source: Caselaw Access Project

author: ALEXANDER HARVEY, II, District Judge:

license: Public Domain

text:
    Clifford M. CARROLL, Jr., Plaintiff, v. UNITED STATES of America, Defendant.
    Civ. No. H-79-1589.
    United States District Court, D. Maryland.
    June 18, 1982.
    Clifford J. Shoemaker, Washington, D.C., and James B. Hopewell, Landover, Md., for plaintiff.
    Steven A. Allen, Asst. U.S. Atty., Baltimore, Md., and Betsy Ginsberg, Dept, of Justice, Washington, D.C., for defendant.
   ALEXANDER HARVEY, II, District Judge:

This is another of the many civil actions brought by persons who received inoculations pursuant to the National Swine Flu Immunization Act of 1976, 42 U.S.C. § 247b, and who later suffered from the serious neurological disorder known as Guillain-Barre Syndrome (hereinafter “GBS”). Clifford M. Carroll, plaintiff herein, received a swine flu shot on October 18, 1976. Many months later he was diagnosed as having contracted GBS. In this action, plaintiff is seeking substantial damages from the government under the Federal Tort Claims Act, 28 U.S.C. § 2671, et seq., and the 1976 Swine Flu Act, 42. U.S.C. § 247b.

Suit was initially filed in this Court on August 27, 1979. Thereafter, this action was transferred by the Judicial Panel on Multidistrict Litigation to the United States District Court for the District of Columbia, pursuant to 28 U.S.C. § 1407. Following various discovery and other pretrial proceedings, the case was remanded to this Court on August 25, 1980. Further discovery was then undertaken by the parties and a pretrial conference was held. The case then came on for trial before the Court sitting without a jury. Numerous expert and other witnesses testified at the trial, and many exhibits were admitted in evidence. Findings of Fact and Conclusions of Law under Rule 52(a), F.R.Civ.P., are contained in this opinion, whether or not expressly so characterized.

The Issues

The Final Pretrial Order entered by the United States District Court for the District of Columbia and applicable in this case provides that where the United States stipulates that a plaintiff has developed GBS at any time after receiving a swine flu vaccination, no theory of liability need be established by the plaintiff in order to recover damages. See Stipulation and Final Pretrial Order, 11IX; see also In Re Swine Flu Immunization Products Liability Litigation, 464 F.Supp. 949 (J.P.M.L.1979). In this case, it has been stipulated that plaintiff contracted GBS after he received a swine flu vaccination. Therefore, plaintiff here need not prove negligence or other fault of the government to be entitled to recover damages. However, to be entitled to damages, plaintiff must here prove by a preponderance of the evidence that the swine flu vaccination which he received was the proximate cause of the GBS which he later contracted.

Plaintiff received an inoculation of swine flu vaccine on October 18, 1976, in Montgomery County, Maryland. However, it was not until December 9, 1977, when plaintiff was admitted to the Suburban Hospital in Bethesda, Maryland, that he was diagnosed as suffering from GBS. It is plaintiff’s contention that shortly after receiving his swine flu shot in October 1976, he experienced symptoms indicating that he had then contracted GBS. Plaintiff asserts that GBS can assume several forms. Most persons contracting GBS have a rapid onset followed by a rapid recovery. Others, a small minority, contract a chronic form of GBS, in the course of which there can be a lengthy progression of the disease followed by a slow recovery. It is plaintiff’s position that he suffered from the chronic form of GBS, which finally resulted in his hospitalization almost fourteen months after he was inoculated.

Although conceding that plaintiff had GBS in December of 1977 when he was hospitalized, the government contends that the antecedent event which caused plaintiff’s neurological disorder was not the swine flu shot received by him some fourteen months prior to his hospitalization. Suggesting that an upper respiratory infection which plaintiff suffered in November 1977 was probably the antecedent event related to the onset of plaintiff’s episode of GBS in December 1977, the government argues that in any event, plaintiff has not met his burden of proving that his flu shot proximately caused his GBS.

It is conceded by the government in this case that GBS can take two forms, the classic form in which the disease peaks generally one month after the onset of symptoms and a chronic form in which the syndrome evolves over a much more prolonged period and peaks at a date many months after the onset of the original symptoms. In other cases, the government has challenged the existence of so-called “chronic” or “relapsing” GBS. In this particular case, the scientific evidence clearly establishes that one of the many forms of GBS, although relatively rare, is the slowly progressive, chronic or relapsing type. This evidence is not being challenged here by the government.

The issue is therefore considerably narrowed in this case. What the Court must here determine is the date of the onset of neurological symptoms experienced by plaintiff. If plaintiff experienced neurological symptoms during the ten weeks after he received his flu shot indicating that he had contracted GBS, he would be entitled to a recovery, even though his condition was not finally diagnosed until December of 1977. On the other hand, if no such symptoms were experienced or the symptoms described by the plaintiff were not such as to indicate that he was suffering from the chronic form of this neurologic disorder, then plaintiff will have failed in proving that the inoculation was the proximate cause of his contracting GBS. In deciding this ultimate issue, the Court must focus in particular on the events occurring in the life of Clifford Carroll and his family in the ten-week period after October 18, 1976, as well as on events which occurred during the spring and summer of 1977 and which might shed some light on the nature of the earlier events.

Facts

Clifford M. Carroll, Jr. was born on April 6, 1947, and he was therefore 29 years of age when he received his swine flu shot on October 18, 1976. In 1968, plaintiff married his wife, Sherri Ann, and they subsequently had two children, Shannon, who was 12 years of age at the time of the trial, and Nicholas, who was then 9 years of age.

For many years, plaintiffs father, Clifford M. Carroll, Sr., had been sexton at St. John’s Episcopal Church in Chevy Chase, Maryland. In 1975, plaintiff succeeded his father at that position. As sexton of the church, plaintiff had various janitorial duties and was responsible for the general maintenance and upkeep of the church and of the school connected with it. Before October of 1976, plaintiff enjoyed excellent health and engaged in various athletic activities.

Within a week after receiving his swine flu shot, plaintiff experienced a tingling sensation in his legs and felt unusually tired. He told his wife that his legs hurt and that his hands did not want to work right. He and his wife were scheduled to go out to dinner the week after the flu shot to celebrate his mother-in-law’s birthday. However, he was too tired to go out and his wife cooked at home.

During the latter part of October, he felt numbness in his hands and arms, and continued to feel fatigued. As he expressed it, “a hand would go to sleep,” and it would take a long period of time before the affected limb would regain its normal sensation. Although he was able to continue to work, he did not carry his workload as well as he had previously.

During the late fall of 1976, plaintiff, because of his fatigue, did not engage in a number of his usual activities. On Halloween, October 30, 1976, plaintiff did not accompany his children on their usual trick- or-treat activities because he felt too tired. For the first time, his wife went out with the children on Halloween. By November of 1976, plaintiff had stopped playing basketball and football with his children because he was too tired. His wife noticed that he was doing his work much more slowly than previously. Ordinarily, plaintiff and his family would visit plaintiffs parents at Thanksgiving. However, plaintiff was too tired to make this visit during Thanksgiving 1976. Plaintiff and his father usually went hunting during the last week of the hunting season in Virginia, which was the first week of January. In mid-December of 1976, plaintiff told his father that he would probably not be able to go hunting that year because he did not feel up to it. On December 20, 1976, plaintiff was seen by his family physician, Dr. Donald Ekman, who diagnosed an upper respiratory infection and treated plaintiff accordingly. At Christmas of 1976, plaintiff did not, as he was accustomed to doing, visit his wife’s parents with the rest of the family because he felt too tired.

During the spring and summer of 1977, plaintiff’s feelings of fatigue continued. As in the fall of 1976, there were many family activities in which he did not participate because of his feelings of fatigue. On April 1, 1977, he saw Dr. Ekman, who diagnosed bronchitis .and flu. During the spring and summer months, plaintiff’s wife and parents assisted him in performing his duties as a sexton. On June 20, 1977, plaintiff again visited Dr. Ekman. At that time, plaintiff complained of being tired and fatigued, and of having difficulty in sleeping. Dr. Ekman examined him and performed a blood test, but did not refer plaintiff to a neurologist. In August of 1977, plaintiff, his family and his parents, took an automobile trip to the western part of the United States. Because of plaintiff’s continuing fatigue, the trip was cut short. On September 23, 1977, plaintiff was treated by Dr. Ekman for a sore throat.

On December 7, 1977, when plaintiff did not return home for lunch at his usual time, his wife went to look for him and found him sitting on the steps of the church, unable to stand up. She helped him home, and then called Dr. Ekman, who advised her to put plaintiff to bed and to call again in the morning if he had not improved by then. The next morning, plaintiff was obviously seriously ill, and he was taken by ambulance to Suburban Hospital, where he was admitted on December 9, 1977. At the hospital, plaintiff was seen by Dr. David Satinsky, who diagnosed his condition as GBS. On December 30, 1977, plaintiff was discharged from the hospital.

Since his release from the hospital, plaintiff has been completely disabled and has not been able to return to his prior or to any other employment. He has been hospitalized on several occasions since then, and at the time of the trial, he was confined in a wheelchair.

Discussion

On the record here, this Court finds and concludes that plaintiff has met his burden of proving by a preponderance of the evidence that he would not have contracted GBS but for the swine flu inoculation he received on October 18, 1976. Plaintiff has therefore proved that the proximate cause of his injury was the swine flu shot.

GBS is an acute polyradiculoneuropathy, which results in a degeneration of peripheral nerves. The medical experts agree that there are many causes of GBS. Following a substantial increase in the incidence of GBS in the United States after the swine flu immunization program of 1976, it has been recognized that a swine flu innoculation may cause GBS. GBS is an autoimmune disorder, in that mechanisms of the body designed to combat disease turn upon the body itself. Thus, GBS results when a person’s own antibodies attack the myelin sheath which protects the peripheral nervous system. This has been shown to be the result of some type of stimulation of the body’s immune system, which can be caused by an inoculation, an upper respiratory infection or some similar event.

