author: BROOKS, District Judge.

text:
    Mary MAY, Plaintiff, v. EVANSVILLE-VANDERBURGH SCHOOL CORPORATION; Lonnie Freeman, Albert J. Umbach, Jr., Martha Schmadel, Suzanne Aiken, and Elaine Amerson, individually and in their official capacities as members of the Board of Education; and Victor L. Fisher, Jr., individually and in his official capacity as Superintendent, Defendants.
    No. EV 84-165-C.
    United States District Court, S.D. Indiana, Evansville Division.
    June 27, 1985.

      Terry Noffsinger, Noffsinger & Deig, Evansville, Ind., Thomas Stephen Neuberger, Wilmington, Del., John W. Whitehead, Manassas, Va., for plaintiff.
    Jeffrey R. Frank, Evansville, Ind., Ron A. Hobgood, Robert Musgrave, Kightlinger Young Gray & DeTrude, Evansville, Ind., for defendants.
   MEMORANDUM DECISION

BROOKS, District Judge.

This matter comes before the Court upon cross motions for summary judgment filed by the parties to this action. The motions address the basic issue on the merits of this case, i.e., whether the United States Constitution permits a school board to prohibit so-called prayer meetings conducted by school employees on school property. This Court has jurisdiction over the action pursuant to 28 U.S.C. §§ 1331 and 1343.

FACTUAL SUMMARY

There is little dispute about the facts surrounding the meetings which transpired and which are at issue in this case. The plaintiff, Mary May, is a teacher’s aide employed by the Evansville-Vanderburgh School Corporation (“EVSC”). She has been so employed for approximately six (6) years. During the 1981-82 school year, Mrs. May and other EVSC employees, either full-time teachers or teachers’ aides, met on Tuesday mornings at Harper School for prayer, religious devotions, and religious speech. All of the participants worked at Harper School, an elementary school operated by the EVSC. The meetings were conducted weekly from 7:25 until 7:45 a.m., all occurring before teachers were to report to duty stations in the school. The meetings were voluntary. All participants were adults. No students attended the meetings. The meetings continued for some period of time, not altogether clear from the record, until early in the 1983-84 school year. No school corporation administrators were aware of the meetings until that time.

In September, 1983, Kenneth Wempe became the new principal at Harper School and instituted a practice of publishing a daily school newsletter. Mrs. May approached Mr. Wempe and inquired if the newsletter might include notice of the weekly prayer meetings. As Mrs. May testified in her deposition:

Well, he has a daily newsletter that goes out every day, and I wrote a little voluntary invitation to invite anyone that would like to to (sic) come to the prayer and religious meetings at that time and gave it to him.

(May deposition, Q. 161, p. 23).

Shortly thereafter, Mrs. May was advised by Mr. Wempe, who had consulted with school corporation administrators, that the meetings should stop because they violated school board policy. Although no written policy is evident, it appears from the record that the school board and the superintendent of schools had consistently applied a policy prohibiting use of school facilities for religious activity. At all times pertinent to this complaint, no religious meetings occurred on school property, at least to the knowledge of school administrators, and no meetings of teachers occurred at Harper School except for those necessary to the operation and management of the school.

There is no evidence that Mrs. May’s meetings were disruptive to the school environment. Obviously, the meetings continued for a lengthy period of time undiscovered by school officials.

After being told that further meetings would not be permitted, Mrs. May and her group met in a car on the school parking lot at the appointed time.

In her complaint, Mrs. May alleges five constitutional rights were violated by the defendants’ action: free speech, free association, equal protection, equal protection in a public forum, and free exercise of religion.

I

The Court first determines whether Harper School is a public forum, whether the defendants have made Harper School a public forum, or whether the defendants have made Harper School a limited public forum.

The First Amendment “does not guarantee access to property simply because it is owned or controlled by the government.” United States Postal Service v. Council of Greenburgh Civic Assns., 453 U.S. 114, 129, 101 S.Ct. 2676, 2685, 69 L.Ed.2d 517 (1981). The Supreme Court has not “suggested that students, teachers or anyone else has an absolute constitutional right to use all parts of a school building or its immediate environs for ... unlimited expressive purposes.” Grayned v. City of Rockford, 408 U.S. 104, 117-18, 92 S.Ct. 2294, 2304, 33 L.Ed.2d 222 (1972).

A public school does not become a public forum simply by its existence. A school system is justified and is on firm constitutional ground in refusing to allow the use of school facilities as a public forum. Seyfried v. Walton, 668 F.2d 214 (3rd Cir.1981); Brandon v. Board of Education, 635 F.2d 971, 980 (2nd Cir.1980), cert. denied, 454 U.S. 1123, 102 S.Ct. 970, 71 L.Ed.2d 109 (1981). “In addition to time, place, and manner regulations, the State may reserve the forum for its intended purposes, communicative or otherwise, as long as the regulation on speech is reasonable and not an effort to suppress expression merely because public officials oppose the speaker’s view.” Perry Education Assn. v. Perry Local Educators’ Assn., 460 U.S. 37, 46, 103 S.Ct. 948, 955, 74 L.Ed.2d 794 (1983) citing Greenburgh, supra, 453 U.S. at 131, n. 7, 101 S.Ct. at 2686, n. 7.

The Court finds in this case that Harper School is not a public forum in the inherent or traditional senses. Examples of such public forums would be streets, sidewalks, or parks. See, Martin v. Struthers, 319 U.S. 141, 63 S.Ct. 862, 87 L.Ed. 1313 (1943); Hague v. C.I.O., 307 U.S. 496, 59 S.Ct. 954, 83 L.Ed. 1423 (1939).

While a public forum may be “created” by the governmental entity, that ‘creation” requires some deliberate uses as a place for exchange of views. Perry, supra, see also, Widmar v. Vincent, 454 U.S. 263, 102 S.Ct. 269, 70 L.Ed.2d 440 (1981). Because public ownership does not guarantee public access, the Court must inquire whether the defendants have deliberately created a public forum at Harper School. It is clear on this record that no such public forum has been created by the defendants. A policy prohibiting religious meetings or activity on school grounds, including Harper, is evident, even if the policy is not written. Consistent application of such a policy amounts to a refusal to create such a forum. Plaintiff attaches significance to an incident several years ago in which a church was permitted to use a neighborhood school for services after a fire destroyed the church building. The Court considers this instance entirely unique and isolated, and it does not represent an intent by the defendants to make school buildings public forums. The plaintiff also argues that the recent adoption of the Equal Access Act by the EVSC makes school buildings public forums. While that Act was adopted after this case was commenced, the evidence is clear that the Act applies to student, rather than teacher groups; that the Act is directed to secondary, rather than elementary schools; and that there is no reference whatever to groups organized by or involving only teachers or school employees. The Court is unpersuaded that the School Board’s adoption of that Act as policy is sufficient to create a public forum.

Neither can the Court conclude that even a limited public forum has been created or permitted to exist. The plaintiff argues that teachers discuss a variety of topics prior to the school day, and that the defendants seek only to exclude religious speech by their actions in Mrs. May’s case. There is simply no evidence that teachers can discuss anything, and the examples noted by the plaintiff involve the kinds of informal, isolated conversations which occur in any workplace. There is no evidence that teachers met at Harper School, or in any other EVSC school, in a consistent, formal, patterned way other than to conduct business necessary to the operation and administration of the school. Mrs. May’s meetings are distinct. They do not represent happenstance conversation or informal meeting; rather, they are formal, organized meetings conducted for the sole purpose of engaging in religious speech and worship. Plaintiff has not, and apparently cannot, point the Court to any other similarly formal meetings in the school involving teachers which do not pertain to school business. If other teacher groups were permitted to meet on a variety of religious and non-religious subjects in the kind of formalized way Mrs. May’s group met, there might be an argument that a public forum, or at least a limited public forum, existed in this case and that the exclusion of Mrs. May’s group was some denial of constitutional rights. The record reveals no such scenario.

The Court concludes that no public forum existed in the instant case. As such, there is no violation of the plaintiffs free speech rights.

II

The Court now examines whether the defendants’ policy is supported by analysis under the Establishment Clause. Defendants’ success on this issue would justify any other alleged infringement of the plaintiff’s constitutional rights on grounds of a compelling state interest.

The First Amendment states, in pertinent part, “Congress shall make no law respecting an establishment of religion____” This clause has been interpreted to prohibit three identified “evils”— “sponsorship, financial support, and active involvement of the sovereign in religious activity.” Walz v. Tax Commission, 397 U.S. 664, 668, 90 S.Ct. 1409, 1411, 25 L.Ed.2d 697 (1970). Thus, the government is restrained from entanglement with religious speech or activity. This is true although “judicial caveats against entanglement must recognize that the line of separation, far from being a ‘wall,’ is a blurred, indistinct, and variable barrier depending on all circumstances of a particular relationship.” Lemon v. Kurtzman, 403 U.S. 602, 614, 91 S.Ct. 2105, 2112, 29 L.Ed.2d 745 (1971). The First Amendment does not forbid the mention of religion, only the advancement or inhibition thereof by the government. Florey v. Sioux Falls School Dist. 49-5, 619 F.2d 1311 (8th Cir.1980), cert. denied, 449 U.S. 987, 101 S.Ct. 409, 66 L.Ed.2d 251 (1980).

The appropriate test by which to measure the School Board’s policy in the instant case is stated in Lemon, supra, 403 U.S. at 612-13, 91 S.Ct. at 2111:

First, the statute (or policy ) must have a secular legislative purpose; second, its principal or primary effect must be one that neither advances nor inhibits religion, (cite omitted); finally, the statute must not foster ‘an excessive government entanglement with religion’ (cite omitted).

