author: BILLINGS, District Judge.

text:
    Marie R. CYR, Plaintiff, v. Cecil MAYO, Jr., and Nathan Barbour and John Does 1-10, Defendants, v. James BRADLEY and United States of America Department of Agriculture, FMHA, Third Party defendants.
    Civ. No. 84-102.
    United States District Court, D. Vermont.
    Oct. 31, 1984.

      Jeffrey Smith, Middlebury, Vt., for plaintiff.
    David A. Williams, Morrisville, Vt., for defendants Mayo and Barbour.
    James W. Runcie, Downs, Rachlin & Martin, South Burlington, Vt., for third party defendant James Bradley.
    Peter W. Hall, Asst. U.S. Atty., Rutland, Vt., for third party defendant USA.
   OPINION AND ORDER

BILLINGS, District Judge.

This case is before the court on the motion of third-party defendant United States to dismiss for lack of subject matter jurisdiction. For the reasons recited below, that motion is GRANTED and the action is REMANDED to the Lamoille Superior Court of the State of Vermont.

FACTS

In January, 1984, plaintiff Marie R. Cyr filed a complaint in Lamoille Superior Court alleging that defendants Cecil Mayo, Jr.; Nathan Barbour; and John Does # 1-10 had constructed and sold to her a defective house. She asserted claims against the defendants for breach of warranty, misrepresentation and negligence. On February 1, 1984, defendants Cecil Mayo, Jr. and Nathan Barbour filed a third party complaint against James Bradley, the United States Department of Agriculture, and the Farmers Home Administration. (Hereinafter, the last two defendants will be collectively referred to as “the United States.”) Defendants, third-party plaintiffs alleged that any construction defects connected with the foundation of the dwelling arose because of specifications “dictated” by FmHA (Third-party Complaint, Paragraph 5). Defendants, third-party plaintiffs sought judgment against the United States in the amount of any judgment rendered against the United States. On March 19, 1984, the United States successfully petitioned for removal of this action to this court, pursuant to 28 U.S.C. Sec. 1441(a). On September 19, 1984, the United States filed this motion for dismissal.

DISCUSSION:

This case must be dismissed in accordance with the legal doctrine of derivative jurisdiction which holds that upon removal, the receiving court only acquires that jurisdiction vested in the' transferor court. Here, the state court had no subject matter jurisdiction over the claim against the United States.

The United States Supreme Court first enunciated' this doctrine in the case of Lambert Co. v. Balt. & Ohio R.R. Co., 258 U.S. 377, 382, 42 S.Ct. 349, 351, 66 L.Ed. 671 (1922). There, the Court said:

“The jurisdiction of the federal court on removal is, in a limited sense, a derivative jurisdiction. If the state court lacks jurisdiction of the subject matter or of the parties, the federal court acquires none...”

The Supreme Court has reiterated this doctrine in the cases of Arizona v. Manypenny, 451 U.S. 232, 242 n. 17, 101 S.Ct. 1657, 1665 n. 17, 68 L.Ed.2d 58 (1980) (even though a federal court has original jurisdiction over a suit, it acquires no jurisdiction upon removal from a state court that lacked jurisdiction); and Minnesota v. United States, 305 U.S. 382, 388-389 (1939) (when state court lacks jurisdiction; on removal, the federal court acquires none). This doctrine has been the subject of considerable well-deserved criticism. Writing in State of Washington v. American League of Professional Baseball Clubs, 460 F.2d 654, 658-659 (9th Cir.1972), Judge Duniway stated that:

“This is the kind of legal tour de force that most laymen cannot understand, particularly in a ease where the federal court not only has subject matter jurisdiction but has exclusive subject matter jurisdiction. One would have thought that the purpose of removal in such a case is to get the case out of the court that lacks jurisdiction to hear it and into the court that has jurisdiction, and to keep it in the latter court, so that it can be tried and a valid judgment can be entered.”

However, he concluded, “whatever we think of it, the rule has been applied by the Supreme Court,” id. at 659. Only legislation can change this rule. See 14 Wright and Miller, Section 3722 at pp. 574-577.

In recent years, numerous other federal courts have applied the doctrine of derivative jurisdiction to dismiss from federal court claims against the United States that were originally brought in state court. See, e.g., Reid v. United States, 715 F.2d 1148, 1153-1154 (7th Cir.1983) (dismissal of removed trespass claims, as federal district courts and the Court of Claims have exclusive jurisdiction under the Tucker Act); Spencer v. New Orleans Levee Board, 563 F.Supp. 1352, 1354 (E.D.La.1983) (dismissal of removed claim as Federal Tort Claims Act gives exclusive jurisdiction to the federal courts); Goodrich v. Burlington Northern R.R. Co. 701 F.2d 129, 130 (10th Cir.1983) (dismissal of removed claim as federal courts had exclusive jurisdiction under the Federal Tort Claims Act); and Cusanelli v. Klaver, 542 F.Supp. 677, 680 (E.D.N.Y.1982) (dismissal of removed claim as state court did not have jurisdiction over the United States).

In the case at bar, the Lamoille Superior Court lacked subject matter jurisdiction over the third-party claim against the United States. The sovereign immunity of the United States with respect to tort claims is exclusively waived under the Federal Tort Claims Act, 28 U.S.C. Sec. 1346(b), 2671-2680. The Act states that “the district courts ... shall have exclusive jurisdiction of civil actions on claims against the United States.” 28 U.S.C. Sec. 1346(b). Since the state court had no subject matter jurisdiction over the third-party claim, this court acquired none upon removal. The case must be dismissed.

With dismissal of the claim against the United States, pendent jurisdiction over the original claim disappears. The case is hereby remanded to the Lamoille Superior Court.

SO ORDERED.


source: Caselaw Access Project

author: JAMES LAWRENCE KING, Chief Judge.

license: Public Domain

text:
    BRYANT HEATING AND AIR CONDITIONING CORP., INC., Plaintiff, v. CARRIER CORPORATION, et al., Defendants.
    No. 80-509-CIV-KING.
    United States District Court, S.D. Florida.
    Nov. 1, 1984.

      Podhurst, Orseck, Parks, Josefsberg, Eaton, Meadow & Olin, P.A. by Joel S. Perwin and John Oster, Miami, Fla., for plaintiff.
    Morgan, Lewis & Bockius by Lowell Garrett, Squire, Saunders & Dempsey by Philip L. O’Neill, Miami, Fla., for defendants.
   ORDER GRANTING PARTIAL JUDGMENT ON THE PLEADINGS AS TO COUNTS I, IV, V, VI, VII, VIII, XVII and XVIII; ORDER GRANTING SUMMARY JUDGMENT AS TO COUNTS II and III

JAMES LAWRENCE KING, Chief Judge.

This cause arises before the Court upon defendants’ joint motion for partial judgment on the pleadings or, in the alternative, for summary judgment.

On February 27, 1980, plaintiff, an independent distributor of defendant CARRIER CORPORATION, filed suit against its manufacturer CARRIER CORPORATION; CARRIER’S wholly owned finance subsidiary CARRIER DISTRIBUTION CREDIT CORPORATION (CDCC); and individual defendants MELVIN C. HOLM, JOSEPH HOFF, RICHARD E. WEINBERG and ALBION W. FRAZIER, all officers and/or management personnel of CARRIER and/or its BDP company division, alleging violations of sections 1 and 2 of the Sherman Act, section 7 of the Clayton Act, and alleging additional claims based upon state statutory, contract, tort and civil conspiracy grounds.

The gist of plaintiff's claims originates in CARRIER’S 1978 termination .of plaintiff as a distributor of its Bryant line of heating and air conditioning equipment and its replacement of plaintiff with a company owned factory branch. Plaintiff alleges that this termination and takeover was the culmination of an overall anticompetitive effort on the part of defendants to put its independent distributors, such as plaintiff, out of business.

Defendants’ motion requests judgment on ten of the eighteen counts of plaintiff’s complaint, including all eight of the antitrust counts, based upon the following arguments:

1. Defendants are entitled to judgment on the pleadings as a matter of law for all six of the plaintiff’s conspiracy claims under section 1 of the Sherman Act, Counts I, II, III, V, VII and VIII, for plaintiff’s failure to identify the requisite plurality of actors.
2. Defendants are entitled to judgment on the pleadings as a matter of law for the plaintiff’s claims under section 2 of the Sherman Act, Count IV, and section 7 of the Clayton Act, Count VI, as the plaintiff lacks standing to assert these claims because it has not suffered an “antitrust injury”.
3. As an alternative basis for judgment on plaintiff’s claim under section 2 of the Sherman Act, Count IV, defendants are entitled to summary judgment as the defendant CARRIER CORPORATION lacks the requisite degree of market power to sustain a monopolization or attempted monopolization claim.
4. Defendants are entitled to judgment on the pleadings as a matter of law for plaintiffs claim under the Florida Deceptive and Unfair Trade Practices Act, Count XVII, as the plaintiff lacks standing to assert this claim because it has prior experience in the business.
5. Defendants are entitled to judgment on the pleadings as a matter of law for plaintiffs claim for wrongful conspiracy under Florida law, Count XVIII, for plaintiffs failure to identify the requisite plurality of actors.