Epidemiologic studies performed by the Center for Disease Control in Atlanta, Georgia, and reported in an article by Dr. Lawrence Schonberger, show that there is a definite etiological relationship between the swine flu vaccine and GBS. According to Dr. Schonberger, this relationship extends for a period of some ten weeks. Dr. Schonberger’s findings may be summarized as follows:

INTERVAL IN WEEKS FROM VACCINATION PERCENT CHANCE THAT GBS TO ONSET OF NEUROLOGICAL SYMPTOMS WAS CAUSED BY VACCINE
1 (days 1 + through 7) 79.0
2 92.2
3 93.5
4 82.0
5 75.6
6 52.0
7 61.5- 75
8 56.5- 57
9 48.7-49
10 46.5
11 No relation, because the increased risk disappears

Neurological symptoms of GBS include tingling, numbness of the extremities and weakness. These were all experienced by the plaintiff in the first few weeks after he was vaccinated. The evidence in this case therefore shows a clinical manifestation of GBS within several weeks after he received his shot. Moreover, during the ten-week period after October 18, 1976, plaintiff’s symptoms continued and were accompanied by generalized fatigue, which is also recognized as a symptom of GBS. None of these symptoms had been experienced by plaintiff before he received his swine flu shot. They began shortly after the shot, and they continued off and on over a period of many months. In view of this evidence, this Court finds and concludes that as a result of the innoculation he received on October 18, 1976, plaintiff contracted a mild, chronic form of GBS which later developed into an acute form in December 1977.

In making these findings, this Court is relying heavily on the testimony of both plaintiff and his wife. The Court found both of them to be extremely credible witnesses. Moreover, their testimony was supported by that of plaintiff’s mother and father, who confirmed many of the facts indicating that the plaintiff’s onset of neurological symptoms occurred very shortly after he received the swine flu shot. The Court will further credit the testimony and opinions given in this case by Dr. Charles M. Poser. According to Dr. Poser, plaintiff had an unusual form of GBS. Plaintiff’s GBS was a slowly progressive type which later developed into a chronic, recurrent form. After considering the symptoms experienced by plaintiff after October 18, 1976, Dr. Poser was of the opinion that plaintiff’s GBS was caused by the swine flu shot. His views will be accepted by the Court.

In seeking to discredit the testimony of plaintiff and his wife, the government relies on the fact that plaintiff was seen by his family doctor on several occasions after he received his vaccination, but did not relate his neurological symptoms to his family physician. The government contends that had plaintiff been ill with GBS after October 18, 1976, he would have con-suited his family doctor, would have described the symptoms to which he testified and would have been seen by a neurologist. However, as the evidence indicates, plaintiff was stoic in his approach to medical problems. The symptoms which he was experiencing in the fall of 1976 were puzzling ones which were not disabling to any great degree. Plaintiff had a mild and unusual form of GBS. Plaintiff did not associate his symptoms with a neurologic disorder and did not consult his family physician until he had acute symptoms indicating other ailments.

The evidence discloses that plaintiff was treated by Dr. Ekman on December 20, 1976 for an upper respiratory infection and again on April 1, 1977 for bronchitis and flu. It is argued that, since Dr. Ekman did not recall any discussion of neurological symptoms on those occasions and since his records support this testimony, plaintiff must not have been then experiencing the symptoms he has described in his testimony. Little weight will be given in this case to the testimony or the records of Dr. Ekman. He was a general practitioner with an extremely busy, volume practice. He was not a neurologist and was hardly equipped to diagnose a chronic form of GBS such as this one was. Dr. Ekman’s record-keeping left much to be desired. According to Mrs. Carroll, plaintiff did tell Dr. Ekman when he visited him in June of 1977 that “his body ached like a toothache” and that “his hands get numb.” These statements were not recorded in Dr. Ekman’s notes. In view of his busy, family-type practice, Dr. Ekman could hardly have been expected to have given plaintiff the type of neurological examination which would have revealed the existence of this unusual type of GBS contracted by plaintiff in the fall of 1976.

For these reasons, this Court concludes that plaintiff is entitled to recover damages in this case.

Damages

Before he contracted GBS, plaintiff was in excellent health and engaged in various types of athletic endeavors with members of his family. He went hunting with his father and played basketball and football with his children. He had always been well able to perform the physical and other duties required of a church sexton.

The GBS contracted by plaintiff has had devastating effects on his activities and life style. His first hospitalization at Suburban Hospital lasted from December 9, 1977 until December 31, 1977, during which time he suffered from acute generalized weakness. He was treated with various drugs. Toward the end of his stay, he was started on physical therapy and began taking steps with a walker. Following outpatient physical therapy treatments, he was able to walk with a single cane until January of 1981 when he began getting weaker, especially in his legs. On July 7, 1981, he was again admitted to Suburban Hospital, at which time he was not able to walk even with the assistance of two canes. He was diagnosed as having suffered a relapse, was treated with drugs and was finally discharged on July 21, 1981. At the time of the trial, plaintiff was confined to a wheelchair. His condition will probably not improve in the future.

When he received his flu shot, plaintiff was more than six months past his 29th birthday. The life expectancy of a 30-year old, white male is 42.8 more years.

In support of his claim for damages, plaintiff called Dr. Richard J. Lurito, an economist and formerly a Professor of Economics at Georgetown University. As sexton at St. John’s Episcopal Church in Chevy Chase, Maryland, plaintiff had received both a salary and the free use of a house. Dr. Lurito used a figure of $11,000 as plaintiff’s average salary for three prior years and added $2,300 for housing. These figures will be accepted by the Court, and $13,300 will be used as the base figure for computing lost income. Dr. Lurito used a 7.3% figure for a projected annual increase in plaintiff’s income. This figure will likewise be accepted by the Court. However, Dr. Lurito used an 8% after-tax discount rate in determining the present value of plaintiff’s future lost income. This figure will be rejected, and the Court will employ an average 12% figure, which is much more realistic at the present time when interest rates are high and are expected to remain high. Indeed, Dr. Lurito recalculated his figures based on a 12% after-tax discount rate, and concluded that plaintiff’s lost net income would amount to $376,167. This figure will be accepted by the Court as representing plaintiff’s lost net income, as discounted to present worth.

Plaintiff has likewise sought recovery for services of a home health aide for eight hours a day to attend to his needs. This item of claimed damages has not been proved. It has not been shown that any such special health care was ever used by plaintiff or that it was necessary. No evidence has been introduced to indicate that plaintiff has ever paid for the services of a home health aide since he contracted GBS. Other than those times when plaintiff was hospitalized or otherwise under a doctor’s care, plaintiff’s wife and family have been well able to attend to his daily needs.

A further item of damages sought by plaintiff is the cost of services which he claims he had regularly performed for his family. Once again, the proof has not been sufficient to establish plaintiff’s entitlement to this item of damages. Under Maryland law, damages in a personal injury action must not be merely speculative in character but must be proved with reasonable certainty. Adams v. Benson, 208 Md. 261, 271, 117 A.2d 881 (1955). As to this particular item, plaintiff has not met this test. The hourly figures and the cost per hour used to compute plaintiff’s claim for lost family services are much too speculative to be credited by the Court.

Finally, plaintiff claims damages for pain, suffering and emotional distress. In the Pretrial Order, plaintiff suggested an award of $400,000 for this item of damages. Certainly, plaintiff is entitled to a substantial award for pain and suffering. He is permanently confined to a wheelchair, and he requires assistance in his physical activities. It is not expected that his condition will improve in the future. Plaintiff has been hospitalized twice because of the GBS he contracted. He has experienced considerable pain over the years and great mental anguish. A healthy, hard-working family man before he contracted GBS, his life style has now changed drastically. On the record here, this Court finds and concludes that an appropriate award for the plaintiff’s pain and suffering and for his permanent disability is $300,000. The total award is therefore $676,167.00.

Defendant contends that any award made to plaintiff in this case should be reduced by the Social Security disability payments he has received and will continue to receive from the government. This Court would disagree. The collateral source rule permits no such deduction. In Smith v. United States, 587 F.2d 1013, 1016 (3d Cir.1978), the Court held that where state law recognizes the collateral source doctrine, Social Security benefits should not be deducted from a recovery under the Federal Tort Claims Act (the FTCA). In so holding, the Third Circuit relied on rulings by the Fourth Circuit that benefits conferred by the United States out of a special fund need not be deducted from a FTCA recovery. See United States v. Price, 288 F.2d 448 (4th Cir.1961) and United States v. Brooks, 176 F.2d 482 (4th Cir.1949). After reviewing these decisions, this Court is satisfied that the Fourth Circuit, if presented with this question, would follow the Smith opinion and hold that no deduction should be made from the award to plaintiff because of Social Security benefits he receives.

Overton v. United States, 619 F.2d 1299 (8th Cir.1980), is not to the contrary. In that case, the Eighth Circuit distinguished Smith and held in a swine flu case brought under the FTCA that the government was entitled to a set-off for Medicare payments because the plaintiff had not made any contributions to the funds from which the Medicare payments were derived. In this case, plaintiff has indeed made contributions towards the Social Security benefits he is receiving. Overton recognized that there would have been no set-off in that case if (as here) the plaintiff had made contributions to the Medicare funds. See Nightingale v. United States, Civil Nos. 79-448-RE and 79-643-RE (D.Ore. Opinion dated January 17, 1980).

Conclusion

For the reasons stated, judgment will be entered in favor of the plaintiff in the amount of $676,167.00, plus costs. The Clerk is directed to enter judgment accordingly.

      . On January 7, 1982, the fourth day of the trial, plaintiff became ill and could not continue. Since plaintiff had not as yet testified, the trial was suspended. The trial was resumed on April 1, 1982 and completed that same day.

      . At the request of the Court, the parties have submitted Proposed Findings of Fact and Conclusions of Law.

      . In Thompson v. United States, Civil No. 79-1017-A (E.D.Va., Memorandum Opinion dated November 6, 1980), the government had contended that there was no medical or scientific support for the existence of a slow developing GBS which did not manifest itself within a ten-week period. This contention was rejected by Judge Bryant who, after reviewing the scientific evidence, accepted the theory advanced by the plaintiff in that case that GBS can have a slow progression.

      . A full discussion of GBS and of expert testimony describing the nature of this disorder is contained in Alvarez v. United States, 495 F.Supp. 1188, 1194-1205 (D.Colo.1980). Several of the experts who testified in that case also testified here.

      . Dr. Satinsky confirmed that plaintiff had an unusual case of GBS.

