author: POLOZOLA, District Judge.

text:
    UNITED STATES of America v. FERRO CORPORATION.
    Civ. A. No. 84-680-B.
    United States District Court, M.D. Louisiana.
    Jan. 23, 1986.
    Edward Gonzales, Asst. U.S. Atty., Baton Rouge, La., for plaintiff.
    Warren E. Byrd, II, Asst. Atty. Gen., Baton Rouge, La., James D. Robertson, Environmental Enforcement Section, Land and Natural Resources Div., U.S. Dept, of Justice, Washington, D.C., for intervenor.
    Walter C. Thompson, Jr., Sessions, Fish-man, Rosenson, Boisfontaine, Nathan & Winn, New Orleans, La., Jeffrey 0. Cerar, Glenn M. Young, Squire, Sanders & Dempsey, Washington, D.C., for defendant.
   POLOZOLA, District Judge.

The issue before the court is whether Ferro Corporation (“Ferro”) is entitled to a jury trial in an action brought by the United States under Section 309(b) and (d) of the Clean Water Act.

The court finds that Ferro is not entitled to a jury trial. Therefore, the motion of the United States to strike defendant’s request for a jury trial is hereby granted.

The United States filed this suit pursuant to Section 309(b) and (d) of the Clean Water Act against Ferro seeking an injunction to prohibit Ferro from violating the Clean Water Act; an order to have Ferro implement a pollution abatement program; and, the imposition of civil penalties for alleged violations. The State of Louisiana has intervened in this action seeking substantially the same relief. After the suit was filed, Ferro filed its demand for a jury trial. Thereafter, the United States filed its motion to strike Ferro’s request for a jury trial.

Rule 38(a) of the Federal Rules of Civil Procedure provides that “[t]he right of trial by jury as declared by the Seventh Amendment to the Constitution or as given by a statute of the United States shall be preserved to the parties inviolate.” Therefore, Ferro would be entitled to a jury trial in this case if such a right is given by the Clean Water Act or if the Seventh Amendment to the United States Constitution so requires. Ferro does not contend that the provisions of the Clean Water Act grant it a right to a jury trial. Therefore, the sole issue before the court is whether Ferro is entitled to a trial by jury under the Seventh Amendment.

The Seventh Amendment to the Constitution provides, in pertinent part, that “[i]n suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved....” This right necessarily is limited to a suit whose nature reflects an action existing at common law at the time the amendment was adopted. This right to a jury trial is limited to those actions in which legal issues, as opposed to equitable issues alone, are to be resolved. Furthermore, it is “the nature of the issue to be tried rather than the character of the overall action” that determines whether one is entitled to a jury trial. In Ross v. Bernhard, 396 U.S. 531, 90 S.Ct. 733, 24 L.Ed.2d 729 (1970), the Court stated:

... the “legal” nature of an issue is determined by considering, first, the pre-merger custom with reference to such questions; second, the remedy sought; and third, the practical abilities and limitations of juries. Of these factors, the first, requiring extensive and possibly abstruse historical inquiry, is obviously the most difficult to apply. [Citation omitted.]

Ross v. Bernhard, 396 U.S. at 538, n. 10, 90 S.Ct. at 738, n. 10. The fact that both legal and equitable issues are presented in the same case does not rescind a party’s right to have a jury determine the legal issue. If both legal and equitable issues are presented in the same action, the factual issues common to both the legal and equitable claims are to be submitted to a jury for a determination of the legal claim before the court makes a determination of the equitable claim.

Thus, the specific issue before the court is whether or not there is any issue to be resolved in this case that is “legal” in nature. If there is a legal issue involved, Ferro would be entitled to a trial by jury on such a claim. In addition, Ferro would be entitled to have any factual issues common to the legal claim and any equitable claim submitted to a jury prior to the court’s determination of the equitable claim. In order for the court to determine whether there is a legal issue presented in this case, the court must determine whether the imposition of civil penalty under the Clean Water Act is legal in nature.

Ferro contends that when the government sues to collect a civil penalty, the Seventh Amendment provides a right to a trial by jury. In support of its contention, Ferro relies upon three Supreme Court cases: Hepner v. United States, 213 U.S. 103, 115, 29 S.Ct. 474, 479, 53 L.Ed. 720 (1909); United States v. Regan, 232 U.S. 37, 47, 34 S.Ct. 213, 216, 58 L.Ed. 494 (1914); and Atlas Roofing Co., Inc. v. Occupational Safety and Health Review Commission, 430 U.S. 442, 97 S.Ct. 1261, 51 L.Ed.2d 464 (1977). In addition, Ferro cites a number of circuit cases as jurisprudential authority in support of its argument that it has a right to a jury trial when the government sues to collect a civil penalty for the violation of a statute. Finally, Ferro argues that the congressional intent in imposing civil penalties under the Clean Water Act is to punish the violator and, therefore, act as a deterence to prevent other violations. Ferro contends that if the civil penalties are considered in this manner, the penalties would be similar to punitive damages, which is a legal issue. For the reasons which follow, the court finds that there is no right to a trial by jury in an action brought by the United States pursuant to the Clean Water Act, even in those cases wherein the government seeks the imposition of a civil penalty.

The court could find no case decided by the Fifth Circuit Court of Appeals which has ruled on the issue now pending before the court. However, the Fourth and Eleventh Circuit Courts of Appeals and one district court have refused to grant a jury trial when the government sought civil penalties under the Clean Water Act. United States v. Tull, 769 F.2d 182 (4th Cir.1985); United States v. M.C.C. of Florida, Inc., 772 F.2d 1501 rehearing denied 778 F.2d 793 (11th Cir.1985); United States v. Lambert, 19 E.R.C. 1055 (M.D.Fla.1983). This court fully agrees with the conclusion reached in these cases and, therefore, finds that Ferro is not entitled to a jury trial in this action.

Although Ferro relies heavily on Hep-ner, Regan, and Atlas, these cases did not decide the issue before the court. The language in these three cases relied on by Ferro is clearly dicta. Furthermore, the express reservation by the United States Supreme Court in Atlas on whether the Seventh Amendment has any application in suits filed by the United States is clear indication that the Supreme Court has not required jury trials under the Seventh Amendment where the United States seeks civil penalties.

In the Tull case, the Fourth Circuit applied the traditional legal versus equitable analysis in holding that a litigant was not entitled to a jury trial when the government filed suit under the Clean Water Act for the imposition of civil penalties. Relying upon Curtis v. Loether, 415 U.S. 189, 196, 94 S.Ct. 1005, 1009, 39 L.Ed.2d 260 (1974), the Fourth Circuit stated that “[t]he Supreme Court has not gone ‘so far as to say that any award of monetary relief must necessarily be legal [as opposed to equitable] relief’ for purposes of determining the right to trial by jury.” Both the Tull and Lambert courts relied upon the fact that the penalty to be awarded is completely within the discretion of the court rather than on a set penalty. , This distinction is important because any reliance upon Hepner and Regan to provide a basis for a trial by jury under the Seventh Amendment for collection of a civil penalty must be diminished when such discretion in the amount to be awarded is involved because the Supreme Court characterized both Regan and Hepner as “actionfs] in debt.”

In United States v. M.C.C. of Florida, Inc., 772 F.2d 1501 (11th Cir.1985) the Eleventh Circuit held that actions brought pursuant to the Clean Water Act were equitable in nature and, therefore, there was no right to a trial by jury, even if the government did seek the imposition of civil penalties. The court, in reaching its conclusion that such actions were equitable in nature, relied upon Weinberger v. Romero-Barcelo, 456 U.S. 305, 318, 102 S.Ct. 1798, 1806, 72 L.Ed.2d 91 (1982), wherein the United States Supreme Court stated that the Clean Water Act allowed “the exercise of a court’s equitable discretion, whether the source of pollution is a private party or a federal agency, to order relief that will achieve compliance with the Act.” Weinberger v. Romero-Barcelo, 456 U.S. at 318, 102 S.Ct. at 1806 quoted in United States v. M.C.C. of Florida, Inc., 772 F.2d at 1507.

Finally, the court finds that Ferro’s contention that the penalties involved in this case are the equivalent of punitive damages is without merit. The Tull court correctly disposed of this contention as follows:

... [T]he assessment of penalties intertwines with the imposition of traditional equitable relief. The district court fashions a “package” of remedies, one part of the package affecting assessment of the others. (Footnote reference omitted.) This combined relief serves several goals, including environmental preservation and fairness to third party property buyers as well as deterrence. In such circumstances, the seventh amendment is inapplicable. See [NLRB v.] Jones & Laughlin, 301 U.S. [1] at 48-49, 57 S.Ct. [615] at 629-630 [81 L.Ed. 893 (1937)], quoted in Atlas Roofing, 430 U.S. at 453, 97 S.Ct. at 1268 (seventh amendment inapplicable where “recovery of money damages is an incident to [nonlegal] relief even though damages might have been recovered in action at law,” since equity courts historically granted such monetary relief.)

For these same reasons, the court finds that Ferro is not entitled to a jury trial based on the contention that the civil penalties are equivalent to punitive damages.

To summarize, the court finds that Ferro is not entitled to a jury trial under the Seventh Amendment in the present action. This conclusion is based upon an equitable versus legal analysis of the claim asserted by the United States under the Clean Water Act. The court finds that the relief sought by the United States under the Clean Water Act is equitable in nature, even if the government does seek the imposition of civil penalties.

Therefore:

IT IS ORDERED that the motion of the plaintiff, the United States of America, to strike the demand of the defendant, Ferro Corporation, for a trial by jury be, and it is hereby GRANTED.

      . 33 U.S.C. 1319(b) and (d).

      . Atlas Roofing Co., Inc. v. Occupational Safety and Health Review Commission, 430 U.S. 442, 458, 97 S.Ct. 1261, 1270, 51 L.Ed.2d 464 (1977).

      . United States v. Louisiana, 339 U.S. 699, 70 S.Ct. 914, 94 L.Ed. 1216 (1950).

      . Ross v. Bernhard, 396 U.S. 531, 538, 90 S.Ct. 733, 738, 24 L.Ed.2d 729 (1970).

      . See generally 5 J. Moore, J. Lucas & J. Wicker, ■Moore’s Federal Practice § 38.11 [5] (2d ed. 1985).

      . Dairy Queen, Inc. v. Wood, 369 U.S. 469, 82 S.Ct. 894, 900-01, 8 L.Ed.2d 44 (1962); Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 79 S.Ct. 948, 3 L.Ed.2d 988 (1959).

      . Roscello v. S. W. Airlines Co., 726 F.2d 217, 221 rehearing denied 732 F.2d 941 (5th Cir.1984) and Turner v. Kaiser Aluminum and Chemical Corporation, 602 F.Supp. 519, 525 (M.D.La.1984).