The parties agree that this so-called Lemon “tripartite” test is appropriate to apply to the instant case.

The Court concludes that the School Board policy in question is supported by a secular purpose, i.e., a neutral position which seeks neither to support nor inhibit religious practice or activity. The Court already has concluded the evidence in this case does not support a finding of either a public forum or limited public forum at Harper School. It would appear the defendants have the legal authority to operate their school, within state and federal law, toward whatever ends achieve the traditional function of a school.

The Court further concludes that the School Board policy in question does not have as its primary effect the advancement of religious belief or practice. Obviously, the impact of the policy serves contrary ends. The defendants further argue that plaintiff’s success in this case would put them in the untenable and unconstitutional position of advancing belief over non-belief. The plaintiff correctly argues that whatever benefits accrue to her and fellow participants may well fall into the de minimis range when economic benefit is considered. There is, however, some question of an imprimatur of state approval for religious belief were the School Board required to alter its policy to conform to plaintiffs demands. Such an impression of government approval for religious activity is forbidden under the Establishment Clause. Everson v. Board of Education, 330 U.S. 1, 67 S.Ct. 504, 91 L.Ed. 711 (1947). In the instant case, there is no evidence that students were aware of the ongoing prayer meetings or were unfairly exposed to religious speech by Mrs. May or other meeting participants. There is, however, an indication that Mrs. May sought to expand her group by advertisement in the school’s daily newsletter. The group was not discovered until it moved toward more public and wider exposure of its activities. In the peculiarly sensitive atmosphere of an elementary school, there is a significant risk of creating an improper imprimatur of state approval for religious activity. The School Board’s policy is intended to and succeeds in preventing such a question of impressionability.

The measure of the final part of the test, excessive entanglement, is whether the government is required to exercise “comprehensive, discriminating, and continuing” surveillance of the speech involved. Lemon, supra, 403 U.S. at 619, 101 S.Ct. at 2114. The plaintiff argues that a need for an adult monitor of the meetings is unnecessary. Such an adult monitor has been a sticking point in cases involving student groups using school property for religious meetings. See, e.g., Bender v. Williamsport Area School District, 741 F.2d 538 (3rd Cir.1984). The plaintiff’s argument misses the point.

At issue in the instant case is how a public, government-operated school system is to administer its property and employees. Permitting Mrs. May’s meetings would require some comprehensive and continuing supervision. The school is obligated to abide by the law, and any deviation from the adults-only organization of the prayer group would require immediate action. Even the plaintiff concedes involving students would violate the law. The impressionability problem is avoided on these facts, and the Court does not presume here facts which are not in the case. But there is little question that such meetings invite and require administrative vigilance to ascertain the degree and extent of employee involvement and to prevent any exposure of the meetings to students. The defendants have chosen to avoid such entanglement by forbidding such meetings on school property. That decision may disrupt what this plaintiff would prefer, but the law permits the defendants to make that decision. By neither creating a public forum nor establishing a policy in which religious speech or activity is permitted in the school, the defendants have spared themselves the challenge of surveillance and scrutiny the law would appear to require of them. The policy without question avoids excessive entanglement as required in the Lemon test.

Accordingly, the Court finds that the defendants’ policy under which they prohibited Mrs. May and her fellow teachers from conducting religious meetings on school property is constitutional. The defendants acted properly and within correct precepts of constitutional law.

III

Having decided the pivotal issue in the defendants’ favor with respect to the Establishment Clause defense, the Court need not engage in scrutiny of the other constitutional claims in the plaintiff’s complaint. There exists a compelling state interest in the instant case which requires the defendants to follow the Establishment Clause. As such, that precept overrides Mrs. May’s other alleged constitutional violations involving free association, equal protection, and free exercise of religion. Sherbert v. Verner, 374 U.S. 398, 83 S.Ct. 1790, 10 L.Ed.2d 965 (1963). The state claims are dismissed because the Court lacks jurisdiction to hear them because the federal question issues have been resolved in the instant case against the plaintiff. In any event, it would appear the defendants’ position in claiming the supremacy clause of the Constitution would render moot those claims is well taken. The finding against the plaintiff on the additional constitutional issues is consistent with Brandon and Bender.

The decision herein renders moot other pending motions for summary judgment and partial summary judgment. Because the Court will enter judgment consistent with this opinion for all defendants, consideration of those motions is unnecessary.

IV

CONCLUSION

In light of the foregoing, the Court finds that the plaintiff’s claims must fail in their entirety. The defendants’ motion for summary judgment is GRANTED. The plaintiff’s motion for summary judgment is DENIED. The state claims are hereby DISMISSED. Judgment will be entered in accordance herewith and defendants awarded their costs of the action.

IT IS SO ORDERED.

JUDGMENT ENTRY

This matter comes before the Court upon cross motions for summary judgment filed by the parties to this action. The Court, having considered the motions and the responses thereto, and having entered its findings GRANTING the defendants’ motion and DENYING the plaintiff’s motion in a memorandum decision on this date.

IT IS SO ORDERED and ADJUDGED

that the plaintiff take nothing by way of her complaint, that there are no genuine issues as to material facts as to the legal issues presented in the motions, that the state claims raised by the plaintiff in her complaint are DISMISSED, that the defendants are entitled to judgment on all counts of the complaint alleging violations of federal constitutional rights, and that judgment is hereby entered for the defendants on those counts. The case is hereby DISMISSED on the merits. Plaintiff will bear the costs of the action.

      . See, Widmar v. Vincent, 454 U.S. 263, 271, 102 S.Ct. 269, 275, 70 L.Ed.2d 440 (1981).


source: Caselaw Access Project

author: SWEET, District Judge.

license: Public Domain

text:
    PRINTERS II, INC., Plaintiff, v. PROFESSIONALS PUBLISHING, INC., Defendants.
    No. 84 Civ. 2745 (RWS).
    United States District Court, S.D. New York.
    July 8, 1985.
    As Amended July 26, 1985.

      Flemming, Zulack & Williamson, New York City, for plaintiff; Gerald G. Paul, Pamela M. Sloan, New York City, of counsel.
    Sudler & Barth, New York City, for defendants; Patrick Barth, Erie M. Cahalan, New York City, of counsel.
   OPINION

SWEET, District Judge.

This is a diversity action in which plaintiff Printers II, Inc. (“Printers II”), a District of Columbia corporation, seeks to recover sums owing as a result of its printing the third issue of “Physicians’ Travel & Meeting Guide” (the “Guide”), a publication of defendant Professionals Publishing, Inc. (“Pro Pub”), a Nevada corporation with offices in New York City. Judgment will be entered in favor of Printers II upon the facts and conclusions set forth below.

The action was bifurcated as determined in prior opinions, and the nonjury portions were tried to the court by skilled and able counsel on April 1, 4-5, 9-11 and May 13-15, and finally submitted on June 3, 1985. The evidence establishes a course of dealing between the parties that was initiated in trust and confidence and that dissolved under financial pressures in a relatively short time into charges of chicanery and dilatory tactics. As a consequence, a resolution which should have been reached by sensible businessmen has become the subject of a court decree, to the advantage of neither side. The inability to deal rationally with each other may well have resulted from the similarities of the firms, their structures, and their initial relationship, which was described by one witness as symbiotic.

Printers II operates its commercial printing business in Tuxedo, Maryland with 225 employees operating seven presses, a bindery and certain preprinting processes, six days a week, twenty-four hours a day. Eighty percent of its ownership is held equally by the President, Robert Saum, Jr. (“Saum”) and its Vice President Melvin Galloway (“Galloway”), who may be broadly termed the Mr. Inside and Mr. Outside, respectively, of the business.

Pro Pub is the brainchild of Stephen Salinger (“Salinger”), who is the publisher of the Guide and has been, among other things, an associate professor of English, engaged in the jewelry business, and the publisher of “Playground,” a publication describing events and facilities in the Virgin Islands, Salinger’s residence during its publication. Salinger is the Chief Executive Officer of Pro Pub, a Nevada corporation not qualified to do business in New York but with offices here. Alexander Londine (“Londine”) is its President. Pro Pub commenced business in 1982 by publication of the Guide.

The Guide is a glossy publication similar in appearance to “Travel and Leisure.” It contains a listing of meetings, symposia, and seminars for doctors, described as Medical Event Data, which includes the dates, places and purposes of the events categorized. Editorial matter, articles and advertising are also included. Advertising is the principal source of revenue for the Guide, which has a subscription price of $20 an issue but which is mailed to non-subscribers as well.

The relationship between Saum and Salinger commenced satisfactorily with the printing of “Playground” by Printers II starting in 1980. When Salinger devised his plan for the Guide he discussed it with Saum, received quotes, and on January 21, 1983,175,000 copies of the first issue of the Guide, consisting of 136 pages, was mailed.

In June and July, 1983 the second issue entitled Summer/Fall 1983 was printed by Printers II and mailed. The second issue consisted of two editions: the pharmaceutical version, which was intended for prescription writing doctors and the consumer version, which was geared to the remainder of the profession. The editorial content of each version was the same, but the advertising in the pharmaceutical version was greater, since certain of the ethical drug manufacturers restrict their advertising to only the prescription writing doctors. One-hundred fifty-five thousand copies of the 120-page consumer version and 135,000 copies of the 168-page pharmaceutical version were mailed by July 5, 1983.

