v. Federal Communications Commission, 750 F.2d 70, 75 (D.C.Cir., 1984).

The I.B.A.A.’s proposed order would require a Board decision on the merits of the B.H.C.A. issues in the Dimension proposal. Such a Board decision would, of course, be a final order subject to appellate review. Thus, this Court would be taking action to affect the Court of Appeals’ future jurisdiction over the Board; such an order is improper and this Court lacks jurisdiction to enter it. See Telecommunications Research at 76-77 (exclusive appellate jurisdiction over final agency orders extends to non-final orders; district court lacks jurisdiction to compel agency action); Southwest Bank of Fort Worth v. Hermann, No. 80-1115, mem. op. at 4, (D.D.C. March 25, 1981) (district court has no jurisdiction over Federal Reserve Board). For this reason alone, the motion for an order of referral should be denied.

The I.B.A.A. has also argued that the Federal Reserve Board has conclusively determined that the Dimension proposal raises a substantial B.H.C.A. issue and that this Court is bound by that determination. This contention is incorrect as a matter of fact and law.

The most recent comment of the Federal Reserve Board spoke directly to the “issues ... raised in the above-captioned case.” In that letter, the Board took the position that “it intends to conduct a thorough inquiry into whether the proposed Dimension banks will be operated in a manner so as to comply with the definition of ‘bank’ for purposes of the [B.H.C.] Act.” The letter then goes on to quote the F.H.L. B.B.’s position that the proposal raises “serious and very complex policy issues.” The letter ends as follows:

The staff believes that it would be most useful to undertake a review of the lawfulness under the BHC Act of Dimension’s acquisition of the proposed national banks after any approval of the Dimension proposal by the Bank Board. This scheduling will avoid potentially unnecessary expenditure of administrative resources and will assure that a Board decision is made in the light of facts that are more timely and relevant in relationship to the possible opening for business by the proposed banks.
It is of course preferable that matters such as this be resolved by cooperation among the interested agencies with referral to the Board of issues that require resolution under the BHC Act. In any event, the courts have recognized that the Board’s jurisdiction with respect to matters arising under the BHC Act is paramount. E.g., Board of Governors v. First Lincolnwood Corp., 439 U.S. 234, 250 [99 S.Ct. 505, 514, 58 L.Ed.2d 484] (1978). The Board, therefore, has at any time the authority to determine whether any particular banking institution is a bank for purposes of the BHC Act.

Letter from Michael Bradfield, General Counsel, Board of Governors of the Federal Reserve System, to Richard K. Willard, Acting Assistant Attorney General, Civil Division (January 4, 1985).

Any mention of the Board’s belief that a “substantial” B.H.C.A. question still exists is conspicuously absent from this letter. The Court does not believe this lack of precision in the language of the letter was an oversight, nor is it possible that the Board, or its counsel, is unaware of the “substantial” question test of Whitney. In fact, the November 15, 1983 letter of the Board, also written by the General Counsel, stated unequivocally that “there is a substantial question whether the Dimension banks would be ‘banks’ for the purpose of the BHC Act.” Of course, at that time the expanded definition of “commercial loan” under Reg. Y was still in effect.

Assuming arguendo that the Board had declared that a “substantial” B.H.C.A. question currently exists, this Court would not be bound by such a declaration as a matter of law. As noted supra, the plaintiff argues that this Court may not entertain any “collateral attack” upon the Federal Reserve Board’s determination. It is the plaintiff’s position that the federal courts may make only preliminary judgments on the existence of “substantial” B.H.C.A. issues in cases where the Board has not spoken. Once the Board has spoken, says plaintiff, its actions are not subject to review in this Court, see B.H.C.A. § 9, 12 U.S.C. § 1848, and this Court may not undertake any de novo review of the Board’s position, including its belief that substantial B.H.C.A. issues are raised by the Dimension proposal.

A brief consideration of the circumstances of this case reveals the legal and logical fallacies of plaintiff’s argument. Initially, Section 9 of the B.H.C.A., which provides for review of Board orders in the Courts of Appeals is inapplicable here because the Board has not entered any order. Indeed, the Board has taken no action for this Court to review — de novo or otherwise.

In addition, if in fact the district courts were bound by the Board’s determination in this situation, a highly unusual outcome would result. Anytime the Board “declared” the existence of a substantial B.H. C.A. issue, a federal court could be compelled to enter an indefinite injunction against the Comptroller until the Board decided the issue. Not only is this a bizarre outcome in terms of jurisprudential theory, it is also an untenable result in administrative practice. Conflicts between the federal bank regulators are common, if not inevitable, and the I.B.A.A.’s theory would make the federal courts the “automatic” ally of the Federal Reserve Board. In fact, the Board need not even file a lawsuit as long as it “declares” its position.

The case law also fails to support the I.B.A.A.’s position. It is true that the district courts have no jurisdiction to pass on the merits of a bank holding company proposal. Whitney, 379 U.S. at 419-420, 421-22, 85 S.Ct. 551, 557, 558, 13 L.Ed.2d 386. That power belongs exclusively to the Board. Id. at 419, 85 S.Ct. at 557. At the same time, the Comptroller clearly has jurisdiction to charter national banks without awaiting Board approval as long as those charter applications pose no substantial B. H.C.A. questions. Marshall & Ilsley Corporation v. Heimann, 652 F.2d 685, 701 n. 27 (7th Cir.1981), cert, denied, 455 U.S. 981, 102 S.Ct. 1489, 71 L.Ed.2d 691 (1982); American Bank of Tulsa v. Smith, supra, at 786. Further, the Comptroller must have jurisdiction to determine, at least initially, whether such an issue exists. Otherwise, the Comptroller’s office would be paralyzed by the mere hint of a B.H. C. A. issue. Moreover, if the Comptroller can determine whether the initial charter application raises substantial B.H.C.A. issues, then this Court must also have the power to determine whether such issues exist and whether an injunction should issue. “The mere presence of an objection [under the B.H.C.A.] should not give rise to this extraordinary use of court process. However, if the matter appears to be a substantial problem ... it would seem that the spirit of the Whitney case requires that there be action.” American Bank of Tulsa v. Smith, 503 F.2d 784, 789 (10th Cir. 1984). Thus, although the federal courts “do not have jurisdiction to determine the merits” of B.H.C.A. issues, they “do have the authority to determine whether or not the issue is substantial or frivolous” and whether the Comptroller should be enjoined while the Board considers it. American Bank of Tulsa at 786.