      . Roscello v. S.W. Airlines Co., 726 F.2d 217, 221 rehearing denied 732 F.2d 941 (5th Cir.1984) and Turner v. Kaiser Aluminum and Chemical Corporation, 602 F.Supp. 519, 525 (M.D.La.1984).

      . The United States’ demand for an abatement program and for an injunction to prohibit violations of the Clean Water Act is clearly equitable in nature. See, e.g., United States v. Louisiana, 339 U.S. 699, 70 S.Ct. 914, 917, 94 L.Ed. 1216 (1950).

      . Hepner v. United States, 213 U.S. 103, 29 S.Ct. 474, 53 L.Ed. 720 (1909) was an action brought to collect a $1,000 penalty assessed for a violation of the Alien Immigration Act. The court held that "[t]he defendant was, of course, entitled to have a jury summoned in this case ..." 213 U.S. at 115, 29 S.Ct. at 479. See also footnotes 14, 15 and 16, infra.

      . United States v. Regan, 232 U.S. 37, 34 S.Ct. 213, 58 L.Ed. 494 (1914) was also an action to recover $1,000 as a penalty for an alleged violation of the Alien Immigration Act. In Regan the Supreme Court stated:
      While the defendant was entitled to have the issues tried before a jury, this right did not arise from Article III of the Constitution or from the Sixth Amendment, for both relate to prosecutions which are strictly criminal in their nature ..., but it did arise out of the fact that in a civil action of debt involving more than twenty dollars a jury trial is demandable.
      232 U.S. at 41, 34 S.Ct. at 216. See also footnotes 14, 15 and 16, infra.

      . In Atlas Roofing Co., Inc. v. Occupational Safety and Health Review Commission, 430 U.S. 442, 97 S.Ct. 1261, 51 L.Ed. 464 (1977) the court referred to Hepner v. United States, 213 U.S. 103, 29 S.Ct. 474, 53 L.Ed. 720 (1909) and United States v. Regan, 232 U.S. 37, 34 S.Ct. 213, 58 L.Ed. 494 (1914), and stated "the Government could commit the enforcement of statutes and the imposition and collection of fines to the judiciary, in which event jury trial would be required." 430 U.S. at 460, 97 S.Ct. at 1272. See also footnotes 14, 15 and 16, infra.

      . Illinois Citizens Committee For Broadcasting v. Federal Communications Commission, 515 F.2d 397 (D.C.Cir.1974); United States v. J.B. Williams Company, Inc., 498 F.2d 414 (2nd Cir.1974); and Connolly v. United States, 149 F.2d 666 (9th Cir.1945).

      . As noted earlier in the opinion, Hepner v. United States, 213 U.S. 103, 29 S.Ct. 474, 53 L.Ed. 720 (1909), was an action brought to collect a $1,000 penalty assessed for a violation of the Alien Immigration Act. The question before the court was whether a trial court could direct a verdict in favor of the government. Id. 213 U.S. at 103, 29 S.Ct. at 475. In resolving such issue in the affirmative the court stated:
      The defendant was, of course, entitled to have a jury summoned in this case, but that right was subject to the condition, fundamental in the conduct of civil actions, that the court may withdraw a case from the jury and direct a verdict according to the law if the evidence is uncontradicted and raises only a question of law.

        Id. 213 U.S. at 115, 29 S.Ct. at 479.

      . United States v. Regan, 232 U.S. 37, 34 S.Ct. 213, 58 L.Ed. 494 (1914), like Hepner v. United States, 213 U.S. 103, 29 S.Ct. 474, 53 L.Ed. 720 (1909) was an action to recover $1,000 as a penalty for an alleged violation of the Alien Immigration Act. The question on appeal was whether the burden of proof necessary to recover such penalty was proof beyond a reasonable doubt that violation had occurred. Regan, 232 U.S. at 40, 34 S.Ct. at 214. Therefore, the statement by the court that
      While the defendant was entitled to have the issues tried before a jury, this right did not arise from Article III of the Constitution or from the Sixth Amendment, for both relate to prosecutions which are strictly criminal in their nature ..., but it did arise out of the fact that in a civil action of debt involving more than twenty dollars a jury trial is demandable.
      is clearly dicta. Id. 232 U.S. at 47, 34 S.Ct. at 216.

      . In Atlas Roofing Co., Inc. v. Occupational Safety and Health Review Commission, 430 U.S. 442, 97 S.Ct. 1261, 51 L.Ed.2d 464 (1977), the plaintiff contended it had a right to a jury trial under the Seventh Amendment because the government’s suit to collect civil penalties was similar to a suit for a money judgment. The court stated:
      [i]n light of our disposition of these cases we decline the respondents’ invitation to decide whether the dictum in these cases correctly divines the intent of the Seventh Amendment or whether, as the respondents argue, the Seventh Amendment has no application to Government litigation and leaves solely to the Sixth Amendment the function of interposing a jury between the Federal Government and an individual from whom it wishes to exact a fine. (Citation omitted.)

        Id. 430 U.S. at 449 n. 6, 97 S.Ct. at 1266 n. 6.

      . See footnote 16, supra.

      . In United States v. Tull, 769 F.2d 182 (4th Cir.1985) the court acted on the assumption that the Seventh Amendment applied to actions filed by the United States.

      . United States v. Tull, 769 F.2d 182, 187 (4th Cir.1985).

      . The other factors relied upon by the court in United States v. Lambert, 19 E.R.C. 1055 (M.D.Fla.1983) were (1) the fact that there was no private recipient of the penalty; and, (2) that the purpose of such penalty was to deter violations of the Clean Water Act.

      . Hepner v. United States, 213 U.S. 103, 29 S.Ct. 474, 53 L.Ed. 720 (1909) and United States v. Regan, 232 U.S. 37, 34 S.Ct. 213, 58 L.Ed. 494 (1914).

      . Ferro’s reliance upon Connolly v. United States, 149 F.2d 666 (9th Cir.1945), fails to recognize that the court’s approval of a jury trial in a suit to collect a civil penalty for the violation of 25 U.S.C. § 179 rested upon the concept that an action to collect a debt is legal in nature. 25 U.S.C. § 201 is the enforcement statute for 25 U.S.C. § 179. Section 201 provides that ”[a]ll penalties which shall accrue under this title shall be sued for and recovered in an action in the nature of an action of debt...." [Emphasis added.] Similarly, in United States v. J. B. Williams, 498 F.2d 414 (2nd Cir.1974), the Second Circuit erroneously relied upon Connolly as authority to allow a jury trial in such cases even "when [the amount of the penalty] was subject to the discretion of the court." United States v. J. B. Williams, 498 F.2d at 423. Ferro also relies upon Illinois Citizens Committee for Broadcasting v. F.C.C., 515 F.2d 397 (D.C.Cir.1974). In this case, the court stated that a licensee who paid a forfeiture after the issuance of a notice of apparent liability for the broadcast of obscene material had a right to a jury trial, but had waived such right. The court’s reason for such statement was ”[a]n action by the United States to recover a statutory penalty is of a common law nature for purposes of the Sixth [sic] Amendment. Connolly v. United States, 149 F.2d 666 (9th Cir.1945).’’ This court fails to understand the reliance upon Connolly as authority for the proposition that an action to recover a statutory penalty is of "common law nature” and, therefore, one is entitled to a jury trial under the Seventh Amendment.

        .United States v. Tull, 769 F.2d 182, 187 (4th Cir.1985).

      . Since the court has found that Ferro is not entitled to a jury trial, under this analysis, the court does not need to determine the alternative argument made by the United States in its motion to strike that Ferro waived any right to a jury trial by failing to assert its demand timely.


source: Caselaw Access Project

author: DAVID V. O’BRIEN, District Judge.

license: Public Domain

text:
    DANBURY, INC. A Nevada Corporation Petitioner, v. Anthony OLIVE, Director Bureau of Internal Revenue Government of the Virgin Islands Respondent.
    Civ. No. 1985/269.
    District Court, Virgin Islands, D. St. Croix.
    Jan. 24, 1986.

      Todd Newman, St. Croix, V.I. and William A. Seligmann, Nelson, Seligmann & Wright, P.C., Los Angeles, Cal., for petitioner.
    Meno W. Piliaris, Asst. Atty. Gen. (Tax), St. Croix, V.I., for respondent.
   MEMORANDUM OPINION

DAVID V. O’BRIEN, District Judge.

We are presented here with the prospect of the ultimate tax shelter. Can a United States corporation headquartered in the Virgin Islands avoid paying income tax to both governments? Under the facts of this case, we hold that, by the use of a loophole in the taxing statutes, it can.

I. INTRODUCTION

Before discussing the specifics of this case, an initial introduction is needed to provide an understanding of the Court’s approach to interpretation of tax statutes, as well as a further understanding of the relationship of the United States Internal Revenue Code to the Virgin Islands.

A. Interpretation of a Tax Statute

It is a cardinal rule of statutory construction that when the language of a statute is clear, a court should look no farther than those words in interpreting the statute. E.g., Ernst & Ernst v. Hochfelder, 425 U.S. 185, 201, 96 S.Ct. 1375, 1384, 47 L.Ed.2d 668 (1976). The United States Supreme Court has long applied this rule with equal force to matters involving the Internal Revenue Code (“I.R.C.”). In Gould v. Gould, 245 U.S. 151, 38 S.Ct. 53, 62 L.Ed. 211 (1917), the Court stated:

In the interpretation of statutes levying taxes it is the established rule not to extend their provisions, by implication, beyond the clear import of the language used, or to enlarge their operations so as to embrace matters not specifically pointed out. In case of doubt they are construed most strongly against the government, and in favor of the citizen. (Citations omitted).

Id. at 153, 38 S.Ct. at 53.

Thus, we are constrained to interpret and enforce the tax laws as Congress has enacted them. We may neither rewrite the statutes nor divine an interpretation that is inconsistent with their clear language. And this rule applies despite the most absurd results. White v. United States, 305 U.S. 281, 292, 59 S.Ct. 179, 184, 83 L.Ed. 172 (1938); Estate of Cowser v. Commissioner of Internal Revenue, 736 F.2d 1168, 1171 (7th Cir.1984). Accord Commonwealth Edison Company v. Montana, 453 U.S. 609, 628, 101 S.Ct. 2946, 2959, 69 L.Ed.2d 884 (1981); United States v. Noall, 587 F.2d 123, 126 (2d Cir.1978) cert denied 441 U.S. 923, 99 S.Ct. 2031, 60 L.Ed.2d 396 (1979). .