Payments to Pro Pub by the advertisers were based in part on circulation figures, a factor which inhibited Pro Pub’s ability to pay Printers II invoices on time or, in certain instances, within the 90 days required by the terms of the invoices. This was of concern to Printers II, who submitted the invoices to its bank in order to obtain financing. In the event of nonpayment within 90 days by Pro Pub, the credit arrangement between Printers II and its bank required a reduction in credit in the amount of the overdue payment. To obviate this problem, Printers II obtained a promissory note on May 31, 1983 as payment from Pro Pub in connection with certain of the invoices rendered with respect to the second issue. The promissory note was paid in full on July 20.

On October 1, 1983 Pro Pub gave a second promissory note in connection with the second issue, which it paid on December 13 with interest in a total amount of $196,-127.76. In effect, Printers II was being financed by its bank to enable production of the Guide since certain of the Guide’s receipts were deferred. The relationship was understood by both parties. Printers II rendered invoices, and when requested by Pro Pub gave statements relating to the Guide’s circulation, neither of which acts reflected all the facts entirely accurately, but were designed in each instance for third-party use.

These arrangements, though understood, were not the subject of any contract or bid subsequent to the first issue. No complaints were raised with respect to Printers II work or billing practice. Salinger was, however, dissatisfied with some of the paper used for the second issue and in August, 1983 met with Printers II employees on the subject in order to resolve the problem. One employee of Printers II was Wally Doerk (“Doerk”) in whom Salinger reposed trust. It was he who brought the parties together initially, and it was he who had primary responsibility at Printers II for the Pro Pub account, which was becoming a, if not the, principal account of Printers II. When the relationship between Saum and Salinger began to deteriorate, Doerk left Printers II and become a consultant for Pro Pub. Neither side called him as a witness.

During the August 1983 meeting on the subject of paper, Salinger met with Doerk and a Printers II employee, Rick Saum, and obtained prices for different paper stocks. He then went upstairs to Robert Saum’s office where the selection of the paper to be used was discussed. The shortage of paper was considered, and it was concluded that an early purchase would be desirable. Saum advised Salinger that Pro Pub would be invoiced when “the paper hit the floor.” Saum gave paper prices to Salinger that were higher than had been quoted by Printers II employees downstairs. Saum also gave Salinger a formula to estimate the costs of paper relative to the number of pages produced. Salinger testified that he believed the prices quoted by Saum to be the price to Pro Pub for the paper to be purchased. No such statement was made, however, and there was no agreement as to the cost of the paper to Pro Pub, particularly in view of the fact that it had not yet been purchased.

Although it had not been set forth during dealings between the parties over “Playground” and the first two issues of the Guide, it had been the practice of Printers II to bill for prep charges, that is, charges for the preparation of plates and similar activities, for paper, for printing, for binding, and for delivery and mailing. Initially, certain of the prep charges were performed by Printers II affiliates, but Salinger was dissatisfied with the work performed and made arrangements for certain of the data processing to be done elsewhere. When Printers II had work performed by outside contractors, a markup was added, a practice which obtained with respect to the cost of paper to Printers II. The printing costs were calculated by a computing process which was based on the number of employees, presses and time involved, as well as a markup.

On October 20 the paper purchased for the third issue was invoiced to Pro Pub in the amount of $97,435.00 in accordance with the parties’ understanding. The invoice contained a markup over the cost to Printers II and was forwarded to Printers II’s bank for financing. No complaint or other reaction was received from Pro Pub.

By November the job was in progress with a target date of December 15, and Printers II commenced rendering additional invoices. Printers II had determined that as with the prior issue, so-called “Perfect Binding” would be done, by Specialties Binding, a nearby company which possessed the equipment necessary to accomplish such binding, since Printers II did not have the requisite equipment. The printing and binding processes were complicated by the number of inserts from advertisers, which were late in arriving, by the need to produce the two separate versions, and by the use of a more expensive paper for a limited production issue for copies to be supplied to advertisers. The complications were set forth visually in a mock-up which Doerk provided to Specialties Binding in December. Because of these difficulties, the binding operation required eight variations of the publication. In addition, Specialties Binding had significant other commitments. With the equipment working night and day, except for the Christmas holidays, the binding was completed by late January.

The principal problem which delayed completion of the binding was the tip-on, a promotional four page die cut subscription reply folder attached to the cover. This tip-on was not a standard size and could not be applied by Specialties Binding’s machines and required hand application.

All involved were concerned by the delays. On December 15 Printers II forwarded invoices including bindery charges. Salinger considered the charges excessive. Saum counselled him not to raise the issue of payment until the job had been removed from the bindery. Between December 13 and 21 Printers II delivered 135,080 copies of the pharmaceutical version, consisting of 240 pages for mailing, and Printers II mailed 185,000 copies of the consumer version, consisting of 168 pages, between December 28 and January 21, 1984.

The printing performed by Printers II was done in timely fashion after the submission of the final copy, and the binding was similarly satisfactorly performed, given the complications inherent in the production as evidenced by Doerk’s mock-up on December 15. Meanwhile, on January 18, 1984 the paper invoice became due and payable and Saum called Salinger seeking payment. Saum told Doerk that without some resolution the work would be stopped. This possibility was conveyed to Salinger, presumably by Doerk, and the invoice was paid on January 23. From that time on the propriety of the invoices rendered was challenged by Salinger.

Saum, after investigation, gave Pro Pub a credit for unused paper and obtained a reduction in the Specialties Bindery bill. He collected all the relevant data, mailed a final invoice dated January 17, and then armed with calculations showing that the mark-up on the third issue was less than on the two prior issues, he came to New York on January 27 to resolve the amounts owed by Pro Pub. After a discussion, Salinger stated he would have to confer with his board. No payment was made.

In February, Printers II retained a consultant, Kathryn Rand, who reviewed the Printers II documents, conferred with Lon-dine and on February 15, 1984 submitted a revised bill. In a telephone call shortly thereafter, Printers II through Ms. Rand, offered to accept $386,000 in payment for services rendered in connection with the third issue of the Guide, and Londine indicated he might get authority to offer $381,-000 for services rendered in connection with the Guide. However, Ms. Rand also indicated that there were additional invoices outstanding in the amount of approximately $78,000, and Londine broke off the discussions. Saum called Salinger later that day and indicated the additional invoices were closer to $39,000. In fact the amount of the additional invoices for material and services only a small part of which were for the third issue itself was $34,533.-44 and has not been disputed. In response to Salinger’s request, Printers II sent a final adjusted bill in the amount of $373,470.-43 on April 18, giving credit for the $97,435 already paid.

The invoices sent by Printers II to Pro Pub contained certain trade practice provisions; and there was expert testimony presented as well as the testimony of the parties concerning the practices established by the parties. It is customary in the industry for printers performing the functions performed by Printers II in this transaction to markup invoices for supplies, such as paper, as well as invoices rendered by the suppliers of services, such as Specialties Bindery. The preponderance of the evidence establishes that a 5%-10% markup of such invoices is customary and that Printers II’s invoices were properly within this range. The practices employed by Printers II with respect to the remainder of its billing were also consistent with industry practice.

Once the negotiations had broken down and the final adjusted billing rendered, Saum determined to exert whatever pressure he could to obtain payment. In early April he wrote to advertisers in the Guide advising them of the dispute with Pro Pub and its failure to pay the amounts Printers II claimed to be owing. These letters raised questions with certain advertisers who contacted Pharmaceutical Media, Inc., the exclusive agency used by Pro Pub to obtain the advertisers. Although Mead Johnson did not renew its advertising for the fourth issue of the Guide, Pro Pub failed to establish that the Saum letter was the cause for the Bristol Meyers action. Instead, Mead Johnson was dissatisfied as a result of improperly handled copy, unsatisfactorily explained by Salinger. No damages were established to have resulted as a consequence of Saums’ letter with respect to the four advertisers who did not renew their advertising in the fourth issue of the Guide.

Printers II printed and delivered the third issue of the Guide to Pro Pub, at Pro Pub’s request, under the clear and reasonable expectation of getting paid for these services. The 320,000 magazines printed and mailed to the recipients designated by Pro Pub were accepted by Pro Pub. Printers II duly invoiced Pro Pub for the cost of its services. See, e.g., In re Rich, 337 A.2d 764, 766 (D.C.App.1975) (plaintiff can recover for reasonable value of services under quantum meruit when valuable services are rendered for the person to be charged and services are accepted, used and enjoyed under circumstances where person to be charged is reasonably notified that plaintiff expects payment). Both sides agree that Maryland law governs the breach of contract and quantum meruit claims since performance of the contract— printing and delivery of the third issue of the Guide to the United States Postal Service—took place in Maryland.

Under the facts set forth, there was no specific contract governing the production of the Guide. It was governed by a course of dealing with open price terms. Although the U.C.C. does not explicitly refer to course of dealing in filling in an open price term, it has been interpreted that this method is proper under the Code. Although a contract to print a magazine is not one for the sale of goods and hence the U.C.C. is not directly applicable, North American Leisure Corp. v. A. & B Duplicators Ltd., 468 F.2d 695, 697 (2d Cir.1972); W.H. Smith Publishers, Inc. v. Plexus Publishing Ltd., 557 F.Supp. 546, 548 (S.D. N.Y.1983), nonetheless the U.C.C. reflects the modern trend in contracts and is a useful analogy. U.C.C. § 2-305 provides that when a contract does not specify a price, the reasonable price at the time of delivery will be the contract price. “Neither the Code nor the Official Comments to the Code require that a merchant-seller price at a fair market value under a contract with an open price term, but specify that prices must be ‘reasonable’ and set pursuant to ‘reasonable commercial standards of fair dealing in the trade’.” TCP Industries, Inc. v. Uniroyal, Inc., 661 F.2d 542, 548 (6th Cir.1981). As reflected in the facts found, Printers II’s April 18, 1984 invoice represented a fair and reasonable charge for the production of the Guide. The services performed and the goods produced were worth the amounts for which Printers II charged in the final adjusted bill on April 3, and Printers II became entitled to payment of these sums on April 3, 1984, the date of the submission of those invoices.