      . In view of this Court’s conclusion that plaintiffs symptoms in the fall of 1976 indicated that he had then contracted GBS, it is not necessary to consider the alternative theory presented by plaintiff in this case, based on the alleged presence of so-called P-2 protein in swine flu vaccine and of antibodies against P-2 protein in plaintiffs blood. The Court would note that in Hausler v. United States, Civil No. 79-2031-A (E.D.Va. Memorandum Opinion dated March 17, 1981), Judge Bryant rejected this theory as espoused by Dr. Edwin Eylar and Dr. Terrence Phillips, both of whom testified in this case.

      . As noted, this case was interrupted when plaintiff collapsed and was hospitalized on the fourth day of the trial. At first, it was thought that plaintiff had suffered a stroke. However, it later became apparent that the stress of the trial had caused plaintiff's collapse. The award being made by the Court has not been increased because of plaintiffs brief hospitalization in January of 1982.

      . In the Pretrial Order, plaintiff also claimed special damages in the amount of $2,205.19. However, no evidence was introduced at the trial to support this claim. Thus, in plaintiffs Proposed Findings of Fact and Conclusions of Law, no claim was made for an award of special damages.


author: MAZZONE, District Judge.

text:
    BOSTON CARRIER, INC. and Alan Bernson, Plaintiffs, v. INTERSTATE COMMERCE COMMISSION, Defendant.
    Civ. A. No. 83-3741-MA.
    United States District Court, D. Massachusetts.
    March 27, 1984.
    Alan Bernson, pro se.
    Joseph McGovern, Asst. U.S. Atty., Boston, Mass., for defendant.
   MEMORANDUM AND ORDER

MAZZONE, District Judge.

This pro se action is brought pursuant to the Freedom of Information Act (FOIA), 5 U.S.C. § 552. The plaintiffs, Alan Bernson and Boston Carrier, Inc. (formerly Boston Contract Carrier, Inc.) seek the production of agency records of the Interstate Commerce Commission (ICC) concerning an investigation of the plaintiffs. Alan Bernson is the president and sole owner of Boston Carrier, Inc. (BCI). The plaintiffs made three separate requests for documents. Some documents were provided and others denied as exempt from disclosure by provisions of the FOIA. Subsequent appeals were denied and this complaint was filed on November 30, 1983.

The defendant has filed a motion for summary judgment, supported by the affidavit of Daniel Harris, an attorney and Assistant to the Commission’s Freedom of Information Act/Privacy Act Officer. That motion has been opposed by the plaintiffs who have submitted extensive documentation in support of that opposition. I deferred all discovery and any action on the preparation of a Vaughn Index pending disposition of this motion.

The FOIA provides access and favors a broad policy of disclosure. Department of The Air Force v. Rose, 425 U.S. 352, 361, 96 S.Ct. 1592, 1599, 48 L.Ed.2d 11 (1976). On the other hand, the Act contains provisions which exempt documents from access under certain circumstances. 5 U.S.C. § 552(b). EPA v. Mink, 410 U.S. 73, 80, 93 S.Ct. 827, 832, 35 L.Ed.2d 119 (1973). I have examined each of the requests and the exemption claimed relating to those requests, seriatim.

1. Request of July 5,1983

The plaintiffs made four requests: (1) a tabulation of the Boston office investigations starting back in 1980; (2) an update or record of civil forfeitures in the Boston office; (3) closing memoranda of two investigations of his company; and (4) all documents relating to him and BCI not included in the closed files.

The plaintiff was provided with a printout of the Boston office investigations since October 1, 1979 which included the closing of the two files relating to the plaintiffs. He was also provided with three press releases concerning civil forfeitures, and a packet of letters and memoranda concerning the plaintiffs. One document was withheld, a letter relating to an investigation of BCI for possible unauthorized transportation, pursuant to exemption (b)(7)(A). That letter was part of the agency’s on-going investigation of BCI for unlawful transportation and has resulted in a civil forfeiture case now pending in this Court. United States v. BCI, C.A. No. 83-3994-S, District of Massachusetts. Such documents relating to federal enforcement proceedings were properly withheld. NLRB v. Robbins Tire & Rubber Co., 437 U.S. 214, 98 S.Ct. 2311, 57 L.Ed.2d 159 (1978). The exemption is designed to allow the agency to continue its investigations to an unimpeded and fair conclusion.

(2) Request of September 12, 1983

The plaintiffs made three requests: (1) another copy of 9 pages of material previously sent to Bernson; (2) copies of all correspondence between the FOIA office and the Boston ICC office from January 1, 1982 and the date of his letter; and (3) a blanket request for all documents related to BCI and Bernson.

The plaintiffs were advised that blanket requests were not processed, that a second copy of the 9 pages would be sent, and further correspondence was furnished except for three documents and part of a fourth which were withheld pursuant to exemption (b)(5) as related to intra-agency memoranda and attorney work product. These documents, described in detail in Harris’ affidavit, pertain specifically to ICC’s enforcement efforts regarding potential violations by BCI, comments on progress of the investigation, and materials handed over to the state and federal tax officials.

Intra-agency communications and opinions are protected from disclosure. The purpose of this exemption is to foster and encourage intra-agency cooperation and discussions which would be inhibited if those efforts were disclosed. An attorney’s work product is also protected. NLRB v. Sears Roebuck & Co., 421 U.S. 132, 149-50, 95 S.Ct. 1504, 1515-16, 44 L.Ed.2d 29 (1975); Coastal States Gas Corp. v. Department of Energy, 617 F.2d 854, 866 (D.C.Cir.1980).

(3) Request of September 23, 1983

The plaintiffs requested all documents not previously provided from January 1, 1980, as well as a “Vaughn Index.” The plaintiffs were provided with 9 pages of material, but 54 documents were withheld. Those documents were indexed and identified. In his affidavit filed in support of this motion, Harris described each of the documents in more detail. Those documents concerned investigative reports and efforts, progress reports, findings, draft memoranda and orders, witnesses’ statements, legal analyses, memoranda to file, attorney work product, prosecutorial recommendations and reports, conclusions and recommendations. The documents relate to BCI and Bernson, as well as to Middle-sex Trucking, a newly formed trucking company owned by Bernson’s brothers. These materials were properly withheld under exemptions (b)(5) and (b)(7)(A). Release of these documents could jeopardize pending investigations. Disclosure could also adversely affect communications and cooperation among law enforcement agencies and officials. NLRB v. Robbins Tire & Rubber Co., supra, NLRB v. Sears Roebuck & Co., supra.

In accordance with the above, the defendant’s motion for summary judgment is allowed.

SO ORDERED.

      . While I recognize the practice of requiring that the withheld documents be submitted for in camera review, the description of those documents provided in the affidavit is sufficiently complete so that I have no hesitation in ruling on the existing record.


text:
    Alan BERNSON and Boston Carrier, Inc., Plaintiffs, v. INTERSTATE COMMERCE COMMISSION and Reese Taylor, Jr., Defendants.
    Civ. A. No. 84-468-MA.
    United States District Court, D. Massachusetts.
    June 13, 1984.

      Alan Bernson, pro se.
    Joseph McGovern, Asst. U.S. Atty., Boston, Mass., for defendants.
   MEMORANDUM AND ORDER

MAZZONE, District Judge.

This is a pro se action brought by the plaintiffs, Alan Bernson and Boston Carrier, Inc. (BCI) against the defendants, Interstate Commerce Commission and its chairman, Reese Taylor, Jr. At the heart of this case is an ICC investigation which resulted, at first, in the denial of the plaintiffs’ application for additional motor carrier authority. That investigation has been the basis of a long and bitter dispute between the parties involving charges of harassment and anti-Semitism and into which have been drawn political figures and investigative reporters. Much of this involvement is distracting and not relevant to the basic issues presented. The plaintiffs allege that in the course of its investigation, the ICC violated certain statutory and constitutional rights, mainly that the ICC and its employees made false statements and false reports about the plaintiffs, disclosed information which was private, and committed criminal acts.

In what is termed a “Factual Record,” the complaint contains nine matters which describe the specific conduct and the injuries allegedly suffered by the plaintiff. I summarize those matters briefly.

(1) The Sub-No. 11 Matter.

This matter alleges the Administrative Law Judge who denied the motor authority sought by the plaintiffs did so on false evidence. His actions constituted an abuse of process, malicious prosecution and the publication of a false report violated the plaintiffs’ Fifth Amendment rights as well as the Privacy Act.

(2) The Poland Spring Matter.

This matter alleges that in 1980, an ICC inspector advised a customer of the plaintiffs that BCI did not have authority in Maine and its services should not be used. While the complaint does not describe a particular cause of action, in its reply the plaintiffs assert that this was defamation and over $300,000 of business was lost.

(3) The John Giorgio May 13, 1983 Letter.

This matter alleges Giorgio, an ICC lawyer, in 1977 and 1981, made false statements about the plaintiffs.

(4) The John Giorgio Letter of November 30, 1983.

This matter alleges that Giorgio wrote a letter in response to allegations of misconduct by the plaintiffs and stated attempts were made to encourage voluntary compliance by BCI. The plaintiffs claim no attempts were made and the statement was false.

(5) The Dunn Report.

This matter charges that Dunn, an ICC investigator, accused Bernson of attempting to defraud an insurance company in a report of August 14, 1981. Further, other ICC investigators and attorneys disclosed other confidential information, such as tax returns to other insurance companies and the Commonwealth of Massachusetts. The plaintiffs allege these were criminal acts and otherwise violated the plaintiffs’ civil and constitutional rights.

(6) The Sub 11 Application.

This matter alleges that ICC attorneys Wagner and Curley recommended this pending application be assigned to an oral hearing. The recommendation stated that the office has “not had time to investigate the allegations of the protestants.” The plaintiffs assert this statement was false and, further, large amounts of favorable evidence was omitted to induce the vote. These omissions, the plaintiffs say, violated the Canons of Ethics for attorneys.

(7) The Sub 12 Application.

This matter also alleges that Wagner and Giorgio recommended that this application be assigned for oral hearing. That recommendation, the plaintiffs say, contained the same false statements that were made in connection with the Sub 11 application.

(8) The Sub 13 Application.

This matter alleges that Giorgio and Wagner falsely accused the plaintiffs of attempting to obtain operating authority through another company, Middlesex Transportation, owned by the brother of the plaintiff. These false statements also violated the Canons of Legal Ethics, the plaintiffs claim.

(9) Franklin Trucking.