B. The Mirror Theory

The Virgin Islands tax code is a mirror image of the I.R.C. The genesis of this system is the Naval Service Appropriation Act of 1922, 48 U.S.C. § 1397 (Supp.1985) which provides:

Income tax laws of the United States in force; payment of proceeds; levy of surtax on all taxpayers
The income-tax laws in force in the United States of America and those which may hereafter be enacted shall be held to be likewise in force in the Virgin Islands of the United States, except that the proceeds of such taxes shall be paid into the treasuries of said islands-

This law established the Virgin Islands as a separate tax jurisdiction. Vitco, Inc. v. Government of the Virgin Islands, 560 F.2d 180, 181-82 (3d Cir.1977) cert denied 435 U.S. 980, 98 S.Ct. 1630, 56 L.Ed.2d 72 (1978); Chicago Bridge and Iron Co. v. Wheatley, 430 F.2d 973, 975-76 (3d Cir.1970) cert denied 401 U.S. 910, 91 S.Ct. 873, 27 L.Ed.2d 809 (1971). The I.R.C. and its regulations are adapted by substituting “Virgin Islands” in place of “United States”. Vitco, supra at 181-82; Chicago Bridge, supra at 974-75. Apart from making non-substantive changes in nomenclature, however, the Virgin Islands has no power to enact tax laws or amend the I.R.C.. Chicago Bridge, supra at 975-76.

Consequently, our analysis is limited to the provisions of the I.R.C. as amended under the mirror theory.

II. THE UNDISPUTED FACTS

The petitioner, Danbury, Inc., is an investment corporation owned equally by two shareholders, John M. Aschieris and M. Douglas. Since its creation in 1980, Dan-bury has acted solely as a holding company for the shareholders’ investments. It was organized under the laws of Nevada and, consequently, is a foreign corporation for Virgin Islands tax purposes. As is required by its certificate of incorporation, Danbury is headquartered and maintains its only office in the Virgin Islands. Until its records were seized by federal treasury agents in May, 1984, all corporate documents were maintained here. Additionally Danbury has a local bank account and, pursuant to its bylaws, holds its shareholder and director meetings in the Virgin Islands.

This corporate presence qualifies Danbury as a Virgin Islands inhabitant for tax purposes. It also distinguishes it from the post office box variety shell corporation.

Danbury reported gross earnings of $782,175.55 to the Virgin Islands for the 1981-82 tax years. The income was attributed to:

1981 1982
Limited partnership distributions $203,528.00 $355,655.00
Interest income 52,590.00 168,826.05
Loss from sale of diamonds — (1,576.50)
total $256,118.00 $526,057.55

Both sources of income are located in the United States. Danbury claimed that all but $96,985.00 of its 1982 earnings was exempt and paid a $26,243.00 tax. It paid no tax on the 1981 income. The Government, however, found that the income in both years was taxable in its entirety and assessed deficiencies against Danbury of $97,750.00 and $240,607.00 for the respective years.

Danbury now moves for summary judgment. Its tax shelter is simply explained. Danbury is both a foreign corporation and an inhabitant of the Virgin Islands because it is not organized under the territory’s laws but maintains its headquarters here. As an inhabitant it must pay tax on its world-wide income to the Virgin Islands’ treasury. Foreign corporations, however, are taxed only on income derived in the Virgin Islands. Since Danbury’s income is wholly generated from foreign sources, it owes no tax to the Virgin Islands. And because its United States obligations are satisfied under the Virgin Islands tax code, it owes no tax to the federal government.

On the basis of this scheme, Danbury requests that we invalidate the deficiencies.

The Government, in its cross-motion for summary judgment, argues that Danbury should be treated as a domestic corporation and taxed on its world-wide income.

III. DISCUSSION

The Virgin Islands collects taxes from two sources: inhabitants and non-inhabitant foreign entities. Inhabitants are taxed under the authority of 48 U.S.C. § 1642 (Supp.1985) which provides:

Use of certain proceeds for expenditure; income tax obligations of inhabitants
The proceeds of customs duties, the proceeds of the United States income tax [and] the proceeds of any taxes levied by the Congress on the inhabitants of the Virgin Islands ... shall be covered into the treasury of the Virgin Islands, and shall be available for expenditure as the Legislature of the Virgin Islands may provide: Provided, That the term “inhabitants of the Virgin Islands” as used in this section shall include all persons whose permanent residence is in the Virgin Islands, and such persons shall submit their income tax obligations under applicable taxing statutes of the United States by paying their tax on income derived from all sources both within and outside the Virgin Islands....

Simply stated, permanent residents pay tax on their world-wide income to the territory and in so doing they fulfill their federal tax obligations. See Vitco, supra at 182.

Non-inhabitant foreign entities, on the other hand, are taxed only on the income they derive in the Virgin Islands. By substituting “Virgin Islands” for the “United States” as required under the mirror theory, 26 U.S.C. § 882 provides in pertinent part:

Tax on income of foreign corporations connected with Virgin Islands business
(a) Imposition of tax
(1) In general. — A foreign corporation engaged in trade or business within the Virgin Islands during the taxable year shall be taxable as provided in section 11 or 1201(a) on its taxable income which is effectively connected with the conduct of a trade or business within the Virgin Islands.
(2) Determination of taxable income.
—In determining taxable income for purposes of paragraph (1), gross income includes only gross income which is effectively connected with the conduct of a trade or business within the Virgin Islands.
(b) Gross Income — In the case of a foreign corporation, gross income includes only—
(1) gross income which is derived from sources within the Virgin Islands and which is not effectively connected with the conduct of a trade or business within the Virgin Islands and
(2) gross income which is effectively connected with the conduct of a trade or business within the Virgin Islands.

Corporations organized in the 50 states pay tax on their world-wide income to the federal treasury but, to avoid double taxation, they receive a foreign tax credit for the taxes paid to the Virgin Islands. Chicago Bridge, supra at 974.

As a hybrid, Danbury claims the benefits of both § 1642 and § 882. The result, of course, is that its income is tax exempt. We will examine each claim separately.

A. The § 882 Exemption

As a general rule, the income that a foreign corporation derives from stateside sources cannot be taxed by the Virgin Islands. Section 882 provides that a corporation will be taxed, however, on income derived from a locally conducted trade or business or any other local source. And otherwise exempt income will be taxed, nevertheless, if the Virgin Islands office is a material factor in generating the income. 26 U.S.C. § 864(c)(4)(B).

Although the Government concedes that § 882 applies to Danbury, we will satisfy ourselves as to whether Danbury is entitled to this exemption.

Two factors can be eliminated in short order. First, we can safely assume that Danbury located its headquarters in the Virgin Islands solely to exploit a fluke in the tax laws. The locale in no way contributed to the generation of its income. Moreover, the income clearly originated from mainland investments. The trade or business element, however, requires more consideration.

In order for a taxpayer to claim business or trade status on the basis of investment activity, the taxpayer must be an active investor. E.g., Higgins v. Commissioner of Internal Revenue, 312 U.S. 212, 216-17, 61 S.Ct. 475, 477-78, 85 L.Ed. 783 (1940); Snyder v. Commissioner of Internal Revenue, 295 U.S. 134, 139, 55 S.Ct. 737, 739, 79 L.Ed. 1351 (1934). Active investors spend the majority of their time speculating in securities. Snyder, id.

Under this rule, we need not discuss whether Danbury’s activities qualify as a trade or business. They obviously do not. The sources of the income are by definition synonymous with passivity. The corporation is merely a receptacle for interest income and limited partnership distributions. Thus, we conclude that Danbury is not engaged in a trade or business and hold that Danbury is entitled to the § 882 exemption.

B. The effect of § 1642 on the Internal Revenue Code

The remaining obstacle — and the Government’s sole defense — to Danbury’s tax shelter is the effect of 48 U.S.C. § 1642 (text quoted supra) on the I.R.C. in general and on § 882 specifically.

The Government, in its motion for summary judgment, asserts that § 1642 authorizes the Virgin Islands to dispense with the source distinction of § 882 and tax a foreign corporation as if it were domestic. The Government’s first theory is this: the plain language of § 1642 indicates that it is a taxing statute, separate from the I.R.C., which allows the territory to alter the mirror of § 882. The operative language is “inhabitants ... shall satisfy their income tax obligations ... by paying their tax on income derived from all sources both within and without the Virgin Islands into the treasury of the Virgin Islands.” (emphasis added).

At the onset, we disagree with the Government’s premise that § 1642 authorizes it to alter the definition of a domestic corporation. By limiting the Government’s income taxing authority to the execution of non-substantive changes in nomenclature, the Third Circuit has implicitly held that § 1642 is not a taxing statute. See Chicago Bridge, supra at 975-76. We hold, therefore, that the Government may not tailor the provisions of the I.R.C. to suit the situation. It is bound, as we are, to enforce the statutes as enacted by Congress. E.g., Ernst, supra; Gould, supra; White, supra. The I.R.C. concisely defines foreign and domestic corporations, and the Government may not dispense with these definitions, even where the alternative is the ultimate tax shelter.

In so holding, we decline to follow Rev. Ruling 80-40, the Government’s sole authority for this theory. Although the subject corporation there was conducting business in the Virgin Islands, the facts of Rev. Ruling 80-40 are otherwise on point with Danbury’s tax shelter. The ruling holds, under the purported authority of § 1642, that the corporation should be taxed as a domestic corporation. This ruling must be rejected as suffering from the same malady as the Government’s argument. It merely states a conclusion and the fact that the result is desired is simply not enough. To paraphrase the First Circuit, we find that “attaching the label [tax shelter] is not the end of analysis. We cannot decide this case simply by saying ‘No’. We have a duty to explain ourselves and to set out a rule of law to govern future cases.” Textron, Inc. v. United States, 561 F.2d 1023, 1027 (1st Cir.1977).

The Government argues next that the source distinctions of § 882 conflict with and are, therefore, vitiated by § 1642 because the latter gives to the Virgin Islands the authority to tax “income derived from all sources.” In essence the Government contends that § 1642 precludes the mirroring of I.R.C. provisions, such as § 882 which constrain its ability to tax anything less than all income. To accept this argument is to invite the opening of a Pandora’s box as to all of the I.R.C.’s tax reducing provisions such as the § 162 trade and business deduction and the § 101 exclusion of life insurance proceeds. And this we will not do.

The phrase quoted by the Government must be considered in the context of the statute. It mandates that inhabitants “shall satisfy their income tax obligations under applicable tax statutes of the United States by paying their tax on income derived from all sources” to the territory’s treasury, (emphasis added). The Government persistently urges us to ignore the key words of § 1642 emphasized above. This language means nothing more than that the I.R.C. is the tax code of the Virgin Islands, an interpretation that is consistent with, and mandated by, the mirror law. 48 U.S.C. § 1397 (Supp.1985).

It is true that § 1642 broadly defines taxable income. In this respect it is similar to the I.R.C.’s general definition of income: “gross income means all income from whatever source derived.” 26 U.S.C. § 61. But it cannot be suggested with a straight face that § 61 prohibits a taxpayer from claiming the exemptions, exclusions and deductions authorized by the I.R.C. Yet the Government would have us hold that § 1642 has precisely this effect. In effect, the Virgin Islands seeks to pick and choose which sections of the I.R.C. it will honor.