Pro Pub has counterclaimed for the $97,435 payment, alleging duress and extortion and in addition a civil cause of action under New York Penal Law § 155.-05, the latter giving rise to its as yet unresolved jury counterclaim. Even assuming that Saum’s comment to Doerk, that the Guide would not be mailed unless the paper invoice was paid, was intended to be relayed to Pro Pub, it does not constitute duress or extortion. Printers II demanded payment of the October 20, 1983 paper invoice pursuant to an agreement with Pro Pub. Pro Pub’s failure to pay constituted a breach of that agreement, enabling Printers II to threaten to suspend its own performance and demand payment. Fromm Sales Co. Inc. v. Troy Sunshade Company, 222 Md. 229, 159 A.2d 860, 863 (Ct.App. 1960). It was not extortion for Printer II to demand what it was rightfully entitled to receive under an agreement. Duress exists where there is a wrongful act depriving another of the exercise of his free will. Eckstein v. Eckstein, 38 Md.App. 506, 379 A.2d 757, 761 (1978); Bell v. Bell, 38 Md. App. 10, 379 A.2d 419, 423 (1977); Stewart M. Muller Construction Co., Inc. v. New York Telephone Co., 40 N.Y.2d 955, 390 N.Y.S.2d 817, 359 N.E.2d 328 (1976). A threat to do that which a party has the right to do does not constitute duress. Gerstein v. 532 Broad Hollow Road Company, 78 A.D.2d 292, 429 N.Y.S.2d 195, 199 (1st Dep’t 1980).

Printers II’s demand that if the payment was not made it would cease delivery of the third issue was a justified response to Pro Pub’s failure to pay the invoice. Printers II would have had the right to suspend delivery as a result of Pro Pub’s failure to pay the amounts set forth on the submitted invoices. See Fromm Sales Co., Inc., 159 A.2d at 863 (failure to pay for merchandise under contract for distribution of manufacturer’s awnings and canopies constituted a material breach, justifying termination of agreement); see also Exhibit III-X. Therefore, the defenses or counterclaims of duress and extortion are dismissed.

Because the counterclaims are dismissed, I need not decide whether Pro Pub, a Nevada corporation not qualified to do business in New York, could properly file counterclaims under Business Corporation Law § 1312. The authorities indicate, however, that a corporation though not qualified to do business in New York and unable to file an action, may still raise counterclaims arising out of a cause of action upon which the corporation is sued. See Tri-Terminal Corp. v. CITC Industries, 100 Misc.2d 477, 419 N.Y.S.2d 817 (S.Ct.1979); Intra-Mar Shipping v. John Emery & Co., 11 F.R.D. 284 (S.D.N.Y.1951). Consideration of the merits of the counterclaims is therefore proper.

Assuming that the facts presented in the bench trial cannot differ materially from those presented on Pro Pub’s jury counterclaim for larceny, it too must be dismissed. No cases have been cited giving rise to a civil cause arising out of a criminal act, but even if the civil claim is assumed, there has been a failure of proof that the crime has been committed. Larceny by extortion requires the taking of property. People v. Dioguardi, 8 A.D.2d 426, 188 N.Y.S.2d 84, 90 (1st Dept.1959) (extortion is the obtaining of property from another, with his consent, delivery of property being induced by force or fear), rev’d on other grounds, 8 N.Y.2d 260, 203 N.Y.S.2d 870, 168 N.E.2d 683 (1960).

Neither threatening to contact the Guide’s advertisers nor sending the advertisers letters constitutes the crime of extortion since Printers II did not obtain any money from Pro Pub after the January 23, 1984 payment by Pro Pub of the $97,-435.00, and that payment has been determined not to have been obtained through extortionate means. Pro Pub has failed to prove that Printers II intended to exercise “dominion and control over the property wholly inconsistent with the continued rights of the owner,” People v. Ricchiuti, 93 A.D.2d 842, 461 N.Y.S.2d 67, 70 (2d Dep’t 1983), quoting People v. Olivo, 52 N.Y.2d 309, 438 N.Y.S.2d 242, 420 N.E.2d 40 (Ct.App.1981), that is, that defendant knowingly took property without the rightful owner’s consent.

Finally, Pro Pub seeks to resist Printers II’s recovery by counterclaiming for libel and tortious interference with its advertising contacts and asserting a prima facie tort as a consequence of the letters sent by Saum to its advertisers in April. Both parties seem to agree that New York law is applicable to the letters sent into this state. Any damages Pro Pub claims to have suffered as a result of lost advertising were presumably felt in New York. Cf. Church of Scientology of California v. Green, 354 F.Supp. 800, 803 (S.D.N.Y.1973) (under New York’s conflict of law rules, law applicable to tort of libel is place of most significant relationship: New York law applies where defamed party resides in New York, allegedly libelous letters were received in New York, and publication to third parties in all but one instance took place in New York); Reeves v. American Broadcasting Co., 580 F.Supp. 84, 90 (S.D.N.Y.1983) (although defendants were New York residents and defamatory report was broadcast from Washington, D.C., defamation action was governed by California law, because plaintiff was California resident and report concerned activities in California).

Libelous the letters were not, for they contained no misstatement of fact and because truth is a complete and absolute defense to a claim for libel. Droner v. Schapp, 34 A.D.2d 823, 311 N.Y.S.2d 934, 935 (2d Dep’t 1970); Commonwealth Motor Parts Limited v. Bank of Nova Scotia, 44 A.D.2d 375, 355 N.Y.S.2d 138, 141 (1st Dep’t 1974).

However, Saum did intend to interfere with Pro Pub’s advertising contracts and thereby to put “pressure” on Pro Pub to pay up. Intentional interference with contractual relations requires the existence of a valid contract between the plaintiff and another, defendant’s knowledge of that contract, defendant’s intentional procurement and breach of that contract, and damages. International Bureau for Protection and Investigation v. Public Service Employees Union Local No. 80, 98 Misc.2d 409, 413 N.Y.S.2d 962, 969 (Sup.Ct.N.Y.Co. 1979); Livoti v. Elston, 52 A.D.2d 444, 384 N.Y.S.2d 484, 485 (2d Dep’t 1976).

Although the placement of advertisements in the Guide was never accomplished by way of a contract between Pro Pub and the advertisers, and any “insertion orders” the Guide may have had for the fourth issue were, in accordance with industry-wide practice, cancellable by the advertisers without penalty, presumably prior to publication, the orders were in fact contracts. Saum sought to affect these as well as Pro Pub’s possible future business. However, as set forth above, Pro Pub was unable to establish any damages as a result of Printers II’s actions, and the interference with contract cause of action must fail.

A cause of action based on prima facie tort is reserved for those cases falling outside the ordinary categories of tort. National Nutritional Foods Ass’n v. Whelan, 492 F.Supp. 374, 383 (S.D.N.Y.1980). However, Pro Pub bases all its counterclaims on the same allegations. If allegations are insufficient to sustain a traditional cause of action, such as libel or tortious interference with contract, a party cannot prevail under this tort. Further, of course, motives of profit or economic self-interest are not malicious, and even if they are mixed with malice or personal animus, recovery is still barred under a theory of prima facia tort. Rodgers v. Grow-Kiewit Corp.-MK, 535 F.Supp. 814 (S.D.N.Y.1982).

Since Pro Pub’s counterclaims are to be dismissed, what remains is the matter of prejudgment interest from April 3, the date of the rendition of the Final Adjusted billing. A debt is liquidated if, at the time it arose, it was an easily ascertainable sum certain. Hartford Accident and Indemnity Company v. District of Columbia, 441 A.2d 969, 974 (D.C.App.1982). Prejudgment interest is generally allowed where there is a sum certain and is allowed as part of damages in the discretion of the judge. Id; Atlantic States Construction Company v. Drummond & Company, Inc., 251 Md. 77, 246 A.2d 251 (1968). If it is provided for, prejudgment interest is calculated at six percent per annum. Hubler Rentals, Inc. v. Roadway Express, Inc., 459 F.Supp. 564 (D.Md.1978), aff’d in part, rev’d in part, 637 F.2d 257 (4th Cir.1981); Peerless Insurance Co. v. Bd. of County Commissioners, 248 Md. 439, 237 A.2d 15 (1968).

Here there was no valid, reasoned basis for nonpayment particularly given Londine’s mid February offer. Despite Saum’s tortious conduct, which failed to damage Pro Pub, the creditor in this instance should be made whole. Pro Pub cannot be permitted to benefit from its use of sums due and owing to Printers II for the production of the Guide which had been distributed and for which Pro Pub had been, or was being, paid. To hold otherwise would be to grant Pro Pub an unjustified windfall, and prejudgment interest will be allowed.

Submit judgment, with costs, on notice in. accordance with these findings and conclusions.

IT IS SO ORDERED.


author: JOHN V. PARKER, Chief Judge.

text:
    CLARKCO CONTRACTORS, INC., Granite State Insurance Company, and New Hampshire Insurance Co. v. TEXAS EASTERN GAS PIPELINE COMPANY, A DIVISION OF TEXAS EASTERN TRANSMISSION CORPORATION.
    Civ. A. No. 85-7-A.
    United States District Court, M.D. Louisiana.
    July 11, 1985.
    Felix R. Weill, Watson, Blanche, Wilson & Posner, Baton Rouge, La., for plaintiffs.
    H. Alston Johnson, III, Docia L. Dalby, Phelps, Dunbar, Marks, Claverie & Sims, Baton Rouge, La., for defendant.
   JOHN V. PARKER, Chief Judge.