The discussion which follows will address each of defendants’ arguments in the above stated order.

1. Conspiracy Counts I-VIII under section 1 of the Sherman Act

Defendants’ first argument is predicated upon the recent Supreme Court opinion in Copperweld Corp. v. Independence Tube Corp., — U.S.-, 104 S.Ct. 2731, 81 L.Ed.2d 628 (1984), which changed the law applicable to plaintiff’s six conspiracy claims under section 1 of the Sherman Act. Section 1 explicitly prohibits any “contract, combination ... or conspiracy” that unreasonably restrains trade, 15 U.S.C. § 1 (1982). Thus, in order to state a claim under section 1 it is necessary to challenge concerted action by a plurality of actors. Monsanto Co. v. Spray-Rite Service Corp., — U.S.-,-, 104 S.Ct. 1464, 1469, 79 L.Ed.2d 775 (1984). In June of 1984, the Supreme Court held in Copperweld that, for the purposes of section 1 of the Sherman Act, a corporation and its wholly owned subsidiary or division cannot, as a matter of law, form the plurality of actors required by section 1. Copperweld, — U.S. at-, 104 S.Ct. at 2746. Accordingly, defendants contend that, after Copperweld, all the plaintiff’s section 1 counts alleging an intra-corporate or “horizontal” conspiracy in restraint of trade must be dismissed as they clearly fail to state a claim under section 1 of the Sherman Act, and the plaintiff concedes as much.

Three of the plaintiff’s section 1 counts, (Count I, antitrust conspiracy; Counts V and VII, relating to customer and/or pricing restrictions), specifically challenge concerted action by defendants CARRIER, and its wholly owned subsidiary CDCC. As to these three counts, therefore, the Court finds that, pursuant to Copperweld, the defendants are entitled to dismissal as a matter of law.

Plaintiff’s Count VIII, refusal to deal, fails to even satisfy the threshold pleading requirement of alleging a plurality of actors, alleging instead a unilateral refusal to deal by defendant CARRIER which is not violative of section 1. Therefore, as to this count also the Court finds that defendants are entitled to dismissal as a matter of law.

Defendants argue that the plaintiff’s remaining two section 1 counts (Counts II and III, relating to defendants’ sales allowance program) are subject to the same deficiency as- Count VIII above, as they similarly fail to satisfy the threshold pleading requirement of alleging concerted action by a plurality of actors. Counts II and III allege instead that the “rebate plan”, defendants’ sales allowance program, violates section 1 in that it operates, respectively, as an “unreasonable restraint of trade”, a rule of reason offense, and “as an illegal price maintenance and/or price-fixing scheme”, a per se offense. Moreover, defendants further argue that, notwithstanding the fact that neither count identifies the requisite plurality of actors, both parties throughout the four and one half years of this litigation have viewed the unspecified conspirators in these counts to be defendants CARRIER and CDCC. Thus, these counts would also be subject to dismissal pursuant to Copperweld.

Plaintiff, however, disputes defendants’ assertion that the only conspiracy chailenged or inherent in the complaint is the now discredited “horizontal” or intra-corporate one involving defendants CARRIER and CDCC. As regards Counts II and III, plaintiff contends that the unspecified conspirators, in the alleged resale pricefixing scheme, are itself and defendant CARRIER, operating primarily through its BDP company division, and that the relationship between them is a combination cognizable under section 1. Specifically, plaintiff argues in its response that the allegations in its complaint, at paragraphs 20 and 21, and the facts, as developed in the depositions, affidavits and documents of the appendix attached to its response, both support a “vertical coerced conspiracy” theory between defendant CARRIER and its unwilling distributors, including plaintiff, to set resale prices in violation of section 1. See Greene v. General Foods Corp., 517 F.2d 635, 645 (5th Cir.1975) (independent distributor held not estopped to bring section 1, Sherman Act suit alleging vertical resale pricefixing scheme as record showed plaintiff was coerced by defendant manufacturer into participating in scheme). In essence, according to plaintiff, defendant CARRIER by way of its sales allowance program imposed upon plaintiff “a vertical contract or combination which had the clear effect of constraining price competition at the wholesale level.”

While defendants concede that a “vertical coerced conspiracy” is an established theory of liability under section 1, they argue, nevertheless, that such a theory is neither alleged or inherent in the complaint. They further argue that even assuming a theory of vertical price fixing is sufficiently alleged in the complaint, they would still be entitled to dismissal of Counts II and III on the basis of summary judgment. In effect, defendants in their reply invite the Court to convert their motion for judgment on the pleadings, pursuant to Rule 12(c), Federal Rules of Civil Procedure, into a motion for summary judgment by reviewing all the plaintiffs evidence concerning the alleged illegality of defendants’ sales allowance program.

At the outset, the Court notes that it is not unmindful that under the liberal federal rules concept of “notice pleading”, a complaint is sufficient if the facts state a claim under any conceivable legal theory. See Thompson v. Allstate Insurance Co., 476 F.2d 746, 749 (5th Cir.1973). As the Supreme Court has stated, the theory of notice pleading is satisfied as long as the pleadings “give the defendant fair notice of what the plaintiffs claim is and the grounds upon which it rests.” Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). Moreover, as this Court recognized in City of Gainesville v. Florida Power and Light Company, 488 F.Supp. 1258, 1263 (S.D.Fla.1980), “the concept of notice pleading applies to the ‘big’ antitrust case as well as the ‘small’ negligence lawsuit.” Paragraphs 20 and 21 of plaintiff’s complaint, contain specific and detailed factual allegations that the rebate plan, or sales allowance program, that defendant CARRIER imposed upon plaintiff resulted in an illegal resale price maintenance scheme. To this extent, therefore, the Court agrees with plaintiff that its complaint fairly alleges a vertical coerced conspiracy to maintain resale prices, thus defeating a motion for judgment on the pleadings. Accordingly, the discussion which follows will consider defendants’ alternative basis for dismissal of Counts II and III, namely summary judgment, on the grounds that all the evidence presented demonstrates that defendants’ sales allowance program does not constitute resale price maintenance.

As plaintiff reminds this Court, the Supreme Court in Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962) noted that as a general rule summary judgment is disfavored in complex antitrust litigation because motive and intent are so important. However, this Court is of the view that summary judgment is proper on the record of the instant case. Assuming for the purposes of this motion that all evidence presented by plaintiff concerning the sales allowance program is true, and viewing this evidence and the inferences that can be drawn therefrom in the light most favorable to plaintiff, defendants are still entitled to prevail as a matter of law. See Fed.R.Civ.P. 56(c).

It is well established that vertical price maintenance or price-fixing agreements are per se violations of section 1 of the Sherman Act. See Monsanto Co. v. Spray-Rite Service Corp., — U.S. -, —, 104 S.Ct. 1464, 1469, 79 L.Ed.2d 775 (1984). In order for there to be resale price maintenance, the manufacturer must announce, in advance, a resale price to its distributor and then take “affirmative, action” to force its distributor to comply with the resale price. United States v. Parke, Davis & Co., 362 U.S. 29, 45-47, 80 S.Ct. 503, 512-13, 4 L.Ed.2d 505 (1960). As plaintiff concedes, it must show some affirmative conduct by the defendants which interferes with its free pricing decisions as: “The crux of any price-fixing agreement is the relinquishment by the trader ... of the freedom to set prices in accordance with its own judgment.” Chisholm Brothers Farm Equipment Co. v. International Harvester Co., 498 F.2d 1137, 1142 (9th Cir.1974).

In the sales allowance program in question, however, it is the distributors, such as plaintiff, and not the defendant manufacturer CARRIER; who suggest the resale price. The depositions of Richard Legg, at pages 22-30, and Joseph Hoff, at page 51, which are included in the appendix of documents to plaintiffs response, clearly indicate that the defendants’ sales allowance program is initiated at the discretion of its distributors. The distributors initiate the program as a result of their unilateral determinations regarding their resale prices.

Defendants’ program, as these affidavits illustrate, is essentially one in which it agrees to reduce its wholesale price to its distributors in order to enable them to meet price competition. Any distributor who approaches defendant manufacturer with a request for a lower wholesale price is required to provide proof that a lower wholesale is indeed necessary to meet a specific competitive situation. A further aspect of the sales allowance program is that if it is later learned that the distributor has resold above the price it originally represented as necessary to meet competition, then defendant manufacturer will disallow that previously granted price discount. This is a policy, defendants maintain, which is designed to insure that its distributors actually pass the discounts on to their customers.