This Court finds that the I.B.A.A. has not proved the existence of any substantial Bank Holding Company Act issue.

Obviously, plaintiff’s strongest argument for the existence of a substantial B.H.C.A. question was premised on Reg. Y. In view of the current status of that regulation, it is unnecessary to consider whether a substantial B.H.C.A. issue was presented prior to the invalidation of Reg. Y.

Plaintiff argues, however, that substantial B.H.C.A. issues are presented on grounds not related to the definition of commercial loan as dealt with in Reg. Y. The Court does not find these arguments to be compelling, and in fact, the focus of the I.B.A.A.’s arguments have always been on the Reg. Y issues.

Plaintiff argues, for example, that the proposed Dimension Banks might “provide their customers with access to commercial loans extended by Valley Federal or a sister bank which does not accept demand deposits.” Citing U.S. Trust Corp., 70 F.R.B. 371 (1984), the I.B.A.A. argues that such an arrangement would constitute a “unitary operation” which would cause Dimension to be a “bank holding company” for purposes of the B.H.C.A. Aside from the speculative nature of this argument, and the absence of any evidence in the record, Board investigation of any such “conduit” loans must necessarily await the operation of the banks. This is so because the allegations involve potential illegal activity that occurs only in the course of operating the banks. It would be inequitable to enjoin the chartering of the Dimension banks because of allegations of a possible illegal “unitary” operation when such allegations could only be examined by the Board if the proposal is allowed to proceed. Mere allegations of future wrongdoing never justify injunctive relief.

Plaintiff also argues that it will be “necessary for the Federal Reserve Board to apply and construe applicable state banking laws____” The Board does indeed have authority to interpret state law, see First Interstate Bancorp., 70 F.R.B. 660 (1984), but such authority is limited to situations where the Board is dealing with bank holding companies within its jurisdiction. In this case, the issue of applicability of the B.H.C.A. to the Dimension banks is at the very heart of the dispute and the I.B.A.A.’s state law argument assumes the existence of the fact at issue.

Based on the foregoing, the Court holds that plaintiff has failed to establish that a substantial B.H.C.A. issue exists which would justify the issuance of an injunction against the Comptroller. The Comptroller has not unlawfully “decided the merits” of any B.H.C.A. controversies. Instead, the Comptroller correctly decided that the Dimension proposal did. not in its present form raise any substantial B.H.C.A. issues, and therefore did not merit referral to the Federal Reserve Board. The Comptroller acted correctly and was within the jurisdiction of his office. An appropriate Order will issue in accordance with the terms of this opinion.

ORDER

In accordance with the Memorandum Opinion filed by the Court this 27th day of February, 1985, it is

ORDERED that:

1) Defendants’ Motion to Dismiss for lack of subject matter of jurisdiction is denied;

2) Plaintiff’s Motion for a Preliminary Injunction is denied;

3) Plaintiff’s Motion for Summary Judgment or for an Order of Referral to the Board of Governors of the Federal Reserve System is denied;

4) Defendants’ Motion for Summary Judgment is granted and judgment shall be, and is, entered for the defendants on all counts of the complaint; and

5) The Stay of Proceedings on Defendant Dimension’s Counterclaim is hereby lifted.

      . The proposed Dimension banks would be established in 25 states.

      . Defendants concede that Dimension banks will accept demand deposits; the controversy turns on whether the banks will engage in the making of commercial loans. Dozens of "non-bank banks” or limited-service banks have been approved in recent months on the grounds that one of the two elements of the “bank" definition will be avoided. See Wall Street Journal, Nov. 2, 1984 at 2, col. 3; Washington Post, Nov. 2, 1984 at El, col. 5.

      . The Comptroller examines the applications of all national bank applicants "to determine whether the association is lawfully entitled to commence the business of banking.” 12 U.S.C. § 26.

      . This petition, supplemented in June, 1983, suggested that the Dimension Banks would in fact engage in "commercial lending” and further stated that "the relationships between Dimension, FII and Valley are part of a scheme to avoid various provisions of federal and state law, including, but not limited to, restrictions against interstate banking set forth in § 3(d) of the [Bank Holding Company] Act.”

      . This notice was not the first inkling of the Board’s new position on the scope of the "commercial loans” definition. The amendments to Reg. Y merely codified the Federal Reserve Board’s earlier position in a case involving the Dreyfus Corporation’s plans to acquire the Lincoln State Bank. Letter to William M. Isaac, Chairman, FDIC, from William W. Wiles, Secretary, Board of Governors (December 10, 1982) (“Dreyfus Letter”).

      . Dimension made the same representation in a letter to the Board dated January 6, 1984.

      . This suit was ultimately dismissed without prejudice for lack of ripeness.