The following motions are before the court; all have been briefed and orally argued:

(1) The motion of defendant, Texas Eastern Gas Pipeline Company, a Division of Texas Eastern Transmission Corporation (Texas Eastern), to reconsider the denial of a motion to transfer venue;

(2) The motion of plaintiffs, Clarkco Contractors, Inc., Granite State Insurance Company, and New Hampshire Insurance Company (Clarkco), for summary judgment;

(3) The motion of defendant, Texas Eastern, for summary judgment on its counterclaim.

On March 20, 1985, the court denied Texas Eastern’s motion to transfer this action to the United States District Court for the Southern District of Texas. The court is now convinced that the minute entry ruling dated March 20, 1985 contains factual errors and that it is legally correct only up to a point. Accordingly, that minute entry is hereby vacated.

The ultimate issue to be resolved in this diversity action is whether the indemnity provisions in a pipeline contract between Texas Eastern, a major natural gas transmission company, and Clarkco, its pipeline contractor, may be enforced. Texas Eastern has tendered to Clarkco the defense of a number of death and personal injury actions which have been filed in this court against Texas Eastern alleging its negligence or fault in connection with a pipeline explosion and fire which occurred in West Feliciana Parish, Louisiana, on or about November 25, 1984. Clarkco was then performing work at the site of the explosion under its contract with Texas Eastern.

The contract contains an indemnity clause in favor of Texas Eastern, “from any and all loss ... in any manner arising from, connected with, or related to the work ... excluding, ... loss ... caused by the sole negligence” of Texas Eastern. The contract also has a choice of forum provision (the courts of Harris County, Texas), as well as a choice of applicable law provision (Texas), thus setting up the conflicts of law issues here considered.

A few days before Clarkco and its insurers initiated this action in this district, Texas Eastern filed suit in the Harris County state court against Clarkco demanding that the indemnity agreement be enforced as to the actions pending in this district. Subsequently, the insurers were added as parties defendant in the Texas action and the action was removed to the Southern District of Texas. The action in Texas and the action in this court involve identical parties and issues.

Texas Eastern seeks to enforce the choice of forum provision and asks that the action be transferred to the Southern District of Texas under 28 U.S.C. § 1406(a) as having been filed in the wrong venue, or under 28 U.S.C. § 1404(a) for the convenience of parties and witnesses.

Federal jurisdiction here, as well as in the Southern District of Texas, is predicated upon diversity of citizenship. Although as a federal court sitting in Louisiana, this court must apply the conflict of law rules that a Louisiana court would use in determining the choice of law issue, Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941), we apply federal, not state law in the first instance, because two acts of the Congress have been called into play, §§ 1406 and 1404. See D’Antuono v. CCH Computax Systems, Inc., 570 F.Supp. 708 (D.R.I.1983) and authorities there cited. The Supreme Court in its decision in M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972) held that a forum selection clause is “prima facie valid and should be enforced unless enforcement is shown by the resisting party to be ‘unreasonable’ under the circumstances.” 407 U.S. at 10, 92 S.Ct. at 1913. Although the Bremen dealt with admiralty matters, it has been regularly applied to all actions in federal court. In re Fireman’s Fund Ins. Companies, Inc., 588 F.2d 93 (5th Cir.1979) (action under the Miller Act, 40 U.S.C. § 270b); The Plum Tree, Inc. v. Stockment, 488 F.2d 754 (3d Cir.1973) (diversity action); D’Antuono v. CCH Computax Systems, Inc., 570 F.Supp. 708 (D.R.I.1983) (diversity action); Hoffman v. Burroughs Corp., 571 F.Supp. 545 (N.D.Tex.1982) (diversity action); Quick Erectors, Inc. v. Seattle Bronze Corp., 524 F.Supp. 351 (E.D. Mo.1981) (diversity action); Cutter v. Scott & Fetzer Co., 510 F.Supp. 905 (E.D.Wis. 1981) (diversity action). It has been consistently held that a federal court may decline to enforce a forum selection clause if enforcement would contravene a strong public policy of the forum state. See e.g. Hoffman v. Burroughs Corp., 571 F.Supp. 545 (N.D.Tex.1982) and authorities there cited and discussed.

Thus, if Clarkco can show that enforcing the forum selection clause in this contract would contravene a strong Louisiana public policy, enforcement would be unreasonable and under the teaching of Bremen, supra, that provision should not be enforced.

Resolution of the choice of forum issue requires consideration of the choice of law provision of the contract because Clarkco claims that the Louisiana Oil Field Indemnity Act, LSA-R.S. 9:2780, applies to this contract. That act declares that as a matter of Louisiana policy, certain contractual indemnity provisions contained in contracts in the petroleum industry are declared null and void. Texas has adopted a similar statute but the parties note that there are important differences in detail between the two statutes and that the Texas statute would apparently permit enforcement of indemnity provisions which indemnify the indemnitee against his own negligence. Clarkco claims that the Louisiana statute clearly applies to this contract and that this court should decline to enforce the choice of forum as well as the choice of law provisions and should declare the indemnity provisions null. Texas Eastern argues that the choice provisions were consented to by knowledgeable representatives of business corporations, neither of which is a citizen of Louisiana, Clarkco being a Mississippi citizen, and Texas Eastern, a Delaware corporation, has its principal place of business in Texas, that this is a multi-state contract with the work to be performed in Louisiana and Mississippi on a pipeline that traverses many states, that there is no evidence of overreaching or coercion or fraud and that Clarkco has failed to carry its “heavy burden” of demonstrating unreasonableness of enforcing contractural provisions which have been freely entered into.

The conflicts between the views of the parties as to the conflicts of laws issues are many. Both seem to agree, however, that Louisiana, despite the provisions of Article 10 of the .Louisiana Civil Code, has wholeheartedly embraced the Restatement (Second) of Conflicts of Laws (1969). That Article in pertinent part provides

The form and effect of public and private written instruments are governed by the laws and usages of the places where they are passed or executed.
But the effect of acts passed in one country to have effect in another country, is regulated by the laws of the country where such acts are to have effect.

Some recent federal decisions applying Louisiana law have reached that same conclusion, some more confidently than others. See e.g. Burbank v. Ford Motor Co., 703 F.2d 865 (5th Cir.1983) (“Louisiana courts have indicated their intention to follow § 187 of the Restatement ... ”) i.d. at 866; Delhomme Industries, Inc. v. Houston Beechcraft, 669 F.2d 1049 (5th Cir.1982) (“... [S]ome recent Louisiana cases, as well as federal cases applying Louisiana law, have followed the Restatement (Second), although others have followed the traditional rule of lex loci contractus”) i.d. at 1057; Lee v. Hunt, 631 F.2d 1171 (5th Cir.1980) (“Unfortunately, Jagers [versus Royal Indemnity Co., 276 S.2d 309 (La. 1973)] is far from clear”) i.d. at 1175 and (“... [W]e conclude ... that the current approach to the choice of law in Louisiana is that embodied in the Restatement ... ”) i.d. at 1176.

The decision of the Supreme Court of Louisiana in Jagers v. Royal Indemnity Co., 276 So.2d 309 (La.1973) is certainly a significant conflicts of law case, marking a departure from prior Louisiana jurisprudence applying the law of the place of the tort. Jagers expressly overruled Johnson v. St. Paul Mercury Insurance Co., 256 La. 289, 236 So.2d 216 (1970), a case which had expressly reaffirmed that Louisiana would apply the law of the place of the tort. In overruling Johnson, the Supreme Court did cite Section 6 of the Restatement (Second) Conflict of Laws (1969) but concluded that Jagers presented a false conflicts situation in which only one state actually had an interest. Barely a month later, the Supreme Court in Sullivan v. Hardware Mutual Casualty Co., 278 S.2d 30 (La.1973) confirmed that, “In Jagers we abandoned the rigid rule of lex loci delicti ...” (278 So.2d at 31) and the court proceeded to perform an interest analysis in that tort case, although the decision makes no reference to the Restatement.

Whether the Supreme Court of Louisiana intended its departure from the lex loci delicti rule in tort cases to also signal an end to the lex loci contractus rule in contract cases remains to be seen. Although some intermediate Louisiana appellate courts have so construed Jagers , the Supreme Court has considered only one case involving a contract conflict of laws issue since the decision in Jagers. In Succession of Dunham, 408 So.2d 888 (La.1981), the court carefully avoided approval of the language of the Court of Appeal (which had utilized an interest analysis approach) by noting that all parties agreed that Louisiana law was applicable and that the law of the competing state would produce the same result, and the court then cited the Restatement Section 258 in dicta, 408 So.2d at 894-895. Recognizing that in a civilian jurisdiction such as Louisiana, it is risky business to rely overly much upon extensions of judicial decisions as stating the applicable law, particularly where, as here, Article 10 of the Civil Code provides a statutory basis for the law, Judge Randall’s observation in Lee v. Hunt, 631 F.2d 1171, 1176 (5th Cir.1980), “Jagers is far from clear” seems appropriate.