The Court agrees with defendants that a series of recent Court of Appeals decisions are dispositive on the question of the legality of its sales allowance program, as described above. These decisions hold that price assistance programs, such as the defendants’, do not constitute resale price maintenance violative of section 1, as they are essentially pro-competitive, allowing distributors to engage in price competition, rather than anticompetitive. See AAA Liquors, Inc. v. Joseph E. Seagram & Sons, Inc., 705 F.2d 1203, 1206-1208 (10th Cir.1982); Lewis Service Center, Inc. v. Mack Trucks, Inc., 714 F.2d 842, 846-847 (8th Cir.1983); Jack Walters & Sons Corp. v. Morton Building, Inc., 737 F.2d 698, 706-708 (7th Cir.1984).

The Court notes that plaintiff disputes the crucial point that defendants’ sales allowance program was initiated by its distributors. As it argued at the oral hearing on defendants’ motion:

In this case, the manufacturer structured the program to impose the price upon the dealer, to require the dealer to beg for the rebate because the price was set artificially at a level that was beyond the level at which the dealer could make a profit, could even sell the thing. It was set artificially at a completely .anticompetitive level.

This argument is identical, however, to one rejected by the Court in the Lewis case. Lewis involved a section 1 challenge to a manufacturer’s “sales allowance program”, which operated to allow the manufacturer to reduce its wholesale price so that its dealer could meet retail price competition. The Court in Lewis responded to plaintiff dealer’s argument, that’the manufacturer’s standard wholesale prices were set artificially high in order to force dealers to seek price assistance, by stating:

In the instant case, Mack simply determines the maximum amount, based on the information supplied to Mack by the dealer, by which Mack is willing to reduce its wholesale price (and thereby its profit) in order to assist the dealer in selling a Mack truck. In granting such a discount Mack may require the dealer to reduce its own profit as well. Mack has a right to ensure that the discount it affords its dealers is passed on to the customer. We cannot accept Lewis’ argument that Mack must lower its wholesale price to a figure Lewis deems attractive without requiring a commensurate reduction on Lewis’ part (emphasis added) 714 F.2d at 846.

This Court further agrees with defendant that the Lewis decision is particularly persuasive authority in that the sales allowance program it upheld, as being neither anticompetitive in purpose or effect, shared the following determinative characteristic with defendants’ program herein: the resale price was suggested by the dealer; the manufacturer never refused to sell its equipment because of the dealers pricing policies, nor threatened to terminate the dealer because of a dispute over resale pricing; the program did not have the effect of depriving the dealer of pricing freedom, but instead sought only to ensure that the discount be passed on to the customer.

Therefore, the Court accordingly finds that the defendants’ are entitled to summary judgment as to Counts II and III as their sales allowance program does not constitute resale price maintenance or price-fixing in violation of section 1 of the Sherman Act.

2. Standing under Section 2 of the Sherman Act, Count IV and under Section 7 of the Clayton Act, Count VI

The basis of plaintiff’s Section 2 claim, the monopolization count, and Section 7 claim, the acquisition of assets count, stems from defendant CARRIER CORPORATION’S allegedly unlawful termination of plaintiff as its independent distributor and its replacement of plaintiff with a-company owned factory branch.

Defendants argue that plaintiff lacks standing under section 4 of the Clayton Act, 15 U.S.C. § 15, which provides treble damages to any person injured by “reason of anything forbidden in the antitrust laws”, to seek damages for its section 2 and section 7 antitrust claims because plaintiff has not alleged or suffered “antitrust injury” as required by the Supreme Court’s decision in Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977). Rather, defendants assert that plaintiff’s wrongful injury, if any, amounts to nothing more than claims for common law tort or contract violations.

Analysis of plaintiff’s standing properly begins with the Brunswick opinion which instructs that in order for a private party to recover treble damages under section 4 of the Clayton Act they “must prove antitrust injury, which is to say injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful. The injury should reflect either the anticompetitive effect of the violation or the anticompetitive acts made possible by the violation.” (emphasis added) Id. at 490, 97 S.Ct. at 698. In other words, it is not enough that the plaintiff’s injury would not have occurred but for the defendant’s alleged violation of the antitrust laws; the injury must be the sort of thing the antitrust laws are intended to prohibit.

Plaintiff argues that the appropriate criteria for judging standing under section 4 of the Clayton Act is the more recent Supreme Court decision in Blue Shield of Virginia v. McCready, 457 U.S. 465, 102 S.Ct. 2540, 73 L.Ed.2d 149 (1982) which it quotes at great length. However, Blue Shield does not change this Court’s analysis of “antitrust injury” under Brunswick. The Court in Blue Shield, in reaching its determination that the plaintiff therein had standing under section 4 to challenge Blue Shield’s policy of covering treatment by psychiatrists but not clinical psychologists, considered the above quoted language in Brunswick and expressly reaffirmed the Brunswick requirement that the injury to plaintiffs in antitrust cases must “flow from that which makes defendants’ acts unlawful.” Brunswick, supra, 429 U.S. at 489, 97 S.Ct. at 697. See, Blue Shield, 457 U.S. at 480, 102 S.Ct. at 2549-51. Moreover, the Supreme Court subsequently upheld this requirement again in its latest antitrust standing case, Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 540, 103 S.Ct. 897, 910, 74 L.Ed.2d 723 (1983). As such this Court, in considering plaintiff’s standing, remains concerned with the application of the Brunswick requirement that plaintiff’s injury result from the defendants’ anticompetitive conduct.

The Court’s analysis, therefore, is directed towards whether plaintiff’s injury in the instant case was caused either by the allegedly anticompetitive aspects of the challenged acquisition of its assets or by any anticompetitive acts made possible by the acquisition. This analysis is guided by the numerous judicial decisions which have consistently interpreted the Brunswick rationale to deny standing to plaintiff companies alleging violations of section 2 and section 7 in the acquisition of their assets. The decisions universally hold that in this type of situation plaintiffs’ injuries were not attributable to or caused by any downward effect on competition, which is a prerequisite of any antitrust claim. See McDonald v. Johnson & Johnson, 722 F.2d 1370 (8th Cir.1983), Chrysler Corp. v. Fedders Corp., 643 F.2d 1229 (6th Cir.1981), A.D.M. Corp. v. Sigma Instruments, Inc., 628 F.2d 753 (1st Cir.1980). Similarly, application of the Brunswick rationale to the facts in the instant case convinces this court that the plaintiff lacks standing. As defendants succinctly explained at the oral argument on this motion:

[T]he point of all these cases is that whether or not the acquisition of plaintiff’s assets or the taking over of its business by us had any effect on competition, whether or not that occurred, plaintiff would still be out of business; and thus, there is lacking the essential connection between its injury and the effect on competition that would confer standing under the antitrust laws.

The Court is not persuaded by plaintiff’s attempt to limit the above-cited decisions’ denial of antitrust standing to situations where plaintiff companies “voluntarily” withdrew from the market. Plaintiff argues specifically that the Court in McDonald distinguishes those cases where plaintiff companies “voluntarily” entered into agreements to sell their business and then later tried to back out of the deal, from those cases where, as plaintiff alleges in the instant case, plaintiff companies were forced out of the market by “coercive and predatory practices”. Plaintiff bases its argument on the McDonald Court’s reference, 722 F.2d at 1378, to three criminal cases wherein the United States successfully prosecuted monopolization claims against competitors who forced other competitors to sell. Plaintiff’s reliance on these cases is misplaced, however, in that, as defendants point out, these cases “have absolutely nothing whatsoever to do with the standing of a private plaintiff to seek treble damages under section 4 of the Clayton Act”. Furthermore, the Court also agrees with defendants’ observation that the McDonald Court’s use of the term “voluntary” was meant in a “very broad sense”, encompassing more than uncoerced agreements to sell. This is evidenced by the McDonald Court’s reference, at 722 F.2d 1376, note 7, to Peterson v. Borden Co., 50 F.2d 644 (7th Cir.1931), an early case cited by the Brunswick Court which involved plaintiff stockholders who had allegedly been defrauded in the sale of their stock, as one of their controlling decisions.