Like § 61, § 1642 is a general rule of inclusion and, as such, it is subject to all of the provisions of the I.R.C. — including § 882 — authorizing exceptions to that rule.

Finally, we find nothing in the legislative history of § 1642 to give credence to the Government’s position. Prior to the enactment of § 1642, Virgin Islands residents were taxed by both the federal and territorial government according to the source of their income. The statute abolished the source distinction by introducing a single filing requirement. The purpose was to increase the Virgin Islands’ tax revenues by subjecting to local taxation both the local and mainland income of the residents. S.Rep. No. 1271 83d Cong., 2d Sess. 2, reprinted in 1954 U.S.Code Cong. & Ad. News 2585 et seq.

But there is nothing to suggest that Congress intended to allow the Virgin Islands to chip away at the mirror theory so carefully retained over all these years. Rather, it appears that the effect of § 882 in favor of a foreign corporation inhabitant filing in the Virgin Islands was overlooked. We cannot legislate the closing of this loophole by judicial fiat. To do so would encroach on prerogatives in tax matters delegated to the executive and legislative branches of government.

We hold then, that § 1642 simply provides the basic tax procedure for territorial inhabitants who derive income from either or both Virgin Islands and foreign sources. It has no independent effect on the provisions of the I.R.C.

IV. CONCLUSION

We hold that the deficiencies assessed against Danbury were improper because the corporation’s income is exempt from taxation under 26 U.S.C. § 882.

We are not, however, deciding this case in a vacuum. Danbury was organized for the specific purpose of exploiting a gap in the tax laws — a gap that is truly the ultimate tax shelter. We are certain that Congress did not intend to create this aperture in the tax laws. But where one occurs it is the exclusive province of Congress and the federal chief executive to close it. And until this is accomplished, a corporation may pursue the Danbury route.

      . For clarity’s sake, we will make the transposition of "United States” to "Virgin Islands" in the applicable statutes throughout this opinion.

        . 26 U.S.C. §§ 7701(4) — (5). A foreign corporation is one not organized under the laws of the Virgin Islands.

      . The Revised Organic Act defines inhabitants as "persons whose permanent address is in the Virgin Islands." 48 U.S.C. § 1642 (Supp.1985). “Persons” includes corporations. Vitco, supra at 183. The Vitco Court also held that a mere post office box is sufficient to establish the requisite permanent residence. Id. at 183.

      .Virgin Islands inhabitants, such as Danbury, satisfy their federal tax obligations by filing a single return with the territory's Bureau of Internal Revenue. 48 U.S.C. § 1642. The operation of this statute will be discussed in detail infra.

      . Both the federal and territorial governments have been aware since at least 1980 of this quirk in the law. Tax Management, published by The Bureau of National Affairs, Inc., issued "Business Operations in the U.S. Virgin Islands", T.M. 336-2nd (1980), which precisely describes the loophole. Congress has considered its elimination several times, most recently in President Reagan’s 1985 tax reform package. See' “The President’s Tax Proposals to the Congress for Fairness, Growth and Simplicity", May, 1985, pp. 423-31. At oral argument, the Court was advised that income from hundreds of millions of dollars of corporate assets is currently being sheltered under the Danbury loophole. The Virgin Islands Bureau of Internal Revenue has challenged the tax returns of these foreign corporations in each instance. The Danbury case is the first of those filed in District Court to reach the level of judicial determination.

      . We will discuss the impact of 48 U.S.C. § 1642 on this general rule infra.

      . The statute provides in pertinent part:
      (B) Income, gain, or loss from sources without the Virgin Islands shall be treated as effectively connected with the conduct of a trade or business within the Virgin Islands by a nonresident alien individual or a foreign corporation if such person has an office or other fixed place of business within the Virgin Islands to which such income, gain, or loss is attributable and such income, gain, or loss—
      (iii) is derived from the sale or exchange (without the Virgin Islands) through such office or other fixed place of business of personal property described in section 1221(1), except that this clause shall not apply if the property is sold or exchanged for use, consumption, or disposition outside the Virgin Islands and an office or other fixed place of business of the taxpayer outside the Virgin Islands participated materially in such sale or exchange.

      . 26 U.S.C. §§ 7701(4)-(5).

      . The loophole discussed in this opinion is not the only anomaly which results from the mirror system. In President Reagan’s 1985 proposals for tax reform mentioned in footnote 5, it states at page 426:
      "... the mirror system gives rise to numerous areas of ambiguity and problems of interpretation. These technical difficulties have made administration of the law problematic, created a climate of uncertainty for investors, and raised the possibility of unintended tax benefits for some and harsh consequences for others.”


author: HADEN, Chief Judge.

text:
    Welford L. COTTON and James Roger Cotton, Plaintiffs, v. OTIS ELEVATOR COMPANY and Richard M. Whiston, Defendants.
    Civ. A. No. 3:85-0580.
    United States District Court, S.D. West Virginia, Huntington Division.
    Jan. 24, 1986.

      Wood, Grimm & Delp, Huntington, W.Va., for plaintiffs.
    Stephen P. Goodwin, Richard D. Owen, Goodwin & Goodwin, Charleston, W.Va., for defendants.
   ORDER

HADEN, Chief Judge.

Welford and James Cotton, residents of West Virginia, assert breach of contract and tort claims against Otis Elevator Company and Richard Whiston. Otis is a New Jersey corporation with its principal place of business in Connecticut, and Whiston is a resident of Connecticut. Jurisdiction is founded in this Court under 28 U.S.C. § 1332. Several motions are pending requiring this Court’s attention prior to the close of discovery and trial of this matter.

The Cottons, until November 19, 1981, were the sole shareholders of the Cotton Elevator Company which was in the business of installing, servicing and selling freight and passenger elevators. On November 19, 1981, Otis and the Plaintiffs entered into an agreement for the purchase and sale of stock in the Cotton Elevator Company to Otis. The terms of the agreement provide, among other things, for Otis to pay the Cottons the sum of $298,467.57 on the closing of the agreement on November 19, 1981, $50,000 on each November 19 for the succeeding four years (1982 through 1985) and $65,000 on November 19, 1986. Whiston, by letter dated August 28, 1984, informed the Cottons that Otis would not be paying the $50,000 installment due on November 19, 1984, and also would refuse to pay the two remaining installments after that date.

Count One of the Cottons’ complaint complains of this anticipatory breach of contract. Count Two of the Cottons’ complaint claims that Otis breached its express and implied agreement to negotiate contractual disputes in good faith. In Count Three of the Cottons’ complaint, the Plaintiffs allege that Whiston tortiously caused Otis to breach its contract with the Cottons.

Several motions are pending. Otis and Whiston move to dismiss various aspects of the complaint and the Plaintiffs have moved for partial summary judgment. Otis seeks to dismiss Count Two on the grounds that West Virginia does not recognize a tortious breach of contract and further that punitive damages could not be awarded for breach of contract. Whiston seeks to dismiss Count Three alleging tor-tious interference of another’s contract. The Plaintiffs seek partial summary judgment on the basis of certain requests for admissions filed with the complaint. The Court will consider the motions in the order stated above.

Otis’ motion to dismiss Count Two is founded upon the theory that a mere breach of contract does not give rise to a tort claim. In Short v. Grange Mutual Casualty Co., 307 F.Supp. 768 (S.D.W.Va.1969), the Court, sitting in diversity and applying West Virginia law, held that mere breach of a contractual duty does not give rise to a tort claim. 307 F.Supp. at 772.

The Court finds persuasive the proposition stated in Battista v. Lebanon Trotting Association, 538 F.2d 111 (6th Cir.1976), which held:

“It is no tort to carry a feeling of malice toward a person; it is no tort to breach a contract, regardless of motive. A tort exists only if a party breaches a duty which he owes to another independently of the contract, that is, a duty which would exist even if no contract existed. However, when the promisee’s injury consists merely of the loss of his bargain, no tort claim arises because the duty of the promisor to fulfill the bargain arises only from the contract. The tort liability of the parties to a contract arises from the breach of some positive legal duty imposed by law because of the relationship of the parties, rather than from a mere omission to perform a contract obligation [citations omitted.]”

538 F.2d at 117. Other courts have similarly held. Coastal Plains Feeders, Inc. v. Hartford Fire Insurance Co., 545 F.2d 448, 456 (5th Cir.1977) (applying Alabama law); First National Bank of Akron v. Cann, 503 F.Supp. 419, 438-39 (N.D.Ohio 1980) (applying Ohio law); see also Jaskey Finance and Leasing v. Display Data Corp., 564 F.Supp. 160, 166 (E.D.Pa.1983) (applying Maryland law, finding breach of warranty under Uniform Commercial Code as not stating actionable tort); but see Roberts v. Western-Southern Life Ins. Co., 568 F.Supp. 536, 552 and n. 41 (N.D.Ill.1983) (finding publicly imposed duty on insurers which makes bad faith breach of insurance contract actionable in tort).

Plaintiffs assert that Harless v. First National Bank in Fairmont, 162 W.Va. 116, 246 S.E.2d 270 (1978) and Jenkins v. J.C. Penney Casualty Co., 280 S.E.2d 252 (W.Va.1981), have rendered Short obsolete. Harless held actionable in tort the discharge of a bank employee where the cause of the discharge was the employee’s objection to the bank’s failure to comply with state and federal consumer credit protection laws. The West Virginia Supreme Court of Appeals stated at 246 S.E.2d at 273:

“[A]n employer may subject himself to liability if he fires an employee who is employed at will if the employee can show that the firing was motivated by an intention to contravene some substantial public policy.”

In the Harless case, the policy sought to be protected is reflected by federal and state statutes protecting consumer borrowers. Jenkins was similarly no mere breach of contract. In that case, the West Virginia Supreme Court of Appeals construed W.Va.Code, § 33-11-4(9), which relates to the conduct of insurance companies. Again, there is an express public policy — in the form of a statute — which imposes a standard of conduct independent of the contract.

In the instant action, the Plaintiffs offer no particular public policy — other than the duty to bargain in good faith — which involves a publicly imposed duty of conduct upon the Defendants. The Court is unaware of any West Virginia Supreme Court of Appeals case recognizing “bad faith” as an independent tort absent some contention that a more particularly recognizable public policy has been breached. The parties have cited no such West Virginia case.

Accordingly, this Court concludes that the fundamental proposal stated in Short is still a valid interpretation of West Virginia law. Count Two of the Plaintiffs’ complaint, therefore, fails to establish a tort theory of recovery under the facts provable under its assertions. The Court notes, however, that the “good faith” term referred to in Count Two of the Plaintiffs’ complaint both impliedly and expressly included in the contract and as such, Count Two does state a claim for breach of contract. For this reason, Count Two will not be dismissed inasmuch as it states a claim for breach of contract.