Fortunately, we are not required by this case to determine whether Louisiana has adopted the Restatement for all conflict of laws issues. There is a choice of law stipulation in the contract before the court and Louisiana will enforce such a stipulation unless there is statutory or jurisprudential law to the contrary or strong public policy considerations justifying refusal to enforce them. Associated Press v. Toledo Investments, Inc., 389 So.2d 752, 754 (La.App. 3d Cir.1980); ADR v. Graves, 374 So.2d 699, 700-701 (La.App. 1st Cir.1979) writ denied 377 So.2d 843 (La.1979); Davis v. Humble Oil & Refining Co., 283 So.2d 783, 794 (La.App. 1st Cir.1973) on rehearing. This view is certainly consistent with Louisiana’s longstanding view that parties have the utmost freedom to contract and the binding effect of contracts. Moreover, this view is not inconsistent with Article 10 of the Civil Code, the second paragraph of which provides, “But the effect of acts passed in one country to have effect in another country, is regulated by the laws of the country where such acts are to have effect.” Section 187(2) of the Restatement (Second) Conflicts of Laws (1969) provides in more detail that a choice of law provision will be enforced unless:

(b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which, under the rule of § 188, would be the state of the applicable law in the absence of an effective choice of law by the parties.

The Louisiana statute, LSA-R.S. 9:2780, specifically declares that certain types of indemnity agreements are “null and void and against public policy.” No violence is done to Article 10 or to Jagers or any of its progeny, state or federal, by concluding that a Louisiana court would not enforce the indemnity provision of any contract to be wholly or partly performed in Louisiana if the contract is subject to that statute. It is really unnecessary to determine whether a Louisiana court would perform the complete analysis incorporated in § 187 of the Restatement; suffice it to say, that LSA-R.S. 9:2780 represents a fundamental Louisiana policy and the indemnity provisions of the Texas Eastern-Clarkco contract would not be enforced by a Louisiana court if that statute is applicable to the contract. Having said that, it becomes clear that the only way to determine whether, “There is jurisprudential or statutory law to the contrary or strong public policy considerations” justify refusal to honor this provision, is to determine whether the statute applies to this agreement.

Thus we embark upon the necessary task of determining whether LSA-R.S. 9:2780 applies to this contract. The statute reads in pertinent part as follows:

§ 2780. Certain indemnification agreements invalid
A. The legislature finds that an inequity is foisted on certain contractors and their employees by the defense or indemnity provisions, either or both, contained in some agreements pertaining to wells for oil, gas, or water, or drilling for minerals which occur in a solid, liquid, gaseous, or other state, to the extent those provisions apply to death or bodily injury to persons. It is the intent of the legislature by this Section to declare null and void and against public policy of the state of Louisiana any provision in any agreement which requires defense and/or indemnification, for death or bodily injury to persons, where there is negligence or fault (strict liability) on the part of the indemnitee, or an agent or employee of the indemnitee, or an independent contractor who is directly responsible to the indemnitee.
B. Any provision contained in, collateral to, or affecting an agreement pertaining to a well for oil, gas, or water, or drilling for minerals which occur in a solid, liquid, gaseous, or other state, is void and unenforceable to the extent that it purports to or does provide for defense or indemnity, or either, to the indemnitee against loss or liability for damages arising out of or resulting from death or bodily injury to persons, which is caused by or results from the sole or concurrent negligence or fault (strict liability) of the indemnitee, or an agent, employee, or an independent contractor who is directly responsible to the indemnitee.
C. The term “agreement,” as it pertains to a well for oil, gas, or water, or drilling for minerals which occur in a solid, liquid, gaseous, or other state, as used in this Section, means any agreement or understanding, written or oral, concerning any operations related to the exploration, development, production, or transportation of oil, gas, or water, or drilling for minerals which occur in a solid, liquid, gaseous, or other state, including but not limited to drilling, deepening, reworking, repairing, improving, testing, treating, perforating, acidizing, logging, conditioning, altering, plugging, or otherwise rendering services in or in connection with any well drilled for the purpose of producing or excavating, constructing, improving, or otherwise rendering services in connection with any mine shaft, drift, or other structure intended for use in the exploration for or production of any mineral, or an agreement to perform any portion of any such work or services or any act collateral thereto, including the furnishing or rental of equipment, incidental transportation, and other goods and services furnished in connection with any such service or operation.

Both sides agree that this law is not “clear and free from all ambiguity” so the provisions of Article 13 of the Code do not apply. It is apparent then that the mandate of Article 18 must be followed: “The universal and most effectual way of discovering the true meaning of a law, when its expressions are dubious, is by considering the reason and spirit of it, or the cause which induced the Legislature to enact it.”

The “cause” which induced the Louisiana Legislature to enact the statute is found in Subsection A, an inequity, “contained in some agreements pertaining to wells for oil, gas, or water, or drilling for minerals which occur in a solid, liquid, gaseous, or other state.” Clarkco claims that Subsection C of the statute defines the term “agreement” to include not only wells for oil, gas, or water and drilling for minerals, but also “transportation of oil, gas, or water.” Thus, Clarkco argues that since Texas Eastern is admittedly transporting natural gas in its extensive pipeline system, it is engaged in the “transportation of ... gas” and, since this contract involves repair work on that transportation system, the contract is subject to the statutory provision. Texas Eastern, on the other hand, argues that the reach of the statute should be confined to that which was intended by the Legislature and that Subsection C incorporates only transportation of oil, gas, or water in connection with wells for those substances or drilling for minerals and, says Texas Eastern, since it is not involved with any well or with any drilling for minerals, the statute has no application to this contract.

It is obvious that the words of this statute cannot be applied literally in every respect; for example, the term “oil” means “any greasy substance that does not dissolve in water, but can be dissolved in ether ... Oils are classified as animal, mineral, or vegetable____” The World Book Encyclopedia, 1971 Edition, Volume 14, Verbo, “oil.” The term “gas” is defined as “one of three forms of matter,” the other two being solids and liquids. The World Book Encyclopedia, 1971 Edition, Volume 8, Verbo “gas.” Surely the Legislature by its phrase “oil, gas, or water” did not intend to include contracts relating to such materials as vegetable oils and shortening and all gases known to man such as air, nitrogen, oxygen, etc. Clearly, in the context of this statute, which relates to wells for oil, gas, or water, and drilling for minerals, the Legislature intended to restrict these broad, all encompassing words to oil, more particularly petroleum and its products, and natural gas, a fuel.

This court freely acknowledges that the Louisiana Legislature is at liberty to define terms in its statutes in any way that it desires and, if it intends the word “black” in a particular statute to mean “white,” then for purposes of that statute, so be it. The question here, is whether the Louisiana Legislature intended this anti-indemnity statute to include contracts pertaining to natural gas transmission pipelines when the contract does not pertain to “wells for oil, gas, or water, or drilling for minerals.”

Subsection C of the statute defines “agreement” as “any agreement ... concerning any operations related to the exploration, development, production, or transportation of oil, gas, or water, or drilling for minerals ... including but not limited to drilling [here follows a long list of other well drilling activities] ..., or, otherwise rendering services ... in connection with any well drilled ..., or otherwise rendering services in connection with any mine shaft, drift, or other structure intended for use in the exploration for or production of any mineral ...” (Emphasis supplied). A literal application of the words “transportation of oil, gas, or water” would include every train with tank cars of crude oil, refined products or natural gas, every ship carrying any such product into or out of a Louisiana port, every barge load of those products on the Mississippi, the Intercoastal Waterway or other navigable streams, and every truck load of such products upon the highways, even bottled water being hauled to communities with bad tasting water, such as New Orleans. Since the Legislature has consistently used the words contracts pertaining to wells for oil, gas, or water, or drilling for minerals, I am persuaded that the Legislature intended to include only transportation contracts pertaining to wells or drilling for minerals.

The Legislature was not concerned about transportation of these products except in connection with wells or drilling and the phrase “transportation of oil, gas, or water” should be restricted to transportation of those substances in connection with agreements pertaining to “wells for oil, gas, or water, or drilling for minerals.” This contract, which relates to work to be performed upon an interstate natural gas transmission pipeline, is not an agreement “pertaining to wells, for oil, gas, or water, or drilling for minerals” and the statute does not apply to it.

Because enforcement of the stipulated choice of law provision will not violate any fundamental Louisiana policy, the agreement of the parties should be honored, Davis v. Humble Oil & Refining Co., 283 So.2d 783 (La.App. 1st Cir.1973) on rehearing, and the choice of forum provision is not unreasonable and should also be honored. M/S Bremen v. Zapata Off-Shore Company, 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972). It is unnecessary to pass upon the other pending motions or the other contentions of the parties.

The motion to reconsider the motion to transfer is hereby GRANTED and this action will be transferred under 28 U.S.C. § 1406(a) to the United States District Court for the Southern District of Texas.

      . See e.g. Davis v. Humble Oil & Refining Co., 283 So.2d 783, 789 (La.App. 1st Cir.1973) original opinion; Sutton v. Langley, 330 So.2d 321 (La.App. 2d Cir.1976) writs denied 332 So.2d 805, 820, 333 So.2d 242 (La. 1976), "As Jagers ... evinced willingness to abandon rigid application of the lex loci dilicti rule ... it must also have signified the end of rigid application of the lex loci contractus rule ..." (330 So.2d at 327); Wickham v. Prudential Insurance Company of America, 366 So.2d 951, 954 (La.App. 1st Cir. 1979); Succession of Dunham, 393 So.2d 438, 444 (La.App. 1st Cir.1980), affirmed in part, reversed in part, 408 So.2d 888 (La.1981).