      . Although the litigation in this Court focuses solely on the Dimension proposals, the Court takes notice of the broad economic and public policy impact of the nonbank bank issues. Due to a self-imposed moratorium, which lasted from April 1983 to October 1984, the Comptroller refrained from processing nonbank bank applications in order to give Congress an opportunity to act. Congress did not seize this opportunity and the nonbank applications continued to accumulate. As of October, 1984, there were over three hundred pending applications.
      As the Tenth Circuit noted in Dimension Financial Corp. v. Board of Governors of the Federal Reserve System, 744 F.2d 1402 (1984), the Board's promulgation of Reg. Y was an attempt to slow the pace of the rapid transformations taking place in the financial services industry. This lawsuit shares the same objective, at least in part.
      The Court does not mean to suggest that there is anything less than complete good faith in the positions of the parties. Nor does the Court intend to express any opinion on the wisdom or the soundness of the nonbank banks. Instead, the Court would suggest that all of the regulatory and judicial proceedings to date can serve as little more than expensive holding actions until Congress takes its turn in examining the changes in the industry and the regulatory impact of existing federal law. See Letter from C. Todd Conover, Comptroller of the Currency, to Representative St. Germain, Chairman of the House Committee on Banking (April 5, 1983) (industry developments include changes in savings and loan industry, geographic and product restrictions of state law, and technological developments that make new products and delivery systems possible).

      . The only substantial ground for the defendants' motion to dismiss — mootness—is closely intertwined with the merits. Because of overlapping of preliminary (Rule 12) motions and the merits, the briefing of this case, which allowed the Court to consider the mootness, preliminary injunction, and summary judgment motions in a consolidated fashion, was particularly efficient.

      . The Court would also note that the I.B.A.A.’s litigation strategy has not been limited to one federal district court at a time. In a related action in the Middle District of Florida, the United States District Court recently entered a preliminary injunction preventing the Comptroller from issuing final charters to any non-bank bank on the grounds that a nonbank bank is not engaged in the "business of banking” within the meaning of the National Bank Act, 12 U.S.C. § 1, et seq. Independent Bankers Association of America v. Conover, No. 84-1403-CIV-J-12 (M.D.Fla. February 15, 1985). This holding has no effect on the issues before this Court.

      . Reg. Y, the definition of commercial loan, and the definition of bank all play important roles in this determination but the legal issues and standards are not identical.

      . The Comptroller has suggested that the Tulsa opinion is incorrectly decided and that it misapplies the Whitney doctrine by holding that the Comptroller might be enjoined in situations where no application is pending before the Board. But, the absence of an application by the proposed banks should have no impact on the Supreme Court’s admonition that the "statutory mode of review [i.e., with B.H.C.A. issues exclusively before the Board] be adhered to notwithstanding the absence of an express statutory command of exclusiveness.” Whitney 379 U.S. at 422, 85 S.Ct. at 558. Indeed, the Court stated that ”[o]pponents of the opening of a new bank by a bank holding company must first attack the arrangement before the Board....” Id. The plaintiffs petition for Board review, see supra page 951, constitutes such an attack, and it would be perverse if bank applicants were allowed to avoid Federal Reserve Board review as well as federal judicial authority merely by refusing to file an application before the Board.

      . Plaintiff sought a referral by which the Board would be directed to advise the Court in writing (1) whether "substantial” B.H.C.A. issues exist, and (2) what the Board’s resolution of those issues would be on the merits. By letter of January 4, 1985, the Federal Reserve Board, through counsel, advised the Acting Assistant Attorney General, Civil Division, that the Board’s "current view” was that “it intends to conduct a thorough inquiry into whether the proposed Dimension banks will be operated in a manner so as to comply with the Board's regulations on the definition of ‘bank’ for purposes of the Act.” According to the I.B.A.A., this letter is conclusive proof that there is a "substantial" B.H.C.A. issue, or, at least, that the Federal Reserve Board believes that a "substantial” issue currently exists. Thus, the plaintiff has argued that this Court is bound by the Board's "position."

      . The motion itself uses the language of “direct[ing]” the Board to advise the Court, although the proposed order does not expressly require Board response. In any case, the overall language and tone of the I.B.A.A.’s position suggests that this Court issue an order to the Board. Even if the motion were construed otherwise, the Board would effectively be ordered to act because under the terms of the order final charter approval would be put on indefinite "hold” pending Board action.
      It is, in fact, this concern of the Court — that inaction by the Board could freeze progress on the Dimension proposals — that may have prompted the I.B.A.A. to propose the referal as an alternative to the indefinite injunction.

      . It is perhaps incorrect to attribute these remarks to the Board. Only the Board of Governors or the Chairman would, in a technical sense, speak for the agency. However, in the absence of suggestion to the contrary, the Court will assume that the comments of the General Counsel fairly reflect the consensus of the Board of Governors of the Federal Reserve System.

      . See Rival Bank Regulators Agree Only To Disagree On Most Major Issues, Wall Street Journal, Jan. 23, 1985, at 1, col. 6.

      . In so holding, the Court takes notice of the obvious fact that the Board has not taken advantage of its ample opportunity to act on the Dimension proposal. Although the Whitney test is not time-bound, it appears that the original concern was that the Board had "not had an opportunity to determine” the issue presented. Whitney, 329 U.S. at 425, 85 S.Ct. at 560 (emphasis added). See also American Bank of Tulsa, 503 F.2d at 789 (court should consider "whether the Federal Reserve Board should have an opportunity to consider [B.H.C.A. issue]”). In the present case, the Board has enjoyed such an opportunity. It has been over twenty-one months since the I.B.A.A. initially petitioned the Board to hold hearings on the Dimension proposal. It is difficult to suggest that this Court needs to enjoin the Comptroller in order to give the Board time to act when no action has been taken in over a year and a half.

      . A Petition for a Writ of Certiorari was filed by the Federal Reserve Board with the Supreme Court seeking review of the Court of Appeals decision in Dimension Financial Corporation v. Board of Governors, 744 F.2d 1402 (10th Cir. 1984). Of course, the Tenth Circuit opinion remains valid and binding in the absence of further action by the Supreme Court. The Board’s motion to stay the mandate was denied and the mandate was issued on February 14, 1985. Thus, the Board is currently enjoined from enforcing Reg. Y.