The second portion of Otis’ September 5, 1985, motion, asserts that punitive damages are not recoverable for breaches of contract. Indeed, Short holds that “punitive damages, without exception, are not recoverable in breach of contract actions, and this is true even if the breach is willful.” Short, 307 F.Supp. at 773. Horn v. Bowen, 136 W.Va. 465, 469, 67 S.E.2d 737 (1951) (punitive damages not awardable in breach of contract action). Cf. Teller v. McCoy, 162 W.Va. 367, 253 S.E.2d 114, 138 (1979) (Neely, J. dissenting) (the law seeks to redress one’s actual losses and not to bestow a profit on the injured party).

As the Court has determined that the complaint alleges only a breach of contract as to Otis, punitive damages against Otis are not recoverable in this action.

Defendant Whiston, by motion filed June 20, 1985, seeks dismissal of Count Three against him on the basis that this Court lacks personal jurisdiction over him and that the third count of the Plaintiffs’ complaint fails to state a cause of action for tortious interference of another’s contract. This claim in tort is set out in the Restatement (Second) of Torts, § 766 (1979):

“One who intentionally and improperly interferes with the performance of a contract (except a contract to marry) between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability to the other for the pecuniary loss resulting to the other from the failure of the third person to perform the contract.”

From this description, the Court discerns at least three elements which must be provable under the allegations made in the Plaintiffs’ complaint. First, that the Defendant intentionally and improperly interfered with the performance of the contract; second, that the contract is between “another and a third person”; and third, that the Defendant actually induced or otherwise caused the “third person” not to perform the contract. The Plaintiffs allege that Whiston intentionally and improperly interfered with the performance of a contract and actually caused this contract not to be performed. The dispute arises over whether Otis Elevator may be considered a “third person”.

A review of the pleadings discloses that at Paragraph 11 of the Plaintiffs’ complaint, the Plaintiffs assert the following:

“The Defendant, Richard M. Whiston, (hereinafter ‘Whiston’) was at all times pertinent hereto and still is, and was at all times pertinent hereto [sic] acting in the capacity of, the agent, attorney and general counsel of Otis.”

Also, the Plaintiffs include as Exhibit 2 to their complaint a letter from Whiston on Otis Elevator Company letterhead which identifies Whiston as “Vice President and Counsel”.

Only a third party to a contract may be held liable for intentional interference of another’s contract. Brown v. Loudoun Golf and Country Club, Inc., 573 F.Supp. 399, 404 (E.D.Va.1983). A corporation cannot tortiously interfere with an agreement to which it is a party and accordingly, where an agent breaches a contract to which his principal is a party on behalf of his principal, no cause of action for tortious interference with regard to such contract can be had. DuSesoi v. United Refining Co., 540 F.Supp. 1260, 1275 (W.D.Pa.1982).

In the instant action, the complaint alleges that Whiston is proceeded against in his capacity as an agent for Otis. As such, Whiston cannot be held liable for tortious interference in his principal’s contract. Accordingly, the Court dismisses Count Three of the Plaintiffs’ complaint.

The Plaintiffs by motion filed July 18, 1985, seek partial summary judgment based upon requests for admissions filed with the Plaintiffs’ complaint. In responding to the requests for admissions, the Defendants moved for a protective order and subsequently responded to the requests for admissions. The Court would allow the responses filed July 24, 1985, to stand. The Court would, on the basis of this ruling, deny the Plaintiffs’ motion for partial summary judgment without prejudice, and the Plaintiffs may renew their motion in light of other discovery obtained within the time frame prescribed by the Pretrial Procedures and Final Scheduling Order entered August 23, 1985.

In light of the ruling of this Court, discovery in this matter shall be extended so that it may be completed — as that term is defined in the Pretrial Procedures and Final Scheduling Order, entered August 23, 1985 — not later than February 1, 1986. Further, Defendant Whiston’s motion for protective order filed July 10, 1985, is denied.

       The matter of personal jurisdiction is not well developed factually in this matter. To attempt to determine this issue as this juncture would require that the Court consider facts which are presented only as assertions in the Defendant’s memoranda. As the Defendant Whiston has not demonstrated his right to relief on this issue, the Court denies his motion to dismiss on jurisdictional bases.


text:
    J.B. COURTNEY, II, et al. v. William L. BENEDETTO, et al.
    Civ. A. No. 85-450-B.
    United States District Court, M.D. Louisiana.
    Jan. 24, 1986.

      John N. Gallaspy, Gallaspy & Paduda, Bogalusa, La., John W. DeGravelles, Dué Dodson, de Gravelles, Robinson, & Caskey, Baton Rouge, La., for plaintiffs.
    F.W. Middleton, Taylor, Porter Brooks & Phillips, Baton Rouge, La., Vickie Crochet, A.R. Christovich, Jr., Christovich & Kear-ney, New Orleans, La., for defendants.
   POLOZOLA, District Judge.

On April 22,1985, the plaintiffs filed this suit in the Twenty-First Judicial District for the Parish of St. Helena against William L. Benedetto, Clarence Bailey, Ed Cryer, Walter Jones, Richards Company and Gulf States Utilities Company (“GSU”) to recover damages allegedly caused to their property by the construction of a high voltage electricity line. GSU, a Texas corporation, was served on April 26, 1985; Benedetto, Bailey and Jones, all Louisiana residents, were served on April 29, 1985; and Edward Cryer, a citizen of Texas, was served pursuant to the Louisiana “Long Arm” Statute, Louisiana Revised Statute 13:3204. The Richards Company was never served. On April 29, 1985, one week after the suit was originally filed, the plaintiffs filed a supplemental and amending petition naming CLECO, a Louisiana corporation, as an additional defendant. CLECO was served with this supplemental and amended petition on May 7, 1985; Benedet-to, Bailey and Jones were served with the amended petition on May 8,1985; and GSU was served with the amended complaint on May 14,1985. The Richards Company was never served. On May 10, 1985, four days before GSU had been served with the supplemental and amending petition, but eleven days after it had been filed, GSU and Cryer filed a petition for removal, alleging in their petition that the defendants Bene-detto, Bailey and Jones were nominal parties joined solely to defeat diversity. As stated previously, the Richards Company was never served with either the original or the supplemental and amending petition and, therefore, did not join the petition for removal. On July 3, 1985, GSU and Cryer filed a supplemental petition for removal alleging that CLECO was a nominal party joined solely to defeat diversity. The supplemental petition for removal also stated that the status of CLECO had not been addressed in the original petition for removal because GSU and Cryer had no notice at the time the original removal had been filed that CLECO had been added as a defendant.

On July 9, 1985, CLECO filed a motion for summary judgment on the ground that it has no connection with the activities of GSU with regard to the transmission lines at issue. On August 22, 1985, Benedetto, Bailey and Jones also moved for summary judgment contending that they are nominal parties who, as a matter of law, have no liability to the plaintiffs. The movers in both motions for summary judgment allege that they were named as defendants in the present suit solely for the purpose of defeating diversity.

Thereafter, the plaintiffs filed a motion to remand contending that this court lacks subject matter jurisdiction because complete diversity between all defendants and plaintiffs was not present. A motion to continue the hearings on defendants’ motions for summary judgment until the court decided the motion to remand was also filed by the plaintiffs and denied by the court because the court concluded that it was necessary to consider the merits of these motions in ruling on the motion to remand. In opposition to the motions for summary judgment, the plaintiffs filed the affidavit of John W. Gravelles, attorney for the plaintiffs, stating that: (1) no discovery had been conducted in the case because the plaintiffs did not want to waive the right to file a motion to remand; and, (2) the plaintiffs needed additional time to pursue discovery regarding certain enumerated issues so that they could adequately oppose the motions for summary judgment. Subsequently, the plaintiffs filed a motion for a continuance of all three motions so that discovery could be conducted, which was granted by the court. At the end of the discovery period, the plaintiffs filed a supplemental opposition to the motions for summary judgment stating that they had “reconsidered their position with regard to the taking of additional discovery” and requested that the court decide all three motions based upon the record now before the court.

The plaintiffs’ motion to remand is based upon two grounds. First, the plaintiffs contend that complete diversity, as required by Strawbridge v. Curtiss, 3 Cranch 267, 7 U.S. 267, 2 L.Ed. 435 (1806), is lacking. Since diversity jurisdiction is the only basis for subject matter jurisdiction asserted by the defendants, and it is obvious that complete diversity does not exist in this case, the defendants improperly removed this case to the federal court. Defendants contended in their original and supplemental petitions of removal that Benedetto, Bailey, Jones and CLECO were fraudulently joined and, therefore, the citizenship of these parties should not be considered when diversity is determined. However, the plaintiffs contend that: (1) such allegations, with no factual basis set forth in the petition, is insufficient; and, (2) they have demonstrated that a valid cause of action exists against all non-diverse defendants. The plaintiffs also contend that the procedure employed by GSU and Cryer to remove the present action was defective. More specifically, the plaintiffs allege that: (1) CLECO did not join the original petition for removal; (2) there was no allegation in such petition why CLECO had not joined the petition for removal; and (3) the amended or supplemental petition for removal which asserted that CLECO was a nominal party joined solely to defeat diversity was untimely filed because it was filed more than 30 days after any party had been served with the supplemental and amending state court petition naming CLE-CO as an additional defendant.