The Court notes, moreover, that Peterson is not the only case cited as a controlling decision in McDonald which evidences the proposition that the use of the term “voluntary” should be construed broadly. The McDonald Court also discusses, 722 F.2d at 1375, note 6, and 1377, the decision in Turner v. Johnson & Johnson, 549 F.Supp. 807 (D.Mass.1982), an acquisition of assets case involving allegations of fraud wherein the Court denied antitrust standing to the plaintiffs after analyzing the alleged injuries under the “antitrust injury” requirement of Brunswick. The Turner decision is instructive in that, as in the instant ease, the plaintiffs alleged fraud and misrepresentation by the defendants in acquiring the assets of plaintiffs, and further alleged that the assets were acquired for the purpose of suppressing plaintiffs and eliminating competition. Plaintiffs therein brought a suit for fraud and antitrust violations under Sections I and 2 of the Sherman Act and Section 7 of the Clayton Act. The Turner Court, in denying antitrust standing, offered the following analysis as to why plaintiffs had failed to meet the Brunswick “antitrust injury” requirement:

Any injury which AMEC suffered was due to the alleged business torts and the fraud on the part of J & J and not to any anticompetitive effect of the acquisition. “If the sale of [AMEC’s] assets had an effect on competition, it would have occured whether or not [AMEC] was harmed. There is thus lacking the essential connection between injury and the aims of the antitrust laws necessary to give [AMEC] standing.” Id. It was not the fact of AMEC’s elimination as a competitor which caused its alleged injury; rather the injury resulted from the fraud and misrepresentation allegedly practiced by J & J during the negotiations and the acquisition. 549 F.Supp. at 811.

This Court similarly finds that the plaintiff in this ease has neither alleged or suffered “antitrust injury”. Accordingly, defendants are entitled to judgment on the pleadings as to Counts IV and VI as the plaintiff lacks standing to pursue these claims arising under Section 2 of the Sherman Act and Section 7 of the Clayton Act respectively.

3. Market Power under Section 2 of the Sherman Act, Count IV

As the Court has determined above that plaintiff lacks standing to pursue its section 2 claim, it need not reach defendants’ alternative basis for summary judgment on the section 2 claim. Therefore, the Court expresses no opinion on the question of defendants’ market power as it relates to sustaining a monopolization or attempted monopolization claim under section 2 of the Sherman Act.

4. Standing under the Florida Deceptive and Unfair Trade Practices Act, Count XVII

Defendants argue that the plaintiff lacks standing to pursue its claim under the Florida Deceptive and Unfair Trade Practices Act, Fla.Stat.Ann. § 501.204(1) because the relationship between the plaintiff and the defendants in the instant case did not involve the requisite “consumer transaction’’. As this Court recognized in LJS Co. v. Marks, 480 F.Supp. 241, 244 (S.D.Fla.1979), a private right of action for damages under the Act cannot be maintained unless the alleged unfair or deceptive acts or practices complained of involves a “consumer transaction”, Fla.Stat.Ann. § 501.212(3), and, this Court further recognized that Florida Courts have strictly construed the definition of “consumer transaction”.

As defined by the statute, a “consumer transaction” means:

a sale, lease, assignment, award by chance, or other disposition of an item of goods, a consumer service, or an intangible to an individual for purposes that are primarily personal, family, or household or that relate to a business opportunity that requires both his expenditure of money or property and his personal services on a continuing basis and in which he has not been previously engaged or a solicitation by a supplier with respect to any of these dispositions, (emphasis added) Id. § 501.203(1).

Defendants’ argument is specifically directed to the fact that plaintiff, who admits in its complaint to having been engaged in the heating and air conditioning business for more than 20 years, cannot fit within the “obvious purpose” of the second, or “business opportunity”, clause of the above statutory definition of “consumer transaction”, as it has been “previously engaged in the business involved”. Fla.Stat.Ann. § 501.203(1). As the Florida Court in Darrell Swanson Consolidated Services v. Davis, 433 So.2d 651, 652 (Fla.Dist.Ct.App.1983) explicitly held, “a cause of action for civil damages under Chapter 501 is legally insufficient in the absence of a showing that the plaintiff has not previously been engaged in the business involved.”

Plaintiff argues in response that this Court’s decision in LSJ, wherein it held that the plaintiff had no private right of action as its business was not a “consumer”, was wrongly decided as it was written before the Act was amended to add subsection (9) of § 501.203, which now defines “consumer” to include businesses or corporations such as plaintiff. However, as the later court in Packaging Corporation International v. Travenol Laboratories, 566 F.Supp. 1480, 1481, noted, in endorsing this Court’s decision in LSJ, the added definition of “consumer” does not alter the validity of [the LSJ] Court’s reasoning.” In construing the Act, the Packaging Court stated that “the statute appears , to be directed to entities that have been traditionally thought of as consumers, in situations traditionally thought of as consumer transactions.” 566 F.Supp. at 1483. Thus, the Court in Packaging found that whether or not the plaintiff fit the definition of “consumer” was immaterial in that the case involved did not fit the definition of “consumer transaction.”

As such, this Court admits it is as “mystified” as the defendants as to why the plaintiff bases his argument on the changed definition of consumer when defendants’ point is that the plaintiff cannot satisfy the other, equally crucial, definition of “consumer transaction”. The Court accordingly finds that the plaintiff lacks statutory standing to pursue this claim under the Florida Deceptive and Unfair Trade Practices Act and, therefore, defendants are entitled to judgment on the pleadings as to Count XVII.

5. Conspiracy Count XVIII under Florida Law

Defendants’ final argument is that plaintiff’s claim for wrongful conspiracy under Florida law, Count XVIII, should be dismissed as a matter of law for failure to state a claim as it does not identify the requisite plurality of actors.

Plaintiff’s Count XVIII specifically alleges that “the defendants herein wrongfully conspired to commit the wrongs above alleged, such conspiracy being engaged in willfully and maliciously”. The Court notes, however, that Florida case law holds that members of a single economic unit, such as the named defendants herein, CARRIER CORPORATION, its wholly owned subsidiary CDCC, and the individual defendants who are all officers and/or personnel of CARRIER or its BDP unit, cannot constitute the requisite combination of “separate economic groups or forces” necessary to establish the Florida tort of conspiracy. See Buckner v. Lower Florida Keys Hospital District, 403 So.2d 1025, 1029 (Fla.Dist.Ct.App.1981).

In response, plaintiff contends that the allegations in the complaint also support a theory of “vertical coerced conspiracy” between the defendants and its distributors such as plaintiff to set resale prices, and, as such, the conspiracy counts are facially sufficient. This of course is the same argument advanced by plaintiff in regard to its section 1 antitrust claims. However, while federal law recognizes the theory of “vertical coerced conspiracy” in antitrust actions, federal law is not dispositivé on plaintiff’s Count XVIII which alleges a cause of action under the Florida tort of conspiracy. Whether this count states a cause of action is to be determined by Florida case law, and this Court is not aware of any Florida case law, nor has plaintiff cited any, wherein a Florida Court has recognized a theory by which a plaintiff could recover damages for a conspiracy between itself and defendants to inflict wrong on the plaintiff. Accordingly the Court finds that defendants are entitled to judgment on the pleadings as to plaintiffs claim for wrongful conspiracy under Florida law, Count XVIII, as it fails to state a cause of action.

In conclusion, the Court, after carefully considering oral argument of counsel on defendants’ motion at a hearing on October 1, 1984, and reviewing the several memoranda of law in support and in opposition thereto, herein does:

ORDER and ADJUDGE that defendants' joint motion for partial judgment on the pleadings as to Counts I, IV, V, VI, VII, VIII, XVII, and XVIII be, and it is, GRANTED. The Court does further:

ORDER and ADJUDGE that defendants’ joint motion for summary judgment as to Counts II and III be, and it is, GRANTED.

This case is dismissed as to Counts I, II, III, IV, V, VI, VII, VIII, XVII, and XVIII.


author: URBOM, Chief Judge.

text:
    Dean ROWSE and Helen Rowse, Plaintiffs, v. PLATTE VALLEY LIVESTOCK, INC., a Nebraska corporation, Defendant.
    No. CV84-L-227.
    United States District Court, D. Nebraska.
    Nov. 1, 1984.

      Richard A. Koehler, Geneva, Neb., for plaintiffs.
    Robert M. Cook, Norfolk, Neb., for defendant.
    Sally Johnson, Asst. U.S. Atty., Lincoln, Neb., for intervenor United States of America.
   MEMORANDUM AND ORDER ON MOTION FOR SUMMARY JUDGMENT AND MOTION TO DISMISS

URBOM, Chief Judge.

The plaintiffs are seeking by this lawsuit to enforce a reparations order issued in their behalf by the Secretary of Agriculture under § 309 of the Packers and Stockyards Act of 1921, as amended, 7 U.S.C. § 210. The plaintiffs have filed a motion for summary judgment, filing 9, and the defendant has filed a motion to dismiss, filing 14. Because it affects the jurisdiction of this court, I shall address the defendant’s motion first.

The defendant is a market agency selling livestock on commission and operating a posted stockyard at Gering, Nebraska. As such, it is registered with the Secretary of Agriculture under the Packers and Stockyards Act and is subject to the provisions of the Act and regulations promulgated under its authority. The plaintiffs filed a reparation complaint with the Secretary of Agriculture on March 13, 1980. On February 3, 1984, the office of the Secretary issued a decision and order finding that the defendant had engaged in an unjust practice prohibited by the second clause of § 307(a) of the Act, 7 U.S.C. § 208(a), and awarding to the plaintiffs the net proceeds from the' sale by the defendant of 108 cows ($57,184.33) and the defendant’s commission on the sale ($692.80), a total of $57,-877.13, plus interest thereon at 13 per cent from April 1, 1980, until paid. The defendant has paid no part of that award.