The defendants accused Bernson of being a principal in Franklin Trucking with no supporting evidence.

The matter is before the Court on the defendants’ motion to dismiss, or, in the alternative, for summary judgment. The plaintiffs have filed a reply in opposition and have further supplemented their reply with a June 6, 1984 letter attaching the ICC decision of April 27, 1984 on Sub-No. 13. That decision had already been submitted as Exhibit D in the reply.

I.

While this pro se complaint is entitled to be judged by a less stringent standard, it is clear at the outset that this Court lacks jurisdiction over certain of the plaintiffs’ claims, namely, the request for criminal action and claims under the Federal Tort Claims Act (FTCA). First, only the United States Attorney can enforce federal criminal statutes. Neither the plaintiffs, nor this Court, has the authority to require that a criminal action be instituted. Keenan v. McGrath, 328 F.2d 610 (1st Cir.1964).

II.

Secondly, this Court does not have jurisdiction over the claims under the FTCA because the plaintiffs have not complied with the procedural requirements of 28 U.S.C. § 2675(a). No administrative claim was filed by the plaintiffs at the time this case was filed, nor has the ICC denied any claim made to it. Rise v. United States, 630 F.2d 1068, 1071 (5th Cir.1980); Employees Welfare Committee v. Daws, 599 F.2d 1375, 1378 (5th Cir.1979). Moreover, certain of the torts alleged by the plaintiffs are specifically excepted from the FTCA, such as abuse of process, malicious prosecution, and defamation. 28 U.S.C. § 2680(h); Jiminez-Nieves v. United States, 682 F.2d 1, 6 (1st Cir.1982).

III.

As to the alleged violations of the Privacy Act, 5 U.S.C. § 552a, the plaintiffs seek an order that the ICC treat the records as a system of records under the Privacy Act and a further order to the ICC to correct or delete false statements in the records. The plaintiffs also claim that there was an unauthorized disclosure of records to various insurance companies and to the Commonwealth of Massachusetts. They seek criminal sanctions against the individuals involved.

I repeat, this Court has no authority to require an order that .a criminal action be instituted. Keenan v. McGrath, supra.

Next, the plaintiffs do not allege that the information disclosed came from or was retrieved from the agency record system as required by the Act. 5 U.S.C. § 552a(b). The complaint alleges the information disclosed came from tax records of the plaintiffs, not from the agency record system. Savarese v. Department of Health, Education and Welfare, 479 F.Supp. 304, 308 (N.D.Ga.1979); aff'd, 620 F.2d 298 (5th Cir.1980); cert. denied, 449 U.S. 1078, 101 S.Ct. 858, 66 L.Ed.2d 801 (1981). Even if the information came from the agency’s system of records, I have difficulty in sorting out the exact grounds under the Privacy Act contained in paragraphs 49-52 of the complaint. Essentially, the complaint alleges misconduct by several employees of the ICC, none of whom have been named as a defendant. To some extent, that conduct has been the subject of review and comment by the agency in its decision rendered on April 27, 1984.

Finally, a review of the substance of the records the plaintiffs seek to amend or correct indicates that these records are opinions and recommendations of ICC employees as well as conclusions of an admin-' istrative law judge. These opinions, recommendations or judgments cannot be made more accurate by this Court, nor can this Court order that those opinions be amended to reflect the plaintiffs’ version of the facts. Federal Insurance Co. v. Dye, 642 F.2d 833, 836 n. 5 (5th Cir.1981); Blevins v. Plummer, 613 F.2d 767, 768 (9th Cir.1980). In addition, an appeal of the decision of the administrative law judge is pending review in Boston Contract Carrier, Inc. v. ICC, 746 F.2d 1555 (D.C.Cir.1983).

IV.

Finally, the plaintiffs have not alleged any specific constitutional right, a violation of which would provide them with a cause of action. While damage suits against federal officials are authorized under Bivens v. Six Unknown Agents, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971), the plaintiffs must identify and allege the participation of the particular federal official. Here, only the agency and its chairman are named as defendants. The agency cannot be liable under Bivens since liability of the United States is limited to the FTCA. There are no allegations that the chairman participated directly in the claimed violations or played any role whatsoever in the actions of the ICC officials who are identified by the complaint. All that can be said directly about the chairman’s conduct is that he dissented from the April 27, 1984 decision. That conduct does not amount to a cause of action.

Conclusion

Again, I am mindful that the plaintiffs are proceeding pro se. Nevertheless, this complaint does not set out a clear, brief statement of the charges against particular defendants. As it presently stands, the complaint must be dismissed for failure to state claims for which relief may be granted.

SO ORDERED.

      . That authority originally sought by the plaintiff was granted on April 27, 1984. This action was filed on February 21, 1984.


author: GARRITY, District Judge.

text:
    Alan BERNSON et al., Plaintiffs, v. INTERSTATE COMMERCE COMMISSION, et al., Defendants.
    Civ. A. No. 85-2539-G.
    United States District Court, D. Massachusetts.
    Dec. 17, 1985.

      Alan Bernson, pro se.
    Martha B. Sosman, Asst. U.S. Atty., Boston, Mass., for defendants.
   MEMORANDUM AND ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS IN PART

GARRITY, District Judge.

Plaintiffs in this action seek the disclosure of Interstate Commerce Commission (“ICC”) documents pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552. Plaintiffs also seek to have the ICC expunge certain of its records and correct others according to the provisions of the Privacy Act, 5 U.S.C. § 552a and the Administrative Procedure Act, 5 U.S.C. §§ 701-706. The matter now comes before this court upon the defendants’ motion to dismiss or in the alternative for summary judgment.

Procedural History

A brief procedural history will be helpful. Between June 1983 and April 1985, plaintiffs filed several FOIA requests with the ICC pertaining to documents the ICC has numbered 20 to 282. Although it released some of these documents, the ICC withheld others claiming they fell within two of the exemptions from disclosure provided for by FOIA, 5 U.S.C. § 552(b)(5) and (b)(7)(A). Plaintiffs’ administrative appeals of these denials were unsuccessful. Subsequently, plaintiffs filed suit seeking to compel the ICC’s disclosure of documents 20 to 211. The court in that case granted defendants’ motion for summary judgment, holding that the documents in question were properly withheld under FOIA exemptions (b)(5) and (b)(7)(A). Boston Carrier, Inc. v. Interstate Commerce Commission, 625 F.Supp. 8 (D.Mass.1984) (“Bern-son I”). In a separate suit, plaintiff alleged ICC wrongdoing and sought relief under the Privacy Act. That complaint was dismissed for failure to state a claim upon which relief could be granted. Bernson v. Interstate Commerce Commission, 625 F.Supp. 10 (D.Mass.1984) (“Bernson II”).

Issues

A. Res Judicata

In the instant case, defendants move to dismiss portions of plaintiffs’ complaint on the ground of res judicata. They assert that the propriety of withholding documents 20 to 211 was already decided in Bernson I. Plaintiffs counter that the circumstances have changed since Bernson I and that the (b)(7)(A) exemption then applicable, in the court’s view, (permitting the withholding of documents if their disclosure would interfere with an ongoing enforcement proceeding) no longer applies. Specifically, at the time Bernson I was decided there was a civil forfeiture proceeding then pending against plaintiffs, United States v. Boston Carrier, Inc., D.Mass., filed Dec. 12, 1983, No. 83-3894-S. Plaintiffs contend that subsequent to Bernson I, this forfeiture proceeding was effectively terminated by an April 27, 1984 ICC decision allowing plaintiffs to expand their operating authority and stating that the allegations against plaintiffs were too minor to warrant a “further commitment of [the ICC’s] enforcement resources.” We disagree. Despite the ICC decision, the civil forfeiture proceeding is still being actively prosecuted. It is therefore an ongoing enforcement proceeding within the meaning of FOIA and remains a valid basis for non-disclosure, as decided in Bernson I. Cf. Coastal States Gas Corp. v. Dept. of Energy, D.C.Cir.1980, 617 F.2d 854 (government agency made no effort to demonstrate that cases were still under investigation or being actively pursued and therefore the (b)(7)(A) exemption was inapplicable). Consequently, plaintiffs’ claim with, respect to documents 20 to 211 is dismissed on the ground of res judicata.

The court also dismisses plaintiffs’ claim seeking relief under the Privacy Act. That claim is no different than the one litigated in Bernson II and dismissed for failure to state a claim. Since such a dismissal is an adjudication on the merits for res judicata purposes, see Isaac v. Schwartz, 1 Cir. 1983, 706 F.2d 15, 17, the court dismisses this portion of plaintiffs’ complaint on that ground.

B. FOIA Exemptions

Plaintiffs do raise a claim not previously litigated in a judicial forum: the propriety of the ICC’s withholding documents 212 to 282. Defendants have refused to disclose most of these documents on the ground that they are exempted from disclosure by subsections (b)(5) and (b)(7)(A). Plaintiffs argue that defendants have failed to satisfy the government’s burden of establishing that the documents are protected by these FOIA exemptions. See Environmental Protection Agency v. Mink, 1973, 410 U.S. 73, 93 S.Ct. 827, 35 L.Ed.2d 119. They contend that the affidavit submitted by defendants in support of their refusal to disclose the documents lacks sufficient detail to constitute a Vaughn index, see Wightman v. Bureau of Alcohol, Tobacco & Firearms, 1 Cir.1985, 755 F.2d 979, 981 n. 1, and does not provide enough information for the court to decide whether the FOIA exemptions were properly claimed.

Defendants’ response to this argument is twofold. First, with regard to the subsection (b)(5) exemption, they contend that the affidavit they have submitted provides a sufficiently detailed description of the documents in question. Secondly, with regard to the (b)(7)(A) exemption, defendants argue that in accordance with NLRB v. Robbins Tire & Rubber Co., 1978, 437 U.S. 214, 98 S.Ct. 2311, 57 L.Ed.2d 159, they need not furnish the detailed justification for each document’s withholding required by a Vaughn index and, moreover, that they have satisfied their burden merely by demonstrating that plaintiffs seek disclosure of documents relating to an ongoing enforcement proceeding.