      . The Board suggested as much in its letter of June 19, 1984, see supra page 957, when it stated that it would conduct an "informal hearing” to determine "whether the proposed Dimension banks will be operated in a manner so as to comply with the Board’s regulations____” (emphasis added)


author: MERHIGE, District Judge.

text:
    James DOE, et al., Plaintiffs, v. Frank S. DULING, et al., Defendants.
    Civ. A. No. 84-0118-R.
    United States District Court, E.D. Virginia, Richmond Division.
    Feb. 27, 1985.

      Michael Morchower, John B. Boatwright, III, Morchower & Luxton, Richmond, Va., for plaintiffs.
    Michael L. Sarahan, James C. Wicker, Jr., Asst. Commonwealth's Atty., for the City of Richmond, Va., Richmond, Va., Linwood T. Wells, Asst. Atty. Gen. of Va., Richmond, Va., for defendants.
   MEMORANDUM

MERHIGE, District Judge.

I. Facts

This is an action challenging the constitutionality of Virginia’s fornication and cohabitation statutes. Section 18.2-344 of the Virginia Code provides that “[a]ny person, not being married, who voluntarily shall have sexual intercourse with any other person, shall be guilty of fornication, punishable as a Class 4 misdemeanor.” Section 18.2-345 punishes as a Class 3 misdemeanor “any persons, not married to each other, [who] lewdly and lasciviously associate and cohabit together [or], whether married or not, be guilty of open and gross lewdness and lasciviousness....” Plaintiffs allege that these statutes violate their “rights to privacy, freedom of association, and freedom of expression protected by the First, Fifth, Ninth and Fourteenth Amendments to the United States Constitution.”

Plaintiffs are proceeding in this action under the pseudonyms of James Doe and Jane Doe. They are unmarried adults who reside in the City of Richmond, Virginia and allege to have engaged in sexual intercourse in Richmond with unmarried members of the opposite sex. They both express the desire to engage in such activity in the future and to cohabit with a member of the opposite sex “under conditions normally associated with living as husband and wife.” In their depositions, both plaintiffs testified that they have not engaged in sexual intercourse since the filing of this action partly because of their fear of prosecution.

Defendant Frank Duling is the Chief of the Richmond Bureau of Police, and his co-defendant, Aubrey Davis, is the Commonwealth’s Attorney for the City of Richmond.

Plaintiffs assert that this Court has jurisdiction under 28 U.S.C. §§ 1343, 2202, 2283 and has the power to grant relief pursuant to 42 U.S.C. § 1983. They request declaratory and injunctive relief. Defendants have moved for dismissal, asserting that this Court has no subject matter jurisdiction because there is no case or controversy and that plaintiffs lack standing to bring this action.

In depositions, documents, and stipulations of facts filed with the Court, it is apparent that the fornication and cohabitation statutes are enforced if complaints are received and the police at the time have available manpower to respond. Defendants assert that enforcement of these statutes has low priority, and that no complaints regarding private, consensual, nonprostitutional violations of the statutes have been responded to by the Division of the Richmond Police since 1978. Arrest records filed with the Court, however,- reveal that there have been at least eight arrests on fornication charges since 1982.

II. Jurisdiction.

The merits of the case are legally inconsequential unless the Court has jurisdiction to adjudicate the issue. The power of the Court is limited by the “case or controversy” requirement of Article III of the Constitution; in short, the issues presented to the Court must be justiciable, and it is a determination of that question which must be addressed initially.

When a state statute is challenged on constitutional grounds, two major inquiries on the justiciability of the challenge are whether the litigants have standing and whether the issues raised are ripe. The requirement of standing “focuses on the party seeking to get his complaint before a federal court and not the issues he wishes to have adjudicated.” Valley Forge Christian College v. Americans United for Separation of Church and State, 454 U.S. 464, 484, 102 S.Ct. 752, 765, 70 L.Ed.2d 700 (1982) (quoting Flast v. Cohen, 392 U.S. 83, 99, 88 S.Ct. 1942, 1952, 20 L.Ed.2d 947 (1968)). “Standing,” has been described by the Supreme Court as subsuming “a blend of constitutional requirements and prudential considerations.” Id. 454 U.S. at 471,102 S.Ct. at 758. Minimally, article III requires he who invokes the Court’s authority to allege and ultimately show (a) that he personally has suffered an actual or threatened injury as a consequence of the putatively illegal conduct of the defendant, (b) that such injury may fairly be traced to the complained of action, and finally, (c) such injury is likely to be redressed by a favorable decision. Id. at 475, 102 S.Ct. at 760; Gladstone Realtors v. Village of Bellwood, 441 U.S. 91, 99, 99 S.Ct. 1601, 1607, 60 L.Ed.2d 66 (1979); Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 38, 41, 96 S.Ct. 1917, 1924, 1926, 48 L.Ed.2d 450 (1976). “Ripeness,” which can be viewed in part as the time dimension of standing, focuses on whether an injury which has not occurred is sufficiently likely to happen to justify judicial intervention. See generally 13A C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3531.12, at 50 (1984).

James Doe and Jane Doe allege that the challenged statutes chill the exercise of their constitutional rights. As indicated, the Court’s first inquiry must be to determine whether these plaintiffs are threatened by enforcement of the statute. Cf. J.N.S., Inc. v. Indiana, 712 F.2d 303, 306 (7th Cir.1983) (plaintiff lacked standing in absence of proof the challenged statute could be applied to it). The statute must apply to the named plaintiffs if they are to have standing. Moreover, unless the threat of prosecution is sufficiently imminent, the instant challenge is not ripe for review. While there must be a realistic threat of prosecution, it is not necessary that plaintiffs first expose themselves to arrest or prosecution. Babbitt v. United Farm Workers National Union, 442 U.S. 289, 298, 99 S.Ct. 2301, 2308, 60 L.Ed.2d 895 (1979). See generally 13A C. Wright, A. Miller & E. Cooper, supra, § 3532.5. Their fear of prosecution, as in the instant case, must be more than imaginary or speculative. Younger v. Harris, 401 U.S. 37, 42, 91 S.Ct. 746, 749, 27 L.Ed.2d 669 (1971).