The jurisdiction of this court is based upon the jurisdiction of the Secretary to have entertained the complaint in the first instance. The jurisdiction of the Secretary is an issue of law to be reviewed de novo here, 5 U.S.C. § 706, but the findings and orders of the Secretary are prima facie evidence of the facts stated, 7 U.S.C. § 210(f). Otherwise, the suit “shall proceed in all respects like other civil suits for damages.” Id. In reviewing the findings and orders of the Secretary, the substantial-evidence-on-the-record standard of 5 U.S.C. § 706(2)(E) applies. Rice v. Wilcox, 630 F.2d 586, 591 (C.A. 8th Cir.1980).

The defendant contends that the Secretary lacked jurisdiction, because the transaction for which the plaintiffs seek damages was an “isolated instance” which does not constitute a “practice” within the meaning of 7 U.S.C. § 208(a). Section 208(a) provides:

“It shall be the duty of every stockyard owner and market agency to establish, observe, and enforce just, reasonable, and nondiscriminatory regulations and practices in respect to the furnishing of stockyard services, and every unjust, unreasonable, or discriminatory regulation or practice is prohibited and declared to be unlawful.”

The United States, which has intervened to defend the Secretary’s jurisdiction, argues that Congress intended that a “practice,” under the second clause, be read to mean a course of conduct of the industry as a whole rather than a course of conduct of a particular respondent. The defendant cites Rice v. Wilcox, supra, at 591, in which the court said, “we emphasize that isolated transactions do not constitute a practice.”

One way to read Rice is to say that it sets an “every dog gets one free bite” rule. In that case Wilcox purchased cattle from Rice seventeen times over a six-month period by paying for the cattle one week after the sale with checks drawn on the account of Davis, to whom Wilcox consigned the cattle for sale; each time Davis honored the checks. Then Wilcox made two more purchases of cattle from Rice, but neither Wilcox nor Davis paid Rice for the cattle; after Davis sold the cattle on consignment, he retained the proceeds to satisfy Wilcox’s debt to him, even though Davis knew that Rice had not been paid. The Secretary found that both Wilcox’s failure to pay for the cattle and Davis’ retention of the sale proceeds and nonpayment of the debt after making a practice of honoring Wilcox’s debts to Rice were unjust practices under 7 U.S.C. § 208. The appellate court affirmed the district court’s decision sustaining the reparation orders. Although it said that an isolated transaction is not a practice, the court observed that several acts of dishonoring checks are not required and that dishonoring two drafts after inducing Rice’s reliance upon Davis’ history of extending credit to cover Wilcox’s purchases was a deceptive practice within the Secretary’s authority to stop.

The reasoning laid out in Rice leaves unclear whether the “practice” was the entire course of action, including honoring 17 checks, or was the two instances of dishonoring checks. The latter was the unfair practice found by the Secretary and upheld by the actual holding of the case. Unless the court believed that honoring the first 17 was deceptive because Davis intended all along to dishonor the last two, which I doubt, then the unfair practice was connected with the last two. Because the court said an isolated transaction was insufficient for a practice, it must have meant either that two unfair transactions do constitute a practice, regardless of the context of prior fair transactions, or that one or two transactions become a practice when they derive their unfairness from the defendant’s abrupt change of a previous course of conduct on which the plaintiff has relied to his detriment. I believe the latter is the proper explanation for the Rice result, and the court was not consciously adopting a “one free bite” rule. Rather the court was giving a broad reading to the power of the Secretary to protect cattle sellers while heeding the idea that the Packers and Stockyards Act was not meant to make the Secretary a collecting agency or provide a federal administrative remedy for every worthless check or dishonored draft. Id. at 591 n. 5.

The policy from Rice applies to the present facts, although those facts are distinguishable. For purposes of the motion to dismiss, the facts alleged by the plaintiff, in this case the findings of the Secretary, must be taken as true. The Secretary’s decision indicates that the defendant’s application of a portion of the net sale proceeds to satisfy a debt owed by the dealer to the defendant when the dealer had not paid the plaintiff was not an isolated transaction on the part of the defendant, although the defendant may not have had a related transaction with the plaintiff. On January 19, 1980, the defendant had sold 159 head of cattle consigned to it by the same dealer, Ken Kaba, and retained a portion of the net sale proceeds to pay a debt owed it by Kaba and gave Kaba a check for the balance. Shortly after that the sellers of the cattle, the Rezac brothers, informed the defendant that Kaba had not paid them. The defendant stopped payment of the check to Kaba and on February 28, 1980, paid the Rezacs the full net proceeds of the January 19 consignment sale. Meanwhile, on February 16, 1980, Kaba and the plaintiffs agreed to the sale of 108 cows, which Kaba picked up on February 20 and 21. Kaba gave the plaintiff two checks in payment on February 21, and the Rowses deposited them into their account the next day. The defendant sold the Rowse cattle on February 27; at this time the president of the defendant knew that Kaba had bought the cattle from Dean Rowse and that Kaba had recently failed to pay for livestock purchased from the defendant, from Dennis Rezac, and from Dale Van Wyk. The next day, the same day that the defendant paid the proceeds of the sale of the 159 steers to the Rezacs, the defendant, with Kaba’s knowledge, paid a portion of the net sale proceeds from the Rowse cattle to itself to satisfy a debt owed it by Kaba and paid the rest to Van Wyk to satisfy Kaba’s debt to him. On March 3 the Rowses learned that the Kaba checks to them were being returned for insufficient funds.

The case of Mid-South Order Buyers, Inc. v. Platte Valley Livestock, Inc., 210 Neb. 382, 315 N.W.2d 229 (1982), is crucial to the question of whether the present defendant’s action was a “practice” under section 208, not because of the legal principle applied in that case, but because of the facts found by the state court. As the Secretary found in the present case, the defendant here also was the defendant in Mid-South. In that case, the plaintiff sold cattle to a dealer, Tige Enterprises, in three lots, but received no payment. Tige consigned the cattle to Platte Valley, and they were sold. Platte Valley then paid the proceeds to itself to cover a debt owed it by Tige, although Mid-South had already informed Platte Valley that Tige had not paid for the cattle. This occurred in 1973. Seven years later, according to the Secretary’s decision, Platte Valley did the same thing to the Rowses.

Even under the narrowest reading of Rice v. Wilcox, the defendant already has had its free bite, either in the Mid-South transaction in 1973 or in the Rezac transaction in 1980, and the repetition makes it a “practice.” However, it is notable that Rice cited Neugebauer v. Ryken, 34 Agric. Dec. 1712 (D.S.D.1975), for the proposition that several acts of dishonoring checks are not necessary. In discussing this point, the Supreme Court of Nebraska in Mid-South noted that Neugebauer involved a single transaction involving a misrepresentation and quoted the portion of the decision that distinguished nonpayment of bills as a mere part of the “ordinary debtor-creditor relationship,” which is unlike a misrepresentation about the breed of cattle, the latter being “ ‘inextricably within the term of “furnishing stockyard services.” ’ ” 210 Neb. at 393, 315 N.W.2d at 235. The Nebraska court concluded that “[t]he term ‘practice’ may involve a single transaction if the unjust or unreasonable practice is among the evils the Packers and Stockyards Act was intended to remedy.” Id., at 393-394, 315 N.W.2d at 235. In this light it is apparent that the two transactions in Rice, when taken in the context of the past dealings between the parties and the reliance the seller developed on that manner of doing business, were among the evils the act was intended to remedy, and this would still be true even if there had been only one instance of refusing to cover the dealer’s check.

In the present case, the defendant’s alleged action was not merely an aspect of the debtor-creditor relationship. Rather, it was an instance of a regulated stockyard market agency violating regulations promulgated to carry out the purposes of the act. Under 9 C.F.R. § 201.39(a), - market agencies are prohibited from paying net proceeds from livestock consignment sales to anyone other than the consignor or shipper, with certain listed exceptions. The only exception relevant here is that the market agency may pay proceeds to a person it has reason to believe is the owner of the livestock. Also, § 201.42 provides that thé proceeds of consignment sales are trust funds in the hands of the market agency and must be deposited into a custodial account and paid only as provided in the regulation. Neither regulation authorizes the market agency to pay consignment sale proceeds to itself to satisfy a debt of the consignor or to another debtor of the consignor. Mid-South Order Buyers, Inc. v. Platte Valley Livestock, Inc., 210 Neb. 382, 385, 394, 315 N.W.2d 229, 231, 235 (1982).