      . For example, Johnson v. St. Paul Mercury Ins. Co., 256 La. 289, 236 So.2d 216 (1970), while distaining the doctrine of stare decisis did recognize the doctrine of jurisprudence constante. After citing a long line of Louisiana cases stretching over a seventy year period applying the lex loci delicti doctrine as the "established rule," the court noted: "Fundamental and elementary principles recognize that certainty and constancy of the law are indispensable to orderly social intercourse, a sound economic climate and a stable government." 236 So.2d at 218. Exactly three years later Johnson was expressly overruled by Jagers v. Royal Indemnity Co., 276 So.2d 309 (La. 1973).
      Louisiana looks first to statutory law. See e.g. Ardoin v. Hartford Acc. & Indem. Co., 360 So.2d 1331 (La.1978): "In deciding the issue before us the lower courts did not follow the process of referring first to the code and other legislative sources but treated language from a judicial opinion as the primary source of law. This is an indication that the position of the decided case as an illustration of past experience and the theory of the individualization of decision have not been properly understood by our jurists in many instances.” 360 So.2d at 1334. See Tate, Techniques of Judicial Interpretation in Louisiana, TL La.Law Review 727 (1962). Louisiana has no legislative conflict of laws rule in tort cases. It may be important to bear in mind that the Restatement (Second) Conflicts of Laws (1969) has not been adopted by the Louisiana Legislature as a part of the Civil Code; Article 10 is a part of the Code.

      . Civil Code Article 1764, "All things that are not forbidden by law, may legally become the subject of, or the motive for contracts, ..."

      . Civil Code Article 1901, "Agreements legally entered into have the effect of laws on those who have formed them____"

      . Although the Restatement was cited and discussed extensively in the original opinion in Davis v. Humble Oil & Refining Co., 283 So.2d 783, 787-90 (La.App. 1st Cir.1973), no such reference is made in the opinion on rehearing where the court simply noted:
      Ordinarily, where a contract is entered into and one of the parties thereto endeavors to enforce a right claimed to have arisen under the contract, the party is bound by each provision of contract unless there is jurisprudential or statutory law to the contrary or strong public policy considerations justifying refusal to honor the contract as written. Id. at 794.
      There the court enforced a contractual stipulation to apply the laws of the state of New York to a pension plan despite the fact that the employee had performed all of his service in Louisiana. No reference was made to the Restatement in Associated Press v. Toledo Investments, Inc., 389 So.2d 752 (La.App. 3d Cir.1980) where the court declined to honor the constructual choice of New York law where that law would violate Louisiana’s strong public policy against awarding any damages.except interest for violation of a contract to pay money. Similarly, in ADR v. Graves, 374 So.2d 699 (La.App. 1st Cir.) writ denied 377 So.2d 843 (La.1979), the court made no reference to the Restatement in declining to honor a North Carolina choice of law which would violate Louisiana’s strong public policy against employee-employer non-competition agreements. See also Fine v. Property Damages Appraisers, Inc., 393 F.Supp. 1304 (E.D.La. 1975), where the court also declined to enforce a choice of law provision that would violate the policy against non-competition agreements.

      . Davis v. Humble Oil & Refining Co., 283 So.2d 783, 794 (La.App. 1st Cir.1973) on rehearing.

      . Civil Code Article 13, "When a law is clear and free from all ambiguity, the letter of it is not to be disregarded, under the pretext of pursuing its spirit.”


author: JOHN W. POTTER, District Judge:

text:
    David J. MILLER, Plaintiff, v. UNITED STATES of America, Defendant.
    No. C 85-7412.
    United States District Court, N.D. Ohio, W.D.
    June 13, 1985.

      Richard S. Lynch, Norwalk, Ohio, for plaintiff.
    Thomas Jones, U.S. Dept. of Justice, Tax Div., Northern Region, Washington, D.C., for defendant.
   FINDINGS OF FACT AND CONCLUSIONS OF LAW

JOHN W. POTTER, District Judge:

This cause came to be heard upon plaintiff’s complaint to review defendant’s jeopardy assessment made against plaintiff. This action is brought under federal statutory law. Plaintiff predicates jurisdiction upon 28 U.S.C. § 1340 and 26 U.S.C. § 7429.

Plaintiff asserts that the United States Internal Revenue Service (hereafter Service) made a jeopardy assessment in the amount of $9,862,142.00 against him. He further asserts that by certified mail he thereafter sought, and subsequently received, administrative review of said jeopardy assessment by the Secretary of the Internal Revenue Service. Plaintiff contends that the Secretary “denied ... Plaintiff’s Request for Administrative Review of the Jeopardy Assessment in issue.” Having claimed that the jeopardy assessment is unreasonable both as to circumstances and as to amount, plaintiff seeks judicial review by this Court of said jeopardy assessment.

Defendant acknowledges that following plaintiffs criminal conviction and sentencing the Service made a jeopardy assessment against plaintiff in the amount of $9,862,142.00 for the years 1972 through 1981. Defendant contends that the jeopardy assessment was reasonable under the circumstances because of the specific facts of this case, inter alia, to wit: that plaintiff was convicted of crimes involving international trafficking in drugs; that after being indicted, but before being convicted and sentenced, plaintiff was a fugitive from justice living under an assumed name in a foreign country; that he has or had money in foreign bank accounts; that plaintiff admitted that certain of his property was held in the names of third persons; that plaintiff has given to his wife his power of attorney enabling her to convey and convert his personal and real property into cash; and that plaintiff failed to report almost $4,000,000.00 in additional income tax. Defendant further asserts that the amount of said jeopardy assessment, having been derived from information submitted to the Service through plaintiffs attorney, was and remains appropriate. The defendant contends that, under the circumstances of this case, the Service both acted reasonably in making the assessment and assessed an appropriate amount.

Both plaintiff and defendant submitted pre-hearing memoranda or briefs. An evidentiary hearing was held on April 26,1985 and May 14, 1985. Upon instruction of the Court, both parties submitted supplemental memoranda or briefs and proposed findings of fact and conclusions of law. Initially, the parties stipulated that the Court might render its determination by June 1, 1985. Pursuant to plaintiffs request, an extension was granted until May 31,1985 for the parties to submit their proposed findings of fact and conclusions of law. Both parties later advised the Court of their consent to the Court rendering its determination by June 10, 1985. Plaintiff thereafter, on June 5, 1985, filed his revised proposed findings of fact and conclusions of law.

The Court is presented with two issues: first, whether or not the making of the jeopardy assessment under 26 U.S.C. § 6861 is reasonable under the circumstances, 26 U.S.C. § 7429(b)(2)(A), and second, whether or not the amount so assessed is appropriate under the circumstances, 26 U.S.C. § 7429(b)(2)(B). The burden of proof with regard to reasonableness or appropriateness under the circumstances of making the jeopardy assessment is upon defendant, 26 U.S.C. § 7429(g)(1), and the burden of proof with regard to reasonableness or appropriateness under the circumstances of the amount so assessed is upon plaintiff, 26 U.S.C. § 7429(g)(2). The Court having considered both the briefs and memoranda and the proposed findings of fact and conclusions of law of both parties, and having thoroughly reviewed the record in this case, has made its own independent determination of the facts in this case and the legal conclusions to be drawn therefrom. The Court determines de novo both that the Service’s jeopardy assessment made under 26 U.S.C. § 6861 against plaintiff is reasonable under the specific circumstances of this case and that the amount so assessed by the Service as a result of the action taken, pursuant to 26 U.S.C. § 686i, is appropriate under the specific circumstances and facts of this case.

Findings of Fact

1. Although he is presently incarcerated in the Federal Correctional Institution in Milan, Michigan, plaintiff asserts, uncontested by defendant, Ohio residency within the Northern District of Ohio.

2. Plaintiff is married to Mary Lee Miller, nee: Labay.

3. Plaintiff was indicted by a federal grand jury in Cincinnati, Ohio in Case No. CR 1-82-047 on May 5, 1982, and in Case No. CR 1-82-059 on June 9, 1982. A superseding indictment in Case No. CR 1-82-047 was filed July 25, 1984.

4. Sometime after initial indictment, plaintiff left the United States. Plaintiff and his wife were located, arrested and detained in Holland. Plaintiff and his wife were then using the assumed names of Leon Von der See and Marion Von der See, respectively. Plaintiff and his wife waived extradition and were subsequently returned to the United States in June, 1984.

5. On October 5, 1984, plaintiff signed a prepared statement of facts, representing both that he had read said statement and that he did not contest the assertions therein made.

6. On October 8, 1984, plaintiff entered into a written plea agreement with the United States Attorney for the Southern District of Ohio.

7. From 1972 to 1981, plaintiff headed a conspiracy along with others, and in which he had a proprietary interest, to illegally import and distribute large quantities of marijuana (approximately 150,000 pounds) from Colombia, South America. Substantial sums of cash were transported from the United States to Colombia, South America to purchase the marijuana. Plaintiff failed to report such transportation of monetary instruments in excess of $5,000.00 from the United States to Colombia, South America.

8. For the calendar years 1979 and 1980, plaintiff caused to be filed United States income tax returns to which he subscribed and in which he failed to report his earnings from the aforementioned illegal marijuana operation.

9. On October 20, 1984 in the United States District Court for the Southern District of Ohio, plaintiff pled guilty to conspiracy to import marijuana, to intentionally failing to report the transportation of monetary instruments in excess of $5,000.00 from the United States to a place outside the United States, and to willfully and knowingly filing false federal income tax returns for the years 1979 and 1980.

10. In November, 1984 in an attempt to resolve his civil tax liabilities and avail himself of item 3A of the plea agreement, plaintiffs attorney submitted to Service Agent Peter Hugenberg a detailed “spreadsheet” or schedule which contained, among other items, detailed computations regarding the amounts of illegal income derived from the marijuana importation operation for the years in question.