Virginia’s fornication and cohabitation statutes expressly apply to unmarried persons such as James Doe and Jane Doe. As with the criminal abortion statute challenged in Doe v. Bolton, 410 U.S. 179, 93 S.Ct. 739, 35 L.Ed.2d 201 (1973), which proscribed an abortion except under certain conditions, there is no question that the plaintiffs are the “one[s] against whom these criminal statutes directly operate....” Id. at 188, 93 S.Ct. at 745. Plaintiffs allege that they wish to have consensual sexual intercourse and cohabit with unmarried adults of the opposite sex. Defendants argue that, since James Doe and Jane Doe are not “proposed partners in the activities in which they hope to engage,” there is insufficient basis for the Court to conclude that plaintiffs will have the opportunity to violate the challenged statutes or that they will be “chilled” in their conduct. The Court disagrees. In their depositions, both plaintiffs testified to having sexual intercourse with members of the opposite sex prior to this suit. Both admit to having opportunity to further violate the challenged statutes. They both testified in depositions that they have not violated the statutes since filing this suit because of their fear of prosecution. There is no reason for the Court to doubt these assertions. If plaintiffs’ activities, which admittedly violate the challenged statutes, are called to the attention of the police, plaintiffs are susceptible to prosecution. Accordingly, plaintiffs have standing to challenge the constitutionality of these statutes.

Still, there must, in addition to standing, be a threat of prosecution sufficient to make this controversy ripe for review. The determination of ripeness, in actions such as this “is made on a ease-by-case basis, by considering the likelihood that the complainant will disobey the law, the certainty that such disobedience will take a particular form, any present injury occasioned by the threat of prosecution, and the likelihood that a prosecution will actually ensue.” Blanchette v. Connecticut General Insurance Corp., 419 U.S. 102, 143 n. 29, 95 S.Ct. 335, 358 n. 29, 42 L.Ed.2d 320 (1974). Of these factors, the Court is most concerned with the present injury and the likelihood of prosecution.

Defendants argue that there are no allegations of a credible threat of prosecution of plaintiffs for violations of sections 18.2-344 and -345 of the Virginia Code. They point to the fact that violations of the statutes are common within all strata of the community and the fact that neither plaintiff has been personally threatened with prosecution. While this fact, coupled with defendants’ contention that prosecution is premised on chance — i.e. the odds of prosecution are low because police must both receive a complaint and have available manpower — actual, threatened, or imminent prosecution is not the test. In Doe v. Bolton, 410 U.S. 179,188, 93 S.Ct. 739, 745, 35 L.Ed.2d 201 (1973), plaintiffs had standing to challenge a recently enacted criminal abortion statute even though there had been no actual or threatened prosecution under the statute. As in Babbitt v. United Farm Workers National Union, 442 U.S. 289, 302, 99 S.Ct. 2301, 2311, 60 L.Ed.2d 895 (1979), “the State has not disavowed any intention of invoking the criminal penalty provisions” for violations of the statutes; Defendants admit in depositions the statutes will be enforced if complaints are received and manpower is available. In Poe v. Ullman, 367 U.S. 497, 81 S.Ct. 1752, 6 L.Ed.2d 989 (1961), the Court found no case or controversy when a statute, enacted in 1879, prohibiting the use of contraceptive devices and the giving of medical advice on their use, had apparently been enforced only once before the constitutional challenge was made. The evidence before the Court in the instant case indicates that the challenged statutes have recently been enforced. The Court concludes that this case is ripe for review. Accordingly, the Court has jurisdiction to decide the issue on its merits.

III. Effects of Previous Decisions

Defendants assert that two previous decisions, binding upon the Court, compel dismissal of this complaint. Contrary to defendants’ assertions, however, the two cases, Doe v. Commonwealth’s Attorney, 403 F.Supp. 1199 (E.D.Va.1975), aff’d, 425 U.S. 901, 96 S.Ct. 1489, 47 L.Ed.2d 751 (1976) and Lovisi v. Slayton, 363 F.Supp. 620 (E.D.Va.1973), aff’d, 539 F.2d 349 (4th Cir.), cert. denied, 429 U.S. 977, 97 S.Ct. 485, 50 L.Ed.2d 585 (1976), though instructive, are not dispositive of the issues presented herein.

In Doe v. Commonwealth’s Attorney, a three-judge panel declared Virginia’s sodomy statute, § 18.1-212 (currently codified at § 18.2-361), constitutional. The Court, in that instance, determined that the right of privacy did not extend to homosexual conduct. The Judge of this Court, in dissent, concluded that the right of privacy did, in fact, extend to consensual, sexual conduct which takes place in private. Id. at 1204-05 (Merhige, J., dissenting).

The precedential effect of the summary affirmance of Doe v. Commonwealth’s Attorney by the United States Supreme Court extends only to the precise issues presented and necessarily decided by the action of the three judge panel; no more may be read into a summary affirmance than is essential to sustain the judgment. Illinois Election Board v. Socialist Workers Party, 440 U.S. 173, 182-83, 99 S.Ct. 983, 989-90, 59 L.Ed.2d 230 (1979). Unquestionably, the summary affirmance in Doe was an adjudication on the merits of the issues in that case. Hicks v. Miranda, 422 U.S. 332, 345 n. 14, 95 S.Ct. 2281, 2290 n. 14, 45 L.Ed.2d 223 (1975). The Court declines' to speculate and extend the Supreme Court’s affirmance in Doe beyond the facts presented therein. See Lovisi, 539 F.2d at 355 (Winter, J., dissenting). Accordingly, the Court accepts that Virginia’s sodomy statute as applied to adult males who consensually engage in homosexual sodomitic activity in privacy is a constitutional exercise of state power.