Therefore, unlike a single instance of a breach of the debtor-creditor relationship, an evil not targeted by the Packers and Stockyard Act, the transaction here, even if viewed as a single transaction, is a practice which Congress intended to reach and regulate under the Act. Unlike a bad-check transaction, it is not an isolated instance because, according to the Secretary’s decision, it is part of an industry-wide practice intended to be reached by the Act. In addition, assuming the truth of the matters stated in the petition and the reparation order, the transaction involving the Rowses was part of a practice by the defendant. The Secretary had the power to consider the plaintiff’s reparation complaint, and this court has jurisdiction to review the Secretary’s action. The defendant’s motion to dismiss the complaint is denied.

The plaintiff’s motion for summary judgment requires consideration of evidence outside the pleadings. The United States submitted, but did not file, a certified copy of the Secretary’s decision and order in Dean Rowse and Helen Rowse v. Platte Valley Livestock, Inc., P. & S.Doc. No. 5778 (Feb. 3, 1984), a copy of which also is attached to the plaintiff’s original complaint in this court. Received in the judge’s office, but not filed by the clerk, as attachments to the defendant’s brief in opposition to the plaintiff's motion for summary judgment were an affidavit of Gene Lenhart, a copy of the USDA hearing transcript, a copy of the respondent’s brief before the Secretary, and a copy of a memorandum and order in Lane v. Sohler, from the United States District Court for the District of Montana. Counsel for the defendant has told the court that he sent the latter group of materials to the clerk’s office in Omaha for filing, but that the clerk apparently took them to be part of the brief, which would not be filed, and forwarded them to the judge’s office without filing them. Counsel for the plaintiffs and defendant have agreed that the court may consider these copies in deciding the summary judgment motion, despite noncompliance with the local rule requiring that such documents be filed with the clerk at the time of the motion or the response to the motion. Therefore, the decision and order, the hearing transcript, and the Lenhart affidavit will be made part of the court file in this case. The court decision and brief are not evidence relevant to any issue in this case and will not be filed, but will be considered as part of the defendant’s argument.

By statute, the findings and order of the Secretary are to be taken as prima facie evidence of the facts stated therein. 7 U.S.C. § 210(f). I agree with the Nebraska Supreme Court that the standard of review under this statute in the summary judgment context is the same as that under the similar provisions of the Interstate Commerce Act, as described in ICC v. Atlantic Coast Line R. Co., 383 U.S. 576, 86 S.Ct. 1000, 16 L.Ed.2d 109 (1966). In Mid-South the court said about the Atlantic Coast Line case:

“The Court there held that the commission's findings on issues other than primary jurisdiction issues ‘are subject to review under the prima facie evidence provision of § 16(a), with the statutory rights of introducing evidence not before the Commission and obtaining a jury determination of disputed issues of fact.’ Id. at 594, 86 S.Ct. at 1011. The Court continued in a footnote: ‘Section 16(2), of course, does not limit the carrier to introducing opposing evidence to rebut the prima facie effect of the Commission’s order. It may also challenge the admissibility of the order on the grounds, for example, that the Commission did not afford the carrier a fair hearing or that the order was not based upon substantial evidence ____ But if a Commission order containing findings on all matters essential to the shipper’s recovery is admitted and the carrier produces no opposing evidence, the findings and order of the Commission may not be rejected by the jury and the shipper is entitled to judgment.’ Id. at 594, 84 S.Ct. at 1011.”

210 Neb. at 395, 396, 315 N.W.2d at 236. The Nebraska court affirmed a summary judgment for the plaintiff where the trial court had received on the motion not only the order and findings of the Secretary, but also the record of the entire hearing before the U.S.D.A. examiner, at which both parties presented evidence without restriction, and where the defendant did not offer to the trial court any additional contradictory evidence or seek a further evidentiary hearing. Id.

The evidentiary status of the present motion is identical, except that the defendant has offered the affidavit of its president, Gene Lenhart, to contradict certain of the Secretary’s findings. The defendant also contends that the Secretary’s order is inadmissible because it was not based on substantial evidence.

Whether the plaintiffs have carried their burden of establishing initially the nonexistence of any genuine issue of material fact depends on the admissibility of the findings and order of the Secretary. If admissible, the Secretary’s decision would satisfy the plaintiffs’ burden as the moving party, and it would then become the responsibility of the defendant to show that a fact issue does indeed exist. See Walling v. Fairmont Creamery Co., 139 F.2d 318, 322 (8th Cir.1943). Also, it is within the court’s power to grant summary judgment against the moving party, despite the lack of a cross-motion, where the party against whom the judgment is entered has had a full and fair opportunity to meet the proposition that there is no genuine issue of material fact to be tried and where the party for whom judgment is rendered is entitled thereto as a matter of law. Rule 54(c), Federal Rules of Civil Procedure; 6 Moore’s Federal Practice ¶ 56.12 (2d ed. 1983).

Thus, the first task is to test whether the Secretary’s findings are supported by substantial evidence in the record and whether the reparation order is consistent with the law. For this purpose, it is necessary to distinguish between the damages awarded by the Secretary, which the plaintiffs seek in their first cause of action, and those that go beyond the reparations order, which they seek in their second cause of action. Logically, the plaintiff cannot benefit from the rules regarding the evidentiary status of the Secretary’s decision when matters not addressed by the Secretary are at issue, except to the extent that the Secretary’s findings settle factual issues common to both claims. Other than the decision and the transcript of the administrative hearing, there is no evidence in the record to show the plaintiffs’ entitlement to the damages claimed under the second cause of action.

Two problems immediately come to mind to stand in the way of granting the plaintiffs’ summary judgment motion concerning the second cause of action. First, neither party has addressed the legal issue of whether additional damages may be awarded as part of a suit brought to enforce a reparations order under the Packers and Stockyards Act, see Crain v. Blue Grass Stockyards Co., 399 F.2d 868 (6th Cir.1968), leaving a question as to this court’s jurisdiction over the second cause of action. (Although the defendant did not raise this objection in its motion to dismiss, lack of subject matter jurisdiction is a defect in the court’s power to act, which may not be waived by the parties.) Viewing the question in a different light, there also has been no argument on whether the court has the power to modify the reparations order so as to increase the award of the Secretary on the basis of evidence considered during the administrative proceedings. Second, the plaintiffs have alleged no ground for relief under the second cause of action other than a violation of the Packers and Stockyards Act. Having raised these questions, I will leave them open until the parties have a further opportunity to address them. Therefore, the motion for summary judgment will be denied as it concerns the claim in the second cause of action for actual interest on capital borrowed to replace the proceeds of the sales to Kaba, which the plaintiffs did not receive because of insufficient funds in Kaba’s bank account to cover his checks. However, the portion of the second cause of action seeking recovery of legal expenses has been briefed by the parties and will be addressed here.

It is a tenet of judicial review of administrative decisions that “[w]hen faced with a problem of statutory construction” courts are bound to give “great deference to the interpretation given the statute by the officers or agency charged with its administration.” Udall v. Tollman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965). This principle applies to the problem of fleshihg out the meaning of the § 208 prohibition of “every unjust, unreasonable, or discriminatory regulation or practice” with respect to the furnishing of stockyard services. Hays Livestock Commission Co. v. Maly Livestock Commission Co., 498 F.2d 925, 930 (10th Cir.1974). The Secretary’s interpretation of the facts, to the effect that the defendant engaged in an unjust and unreasonable practice violative of § 208, is to be accorded great deference if the factual findings are supported by substantial evidence. Id. at 931. As the court noted in Hays Livestock, this level of deference arises because the statute fails to define the critical phrase, leaving its meaning to “ ‘be determined by the facts of each case within the purposes of the Packers and Stockyards Act,’ ” and because “ ‘the responsibility for efficient regulation of market agencies and packers lies with the Secretary of Agriculture ____’” Id. at 930 (quoting Capitol Packing Co. v. United States, 350 F.2d 67, 72, 76 (10th Cir.1965)).

Having set out the standard of review, I must now refrain from applying it. In order to test whether the findings and order of the Secretary are supported by substantial evidence in the record, I must have before me the complete record. All that the court file contains at this point is a copy, not certified, of the transcript of hearings in this matter before a presiding officer of the USDA on September 15 and 16, 1981. The transcript refers to several exhibits admitted into evidence at the hearing, as well as an investigative file of the Department. Frequently the testimony referred to the exhibits and investigative file documents, and counsel on both sides often objected to questions that referred to the documents on the ground that the exhibit speaks for itself. None of these exhibits nor the investigative file is on file in this court. Rather than search the incomplete record for substantial evidence, I will deny the plaintiff’s motion as to the first cause of action for lack of proof at this time. See Vance v. Reed, 495 F.Supp. 852, 856-57 (M.D.Tenn.1980).