Courts have consistently construed 28 U.S.C. § 1446(a) to require that all defendants either join the petition for removal or to consent to such removal. See, e.g., Northern Illinois Gas Co. v. Airco Industrial Gases, 676 F.2d 270, 272 (7th Cir.1982); Tri-Cities Newspapers, Inc. v. Tri-Cities P.P. & A. Local 394, 427 F.2d 325 (5th Cir.1970); Lontheir v. Northwest Insurance Company, 599 F.Supp. 963 (W.D.La.1985); Mason v. International Business Machines & RTKL, 543 F.Supp. 444, 446 (M.D.N.C.1982) and Baldwin v. Perdue, Inc., 451 F.Supp. 373, 376 (E.D.Va.1973). Furthermore, defendants mandated by 1446(a) to either join the petition for removal or to consent to such removal must do so within thirty (30) days of notice or service of process. Tri-Cities Newspapers, Inc. v. Tri-Cities P.P. & A. Local 394, 427 F.2d 325; Brooks v. Rosiere, 585 F.Supp. 351 (E.D.La.1984); Albonetti v. GAF Corporation—Chemical Group, 520 F.Supp. 825 (S.D.Tex.1981) and Intercoastal Refining Co., Inc. v. Jalil, 487 F.Supp. 606 (S.D.Tex.1980). The exceptions to the general rule that all defendants join or consent to the petition for removal exist when: (1) the non-joining defendant has not been served with service of process at the time the removal petition is filed; (2) the non-joining defendant is merely a nominal or formal party; and, (3) the removed claim is a separate and independent claim as defined by 28 U.S.C. § 1441(c). See

Mason v. International Business Machines & RTKL, 543 F.Supp. at 446, n. 1 and Albonetti v. GAF Corporation—Chemical Group, 520 F.Supp. at 827. A necessary corollary to 1446(a) which requires the petition for removal contain “a short and plain statement of the facts which entitle him or them to removal” is that the removal petition must set forth the reason why a defendant named in such action has not joined the petition for removal. Lewis v. Rego Co., 757 F.2d 66 (3rd Cir.1985); P.P. Farmers’ Elevator Co. v. Farmers Elevator Mutual Ins. Co. & New Amsterdam Casualty Co., 395 F.2d 546 (7th Cir.1968); Wright v. Missouri Pac. R. Co., 98 F.2d 34 (8th Cir.1938); Hardesty v. General Foods Corp., 608 F.Supp. 992 (N.D.Ill.1985); Lontheir v. Northwest Insurance Company, 599 F.Supp. 963 (W.D.La.1985); Romashko v. Avco Corp., 553 F.Supp. 391 (N.D.Ill.1983); and DiCesare-Engler Productions, Inc. v. Mainman, Ltd., 421 F.Supp. 116 (W.D.Pa.1976). A petition for removal filed by less than all defendants is considered defective if it does not contain an explanation for the non-join-der of those defendants. Id. In Romashko v. Avco Corp., 553 F.Supp. 391, 392 (N.D.Ill.1983), the court stated that “[i]t is the defendant’s burden under the removal statute (28 U.S.C. § 1446(a)) to explain affirmatively the absence of co-defendants in the petition for removal, and failure to set out such explanation renders the removal petition defective.”

In the present case, the original petition for removal contained explanations as to why the Richards Company, Benedetto, Bailey and Jones had not joined the petition for removal, although it contained no explanation as to why CLECO had not joined. Four days after the petition for removal was filed in this court, GSU was served with the supplemental and amending petition naming CLECO as an additional defendant in the state court action. The defendants, however, did not amend the original petition for removal to “affirmatively explain the absence” of CLECO until it filed a supplemental petition for removal alleging that CLECO was a nominal party joined solely to defeat diversity on July 3, 1985, some 50 days after GSU had been served with the supplemental and amending state court petition, 54 days after the original petition for removal had been filed, 57 days after CLECO had been served, and 65 days after the supplemental and amending petition had been filed in state court.

Therefore, the question before the court is whether this supplemental petition for removal filed substantially after the thirty day limitation set forth by 28 U.S.C. § 1446(b) which sets forth the reason why CLECO had not joined in the original petition for removal can cure the defective original petition for removal. This court finds that the supplemental petition was not timely filed and, therefore, cannot cure the procedurally defective original petition.

A removal petition may be amended freely within the thirty day period set forth in 1446(b). Northern Illinois Gas Co. v. Airco Industrial Gases, 676 F.2d 270. However, after the thirty day period has lapsed, amendments to remedy “defective allegations of jurisdiction” are permitted pursuant to 28 U.S.C. § 1653. This right to amend removal petitions pursuant to § 1653 after the thirty day period set forth in 28 U.S.C. § 1446(b) is considered limited and cannot be used to cure “a substantial defect in removal proceedings.” Mason v. International Business Machines & RTKL, 543 F.Supp. at 446. The Mason court refused to allow an amendment, after the thirty day period had lapsed, to allege that a non-joining party consented to removal, stating that such “failure to join in or consent to removal [was] a substantial defect in the removal proceeding.” Id. Furthermore, in Cook v. Robinson, 612 F.Supp. 187, 190 (D.C.Va.1985), the court refused to allow an amendment under § 1653 to allege that the original petition for removal was timely stating that “[defendants did not defectively allege the timeliness of their petition, but rather failed to make any allegation at all concerning the timeliness of the petition. Therefore, 28 U.S.C. § 1653 is inapplicable.”

In conclusion, this court finds that while the requirement for timely filing the petition for removal is not jurisdictional, it is mandatory. Mason v. International Business Machines & RTKL, 543 F.Supp. at 446. Furthermore, the untimely filing or amending of a petition for removal has been classified as a defect causing “improvident” removal within the purview of 28 U.S.C. § 1447(c) which provides, in pertinent part, that “[i]f at any time before final judgment it appears that the case was removed improvidently and without jurisdiction, the district court shall remand the case, and may order the payment of just costs.” Royal v. State Farm Fire & Casualty Co., 685 F.2d 124 (5th Cir.1982). Therefore, since the original petition was defective and failed to allege why CLECO had not joined the petition for removal, this defect could not be, and, consequently, was not cured by the untimely filing of the supplemental petition for removal on July 3, 1985. Thus, this case was improvidently removed and must be remanded to state court.

Since the court has based its decision to remand the present action to state court for the reasons set forth above, it is not necessary for the court to determine whether there was a fraudulent joinder of parties. In addition, the court finds that since the case is to be remanded to state court, it would be more appropriate for the state court to decide the motions for summary judgment.

Therefore:

IT IS ORDERED that the motion of the plaintiffs, J.B. Courtney, II, Norman Dur-nin and T.E. Davis, Jr., to remand the present case to the Twenty-First Judicial District Court, Parish of St. Helena, State of Louisiana, be and it is hereby GRANTED.

Judgment shall be entered accordingly.

      . See 28 U.S.C. § 1441(a), which defines actions that are removable as follows:
      Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or defendants, to the district court of the United States for the district and division embracing the place where such action is pending.

      . In Bobby Jones Garden Apartments, Inc. v. Suleski, 391 F.2d 172, 177 (5th Cir.1968) the Fifth Circuit, in addressing the issue of fraudulent joinder, stated that a court must determine "whether there is arguably a reasonable basis for predicting that state law might impose liability on the facts involved.” In Green v. Amerada Hess Corp., 707 F.2d 201, 205 reh. denied 714 F.2d 137 (5th Cir.1983) and cert. denied 464 U.S. 1039, 104 S.Ct. 701, 79 L.Ed.2d 166 (1984) the Fifth Circuit reiterated that
      [t]he burden of proving a fraudulent joinder is a heavy one. The removing party must prove that there is absolutely no possibility that the plaintiff will be able to establish a cause of action against the in-state defendant in state court, or that there has been outright fraud in the plaintiffs pleadings of jurisdictional facts.

      . See 28 U.S.C. § 1446(b).

      . 28 U.S.C. § 1446(a) provides that:
      A defendant or defendants desiring to remove any civil action or criminal prosecution from a State court shall file in the district court of the United States for the district and division within which such action is pending a verified petition containing a short and plain statement of the facts which entitle him or them to removal together with a copy of all process, pleadings and orders served upon him or them in such action.

      . 28 U.S.C. § 1446(b) provides, in pertinent part, that:
      The petition for removal of a civil action or proceeding shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, which ever period is shorter.

        . This is commonly referred to as the non-served defendant exception. Pullman Co. v. Jenkins, 305 U.S. 534, 540-41, 59 S.Ct. 347, 350, 83 L.Ed. 334 (1939); Albonetti v. GAF Corporation—Chemical Group, 520 F.Supp. 825 (S.D.Tex.1981).

      . See Tri-Cities Newspapers, Inc. v. Tri-Cities P.P. & A. Local 394, 427 F.2d 325 (5th Cir.1970).

      . 28 U.S.C. § 1441(c) provides that:
      Whenever a separate and independent claim or clause of action, which would be removable if sued upon alone, is joined with one or more otherwise non-removable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, may remand all matters not otherwise within its original jurisdiction.

      . The Richards Company did not join the removal because it had never been served. Bene-detto, Bailey and Jones were not joined because they were nominal parties.

      . The original petition for removal was filed eleven (11) days after the amending petition naming CLECO as an additional defendant was filed in state court and three (3) days after CLECO was served with such petition.

      . 28 U.S.C. § 1653 provides that "[d]efective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts.”

      . The defendants argue that the CLECO’s motion for summary judgment on the basis that there is no viable claim against it in the present action should be considered as its consent to the removal. Therefore, it is asserted that the filing of this motion should cure any procedural defect in the removal petition caused by CLECO’s failure to join in such. Without making any decision with regard to whether the filing of such motion for summary judgment would be sufficient to convey consent to removal, this court notes that such motion was filed on July 9, 1985, and, therefore, for the reasons just stated in the text, this "consent” is also untimely to cure the defect in the petition caused by CLECO’s failur to join in such.


author: HALL, District Judge.

text:
    Odis Wayne McCLUNG, Plaintiff, v. CAMP COUNTY, TEXAS, et al., Defendants.
    No. TX-84-46-CA.
    United States District Court, E.D. Texas, Texarkana Division.
    Jan. 27, 1986.

      Robyn Ray, of East Texas Legal Services, Inc., Longview, Tex., for plaintiff.
    Paul W. Mayben, Pittsburg, Tex., James P. Allison, of Gray, Allison & Becker, Austin, Tex., for defendants.
   FINDINGS OF FACT AND CONCLUSIONS OF LAW

HALL, District Judge.

Odis Wayne McClung brought this suit against Camp County, Texas, five (5) Camp County Commissioners, a Camp County Judge and the Camp County Sheriff, seeking compensatory and punitive damages to-talling approximately one million dollars ($1,000,000.00), declaratory relief and in-junctive relief. Plaintiff asserted that Defendants’ conduct, while Plaintiff was incarcerated in the Camp County Jail, was violative of his constitutional rights as guaranteed by the Eighth and Fourteenth Amendments to The United States Constitution [The Civil Rights Act, 42 U.S.C. § 1983 (1981)] and also constituted com-pensable tortious conduct under the Texas Tort Claims Act, TEX.CIV.PRAC. & REMS.CODE § 101.001 et seq. (Vernon Pamph.1986). Defendants denied liability and counterclaimed for attorneys fees and costs. Included in this pendent state claim is the assertion that Defendants’ conduct violated The Texas Jail Standards Act, TEX CIV. CODE ANN. § 5115 et seq. (Vernon Supp.1986). On November 6, 1985, this Court dismissed Plaintiff’s claims for declaratory and injunctive relief, based on Defendants’ Motion for Summary Judgment and Plaintiff’s Response thereto.

Jurisdiction is vested in this Court by virtue of the federal question [28 U.S.C. § 1331 (1985)] presented pursuant to The Civil Rights Act, 42 U.S.C. § 1983 (1981), 28 U.S.C. § 1343 (1985).