James Doe and Jane Doe, however, do not assert a right to engage in such homosexual conduct; their assertion is that, as applied to them, the cohabitation and fornication statutes are unconstitutional. The case of Doe v. Commonwealth’s Attorney is not dispositive, nor does it discuss these issues. A declaration that the right of privacy does not extend to homosexual, sodomitic activity does not imply that the right of privacy would not extend to consensual, heterosexual conduct between unmarried adults.

In Lovisi, the question facing this Court and the Court of Appeals was whether the right of privacy extended to heterosexual relations between consenting, married adults when such relations were witnessed by a third person and photographed. The Court of Appeals, though not without studious dissent, affirmed the judgment of this Court, concluding that the Lovisis surrendered their, marital right of privacy when they admitted a third person. Id., 539 F.2d at 351. The majority found it unnecessary to recognize a right of privacy outside the marriage.

In the instant case, the issue of whether the constitutional right of privacy extends to unmarried adults to engage in consensual, non-prostitutional, heterosexual relations in private must be decided. The majority in Lovisi implied, without deciding, that there was no such right. While the Court’s instant task would be greatly lightened if it were so, Lovisi simply is not dispositive of this issue.

IV. Plaintiffs’ Constitutional Right of Privacy.

The fundamental substantive issue before the Court is whether the State, consistent with the Constitution, may restrict the non-prostitutional, heterosexual activities of two unmarried, consenting adults when such activities occur in the privacy of one’s home. Plaintiffs contend such intimate, sexual activity is protected by the constitutional right of privacy; any attempts by the state to regulate this activity is unconstitutional. Defendants contend the right of privacy only extends to sexual conduct between two people who are married to each other; heterosexual conduct between unmarried adults does not fall within the scope of the right of privacy.

The Court has had occasion in previous opinions to outline the nature and extent of the constitutional right of privacy as it relates to intimate sexual relations between consenting adults in private. See, e.g., Doe v. Commonwealth’s Attorney, 403 F.Supp. at 1203-04 (Merhige, J., dissenting) (constitutional rights of privacy as it relates to homosexual conduct); Lovisi, 363 F.Supp. at 624-26 (extent of the constitutional right of privacy between married persons where third person is present and the activity is photographed). The Court must now decide whether its analysis of the constitutional right of privacy changes in light of subsequent decisions.

Since its seminal decision of Griswold v. Connecticut, 381 U.S. 479, 85 S.Ct. 1678, 14 L.Ed.2d 510 (1965), the Supreme Court has clarified the nature of the right of privacy as related to decisions of whether to bear or beget a child. The right of privacy expressed in Griswold was argued by some to extend only to marital privacy. See, e.g., Doe, 403 F.Supp. at 1201. The case of Eisenstadt v. Baird, 405 U.S. 438, 92 S.Ct. 1029, 31 L.Ed.2d 349 (1972), held that there was no rational, articulated reason for limiting the access to contraceptives of single adults when married adults are afforded a right to contraceptives. “[W]hatever the rights of the individual to access to contraceptives may be, the rights must be the same for the unmarried and the married alike.” Id. at 453, 92 S.Ct. at 1038. The case of Roe v. Wade, 410 U.S. 113, 93 S.Ct. 705, 35 L.Ed.2d 147 (1973), decided one year later, extended the right of privacy to first trimester abortions.

Although the full extent of the right of privacy has not been determined, it is clear that the “decision whether or not to beget or bear a child is at the very heart of [the] cluster of constitutionally protected choices.” Carey v. Population Services International, 431 U.S. 678, 685, 97 S.Ct. 2010, 2016, 52 L.Ed.2d 675 (1977). The Carey case, decided over a year after the Court of Appeals decision in Lovisi, supra, and the Supreme Court’s summary affirmance of Doe, supra, make it clear that individual autonomy in matters of childbearing extend to married and single people alike.

Griswold may no longer be read as holding only that a state may not prohibit a married couple’s use of contraceptives. Read in light of its progeny, the teaching of Griswold is that the Constitution protects individual decisions in matters of childbearing from unjustified intrusion by the state.

Carey, 431 U.S. at 687, 97 S.Ct. at 2017.

Necessarily implicit in the right to make decisions regarding childbearing is the right to engage in sexual intercourse. To hold otherwise would result in the constitutional right to decide whether to bear or beget a child contingent on one’s marital status. Carey makes it clear that such a limitation is not valid. “If the right of privacy means anything, it is the right of the individual, married or single, to be free from unwarranted governmental intrusion into matters so fundamentally affecting a person as the decision whether to bear or beget a child.” Eisenstadt, 405 U.S. at 453, 92 S.Ct. at 1038 (emphasis original). The decision to engage in sexual intercourse, just as the decision to use contraceptives, is a matter fundamental to the decision whether to bear or beget a child. In the view of this Court, the constitutional right of privacy extends to a single adult’s decision whether to engage in sexual intercourse.

The inquiry, however, does not end here. Even fundamental constitutional rights are not absolute; the state’s regulation of these rights may be justified if the statute infringing on them is shown to be narrowly tailored to further a compelling state interest. Roe, 410 U.S. at 155, 93 S.Ct. at 728. The Court has great difficulty accepting an argument that the state’s purpose for the fornication statute is anything other than preventing sexual intercourse among unmarried individuals. Clearly, such a purpose would not be constitutionally permissible. Nevertheless, defendants have articulated other reasons for passing the fornication statute. None of these reasons, in the Court’s view, justify the fornication statute.

The defendants, in this instance, argue that the compelling reason for the fornication statute is to further the State’s interest in “encouraging, promoting and regulating traditional marital and family relationships as well as traditional moral values.” Defendants add that the fornication statute is designed to protect the State’s citizens from sexual diseases and to minimize illegitimate births. As laudable as these state goals are, they do not justify an absolute prohibition of the exercise of a constitutionally protected activity.