There are two matters concerning the summary judgment motion that stand on a somewhat different footing. The Secretary’s reparation order of February 3,1984, awarded 13 percent interest on the principal-sum from April 1, 1980. The plaintiffs’ first cause of action seeks to enforce the entire award, including the pre-award interest — the interest sought in the second cause of action is the excess of the interest actually paid by the plaintiffs on a bank loan procured to replace the sum they lost on the dishonored Kaba checks over the Secretary’s interest award. Also, the second cause of action seeks legal expenses alleged to have been incurred, for the most part during the period before the Secretary’s order was issued, as a result of the defendant’s violation of the Packers and Stockyards Act.

The plaintiff has failed to cite any legal basis for the Secretary’s award of what amounts to prejudgment interest. The defendant cites Nebraska case law, repeating the state’s restrictive rule on prejudgment interest, and an unpublished opinion from the federal trial court in Montana, which struck down the pre-award interest component of a Packers and Stockyards Act reparation award, not on the ground that there was no legal authority to award prejudgment interest, but because the precise amount owed to the plaintiff “was difficult to ascertain.” Yet to be addressed are the difficult issues of what law applies to the award of prejudgment interest as a component of damages in a Packers and Stockyards Act reparation order enforcement proceeding and how that law would apply to the facts of the present case, once the entire record is available to determine what facts are supported by substantial evidence. Thus, the plaintiffs have failed to carry their burden of showing entitlement to the interest award, and the defendant has failed to show it would be entitled to a sua sponte partial summary judgment on the prejudgment interest issue.

The legal expenses sought in the second cause of action — as opposed to the attorney fees sought in paragraph C of the prayer for relief — are alleged to have been incurred during two periods. The first is from some undesignated starting date through February 5, 1982; the second from February 5, 1982, through February 6, 1984, the latter date being three days after the issuance of the Secretary’s decision and order. The significance of neither date is apparent. However, what is clear is that section 309(f) of the Packers and Stockyards Act, 7 U.S.C. § 210(f), authorizes the award of only those legal expenses incurred as part of the' cost of the suit in district court to enforce the reparation order and precludes recovery of attorney fees incurred in the reparation proceedings before the Secretary or in a collateral suit to enjoin the Secretary’s order. Hays Livestock Commission Co. v. Maly Livestock Commission Co., 498 F.2d 925, 933 (10th Cir.1974). While it is conceivable that some portion of the claimed legal expenses incurred in the three days after the Secretary’s order could be proven to be related to the present enforcement suit rather than the reparation proceedings, the portion of the legal expenses that were incurred in the reparation proceedings before the Secretary may not be recovered.

THEREFORE, IT IS ORDERED;

1. That the clerk file the following documents accompanying this memorandum and order;

a. The transcript of the hearing before the United States Department of Agriculture in the matter of Dean Rowse and Helen Rowse v. Platte Valley Livestock, Inc., Docket No. 5778, dated September 15 and 16, 1981;
b. The certified copy of the Decision and Order issued February 3, 1984, in Dean Rowse and Helen Rowse v. Platte Valley Livestock, Inc., P. & S. Docket No. 5778;
c. The affidavit of Gene Lenhart, dated July 25, 1984, entitled “Affidavit in Support of Defendant’s Brief in Opposition to Plaintiffs’ Motion for Summary Judgment”;

2. That the defendant’s motion to dismiss on the ground of lack of subject matter jurisdiction, filing 14, is denied;

3. That the plaintiffs’ motion for summary judgment is denied;

4. That the defendant is granted partial summary judgment against that portion of the second cause of action of the plaintiffs’ amended complaint which seeks to recover legal expenses incurred in the reparation proceedings before the Secretary of Agriculture.


author: SWEET, District Judge.

text:
    Donald ROBINSON, Richard Hill, Charles M. Adams, James Wolfanger, Karl Rahn, and Ronald Fregara, Plaintiffs, v. PAN AMERICAN WORLD AIRWAYS, INC., Defendant.
    No. 84 Civ. 4094 (RWS).
    United States District Court, S.D. New York.
    Nov. 6, 1984.

      Bernstein & Arfa, New York City, for plaintiffs; Stephen G. Eisenberg, New York City, of counsel.
    Poletti, Freidin, Prashker & Gartner, New York City,' for defendant; William E. Malarkey, Catherine J. Minuse, New York City, of counsel.
   OPINION

SWEET, District Judge.

Plaintiffs Donald Robinson, Richard Hill, Charles Adams, James Wolfanger, Karl Rahn, and Ronald Fregara, former employees of defendant Pan American World Airways, Inc. (“Pan Am”) brought this action pursuant to the Railway Labor Act, 45 U.S.C. § 151 et seq. (the “R.L.A.”) asserting that they were dismissed because of their union organizing efforts in violation of § 2, Fourth of the R.L.A. Pan Am has now moved to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim and for untimeliness. For the reasons stated below, the motion is granted in part and denied in part.

Facts

In 1977, the International Brotherhood of Teamsters, Airline Division, Local 732 (“the Union”) filed, an application with the National Mediation Board (the “NMB”) pursuant to § 2, Ninth of the R.L.A., 45 U.S.C. § 152, Ninth, seeking representation status as to certain Pan Am employees denominated as “Production/Maintenance Supervisors,” a group which included both Production Supervisors and Inspection Supervisors as well as other employees. At that time these employees were not represented by any labor organization. Following hearings held in 1978 and 1979, the NMB decided in January of 1980 that Pari Am’s Inspection Supervisors were not "employees or subordinate officials” within the meaning of § 1, Fifth of the R.L.A., 45 U.S.C. § 151, Fifth. At the same time, the Board held that Pan Am’s Production Supervisors were “employees or subordinate officials” and as such technically constituted a craft or class for representation purposes under the R.L.A. Pan American World Airways, 7 N.M.B. No. 95 at 189 (Jan. 18, 1980) (“Pan Am I”). However, the NMB declined to allow an election because of the recently consummated merger of Pan Am with National Airlines (“National”) and instead authorized the Union to submit a new application later on in 1980 so that the NMB could investigate the impact of the merger on the supervisors.

In December 1980 the Union filed another application pursuant to § 2, Ninth of the R.L.A., 45 U.S.C. § 152 seeking to represent Pan Am’s Production Supervisors. Hearings were subsequently held by the NMB between March and October of 1981 in which representatives of both the Union and Pan Am participated. On February 16, 1982, the NMB ruled that Pan Am’s Production Supervisors were not “employees or subordinate officials” within the meaning of § 1, Fifth of the R.L.A., 45 U.S.C. § 151, Fifth, citing various changes that had gradually been made in the job after the merger. Pan American World Airways, 9 NMB 73 at 229 (Feb. 16, 1982) (“Pan Am II”).

Plaintiffs Robinson, Adams, Wolfanger, Rahn and Fregara were Production Supervisors with Pan Am. Plaintiff Hill was an Inspection Supervisor. The plaintiffs allege that during the pendency of the second application and its hearings, in which they participated, they and other Supervisors were threatened, harassed, questioned and intimidated by Pan Am because of their activities in support of the Union. In June of 1981 plaintiffs Robinson, Adams, Wolfanger, Rahn and Fregara were all dismissed from their positions. Hill was dismissed from his position of Inspection Supervisor in February of 1982. Plaintiffs Robinson, Hill, Adams, Wolfanger and Rahn contested their termination in accordance with the terms of Pan Am’s personnel manual. Thereafter, grievance hearings were held before Pan Am’s Management Appeal Board. According to the plaintiffs, the Appeal Board has yet to advise them of any decision as to their grievances.

The plaintiffs commenced this action on June 12, 1984 alleging that they were dismissed for their pro-union activities in violation of § 2, Fourth of the R.L.A., 45 U.S.C. § 152, Fourth. In addition, Robinson, Hill, Adams, Wolf anger and Rahn allege as a pendent state claim that Pan Am’s Management Appeal Board failed to adhere to time limits established by Pan Am in violation of their employment agreement.

Two separate issues are presented for consideration, either of which could dispose of this case. Pan Am first argues that the plaintiffs were not “employees or subordinate officials” within the meaning of § 1, Fifth of the R.L.A., 45 U.S.C. § 151, Fifth at the time of their dismissal and as such are not entitled to the protections of § 2, Fourth of the R.L.A. Alternatively, Pan Am contends that even if the plaintiffs were “employees or subordinate officials” within the R.L.A. this action is barred by the statute of limitations.

Applicability of the Railway Labor Act

Section 2, Fourth of the R.L.A., 45 U.S.C. § 152, Fourth, reads:

Employees shall have the right to organize and bargain collectively through representatives of their own choosing. The majority of any craft or class of employees shall have the right to determine who shall be the representative of the craft or class for the purposes of this chapter. No carrier, its officers, or agents shall deny or in any way question the right of its employees to join, organize, or assist in organizing the labor organization of their choice, and it shall be unlawful for any carrier to interfere in any way with the organization of its employees, or to use the funds of the carrier in maintaining or assisting or contributing to any labor organization, labor representative, or other agency of collective bargaining, or in performing any work therefor, or to influence or coerce employees in an effort to induce them to join or remain or not to join or remain members of any labor organization, or to deduct from the wages of employees any dues, fees, assessments, or other contributions payable to labor organizations, or to collect or to assist in the collection of any such dues, fees, assessments, or other contributions: Provided, That nothing in this chapter shall be . construed to prohibit a carrier from permitting an employee, individually, or local representatives of employees from conferring with management during working hours without loss of time, or to prohibit a carrier from furnishing free transportation to its employees while engaged in the business of a labor organization (emphasis added).