1. Subsection (b)(5)

The subsection (b)(5) exemption protects “inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency.” 5 U.S.C. 552(b)(5). Courts have applied this exemption to inter-agency memoranda and letters if such documents have played a role in an agency’s decision-making process, see NLRB v. Sears, 1974, 421 U.S. 132, 95 S.Ct. 1504, 44 L.Ed.2d 29. “[T]he agency has the burden of establishing what deliberative process is involved, and the role played by the documents in issue in the course of that process.” Coastal States Gas Corp., supra at 868. The (b)(5) exemption has also been applied to a government attorney’s work product, see FTC v. Grolier, 1983, 462 U.S. 19, 20, 103 S.Ct. 2209, 2210, 76 L.Ed.2d 387, provided the documents were prepared in contemplation of litigation and otherwise conformed to the requirements of the attorney work product privilege afforded parties in ordinary civil discovery. See Coastal States Gas Corp., supra at 864.

Defendants have submitted the affidavit of Daniel Harris in support of their assertion that the subsection (b)(5) exemption applies to certain of the documents withheld on the grounds that they are inter-agency memoranda or attorney work product. Harris is the individual in the ICC’s Freedom of Information/Privacy Office who made the initial determination to deny plaintiffs’ FOIA requests. The affidavit provides a brief description of each document withheld and Harris’ summary of his reasons for withholding the documents generally, but it does not contain sufficient information to enable the court to determine whether the (b)(5) exemption applies. The Harris affidavit does state that these documents were prepared by agency attorneys in contemplation of litigation, but it provides no support for this conclusory allegation on a document-by-document basis. Similarly, the affidavit indicates that certain documents involved inter-agency communications and concludes in general terms that the documents played a role in the agency’s deliberative process. There is, however, no specific description concerning what deliberative process was involved or what role any document served in that process. The affidavit’s brief descriptions and general conclusions are inadequate. The court needs specific, document-by-document analysis in order to determine subsection (b)(5)’s applicability. See Vaughn v. Rosen, D.C.Cir.1973, 484 F.2d 820, cert. denied, 1974, 415 U.S. 977, 94 S.Ct. 1564, 39 L.Ed.2d 873.

2. Subsection (b)(7)(A)

The subsection (b)(7)(A) exemption protects “investigatory records compiled for law enforcement purposes, but only to the extent that the production of such records would ... interfere with enforcement proceedings.” 5 U.S.C. § 552(b)(7)(A). This exemption applies when the government demonstrates that there is an ongoing or contemplated enforcement proceeding that would be harmed by the government’s release of information. See NLRB v. Robbins Tire & Rubber Co., 1978, 437 U.S. 214, 98 S.Ct. 2311, 57 L.Ed.2d 159. As the Supreme Court there stated at 236, while the government need not show how each document interferes with the enforcement proceeding, it must demonstrate how the disclosure of particular kinds of documents will interfere with the particular kind of enforcement proceeding involved.

In the instant case, defendants have failed to make this showing. Instead, they contend that by demonstrating that documents relate to an ongoing proceeding, they have, by definition, demonstrated that the release of such documents would interfere with enforcement. They paint with too broad a brush; the mere fact that the documents are somehow related to the ongoing enforcement proceeding is not sufficient to establish interference. The Harris affidavit does note that witness statements have been withheld and it describes how the release of such statements would interfere with the ICC’s civil forfeiture proceeding. This is a step in the right direction, but it is unclear from the affidavit whether defendants claim the (b)(7)(A) exemption only for witness’ statements or whether they claim it for other categories of documents as well. It is also unclear which documents are to be considered witness’ statements. As was the case with the (b)(5) exemption, therefore, the court is simply unable to determine on the basis of the Harris affidavit whether documents 212 to 282 have properly been withheld.

Summary

Therefore, it is ordered that defendants’ motion to dismiss be granted with respect to plaintiffs’ claims for relief under the Privacy Act and the Administrative Procedure Act and for the release of documents 20 to 211. It is further ordered that defendants file by December 30, 1985 affidavits) with respect to the withholding of documents 212 to 282 in accordance with this memorandum. Pending submission of the affidavit(s) the court reserves judgment on other aspects of the defendants’ motion.

      . Indeed, it was only at the court’s direction that defendants even indicated which documents they claimed were protected by the subsection (b)(5) exemption.

      . Subsequent to hearing defendants’ motion, plaintiffs filed their own motion for partial summary judgment. Defendants have not as yet responded. Since plaintiffs’ motion pertains to documents 212 to 282, the court reserves judgment on it pending defendants’ submissions. If the defendants wish to respond to plaintiffs’ motion, they must do so by December 30, 1985.


author: NORDBERG, District Judge.

text:
    Curtis W. SEARIGHT, Jr., Plaintiff, v. KAISER ALUMINUM AND CHEMICAL CORPORATION, Defendant.
    No. 80 C 4245.
    United States District Court, N.D. Illinois, E.D.
    Dec. 19, 1984.

      William J. Sneckenberg, William J. Sneckenberg & Associates, Ltd., Chicago, 111., for plaintiff.
    Roger J. McFadden, Thomas J. Dillon, Schuyler, Roche & Zwirner, Chicago, 111., for defendant.
   MEMORANDUM OPINION AND ORDER

NORDBERG, District Judge.

This case involves an age discrimination claim brought by Curtis Searight, Jr. against his former employer, Kaiser Aluminum and Chemical Corporation. Sea-right’s motion to amend his complaint to include a breach of contract claim and Kaiser’s motion for summary judgment are currently pending before the Court. For the reasons stated in the following opinion, the Court denies both motions.

Plaintiffs Motion for Leave to File an Amended Complaint

After examining plaintiff’s proposed amendment based upon an alleged breach of contract, the Court denies plaintiff’s motion. Although an amendment under rule 15(a) to state a new claim will generally be allowed, C. Wright & A. Miller, Federal Practice and Procedure § 1474 (1971), the trial court may properly deny leave to amend the pleadings when the amendment would not withstand a motion to dismiss. Massarsky v. General Motors Corp., 706 F.2d 111, (3d Cir.) cert. denied, 464 U.S. 937, 104 S.Ct. 348, 78 L.Ed.2d 314 (1983); see Shashoua v. Quern, 612 F.2d 282 (7th Cir.1979). Plaintiff’s proposed breach of contract claim is clearly frivolous on its face and cannot withstand defendant’s outstanding objections to the amendment or alternatively, its motion to dismiss.

The undisputed facts are that Searight was employed by Kaiser from September 1, 1956 to February 1, 1980. On March 1, 1960, during Searight’s tenure, Searight and Kaiser entered into an agreement, (“Agreement”), attached hereto as Appendix A. Searight’s proposed amendment is based upon the Agreement.

Essentially, the Agreement provides: 1) that Kaiser would continue to employ Sea-right as long as both parties mutually agreed to the employment and; 2) that any and all trade secrets or inventions, etc., which Searight conceived or made during his employment would be Kaiser’s property. The Agreement further provided that Searight would not disclose such secrets or inventions during or subsequent to his employment without Kaiser’s consent. Sea-right contends that since the Agreement contemplates lifetime performance by him, i.e., not to disclose trade secrets or inventions, that the contract should also be construed to provide lifetime employment for him, unless it is “mutually agreed” that Searight be terminated. Searight argues that the following language of the Agreement also permits such a conclusion:

IT IS MUTUALLY AGREED AS FOLLOWS:
1. Employer employs and shall continue to employ Employee at such compensation and for such a length of time as shall be mutually agreeable to Employer and Employee.

The balance of the Agreement essentially provides for non-disclosure of trade secrets and inventions and makes the Agreement retroactive to the date on which Searight began his employment.

This language of the Agreement and Searight’s lifetime promise not to disclose trade secrets cannot, as a matter of law, provide Searight with any breach of contract claim. In the first place, in Illinois an employment relationship is understood to be terminable at any time, with or without cause, by either party, unless a contract specifies a duration. Atwood v. Curtiss Candy Co., 22 Ill.App.2d 369, 161 N.E.2d 355 (1959). However, the Agreement in the instant case did not alter the terminable at will employment relationship.

Under general principles of contract law and Illinois law, which the parties seem to agree governs this case, questions as to the meaning of an unambiguous contract can be appropriately decided upon a motion to dismiss. Egger v. Phillips, 710 F.2d 292 (7th Cir.1983). The preliminary question of whether an ambiguity exists is a question for the court to determine as a matter of law. Joseph v. Lake Michigan Mortgage Co., 106 Ill.App.3d 988, 62 Ill.Dec. 637, 436 N.E.2d 663 (1982). The court must look to the works used in the contract to determine the intent of the parties. E.g., Western Illinois Oil Co. v. Thompson, 26 Ill.2d 287, 186 N.E.2d 285 (1962). Absent ambiguity, the words of the contract are generally the sole indicators of what the parties intended. Sunstream Jet Express, Inc. v. International Air Service Co., 734 F.2d 1258, 1266-1270 (7th Cir.1984); Ambarann Corp. v. Old Beu Coal Corp., 395 Ill. 154, 69 N.E.2d 835 (1946). In other words, a contract is ambiguous only if it is reasonably susceptible to different constructions when read in its plain and ordinary meaning. Susmano v. Associated Internists of Chicago, Ltd., 97 Ill.App.3d 215, 52 Ill.Dec. 670, 422 N.E.2d 879 (1981). These principles of contract construction are applicable to employment contracts as well as other types of contracts. Goodman v. Board of Trustees of Community College, Etc., 511 F.Supp. 602, 605 (N.D.Ill.1981).

Applying these principles to the case at bar, the Court finds that the Agreement can have only one meaning: If either party no longer desires the employment to continue, the employment would no longer be “mutually agreeable” and could be terminated by either party. The Court concurs with the well-reasoned opinion of Chief Judge Haden in Murray v. Kaiser Aluminum & Chemical Corp., 591 F.Supp. 1550 (S.D.W.Va., 1984), interpreting identical language, wherein the court held the contract to be terminable at will, finding that any other construction of the “mutually agreeable” language would be tortured, untenable and a reductio ad absurdum. Id. at 1553. (See Exhibit A to Defendant’s Response to Plaintiff’s Motion for Leave to File Amended Complaint).