It was undisputed at trial that on March 27, 1981, McClung was convicted of raping his stepdaughter and was sentenced to ten (10) years probation. He subsequently spent a total of twenty-one (21) days in the Camp County Jail awaiting hearings on alleged probation violations. This twenty-one (21) days is inclusive of three (3) separate periods of incarceration: April 11, 1982 through April 14, 1982 [4 days]; November 2,1983 through November 12,1983 [11 days]; and December 8, 1983 through December 14, 1983 [7 days].

Plaintiff summarized his position in the Joint Pre-Trial Order as follows: “Plaintiff has sustained injuries because he was incarcerated in ... overcrowded cells, he was denied adequate access to direct sunlight, was denied the opportunity to have adequate exercise, was never permitted to exercise outdoors, was fed inadequate meals, was not provided clean bedding, toiletries and clothing, was subjected to danger from fire hazards and was seriously injured as a result of fire”. Additionally, Plaintiff contended at trial that certain medications were not administered to him according to prescription, which resulted in damage to the Plaintiff.

On December 11, 1985, this case was commenced and at the conclusion of the trial on December 12, 1985, the Court rendered Judgment for the Defendants, and after summarizing the evidence, stated: “I therefore hold that the Plaintiff was not subjected to cruel and unusual punishment while incarcerated in the Camp County Jail, that the Defendants and their employees did not commit any acts of negligence in regard to the Plaintiff’s incarceration, and thirdly, that the Plaintiff has not suffered any damages as a result of the Defendants violating any of his rights as guaranteed to him by the Constitution of the United States”. The Court issues this opinion to supplement its December 12, 1985 ruling, by setting forth, in more detail, the factual and legal basis of its Judgment.

THE LEGAL STANDARDS

Pendent State Claims

It is asserted in Plaintiffs First Amended Complaint, filed by Counsel in October of 1985, that “[t]his action is maintained pursuant to the Texas Tort Claims Act, Revised Civil Statutes, Art. 6252-19. In this connection, Plaintiff shows that the defense of immunity is unavailable by virtue of Section[s] 3 and 4 of the Revised Civil Statutes of Art. 6252-19”. The Court notes that TEX.REV.CIV.STAT.ANN. Art. 6252-19 (Vernon 1970) was repealed by Acts 1985, 69th Leg., p. 7218, ch. 959 § 9(1), eff. Sept. 1, 1985, and is now set forth as TEX.CIV.PRAC. & REMS.CODE § 101.001 et seq. (Vernon Pamph.1986). However, the effective version of “The Act” is substantially similar to the prior version. Section 101.021 of “The Act” waives governmental immunity for ”... personal injury ... proximately caused by the wrongful act or omission or the negligence of an employee acting within his scope of employment ... and [the] ... personal injury ... is so caused by a condition or use of tangible personal or real property if the governmental unit would, were it a private person, be liable to the claimant according to Texas law”. Section 101.-055(3), like former Art. 6252-19 § 14(9), exempt a governmental unit from the general waiver of sovereign immunity set forth in § 101.021 for a claim arising “from the failure to provide or the method of providing police or fire protection”. (Emphasis added.) Under Texas caselaw, “method” as used in the exemption provision, refers to the decision or plan as to how the act is performed: and if the negligence which causes an injury lies in the formulation of a policy such as the determination of a method of fire protection, the government remains immune from liability; however, if an officer or employee acts negligently in carrying out the formulated policy, government liability may exist under the Tort Claims Act. State v. Terrell, 588 S.W.2d 784, 788 (Tex.1979); Genzer v. City of Mission, 666 S.W.2d 116, 120 (Tex. App.—Corpus Christi 1983, writ ref'd n.r.e.); Norton v. Brazos County, 640 S.W.2d 690, 692-693 (Tex.App.—Houston [14th Dist.] 1982, no writ); Forbus v. City of Denton, 595 S.W.2d 621, 623 (Tex.Civ.App.-Fort Worth 1980, writ ref’d n.r.e.); Cuddy v. Texas Department of Corrections, 578 S.W.2d 522, 524 (Tex.Civ.App.—Houston [14th Dist.] 1979, writ ref’d n.r.e.); Jenkins v. State, 570 S.W.2d 175, 179 (Tex.Civ.App.—Houston [14th Dist.] 1978, no writ).

As to any claims that Defendants’ conduct violated the Texas Jail Standards Act, TEX. CIV. CODE ANN. § 5115 et seq. (Vernon Supp.1986), and the regulations promulgated thereunder, the Court is of the opinion that the Plaintiff did not prove such violation by a preponderance of the evidence, which evidence will be discussed below. Therefore, a discussion of the requirements of The Texas Jail Standards Act will not be set forth herein.

Civil Rights Claims

In order for Plaintiff to prove his case under the Civil Rights Act, he must show that Defendants’ conduct rose to the level of violating his constitutional rights. Hull v. City of Duncanville, 678 F.2d 582, 584-585 (5th Cir.1982); Jordan v. Five Unnamed Police Officers and Agents, 528 F.Supp. 507, 511 (E.D.La.1981). The two (2) essential elements of any section 1983 action are: 1) the complained of conduct must have been committed by a person acting under color of state law; and 2) this conduct must have deprived the plaintiff of rights, privileges or immunities secured by the Constitution or laws of the United States. Parratt v. Taylor, 451 U.S. 527, 535, 101 S.Ct. 1908, 1912, 68 L.Ed.2d 420 (1981); Augustine v. Doe, 740 F.2d 322, 324-325 (5th Cir.1984).

Viewed in the light most favorable to the Plaintiff, the complaint asserts two (2) constitutional violations: cruel and unusual punishment, in violation of the Eighth Amendment as incorporated into the Fourteenth Amendment; and deprivation of liberty without due process of law, in violation of the due process clause of the Fourteenth Amendment.

In order for the Plaintiff to show that Defendants’ conduct constituted cruel and unusual punishment under the Eighth Amendment, he must show that said conduct amounted to “deliberate indifference” on the part of Defendants. Estelle v. Gamble, 429 U.S. 97, 97 S.Ct. 285, 50 L.Ed.2d 251 (1976); Fielder v. Bosshard, 590 F.2d 105, 107-109 (5th Cir.1979); S. Nahmod, Civil Rights & Civil Liberties Litigation § 3.07 (1979 and Supp.1985). The totality of the conditions of confinement does not offend the Constitution unless prison conditions are cruel and unusual, and not merely harsh or restrictive. Rhodes v. Chapman, 452 U.S. 337, 101 S.Ct. 2392, 69 L.Ed.2d 59 (1981); Ruiz v. Estelle, 679 F.2d 1115, 1140 (5th Cir.1982), amended in part and vacated in part, 688 F.2d 266 (5th Cir.1982), cert. denied 460 U.S. 1042, 103 S.Ct. 1438, 75 L.Ed.2d 795 (1983). The Fifth Circuit Court of Appeals has stated that “... the constitutional mandate against cruel and unusual punishment is not a warranty of pleasant prison conditions”. Ruiz v. Estelle, supra at 1145.

To state a substantive due process claim, the Plaintiff must show that Defendants’ conduct rose to the level of being “conduct which shocks the conscience”. Rochin v. People of California, 342 U.S. 165, 172, 72 S.Ct. 205, 209, 96 L.Ed. 183 (1952); Juncker v. Tinney, 549 F.Supp. 574, 581 (D.Md.1982); S. Nahmod, Civil Rights & Civil Liberties Litigation § 3.08 (1979).

And in determining whether or not state action has violated the Plaintiff’s right to procedural due process under the Fourteenth Amendment, the Court must make two (2) inquiries: 1) whether the state action has deprived the Plaintiff of a protected interest — life, liberty or property; and 2) and, finding such deprivation, whether the state procedures available for challenging the deprivation satisfy the requirements of due process. Hudson v. Palmer, 468 U.S. 517, 104 S.Ct. 3194, 3203-3204, 82 L.Ed.2d 393 (1984); Logan v. Zimmerman Brush Co., 455 U.S. 422, 428, 102 S.Ct. 1148, 1153, 71 L.Ed.2d 265 (1982); Parratt v. Taylor, supra 451 U.S. at 535-537, 101 S.Ct. at 1912-1914; Ingraham v. Wright, 430 U.S. 651, 672, 97 S.Ct. 1401, 1413, 51 L.Ed.2d 711 (1977).

Under recent Fifth Circuit caselaw, the availability of and adequate state tort remedy will, in certain circumstances, negate the contention that an injury sustained through the negligence of Defendants was without due process of law. Parratt v. Taylor, supra; Thibodeaux v. Bordelon, 740 F.2d 329 (5th Cir.1984); Compare: Augustine v. Doe, supra. The post deprivation remedies available to McClung under Texas law through tort causes of action against all of the Defendants [TEX. C1V.PRAC. & REMS.CODE 101.001 et seq. (Vernon Pamph.1986) ], negates the Plaintiff’s assertion that the alleged negligence of the Defendants deprived the Plaintiff of liberty without due process of law, except for any claim arising “from the failure to provide or the method of providing ... fire protection” because immunity for said conduct has not been waived under the Texas Tort Claims Act, TEX.CIV.PRAC. & REMS.CODE § 101.055(3) (Vernon Pamph. 1986). Thibodeaux v. Bordelon, supra at 339. Thus, only the contentions relating to negligence in “the failure to provide or the method of providing ... fire protection”, can be considered by this Court in determining whether or not a section 1983, Fourteenth Amendment procedural due process clause violation occurred.

THE FACTS

As to the allegation that Plaintiff was incarcerated in overcrowded cells, the only evidence presented on the issue was the testimony of David Rockwell, a former Camp County prisoner, pursuant to the Court’s inquirty. Based on said testimony, the Court concludes that Plaintiff was not incarcerated in an overcrowded cell, and that Plaintiff's constitutional rights were not violated nor did Defendants’ conduct constitute a tort in regards to overcrowded conditions at the Camp County Jail.

As to the allegations that Plaintiff was denied adequate access to direct sunlight, was denied the opportunity to have adequate exercise and was never permitted to exercise outdoors, the evidence at trial was that there was adequate room for the prisoners to exercise in their cells. The testimony of Eugene Ivory, a former Camp County prisoner, was that prisoners exercised in the cells, although Ivory never saw McClung so exercise. David Rockwell also testified that there was enough room in each cell for a prisoner to exercise. In fact, McClung’s own testimony agreed with that of Ivory’s and Rockwell’s, that there was enough room in the cells for prisoners to exercise. On cross-examination McClung further testified that he would not say that his health had suffered due to a lack of exercise for the four (4), eleven (11) and seven (7) day periods he was confined in the Camp County Jail. The Camp County Sheriff testified that although there was no supervised exercise outside of the cells for the prisoners, the situation was allowable under the plan filed with the State of Texas because variances had been issued for the reason that the facility did not have an exercise or day room. Furthermore, Defense Exhibits sixteen (16) through eighteen (18) were introduced into evidence to show that the State had issued the Camp County Jail Certificates of Compliance with The Texas Jail Standards Act before, during and after the periods of Plaintiffs confinement. Based on the aforementioned evidence, the Court concludes that the conditions placed on Plaintiff’s physical exercise at the Camp County Jail did not constitute a violation of Plaintiff’s constitutional rights nor did they amount to tortious conduct on the part of Defendants. Ruiz v. Estelle, supra at 1152.