11. On January 28, 1985, plaintiff was sentenced in the United States District Court for the Southern District of Ohio to sixteen years in prison. Further, on January 28, 1985, the Service, pursuant to 26 U.S.C. § 6861, made the jeopardy assessment against plaintiff for tax years 1973 through 1980. Also on January 28, 1985, the Secretary sent, pursuant to 26 U.S.C. § 7429(a)(1), a “Notice of Jeopardy Assessment and Right of Appeal” to plaintiff, which notice contained a written statement of the information upon which the Secretary relied in making such assessment. The amount assessed by said jeopardy assessment was, and remains, $9,862,142.00, consisting of tax ($3,806,643.00), penalties ($2,126,756.00), and interest ($3,928,743.00) regarding said tax years. The amount assessed was based on information contained in the “spread-sheet” or schedule submitted to the Service by plaintiff’s counsel, in the various indictments, and in the aforementioned statement of facts.

12. On February 26, 1985, plaintiff, pursuant to 26 U.S.C. § 7429(a)(2), requested administrative review of the jeopardy assessment by the District Director of the Service.

13. On April 11, 1985, plaintiff, pursuant to 26 U.S.C. § 7429(b)(1), brought this action for judicial review, pursuant to 26 U.S.C. § 7429(b)(2), of the subject jeopardy assessment.

14. In accordance with item 3B of the plea agreement, plaintiff paid $1,750,000.00 in cash to the United States of America prior to sentencing, approximately $800,-000.00 of which was to be provided from plaintiff’s numbered bank account with the Foreign Commerce Bank (FOCO), Geneva, Switzerland.

15. Certain real property located in Colorado allegedly belonging to plaintiff is or was held in the name of a third person nominee, Robert Smith.

16. Plaintiff heretofore gave his power of attorney to his wife enabling her to convert and convey real and personal property belonging to plaintiff.

17. Plaintiffs wife converted the contents of one suitcase containing a large sum of musty-smelling cash and the contents of one suitcase containing krugerands and other gold coins into negotiable instruments.

18. Plaintiff has used, at one time or another, several assumed names, to wit: Richie Miller, Ralph Miller, Richard Wells, John Nash, and Leon Yon der See.

19. During the eight year period which is the subject of the jeopardy assessment, plaintiff failed to report substantial amounts of income which he derived from the illegal importation, distribution, and sale of marijuana. Plaintiff was involved in a conspiracy which illegally imported 150,000 to 160,000 pounds of marijuana, the “street value” of which is approximately $250.00 to $260.00 per pound.

Conclusions of Law

1. Jurisdiction over both the subject matter of this cause and all the parties is proper in this Court. 28 U.S.C. § 1346(e); 26 U.S.C. § 7429. Further, this ease is properly venued in this Court. 28 U.S.C. § 1402(a)(1); 26 U.S.C. § 7429(e).

2. The Court’s review in the case sub judice is not plenary, but rather summary in nature. Marranea v. United States, 587 F.Supp. 663, 668 (M.D.Pa.1984). Section 7429(b) of Title 26 of the United States Code, which provides for judicial review of a jeopardy assessment, contemplates that the court will make its own independent de novo determination of whether or not the making of the subject jeopardy assessment was reasonable under the circumstances and whether or not the amount so assessed is appropriate under the circumstances. 26 U.S.C. § 7429(b)(2)(A), (B). See, e.g. Marranea v. United States, supra, at 668; Nolan v. United States, 539 F.Supp. 788, 790 (D.Ariz.1982); Loretto v. United States, 440 F.Supp. 1168, 1170 (E.D.Pa.1977).

3. The standard of reasonable or appropriate under the circumstances has been construed to mean something that is more than merely “arbitrary or capricious,” but, nonetheless, is less than “supported by substantial evidence.” Loretto v. United States, supra, at 1172. Cf. McAvoy v. Internal Revenue Service, 475 F.Supp. 297, 299 (W.D.Mich.1979); Cantillo v. Coleman, 559 F.Supp. 205, 207 (D.N.J. 1983); Nolan v. United States, supra, at 790.

4. A jeopardy assessment is made regarding a tax year which has ended and for which the due date for filing has passed. See; e.g., Nolan v. United States, supra, at 789; Marranea v. United States, supra, at 664. See generally Laing v. United States, 423 U.S. 161, 96 S.Ct. 473, 46 L.Ed.2d 416 (1976).

5. The scope of this Court’s review clearly requires neither a determination of plaintiff’s actual liability, if any, nor a determination of the amount of any deficiency. Nolan v. United States, supra, at 790; McAvoy v. Internal Revenue Service, supra, at 298; Loretto v. United States, supra, at 1175; Cantillo v. Coleman, supra, at 207. In fact, plaintiff’s ultimate tax liability, if any, is irrelevant to this Court’s review and determination. Bremson v. United States, 459 F.Supp. 121, 125 (W.D. Mo.1978).

6. In reaching its determination, the Court may consider any information relevant to the issues of reasonableness of the assessment and of appropriateness of the amount so assessed. The Court’s review is not limited to only that information which was available to the Service at the time the jeopardy assessment was made. See, e.g., McAvoy v. Internal Revenue Service, supra, at 298; Berkery v. United States, 544 F.Supp. 1, 5 (E.D.Pa.1982); Revis v. United States, 558 F.Supp. 1071, 1074-75 (D.R.I.1983).

7. The Court finds that for purpose of this review the plea agreement, the several indictments, the statement of facts, and the “spread-sheet” or schedule supplied by plaintiff’s counsel to Service Agent Hugenberg are neither unavailable to the Court nor inadmissible into evidence under Fed.R.Evid. 408 and 410. The Court further finds that the evidence is ample to support the Service’s determination of jeopardy. Notwithstanding, the Court makes no determination nor should any inference be so drawn as to whether the information available to or relied upon by the Court or by the Service in determining jeopardy is admissible, regarding either form or content, during a subsequent trial on the merits. Marranea v. United States, supra, at 668.

8. In order to establish that the making of a jeopardy assessment is reasonable under the circumstances, the Service “need only establish that the taxpayer’s circumstances appear to be jeopardizing collection of a tax—not whether they definitely do so.” Cantillo v. Coleman, supra, at 207. Several factors are generally considered by the Service in determining jeopardy, to wit: taxpayer is or appears to be planning to quickly depart from the United States to conceal himself; taxpayer is or appears to be designing to place his property beyond the reach of the government, either by removing it from the United States or concealing it, or by transferring it to other persons, or by dissipating it; taxpayer’s financial solvency appears to be imperiled; taxpayer has either filed no income tax return in recent years or has failed to report substantial income; taxpayer has been involved in an illegal enterprise from which he has derived income but failed to report same; and taxpayer has or appears to be attempting to secrete himself by use of assumed names.

The Court finds that the Service reasonably based its decision regarding the necessity of making a jeopardy assessment against plaintiff on the following factors: plaintiff had once fled the country while under criminal indictment, the Service’s assumption that the suspected tax deficiencies were large, taxpayer had pled guilty to tax law violations, taxpayer allegedly held property in Colorado under nominee names, plaintiff’s counsel had informed the Service that plaintiff had “money on the street,” taxpayer had money in a numbered foreign bank account, taxpayer had a substantial amount of money in cash and gold coins, and taxpayer’s wife had his power of attorney.

9. It is well established that income from unlawful activities must be included in taxpayer’s gross income for tax computation purposes. U.S. CONST. amend XVI; 26 U.S.C. § 61. See, e.g., James v. United States, 366 U.S. 213, 218-20, 81 S.Ct. 1052, 1054-56, 6 L.Ed.2d 246 (1961); Loretto v. United States, supra, at 1174 n. 10.

10. When plaintiff on October 20, 1984 entered his guilty plea pursuant to the plea agreement, he thereby admitted to the facts charged in the specific counts of the indictments to which he pled guilty.

11. The Court finds that the making of the jeopardy assessment under 26 U.S.C. § 6861, in light of all the relevant circumstances, both then and now, was reasonable. The Court thus concludes as a matter of law that defendant has sufficiently met its burden of proof, 26 U.S.C. § 7429(g)(1), of demonstrating that the jeopardy assessment was reasonable under the circumstances. See, e.g., Revis v. United States, supra, at 1078-79; Loretto v. United States, supra, at 1174. Plaintiff’s argument that the jeopardy assessment is invalid because he is presently incarcerated, and therefore, does not have the present ability either to secrete himself or his assets from the Service or to dissipate his assets, is not persuasive. See, e.g., Loretto v. United States, supra, at 1174; Amyx v. United States, 529 F.Supp. 98, 100 (S.D.Ohio 1981).

12. The amount assessed by the Service is rebuttably presumed to be appropriate and reasonable. Revis v. United States, supra, at 1179; Amyx v. United States, supra, at 100; Nolan v. United States, supra, at 791.

13. The Court finds that the amount of the jeopardy assessment, $9,862,142.00, so assessed is both appropriate and reasonable with particular regard to plaintiff considering the specific facts and surrounding circumstances of this case. The Court concludes as a matter of law that plaintiff has failed to meet his burden of proof, 26 U.S.C. § 7429(g)(2), of demonstrating that the amount so assessed by the Service, pursuant to 26 U.S.C. § 6861, is inappropriate or unreasonable under the circumstances. See, e.g., Clarendon Ltd. v. United States, 573 F.Supp. 106, 107 (S.D.N.Y.1983); Felkel v. United States, 570 F.Supp. 833, 841 (D.S.C.1983).

14. The Court finds for defendant and against plaintiff. Accordingly, it is

ORDERED that judgment be, and it hereby is, entered for defendant and against plaintiff; and it is

FURTHER ORDERED that plaintiffs complaint be, and it hereby is, dismissed with prejudice.