Moreover, the Court does not find persuasive the authority cited by plaintiff wherein Illinois courts have implied a term of duration into an instrument to avoid the terminable at will doctrine. In the two cases cited by plaintiff either the nature of the Agreement or particular language in the Agreement clarified the parties’ intentions regarding duration. In Ricke v. Ricke, 83 Ill.App.3d 1115, 39 Ill.Dec. 598, 405 N.E.2d 351 (1980), the court found that the term of a lease could be implied from another provision in the agreement providing for exercise of an option. The option provision, the court found, made the parties’ intent as to duration clear. Similarly, in Adkisson v. Ozment, 55 Ill.App.3d 108, 12 Ill.Dec. 790, 370 N.E.2d 594 (1977), the court found that absent a clear provision regarding duration in an agreement to supply water at certain rates, the supplying city could raise rates after furnishing water at the contractual rate for 18 years.

In the same vein, Martin v. Federal Life Insurance Co., 109 Ill.App.3d 596, 65 Ill. Dec. 143, 440 N.E.2d 998 (1982) and Smith v. Board of Education of Urbana School District No. 116 of Champaign, 708 F.2d 258 (7th Cir.1983), simply indicate that in certain circumstances courts will enforce lifetime oral employment agreements supported by consideration other than an employee’s services. In the instant case, plaintiff does not allege the existence of a lifetime oral employment agreement based upon additional consideration so as to bring himself within the holding of such cases. Rao v. Rao, 718 F.2d 219 (7th Cir.1983) is also distinguishable from the facts of the instant case for it deals with the law surrounding restrictive covenants which are not alleged to be a part of this case.

For the foregoing reasons the Court finds that plaintiff’s proposed breach of contract amendment could not withstand a motion to dismiss. Therefore, plaintiff’s motion to amend his complaint to include such a claim is denied.

Defendant’s Motion For Summary Judgment

After reviewing the affidavits and deposition testimony, the Court finds that there are genuine issues of material fact precluding summary judgment.

The standard for granting summary judgment in an age discrimination case is clear:

1. The plaintiff must set forth a prima facie case to raise an inference of discrimination, Huhn v. Koehring Co., 718 F.2d 239 (1983); Kephart v. Institute of Gas Technology, 630 F.2d 1217 (7th Cir.1980). To set forth a prima facie case, plaintiff must show: (a) that he belongs to the protected class; (b) that he was qualified for the position; (c) that he suffered an adverse employment decision, and (d) that the employer sought to replace him. Huhn, 718 F.2d at 239.

2. Once the plaintiff sets forth a prima facie case, the burden shifts to the employer to articulate a justification for the adverse employment decision. Id.

3. Once the employer articulates a justification for his decision, the employee must then prove that the justification was merely a pretext — that, but for his age, he would not have been terminated. The employer need only articulate justification for his decision, thus the ultimate burden of proof remains at all times with the employee. Id.

Applying the standards set forth in Kephart and Huhn to the instant case, the Court finds that summary judgment must be denied. Plaintiff has pled an employment history of 23 years and a recent history of satisfactory performance appraisals sufficient to establish a prima facie case. The employer, through the affidavit of C. Jerry Bills, articulated a host of reasons for its adverse employment decision, for example, that plaintiff continually arrived late and left early, that plaintiff caused disruption in Region 6, that the vice president of Inland Steel, a customer of Kaiser, had been highly critical of plaintiff, and that plaintiff failed to monitor the “Detrick Company problem.” Although many of the facts underlying these reasons are in dispute, a more significant fact forces the Court to deny summary judgment. It is uncontested that Bills, plaintiffs supervisor, referred to Searight and older employees as “old farts” or “O.F.’s” (Def. Reply Memorandum pp. 10-11). Such a categorization suffices to show that plaintiffs supervisor may have had an age-related animus hostile to older individuals, thereby supporting a pretext theory, i.e., that the employer’s termination of plaintiff was due not to dissatisfaction with plaintiff but to an age-related animus. See Scofield v. Bolts & Bolts Retail Stores, 21 FEP 1478, 1480 (S.D.N.Y.1979) (discharged employee made out a prima facie case of age discrimination in view of testimony that employer’s store manager referred to her and another employee as “the old women”); see also Mistretta v. Sandia Corp., 15 FEP 1690 (D.N.M.1977), aff'd in relevant part, 639 F.2d 600 (10th Cir.1980). The foregoing evidence thus raises a genuine issue of material fact.

Conclusion

In accordance with the foregoing opinion, Plaintiff’s Motion to Amend the Complaint is denied. Defendant’s Motion for Summary Judgment is denied.

APPENDIX A

EXHIBIT A

AGREEMENT

This Agreement, entered into this 1st day of March, 1960, by and between Kaiser Aluminum & Chemical Sales, Inc., a corporation of the State of California, (hereinafter called the “Employer”), and C.W. Sea-right, Jr. (hereinafter called the “Employee”).

WITNESSETH:

Whereas Employer desires to employ and to continue to employ Employee and confirm its right to certain inventions of Employee and in recognition of the fact that during said employment Employee may acquire a knowledge of apparatus or of processes used by Employer or of products made by Employer and that knowledge or information may be extended to or gained by Employee in confidence, and that Employee may in the discharge of various duties in which he is occupied devote time and service to invention, discovery and/or to improvement of products, machinery, apparatus, equipment, methods and processes whether chemical, physical or mechanical, relating to or connected with the business, work and/or investigations of Employer and/or any of its subsidiaries or affiliates IT IS MUTUALLY AGREED AS FOLLOWS:

1. Employer employs and shall continue to employ Employee at such compensation and for such a length of time as shall be mutually agreeable to Employer and Employee.

2. Any and all inventions, discoveries and improvements which Employee has conceived or made, and/or may conceive or make, during the period of his said employment, relating to employer’s business or arising out of or resulting from his said employment shall be the sole and exclusive property of Employer or its nominee.

3. Employee, whenever requested by Employer, will execute any and all instruments which Employer may deem necessary to assign and convey to it, its successors or assigns, the sole and exclusive right, title and interest in and to any such inventions, discoveries and improvements, and Letters Patent for same, or such other interests therein as Employee may possess or acquire, together with all instruments deemed necessary by Employer in order to apply for and obtain Letters Patent of the United States and/or foreign countries therefor; and Employee agrees that such obligation to execute any such instruments shall continue after the termination of his employment. All expenses of applying for and obtaining Letters Patent when authorized by Employer to be done shall be borne by it.

4. Employee shall not disclose or use, directly or indirectly at any time, either during or subsequent to the said employment, any secret or confidential information, knowledge or data of Employer or of any of its affiliated companies (whether or not obtained, acquired or developed by Employee), unless he shall first secure the written consent of Employer.

5. This Agreement shall be binding upon the parties hereto, their heirs, executors, administrators, successors and assigns as the case may be.

6. This Agreement shall supersede all previous agreements by and between Employer and Employee and shall be retroactive to the date on which Employee commenced his employment.

/s/ C.W. Searight, Jr.

Employee

KAISER ALUMINUM &

CHEMICAL SALES, INC.

By -

      . In Kephart v. Institute of Gas Technology, 630 F.2d 1217 (7th Cir.1980), the Seventh Circuit noted that the soundness of the employer's expectations should not be scrutinized by the court. The ultimate issue is whether the enriployee was discriminated against because of age. Therefore, the court found that an inquiry into whether the employment decision reflected proper business judgment was in error.


author: GESELL, District Judge.

text:
    GENERAL RAILWAY SIGNAL CO., Plaintiff, v. WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY, Defendant.
    Civ. A. No. 84-1717.
    United States District Court, District of Columbia.
    May 29, 1985.
    Paul L. Waldron, Washington, D.C., for plaintiff.
    Robert J. Sciaroni, William B. Bircher, Robert L. Polk, WMATA, Washington, D.C., for defendant.
   MEMORANDUM

GESELL, District Judge.

This contract dispute is again before the Court on plaintiff’s motion for entry of judgment following completion of the Court’s remand to the Army Corps of Engineers Board of Contract Appeals. The Court has considered the briefs of the parties and the entire record herein.

The dispute now is over the proper amount to be deducted as an equitable adjustment for the elimination of a specific part of the work that General Railway Signal Co. (GRS) contracted to perform on defendant WMATA’s subway system. On January 17, 1979, WMATA’s contract officer set the deduction at $1,336,500, and that amount was withheld from progress payments to GRS. Pursuant to the disputes clause of the contract, the parties submitted the issue to the Army Corps of Engineers Board of Contract Appeals (the Board). The Board fixed the credit due WMATA at $1,403,325, and WMATA’s general manager adopted that amount as his final decision on April 17, 1984.

On consideration of plaintiff’s complaint to review the general manager’s decision adopting the Board’s recommendation, the Court on November 14, 1984 held that the Board’s finding was not supported by substantial evidence and was erroneous as a matter of law. The Court then remanded the case to the' Board “with direction to determine a reasonable cost estimate within 90 days, plus interest as provided by law.” On January 30, 1985, the Court denied WMATA’s motion to stay proceedings pending appeal and ordered the WMATA general manager to issue a decision within seven days of the Board’s determination of the remand.

On March 29,1985, the Board determined the amount of the credit at $360,548, although it declined to rule on the amount of interest to be added to that base amount. In determining the reasonable cost of the deleted work, the Board used WMATA’s own estimate of the cost with certain adjustments primarily for redundant work. The Board added standard percentage markups for indirect costs and profit to GRS and its subcontractor.

On April 5, 1985, the WMATA general manager rejected the March 29 Board decision and stated that his prior decision adopting the Board’s first decision “is correct and the same ... is hereby restated and reaffirmed.” The general manager made no findings of fact beyond readopting the Board’s initial decision.

In its motion for entry of judgment, GRS asks the Court to reject the general manager’s final decision as not based on substantial evidence and to adopt the March 29, 1985 Board decision with the addition of interest from the date in 1979 when the payments were withheld from GRS. GRS thus seeks the difference between the amount withheld in 1979 and the amount that should have been withheld — that is, $1,336,500 minus $360,548, or $975,952-plus interest of $752,713.01. The interest figure is derived from the rates established by 26 U.S.C. § 6621, which are based on the average prime rate as determined by the Secretary of the Treasury.

In its opposition, WMATA contends the general manager’s decision is entitled to affirmance because it was based on substantial evidence in the record. It then proceeds to reargue at length the same issues decided by the Court against WMA-TA in the Court’s November 14, 1984 Memorandum. Since the Court already has decided that there was not substantial evidence supporting WMATA’s view that a correct equitable adjustment was $1,403,-325, and since the general manager has done nothing more than reject out of hand the Board’s remand decision and rely entirely on the old decision, it is apparent that the new general manager’s decision must be rejected.