As to the allegations regarding the lack of clean bedding, clothing and toiletries, Eugene Ivory testified that he would go with the Prison Cook/Jailer, Paulette Ross, once a week, to a laundromat across the street from the jail, to wash the prison laundry. Ivory further testified that bedding was available to inmates upon request. Furthermore, under paragraphs four (4) through six (6) of the “Sanitation Plan” filed by the Sheriff with the State [Plaintiff’s Exhibit 2], it was stated that the prisoners were provided with clean bedding, and as mentioned above, the Camp County Jail was found to be in compliance with The Texas Jail Standards Act, both before, during and after Plaintiff’s terms of confinement. The Sheriff testified that, so far as he knew, the prisoners’ linens were cleaned once a week. The Sheriff further testified that personal toiletry articles were available to the prisoners and that if a prisoner did not like what was available, he could procure his own supplies from family and/or friends. Mrs. McClung testified that she brought her husband these type of supplies. Based on the aforementioned evidence, the Court concludes that clean bedding, clothing and toiletries were provided to Plaintiff, and that Plaintiff’s constitutional rights were not violated nor did Defendants’ commit any torts against Plaintiff in failing to provide clean bedding and clothing, and toiletries.

As to the allegation that Plaintiff did not receive adequate meals at the Camp County Jail, the testimony of various witnesses was that prisoners were fed two (2) meals per day, once in the early morning and then again at about 5:00 p.m. In addition, the prisoners were allowed to receive any food brought to them by their family and/or friends. Both McClung and his wife testified that Plaintiff did, in fact, receive supplementary food from his family. Based on the testimony of the various witnesses regarding the typical menus and based on the testimony of the Prison-Cook Paulette Ross, that she prepared the meals based on menus provided by The Texas Commission on Jail Standards, and that the meals were of sufficient quality and quantity to provide an adult male with a balanced diet, the Court concludes that Plaintiff was fed an adequate diet, and that Plaintiff’s constitutional rights were not violated nor was the Defendants’ conduct tortious regarding food provision at the Camp County Jail.

Regarding the allegation of “inadequate meals” the Plaintiff offered testimony that he was an insulin dependent diabetic and that he therefore required up to as many as six (6) small meals per day. Dr. Robert White, the Plaintiff’s doctor, testified that feeding an insulin dependent diabetic two (2) meals per day instead of more frequent smaller meals, would put more stress on that person’s body, thereby making him more susceptible to injury. It is undisputed that Plaintiff suffered a heart attack and smoke inhalation, either during or shortly after another prisoner started a fire at the Camp County Jail on April 14, 1982. Through Dr. White’s testimony, Plaintiff attempted to demonstrate to the Court that, in addition to the contention that Plaintiff’s injuries were caused by the fire for which Defendants were responsible, an “inadequate diet” also contributed to those injuries — however, this Court is not so persuaded. Dr. White testified that heart disease is generally a condition which develops over time, that Plaintiff had been a diabetic for twelve (12) to fourteen (14) years prior to his first heart attack, that Plaintiff had been overweight for years, and that overweight can contribute to making a diabetic a high risk cardiac patient. Furthermore, Dr. White testified that an overweight diabetic patient with a history of heart disease in his family [on cross-examination Mrs. McClung testified that Plaintiff's brother had had a heart attack in his mid-forties] would have added stress if he were charged with a serious crime, had a public trial and was then incarcerated. And although Dr. White was not Plaintiff’s doctor in 1982, at the time of Plaintiff’s first heart attack during his four (4) day stay in the Camp County facility, he was the Plaintiff’s doctor during Plaintiff’s subsequent stays in the jail; however, Dr. White does not recall sending the Sheriff any written instructions regarding the Plaintiffs dietary requirements. Nor was testimony offered that McClung ever requested a special diet during his incarceration at the Camp County Jail. Paulette Ross, the Prison Cook, testified that McClung never complained to her about the food and that she often prepared food that he liked. In addition, the Court notes the relatively short periods of Plaintiff’s incarceration in concluding that, under the circumstances, Plaintiff was not fed an “inadequate diet”, and the Plaintiff’s constitutional rights were not violated nor was Defendants’ conduct tortious regarding food provision at the Camp County Jail.

As to the allegation that Plaintiff’s medications were not administered according to prescription, Plaintiff testified that his medications were administered either by Paulette Ross or under the direction of the Sheriff, depending on who was on duty at the time. Ms. Ross testified that she gave McClung one medication three (3) times per day instead of the prescribed four (4) daily doses because she was off-duty at the time the fourth dose was to be administered. According to Plaintiff, on the weekends the Sheriff took him to the Sheriff’s Office to take his medications. The Sheriff testified that, insofar as he knew, McClung was given all of his medications according to prescription, and that in his opinion, the Plaintiff had been given proper medical care.

In fact, the evidence showed that McClung had received special treatment during his stay at the Camp County Jail. This included being allowed out of jail pn his own recognizance on one (1) occasion, to accompany his wife to the doctor’s office. On another occasion, the Plaintiff was allowed out of jail for health reasons, for which the Sheriff was later publicly chastised by a State District Judge. The record showed that these special privileges emanated from the fact that the Sheriff and the Plaintiff had known each other for years. The Plaintiff had worked for the Sheriff’s Department, under the direction of the Sheriff, as a dispatcher prior to his arrest for rape of his stepdaughter. The Plaintiff testified that he was on good terms with the Sheriff when he worked as a dispatcher, and that they remained on good terms at all times. In light of the special relationship which existed between the Sheriff and McClung and the special considerations which McClung had received, it seems incredible to the Court that McClung would have been administered medication in a way that violated his constitutional rights or that constituted tortious conduct on the part of Defendants.

Even if, as Plaintiff testified, his insulin was administered two (2) times per day instead of the three (3) prescribed doses, the evidence also showed that Plaintiff had plenty of supplementary food from his family to alleviate any side effects this slight variance in drug dosage could have caused. Furthermore, it must be borne in mind that Plaintiff’s periods of incarceration were relatively brief: four (4), eleven (11) and seven (7) days; therefore, any alleged long term effect on the Plaintiff’s health, or any alleged injury resulting from this slight variation in drug dosage, is questionable. Additionally, Paulette Ross testified that on one (1) occasion the Plaintiff had requested more medication than he had been prescribed, and that he became angry with her when she refused to give him the extra requested dose. The Sheriff testified that if the Plaintiff had complained about the alleged incorrect administration of medication, the Sheriff would have investigated the matter and had the situation corrected. Based on the aforementioned testimony, the Court concludes that the Plaintiff was not administered his medications in a way that constituted either a violation of his constitutional rights or tortious conduct on the part of Defendants. See: Burns v. Head Jailor of La Salle County Jail, 576 F.Supp. 618, 620 (N.D.Ill.1984) wherein a jail inmate’s allegations that jail personnel occasionally either ran out of medicine or were late in delivering his medication to him, which inmate attributed to negligence, was insufficient to show deliberate indifference to serious medical needs essential to a claim of constitutionally inadequate medical care. In the Bums Case, supra, the Plaintiff failed to allege any actual harm from the acts or omissions of the jail personnel; here, McClung has failed to prove any actual harm from the allegedly improper drug administration.

Regarding the allegation that fire hazards at the Camp County Jail violated Plaintiff’s constitutional rights and constituted tortious conduct on the part of Defendants, and that said fire hazards resulted in injury to the Plaintiff, the uncontroverted testimony at trial was that, on April 14, 1982, a fire was started by another prisoner in McClung’s cell named McNutt, from the remains of the personal items the prisoners were allowed. It was also uncontroverted that shortly before the fire was started McNutt was visited by his wife, she said that she would divorce him, which upset McNutt greatly. There was also testimony that McNutt was upset because his relatives refused to post his bail. According to McClung, McNutt then said that he would burn down the jail, so McClung talked to McNutt to calm him down. McClung made no efforts to tell the authorities about McNutt’s plan, nor did Paulette Ross, who was in the office, which was in close proximity to the cell, hear any prisoner shout “fire”. Yet, it is undisputed that McNutt set a fire so severe that the prisoners had to be evacuated from the jail, and McClung had to be transported to the hospital.

David Rockwell, a prisoner at the time of the fire, testified that he heard McNutt say that he would set a fire and that another prisoner named Brown encouraged McNutt to do so. Rockwell further testified that the prisoners waited until the fire was going before they began to holler and scream for help. According to Rockwell, the office where Ms. Ross was stationed was close to where the fire was started. Eugene Ivory, also a prisoner at the time of the fire, affirmed Rockwell’s testimony that all of the prisoners knew of McNutt’s plan and that the Sheriffs Office where Ross was stationed was close enough to the cell for her to hear the inmates. Ivory testified that the prisoners laughed at the fire and waited for Brown’s signal before they began to yell for help.

On cross-examination of the Sheriff, the Plaintiff brought out that the only smoke and fume removal system was a portable machine kept out in the hall and that there was a solid door between the hall and the jail cells. Additionally, the Jail was not equipped with a mechanical voice communication device for prisoner communications to jail officials; however, such a mechanism had been torn off of the wall.

Despite the situation, Paulette Ross testified that a smoke alarm went off and she immediately notified the Sheriff by phone, who was in another building immediately adjacent to the jail. Ms. Ross testified that the Sheriff came to let the prisoners out of the jail approximately thirty (30) seconds after her call. Ms. Ross testified that she did not hear any inmate yell “fire” and that she would have heard any such outcry. (Earlier in the day McNutt had been screaming obscenities which had been clearly audible to Ross.) The Sheriff testified that he heard the smoke alarm when he arrived at the scene, and that about a minute to one and one-half (IV2) minutes elapsed from the time he was notified until he got the prisoners out of the cells. Eugene Ivory testified that the Sheriff came “almost immediately” after the inmates began to holler for help. No evidence was offered that any other inmate, besides McClung, was hospitalized after the fire. Based on the facts before the Court, as outlined above, the Court holds that the Defendants did not violate any of Plaintiff’s constitutional rights nor commit tor-tious conduct in regard to the fire-safety conditions at the Camp County Jail.

It is, therefore, ORDERED, ADJUDGED and DECREED that Judgment be entered for the Defendants, Camp County, Texas, et al., and that Plaintiff Odis Wayne McClung recover nothing against said Defendants. Additionally, it is ORDERED, ADJUDGED and DECREED that Defendants recover nothing against Plaintiff for attorneys fees and costs.