The Court cannot accept the contention that sexual abstention, forced through criminal sanctions, will encourage or regulate marriage. Just as the decision whether to bear or beget a child, a decision to marry is a personal choice protected by the right of privacy. Loving v. Virginia, 388 U.S. 1, 87 S.Ct. 1817, 18 L.Ed.2d 1010 (1967). Such a decision cannot be coerced through infringement on other constitutional rights. Moreover, this state purpose, an attempt to regulate public morals, cannot extend into the privacy of one’s home. There is no showing that fornication in private has any detrimental effect on society. In the absence of such a showing, an individual’s right of privacy extends even to socially condemned activity so long as it is conducted in the privacy of the home. Stanley v. Georgia, 394 U.S. 557, 89 S.Ct. 1243, 22 L.Ed.2d 542 (1969). See also Paris Adult Theatre I v. Slaton, 413 U.S. 49, 67, 93 S.Ct. 2628, 2640, 37 L.Ed.2d 446 (1973). “Our whole constitutional heritage repels at the thought of giving government the power to control men’s minds.” Stanley, 394 U.S. at 565, 89 S.Ct. at 1248. The Court appreciates the state goals of encouraging and regulating marital relationships and moral values. Such goals may be, and indeed are, generally accepted as desirable. Nevertheless, when an individual’s constitutional rights are restricted in an effort to attain those goals, the state’s interest must be more than merely desirable — it must be compelling. Our Constitution preserves for the individual the right to decide whether to procreate or marry. The state interest of promoting healthy and conforming social values is not a compelling interest which justifies deprivation of these fundamental constitutional rights.

The State’s desire to prevent sexual diseases, although legitimate, does not justify prohibiting the exercise of a constitutional right. The fornication statute, involving, as it does, a fundamental right, “must be narrowly drawn to express only the legitimate state interests at stake.” Roe, 410 U.S. at 155, 93 S.Ct. at 728. The fornication statute is not narrowly drawn. All single people who engage in sexual intercourse do not pose a threat of spreading sexual diseases. Yet the statute prohibits single people under all circumstances and in any state of health from engaging in sexual intercourse. In short, the fornication statute is too broadly drawn to fulfill this stated purpose in light of the fundamental right implicated by the statute.

Finally, defendants argue that the fornication statute is designed to minimize illegitimate births. This argument is simply another way of saying that the statute is designed to prevent unmarried individuals from having children. That argument lacks viability. The decision whether to bear or beget a child is a personal one — a constitutional right. In the interest of encouraging family relationships, an attempt to minimize illegitimate births may be a justifiable exercise of state power. Though the interest be legitimate, it is not sufficiently compelling to outweigh an unmarried individual’s right to procreate. If the state wishes to minimize illegitimate births, it will have to use alternative means. One alternative is to enact a statute, such as the Georgia statute discussed in Parham v. Hughes, 441 U.S. 347, 99 S.Ct. 1742, 60 L.Ed.2d 269 (1979), which outlines procedures, short of forced marriage, that can be used to legitimate a child. The state may attempt to educate its citizens on the “immorality” of bearing or begetting a child out of wedlock. The state does not, however, have the power to impose criminal sanctions upon a person who engages in constitutionally protected conduct.

The focus of the Court changes some with regard to the cohabitation statute. Code Section 18.2-345 punishes two types of behavior: all “open and gross lewdness and lasciviousness” and conduct between persons who are not married to each other and are cohabiting together which is lewd and lascivious. See Everett v. Commonwealth, 214 Va. 325, 200 S.E.2d 564, 566 (1973). Only the portion of the statute proscribing the latter type of behavior is at issue here. Unquestionably, the state has the power to prevent open and gross, lewd and lascivious conduct. As discussed supra, the right to engage in heterosexual intercourse, implicit in the right to bear or beget children, is guaranteed by an individual’s right of privacy. Although the right of privacy does not always have a seclusion aspect to it, see, e.g., Roe v. Wade, supra; seclusion is a necessary incident of the right to engage in heterosexual relations. “Obviously, there is no necessary or legitimate expectation of privacy which would extend to marital intercourse on a street comer or a theatre stage.” Paris Adult Theatre I, 413 U.S. at 66 n. 13, 93 S.Ct. at 2640 n. 13.

The portion of the statute that is in question, however, proscribes all lewd and lascivious conduct — regardless of whether the conduct is open — between persons not married to each other who are cohabiting. Defendants assert that Everett, supra, makes openness a requirement of a criminal conviction under section 18.2-345. Careful reading of Everett, however, reveals that defendants’ assertion is erroneous. The defendants in Everett, although charged with “unlawful cohabitation,” were found guilty of “open and gross lewdness and lasciviousness.” Everett, 214 Va. at 327, 200 S.E.2d at 566. The Court’s opinion expressly focused only upon the issue of whether the evidence was sufficient to sustain the conviction. The Court indicated in a footnote that the portion of the statute criminalizing lewd and lascivious cohabitation by persons not married to each other was not shown to be violated because evidence of the defendants’ marital status was not presented. Id. at 327 n. 1, 200 S.E.2d at 566 n. 1. There is no suggestion in Everett that this portion of the statute is unenforceable or requires a showing of open cohabitation.

Neither is Cord v. Gibb, 219 Va. 1019, 254 S.E.2d 71 (1979) dispositive of the issues raised by plaintiffs. In Cord, the Court merely held that the fact that a bar applicant jointly owned and resided in a dwelling with a member of the opposite sex had “no rational connection to ... fitness to practice law.” Id. at 1022, 254 S.E.2d at 72-73. Contrary to defendants’ assertions, the Court sees little relevance of Cord to the issues raised by plaintiffs here, much less a “direct bearing on the proof required to support a criminal charge....”

It is the opinion of the Court that the portion of the statute criminalizing lewd and lascivious cohabitation between persons not married to each other cannot withstand constitutional scrutiny. The articulated state interests in having a cohabitation statute are identical to those state interests for the fornication statute. As discussed supra, all individuals have a constitutional right to decide whether to procreate. Implicit in this decision is the right to engage in private heterosexual intercourse. The state cannot absolutely proscribe such conduct. It is irrational to limit such conduct, if partners are not married to each other, only to those persons who are not living together. Such a limitation hardly furthers the marital relationship and may even frustrate a family relationship— unmarried parents of a child would be deterred from living together.