WMATA has presented no substantial reasons for rejecting the Board’s decision on remand, which is in accord with the Court’s view of the applicable law and was based on undisputable facts. Accordingly the Board’s decision on remand is adopted as establishing the appropriate equitable adjustment for the cost of the deleted work, including profit and overhead. Thus GRS is entitled to $975,952 as reimbursement for the amount WMATA wrongfully withheld as of January 17, 1979 in excess of the proper equitable adjustment of $360,548.

The only remaining issue is GRS’s entitlement to prejudgment interest on the excess withheld. WMATA argues that it is not obliged to pay any prejudgment interest and that if it is, the rate is limited to that set by D.C. Code § 28-3302. The parties have not informed the Court of the jurisdiction whose law governs this contract but seem to assume that the law of the District of Columbia controls. Since the District of Columbia is apparently where the contract was executed and was substantially performed, the Court determines its law to be applicable.

Prejudgment interest against a governmental entity like WMATA is allowable only when there is a statutory or contractual waiver of sovereign immunity for such interest. Waiver occurred here by virtue of the “equitable adjustment” language in the “Changes” clause of the contract. Equitable adjustment is a term of art designed “to keep a contractor whole when the Government modifies a contract.” Bruce Construction Corp. v. United States, 163 Ct.Cl. 97, 324 F.2d 516, 518 (1963). Prejudgment interest may be necessary to restore the contractor to the status quo prior to a change in the contract. Such is the case here. Moreover, the equitable adjustment provided for by the “Changes” clause does not exclude profits on a contractor’s increased costs. Compare Excavation Construction, Inc. v. WMATA, Civil Action No. 83-1125, slip op. at 4-5 (D.D.C. Apr. 19, 1985).

GRS seeks interest from the date of the contracting officer’s final decision to withhold $1,336,500, on January 17, 1979. However, because this was subject to administrative appeal, this did not become WMATA’s final decision under Article 11, the disputes clause of the contract, until WMATA’s board of directors acted through its designated representative, the WMATA general manager. That decision was rendered on April 17,1984. There is no indication that this decision was unreasonably delayed so as to entitle GRS to interest from an earlier date. See General Railway Signal Co. v. WMATA, 664 F.2d 296 (D.C.Cir.1980) (per curiam). The Court concludes that prejudgment interest on the $975,952 is due to GRS as of April 17, 1984.

GRS argues that in waiving immunity as to interest in its contract, WMATA also waived the statutory limit of six percent in the District of Columbia “upon the loan ... of money ... in the absence of expressed contract.” D.C. Code § 28-3302(a) (1984 Supp.). The Court is of the view that this extends WMATA’s waiver too far. The local code provision clearly was intended to make six percent the applicable rate unless the parties fixed some other rate. No such rate was fixed here. Therefore GRS is entitled to six percent interest on $975,952 from April 17, 1984 until the date of this Order. The Court calculates this interest amount at $65,455.63. Post-judgment interest will be fixed by D.C. Code § 28-3302(c) (1984 Supp.) (providing a rate 70 percent of that fixed by the Secretary of the Treasury pursuant to 26 U.S.C. § 6621).

An appropriate Order is attached herewith.

ORDER

Upon consideration of plaintiff’s motion for entry of final judgment, defendant’s opposition thereto, and the entire record herein, for reasons stated in an accompanying Memorandum, it is hereby

ORDERED that judgment is entered for plaintiff in the amount of $975,952 in principal and $65,455.63 in prejudgment interest, with postjudgment interest to be fixed at the rate set by D.C. Code § 28-3302(c) (1984 Supp.).

      . The Board indicated in its decision that "[t]he issue of the extent of WMATA's liability for interest in connection with equitable adjustments is now pending before various judges of the United States District Court for the District of Columbia in several cases. Therefore, the Board’s determination of what interest is ‘provided by law’ must await further instructions from the Court on the criteria to be applied." Board decision at 11.

      . The WMATA contracting officer originally issued a final decision that $1,336,500 was the proper equitable adjustment in May 1977. After GRS noticed an appeal from this decision, the contracting officer made a superseding decision setting the adjustment provisionally at $400,000 pending further negotiations between the parties. The $400,000 was withheld as of this new decision in February 1978. Negotiations during the remainder of 1978 failed to settle the issue, and on January 17, 1979, the contracting officer finally decided that WMATA was entitled to an additional $936,500. That brought the equitable adjustment back to the original figure of $1,336,500.

      . WMATA is correct, of course, that the decision now before the Court for review is that of the general manager, not of the Board on remand. The Court in the first instance, and at the agreement of the parties, remanded the decision directly to the Board, rather than to the general manager, in recognition of the practicalities of the situation — the Board was the designated fact-finder for the general manager and the general manager had wholly adopted the Board’s initial, erroneous decision as his own.

      . WMATA makes one new argument that is wholly frivolous and also must be rejected. It contends that even if $360,548 is a reasonable estimate of the cost of the deleted work, the equitable price reduction must nonetheless be $1,403,325 to avoid paying GRS overhead and profit on the deleted work. The legal principle that GRS should not receive a profit and overhead windfall on the deleted work is not in doubt. What WMATA ignores is that the Board expressly included an overhead and profit calculation in reaching the $360,548 figure. See Board Opinion of March 29, 1985, at 10-11.

      . Article 2, Changes, of the contract's general provisions provides in part that "[i]f any such change [ordered by the contracting officer] causes an increase or decrease in the cost of ... any part of the work under this contract ... an equitable adjustment shall be made in the contract price ... and the contract shall be modified in writing accordingly."


author: EDWARD B. DAVIS, District Judge.

text:
    Richard D. DRISCOLL, Plaintiff, v. SMITH BARNEY, HARRIS UPHAM & CO., INC. and Richard Shalla, Defendants.
    No. 84-8223-CIV.
    United States District Court, S.D. Florida, Miami Division.
    June 6, 1985.
    Russell L. Forkey, Russell L. Forkey, P.A., Ft. Lauderdale, Fla., for plaintiff.
    Robert B. Goldman, Ruden, Barnett, McClosky, Schuster & Russell, P.A., Miami, Fla., for defendants.
   ORDER STAYING PROCEEDING AND GRANTING MOTION TO COMPEL

EDWARD B. DAVIS, District Judge.

THIS MATTER is before the Court upon Defendants’ Motion for Reconsideration of this Court’s Order, which denied Defendants’ Motion to Compel Arbitration. Defendants have also moved to Compel Arbitration of federal securities law claims in this case. It is hereby

ORDERED AND ADJUDGED that the Motion to Compel Arbitration of the pendent state claims is GRANTED. The Defendants’ Motion to Compel Arbitration of the federal securities law claims is also GRANTED. The proceeding shall be stayed pursuant to 9 U.S.C. § 3. Defendants shall submit a status report on the arbitration process every 90 days.

This Court originally denied Defendants’ Motion to Compel arbitration on the basis of Oppenheimer & Co. v. Young, 456 So.2d 1175 (Fla.1984). Oppenheimer held that arbitration agreements are unenforceable in situations governed by Florida state securities laws. This holding is no longer correct as it is in direct conflict with the opinion of the United States Supreme Court in Dean Witter Reynolds, Inc. v. Byrd, — U.S. -, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985). The Supreme Court in Byrd held that district courts are required to compel arbitration of stated claims when an arbitration agreement has been signed and one of the parties files a motion to compel.

Plaintiff argues that the arbitration agreement is an adhesion contract. When presented with a standardized contract of adhesion, a court may deny giving effect to an “unconsionable” clause therein. See 6A A. Corbin, Contracts § 1367, at 20-22 (1962). What is to be considered unconscionable, however, is to be decided by the arbitrator and not the court. Merrill Lynch, Pierce, Fenner & Smith Inc. v. Haydu, 637 F.2d 391 (5th Cir.Unit B1981).

The Supreme Court in Byrd left open the question of whether claims under § 10(b) of the Securities Exchange Act of 1934 or Rule 10b-5 promulgated thereunder are subject to arbitration. The Court did not decide on this issue because the defendant had not raised it. The Court had held in the past that compelled arbitration was inappropriate under § 12(2) of the Securities Act of 1933, 15 U.S.C. § 111(2). Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953). This holding was made regarding § 12(2) because § 12(2) contains an express provision that declares void any stipulation waiving compliance with a provision of the act and the Court felt that an agreement to arbitrate amounted to a stipulation waiving the right to seek judicial review and was therefore void.

Although the issue had not been definitively resolved, there have been indications that arbitration may properly be compelled in § 10(b) and Rule 10b-5 actions. In Scherk v. Alberto-Culver Co., 417 U.S. 506, 94 S.Ct. 2449, 41 L.Ed.2d 270 (1974) the Court questioned the applicability of Wilko to a claim arising under § 10(b) or 10b-5 because these sections do not expressly give rise to a private cause of action. Id. at 512-513, 94 S.Ct. at 2453-54. Similarly, Justice White, in his concurring opinion in Byrd stated that the opinions of some lower courts holding that § 10(b) claims are non-arbitrable “must be viewed with some doubt.”

The reservations of the Supreme Court in Sherck v. Alberto-Culver Co., supra and the analysis of Justice White in Byrd have formed the basis for Florida district court opinions compelling arbitration for claims arising under the Securities Exchange Act of 1934. See Westwind Transportation Inc. v. Merril Lynch, Pierce, Fenner & Smith, Inc., Case No. 84-734-CIV-T-10 (M.D.Fla. March 9, 1985); Niven v. Dean Witter Reynolds, Inc., Case No. 84-1594-CIV-T-10 (M.D.Fla. March 28, 1985) and Greenstein v. First Biscayne Corporation, Case No. 82-0584-CIV-HASTINGS (S.D.Fla. May 16, 1985).

Because of the strong national policy favoring arbitration, see e.g. Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983), and in light of the above mentioned authority, the Court finds that it is proper in this case to order all claims to proceed to arbitration.


author: REAL, Chief Judge.

text:
    Penny CREATON, Patricia Walker and Dolores Anspach, on behalf of themselves and others similarly situated, Plaintiffs, v. Margaret HECKLER, in her official capacity as Secretary of the United States Department of Health and Human Services; Linda McMahon, in her official capacity as Director of the California Department of Social Services, Defendants.
    No. CV 85-3306-R.
    United States District Court, C.D. California.
    June 20, 1985.