The Court concludes that, as they relate to the plaintiffs here, Virginia Code sections 18.2-344 and 18.2-345 are too broad to withstand the searching scrutiny required when fundamental rights are restricted. Plaintiffs have a fundamental constitutional right to decide whether to bear or beget children which can be infringed upon only in limited circumstances. Defendants have failed to articulate a compelling state interest which justifies the extensive intrusion into plaintiffs’ constitutional rights.

An appropriate order will issue.

ORDER

For the reasons stated in the memorandum this day filed and deeming it proper so to do, it is ADJUDGED and ORDERED as follows:

1. The Court declares that Virginia Code Section 18.2-344 and that portion of Section 18.2-345 which reads, “not married to each other, lewdly and lasciviously associate and cohabit together or,” deprive plaintiffs of constitutional rights and are of no force and effect.

2. Defendants, each of them, their agents, servants, employees, and all acting in concert therewith be and they are hereby enjoined from enforcing the aforementioned statutes; judgment is entered in favor of the plaintiffs, and they are entitled to their taxable costs.

      . Note that "a real threat of prosecution” has been discussed by some courts in the context of the "injury” requirement of standing. See, e.g., Pollard v. Cockrell, 578 F.2d 1002 (5th Cir.1978). The Court, however, recognizing that standing focuses on the party to the litigation and not the issues involved, chooses to limit its standing inquiry to whether plaintiffs are subject to enforcement of the statute. Unquestionably, chilling of plaintiffs' rights may be an "injury” for purposes of standing. See, e.g., Steffel v. Thompson, 415 U.S. 452, 94 S.Ct. 1209, 39 L.Ed.2d 505 (1974). Moreover, very little injury need be shown to sustain standing. “[A]n identifiable trifle is enough for standing to fight out a principle; the trifle is the basis for standing and the principle supplies motivation.” United States v. Students Challenging Regulatory Procedures, 412 U.S. 669, 689 n. 14, 93 S.Ct. 2405, 2417 n. 14, 37 L.Ed.2d 254 (1973). Whether the threat of prosecution at this time is sufficient to justify judicial resolution of the dispute is an issue more appropriately discussed in the context of ripeness. Regardless of how the issues are discussed, however, the Court must address both concerns before it may conclude that the controversy is justiciable.

      . For recent application of this requirement in cases challenging “drug paraphernalia” laws, see Hejira Corp. v. MacFarlane, 660 F.2d 1356, 1360 (10th Cir.1981); Broche v. County of Westchester, 658 F.2d 47, 51 n. 6 (2d Cir.1981), cert. denied, 455 U.S. 1005, 102 S.Ct. 1643, 71 L.Ed.2d 874 (1982); Atkins v. Clements, 529 F.Supp. 735 (N.D.Tex.1981) Nova Records, Inc. v. Sendak, 504 F.Supp. 938, 942 (S.D.Ind.1980), aff'd, 706 F.2d 782 (7th Cir.1983); High Ol’ Times, Inc. v. Busbee, 449 F.Supp. 364, 366-67 (N.D.Ga.1978), aff’d, 621 F.2d 135 (5th Cir.1980).

      . There is much dispute over how,much can be read into the Supreme Court’s summary affirmance in Doe v. Commonwealth’s Attorney. In Carey, Justice Brennan noted that “the Court has not definitely answered the difficult question whether and to what extent the Constitution prohibits state statutes regulating ... [private consensual sexual] behavior among adults.” Carey v. Population Services International 431 U.S. 678 at 694 n. 17, 97 S.Ct. 2010 at 2021 n. 17, 52 L.Ed.2d 675 (1977) (Brennan, J., concurring, joined by Stewart, Marshall, and Blackmum, J.J.). Justice Rehnquist, in dissent, however, noted that: “While we have not ruled on every conceivable regulation affecting such conduct, the facial constitutionality validity of criminal statutes prohibiting certain consensual acts has been definitively established.” Id. at 718, 97 S.Ct. at 2033 n. 2 (Rehnquist, J. dissenting) (citing the summary affirmance in Doe v. Commonwealth’s Attorney).

      . As should be clear from the text, the Court only addresses in this case the constitutionality of that portion of Section 18.2-345 that proscribes "any persons, not married to each other," from "lewdly and lasciviously" associating and cohabiting together. The portion of the statute proscribing “open and gross lewdness and lasciviousness” is not challenged here, and would appear to be constitutional. See text supra p. 968. Accordingly, the Court’s conclusion that Section 18.2-345 is unconstitutional applies only to the former phrase in that section of the code.
      The Court notes that it is proper here to sever the unconstitutional portion of the statute for purposes of this ruling. As the Supreme Court has recently held, severability is generally a question of legislative intent. See Regan v. Time, Inc., — U.S. —, 104 S.Ct. 3262, 3269, 82 L.Ed.2d 487 (1984). Further, there is a presumption of severability; and the invalid part may be dropped if what is left is fully operative as a law. Id., quoting Buckley v. Valeo, 424 U.S. 1, 108, 96 S.Ct. 612, 677, 46 L.Ed.2d 659 (1976). Applying these standards, the Court finds no legislative intent to preclude severance of any part of this statute. Further, the Court finds that the statute is fully operative as a law with the objectionable portion severed.

      . It is important to note that the Court necessarily limits its inquiry into the constitutionality of statutes proscribing non-prostitutional, consensual, heterosexual conduct between two adults. To what extent this right of privacy extends to minors is not an issue before the Court. Likewise, the issues of whether the state may regulate or prohibit the commercial sale of sexual services and whether an individual has a legitimate expectation of privacy in prostitutional activities are issues not before the Court and, consequently, not decided today.