      Robert C. Bonner, U.S. Atty., Frederick M. Brosio, Jr., Asst. U.S. Atty., Chief, Civ. Div., Fumiko Haehiya Wasserman, George H. Wu, Asst. U.S. Attys., Los Angeles, Cal., for federal defendant.
    Byron J. Gross, Bruce Iwasaki, M. Judith Nishimoto, Legal Aid Foundation of Los Angeles, Los Angeles, Cal., James Carroll, San Fernando Valley Neighborhood Legal Services, Inc., Pacoima, Cal., Richard A. Rothschild, Western Center on Law and Poverty, Inc., Los Angeles, Cal., Thomas Weathered, Evelyn R. Frank, Legal Aid Soc. of Alameda County, Hayward, Cal., Thomas Mason, Redwood Legal Assistance, Ukiah, Cal., for plaintiffs.
    John K. Van De Kamp, Atty. Gen., Anne S. Pressman, Supervising Deputy Atty. Gen., Barbara M. Motz, Michael V. Hammang, Deputy Attys. Gen., Los Angeles, Cal., for state defendant.
   FINDINGS OF FACT AND CONCLUSIONS OF LAW

REAL, Chief Judge.

This matter came on for hearing before the Court on May 24, 1985 and on June 5, 1985. The Court having considered the pleadings, motions, memoranda of law, declarations, affidavit, exhibits, other papers and oral argument of counsel, being duly advised in the premises, makes the following findings of fact and conclusions of law:

FINDINGS OF FACT

1. On May 17, 1985, plaintiffs Penny Creaton (“CREATON”), Patricia Walker (“WALKER”) and Dolores Anspach (“ANSPACH”), on behalf of themselves and others similarly situated, brought a Class Action Complaint for Declaratory and Injunctive Relief pursuant to 28 U.S.C. Sections 1331, 1343(a)(3) and 1361, seeking injunctive and declaratory relief against the defendants. Plaintiffs challenge implementation in California of federal and state regulations promulgated pursuant to Section 2640(a) of the Deficit Reduction Act of 1984, Pub.L. No. 98-369, 98 Stat. 1145 (1984) (“DRA”), which amended 42 U.S.C. § 602(a) by adding a subpart 38, 42 U.S.C. § 602(a)(38). Pursuant to the DRA, the SECRETARY amended 45 C.F.R. § 206.-10(a)(vii) to conform with the new law. See 49 C.F.R. 35586 (Sept. 10, 1984).

2. The named plaintiffs bringing suit to challenge the regulations set forth claims typical of the class as defined below:

All families in the state of California in which one or more members receives benefits under the Aid to Families with Dependent Children program and in which one or more children living in the household receives benefits under Title II of the Social Security Act resulting from the disability, retirement or death of a parent, and which will lose some or all of their AFDC benefits through implementation of defendants’ regulations purporting to implement Section 2640(a) of the Deficit Reduction Act of 1984.

Further, the members of plaintiffs’ class are so numerous that joinder is impracticable; there are questions of law or fact common to and typical of the class; and the plaintiffs as representative parties will fairly and adequately protect the interests of the class.

3. The Aid to Families with Dependent Children (“AFDC”) program authorized under Title IV-A of the Social Security Act, 42 U.S.C. § 601 et seq., is a cooperative federal-state effort established by Congress in 1935 to enable each state, as far as practicable under the conditions of such state, to furnish financial assistance to certain needy children and the parent or relatives with whom they live. 42 U.S.C. § 602. States are not required to participate in the AFDC program, but those states wishing to participate must submit plans to the Department of Health and Human Services for approval. 42 U.S.C. § 602(b). If the plan meets the requirements of Title IV-A and the implementing regulations and is thereby approved, the state becomes eligible for approximately half of the program’s funding from the federal government. 42 U.S.C. § 603. The AFDC program is administered locally by the states, in accordance with state and federal regulations. Implementing federal regulations are promulgated by the Secretary pursuant to 42 U.S.C. § 1302. The state of California participates in the program.

4. In order to qualify for AFDC benefits, applicants must meet certain standards of financial need, defined by their income and resources. 42 U.S.C. § 602(a).

5. Pursuant to the DRA, several changes were made to the AFDC program, including a change in the composition of the filing unit for AFDC assistance. Section 402(a) of the Act, 42 U.S.C. § 602(a), was amended by the addition of paragraph 38, which provides:

PARENTS AND SIBLINGS OF DEPENDENT CHILD INCLUDED IN AFDC FAMILY; CHILD SUPPORT PAYMENTS
* * # ♦ * *
in making the determinations under paragraph (7) with respect to a dependent child and applying paragraph (8), the State agency shall (except as otherwise provided in this part) include—
“(A) any parent of such child, and (B) any brother or sister of such child, if such brother or sister meets the conditions described in clauses (1) and (2) of section 406(a) [42 U.S.C. § 606(a)], if such parent, brother or sister is living in the same home as the dependent child, and any income of or available for such parent, brother, or sister shall be included in making such determination and applying such paragraph with respect to the family (notwithstanding section 205(j) [42 U.S.C. § 405(j) ] in the case of benefits provided under title II)____

42 U.S.C. § 602(a)(38).

6. The SECRETARY has interpreted “any income of or available for such parent, brother, or sister ... (notwithstanding section 205(j) [42 U.S.C. § 405(j) ] in the case of benefits under title II) ____” to include Title II children’s benefits to a Title II child beneficiary residing with an AFDC family assistance unit. 42 U.S.C. § 602(a)(38).

7. The language “for the use and benefit” of a Title II child beneficiary whose benefits are paid to an adult representative payee, which appears in both 42 U.S.C. §§ 405(j) and 408(e), has been interpreted by the SECRETARY.

8. The SECRETARY’S interpretation of “for the use and benefit” of the Title II child beneficiary is set forth in the Affidavit of Jack Gallagher, Director of the Litigation Staff, Office of Regulations in the Office of Policy, Social Security Administration, Department of Health and Human Services (“GALLAGHER AFFIDAVIT”). According to this affidavit, the SECRETARY considered prior to and after the DRA, that the use of Title II children’s benefits to provide support and maintenance for both the beneficiary and the AFDC family assistance unit of which the beneficiary is a member, to be “for the use and benefit” of the beneficiary as set forth in section 208(e) of the Social Security Act, 42 U.S.C. § 408(e).

9. On September 10,1984, the Secretary published interim final regulations, 42 Fed. Reg. 35586 (1984), implementing the DRA changes, effective October 1, 1984. The regulations require that all income and resources of the individuals required to be included in the assistance unit must be considered in determining eligibility and payment for the assistance unit. See, 49 Fed.Reg. 35588. The SECRETARY states that:

[T]he statute specifically provides for the inclusion of title II benefits, notwithstanding section 205(j). When title II benefits are paid to a representative payee on behalf of a member of the assistance unit and the payee lives in the same household as the assistance unit, the title II benefits must be counted as income. When the representative payee does not live in the household, the title II benefits are included only to the extent that the payee makes them available for the support of the beneficiary. Conforming changes in the title II regulations will be published shortly.

49 Fed.Reg. 35588-89.

10. The regulations defining the family filing unit provide:

For AFDC only, in order for the family to be eligible, an application with respect to a dependent child must also include, if living in the same household and otherwise eligible for assistance:
(A) Any natural or adoptive parent, or stepparent (in the case of States with laws of general applicability); and
(B) Any blood-related or adoptive brother or sister.

49 Fed.Reg. 35599 (Sept. 10, 1984), codified at 45 C.F.R. § 206.10(a)(l)(vii).

11. Any conclusion of law deemed to be a finding of fact is hereby incorporated into these Findings of Fact.

CONCLUSIONS OF LAW

1. This Court has jurisdiction herein.

2. Plaintiffs’ Motion for Class Certification is granted and, pursuant to Rule 23 of the Federal Rules of Civil Procedure, the matter is certified as a class action.

3. Plaintiffs’ Motion for Preliminary Injunction is denied because the Court rejects the legal arguments set forth by plaintiffs. See, Los Angeles Memorial Coliseum Com’m v. Nat Football League, 634 F.2d 1197 (9th Cir.1980); Sports Form, Inc. v. United Press Intern., Inc., 686 F.2d 750, 753 (9th Cir.1982); Miss Universe, Inc. v. Flesher, 605 F.2d 1130, 1134 (9th Cir.1979); Benda v. Grand Lodge of Intern. Ass’n., 584 F.2d 308, 315 (9th Cir.1978).

4. Under the Secretary’s interpretation of “for the use and benefit of” in 42 U.S.C. §§ 405(j) and 408(e), the Title II children’s benefits paid to a representative payee are available to provide support and maintenance for both the Title II beneficiary and the AFDC Assistance Unit when the Title II children reside with parents or siblings who receive AFDC. See 42 U.S.C. § 408(e); GALLAGHER AFFIDAVIT; and Exhibit 1, attached hereto.

5. The construction of a statute by the agency charged with its enforcement is entitled to substantial deference, and the agency’s interpretation will be deferred to if it is reasonable and consistent with the underlying congressional purpose. See Schweiker v. Hogan, 457 U.S. 569, 588, 102 S.Ct. 2597, 2609, 73 L.Ed.2d 227 (1982); Blum v. Bacon, 457 U.S. 132, 141-42, 102 S.Ct. 2355, 2361, 72 L.Ed.2d 728 (1982). There is nothing in the legislative history to indicate that the Secretary could not interpret “for the use and benefit” of the Title II child beneficiary to include Title II payments made to provide for the support and maintenance of both the beneficiary and the AFDC family unit with which the child resides. Because the Secretary's interpretation of 42 U.S.C. § 602(a)(38), in light of her interpretation of “for the use and benefit” in 42 U.S.C. §§ 405(j) and 408(e), is reasonable and consistent with the DRA, the Title II children’s benefit program, and the AFDC program, substantial deference must be given. Her regulations are consistent with her interpretation of the statutes.

6. Plaintiffs’ oral motion for an injunction pending appeal is denied without prejudice because the Court is informed that the parties will make efforts to have the matter expedited on appeal.

7. Any finding of fact deemed to be a conclusion of law is hereby incorporated in these Conclusions of Law.