Only “employees” are entitled to the protection of this section. The term “employee” is defined in Section 1, Fifth of the R.L.A., 45 U.S.C. § 151, Fifth:

The term “employee” as used herein includes every person in the service of a carrier (subject to its continuing authority to supervise and direct the manner of rendition of his service) who performs any work defined as that of an employee or subordinate official in the orders of the Interstate Commerce Commission now in effect, and as the same may be amended or interpreted by orders hereafter entered by the Commission pursuant to the authority which is conferred upon it to enter orders amending or interpreting such existing orders: Provided, however, That no occupational classification made by order of the Interstate Commerce Commission shall be construed to define the crafts according to which railway employees may be organized by their voluntary action, nor shall the jurisdiction or powers of such employee organizations be regarded as in any way limited or defined by the provisions of this chapter or by the orders of the Commission.

When the R.L.A. was amended to include air carriers in 1936, coverage was again limited to those qualifying as an “employee or subordinate official” within the meaning of section 1, Fifth, 45 U.S.C. §§ 181, 182.

Although the R.L.A. authorizes the Interstate Commerce Commission (“ICC”) to define work performed by an employee or subordinate official, 45 U.S.C. § 151, Fifth, the ICC has never undertaken to define these terms for air carriers. Podlesnick v. Airborne Express, 550 F.Supp. 906, 908 n. 1 (S.D.Ohio 1982). Instead, the National Mediation Board, which has exclusive jurisdiction over representation matters, Air Line Pilots Association v. Texas International Airlines, 656 F.2d 16 (2d Cir.1981), has the jurisdiction and authority to make such a determination. Northwest Airlines, Inc., 2 NMB 19, 25-26 (1948); Switchmen’s Union of North America v. NMB, 320 U.S. 297, 64 S.Ct. 95, 88 L.Ed. 61 (1943). The NMB’s determination of whether an individual is an employee or subordinate official within the meaning of the R.L.A. is normally made in the context of a representation dispute. See e.g., International Association of Machinists & Aerospace Workers, AFL-CIO, 9 NMB 80 (1982). Because the NMB has exclusive jurisdiction over representation disputes, such determinations are subject to very limited judicial review. See Brotherhood of Railway and Steamship Clerks v. Employees Ass’n., 380 U.S. 650, 668, 85 S.Ct. 1192, 1201, 14 L.Ed.2d 133 (1965).

The issue here presented is whether or not the plaintiffs were “employees or subordinate officials” within the meaning of Section 1, Fifth of the R.L.A. and the nature and effect of an NMB determination as to the status of an employee in the context of a claim brought under § 2, Fourth of the R.L.A. Neither party has presented any authority as to the retroactive or prospective binding effects of NMB rulings, and this court has been unable to find any.

In most cases in which courts have been confronted with claims under this section, there has apparently been no controversy over whether or not the plaintiff employees are entitled to the protections of the Act. See, e.g., Stephanischen v. Merchants Despatch Transportation Corporation, 722 F.2d 922 (1st Cir.1983); Davin v. Delta Airlines, 678 F.2d 567, 570 (5th Cir.1982); Conrad v. Delta Airlines, Inc., 494 F.2d 914 (7th Cir.1974); Scott v. American Airlines, Inc., 488 F.Supp. 415 (E.D.N.Y.1980); Griffin v. Piedmont Aviation, Inc., 384 F.Supp. 1070 (N.D.Georgia 1974). In those cases where a plaintiff’s status has been at issue, there do not appear to have been, any previous NMB rulings in relation to. employees of the plaintiff’s description, and courts have undertaken independent investigations using NMB criteria to resolve the issue. See Podlesnick v. Airborne Express, supra, 550 F.Supp. 906; Lum v. China Airlines, 413 F.Supp. 613 (D.Hawaii 1976); Lundberg v. Chicago Great Western Ry., 76 F.Supp. 61 (W.D.Mo.1948). No authority has been cited dealing with the effect of a prior NMB ruling in this context.

Here I conclude that the NMB’s 1980 determination as to the status of Inspection Supervisors is controlling. In Pan Am I, the NMB decided that Inspection Supervisors were not “employees or subordinate officials” within the meaning of the R.L.A. 7 NMB at 191. This decision represented the NMB’s most recent determination of the status of these Supervisors, a determination based on an extensive factual investigation into the nature and responsibilities of the job. The Board gave no indication that the status of these employees would change after the merger, nor did the Union choose to reapply for representation status for these employees on the basis that the position had changed. Plaintiff Hill has not suggested that his position was altered in such a way after the merger that would justify ignoring the NMB’s factual determination. Because Hill was not an “employee or subordinate official” within the meaning of the R.L.A. at the time of Pan Am’s alleged illegal actions were taken, he is not entitled to claim the protections of § 2, Fourth of the R.L.A. Therefore, Pan Am’s motion to dismiss will be granted as to plaintiff Hill.

As to Production Supervisors, however, the NMB has made two separate determinations as to whether Pan Am’s Production Supervisors are employees or subordinate officials within the meaning of § 1, Fifth of the R.L.A. In the first decision the NMB ruled that Production Supervisors came within the Act. Pan. Am I, 7 NMB No. 95 (1980). Two years later, following the merger between Pan Am and National, the Board decided that these supervisors could no longer be considered “employees or subordinate officials” because of various changes that had occurred in the job during the intervening years. Pan Am II, 9 NMB 229, 250 (1982). The court has not been asked to review the basis of a decision made by the NMB; neither party contests the validity of either NMB ruling. Instead, the issue is whether one of these two conflicting decisions should determine the plaintiffs’ status under the R.L.A. at the time of their dismissals. During the period between the two decisions, all of the plaintiffs were dismissed from their positions.

In bringing this motion, Pan Am argues that the question of whether or not the plaintiffs may claim the protections of the R.L.A. as “employees or subordinate officials” is controlled by the NMB’s most recent decision as to the status of employees holding plaintiffs’ positions with Pan Am, where the Board concluded that “ ‘Pan Am has, at the present time, invested its Production Supervisors with a level of authority and responsibility which indicates that they can no longer be considered “employees or subordinate officials’” within the meaning of the Railway Labor Act.” Pan Am II, 9 NMB at 249. In making this determination, the Board did not articulate the precise moment at which the Supervisors ceased being employees within the R.L.A. They noted instead that “[i]t is sufficient for the purposes of this case to note that Pan Am’s basic nature has been greatly altered ____ The Board must examine Pan Am as it finds it during the relevant time frame. Freezing an inquiry at a particular point in time would not serve the purposes of the Act in an era of dynamic change.” 9 NMB at 246-47. Pan Am concedes that the exact moment at which the change in status occurred “probably cannot be determined with absolute precision.” (Defendant’s Reply Memorandum at 5). It argues, however, that because the Board’s decision was based on a hearing record compiled between March and October of 1981 it may be implied that the significant changes had been put into effect prior to the terminations in July of 1981. Therefore, Pan Am contends the 1982 decision should control the question of these Supervisors’ status at the time they were dismissed.

The plaintiffs, on the other hand, contend that because the NMB’s 1980 determination as to their status was still in effect at the time of the terminations, it should control this decision. They argue that in order to give any meaning to NMB rulings, once the Board makes a determination it must be considered binding upon the affected parties until it is reversed, modified or otherwise superseded. In this case, they contend, the Board did not reverse its prior decision as to the status of Production Supervisors until February of 1982; according to them, the fact that hearings were held before that time should be irrelevant to the binding effect of the NMB’s prior ruling during the time between the two decisions.

Given the specific factual setting of this case, we decline to find either of the NMB’s decisions as to the Production Supervisors' binding in the present case. The primary question to be resolved is the factual question of whether or not the Production supervisors were “employees or subordinate officials” within the meaning of the R.L.A. at the time that they were dismissed. The NMB’s most recent decision in 1982 only resolves the question of the Production Supervisor’s status at that time; the decision does not aid in resolving the question of their status at the time relevant to this case. While it is true that its 1982 decision was based on hearings held during the relevant time period, the positions significantly changed in character over the a two-year period, and evidence was submitted on this issue on dates which bracketed the date of dismissal. This record presented on this motion fails to establish the date of the change in status.

At the same time, the facts bar the plaintiffs’ argument that the 1980 ruling should be prospectively binding as to the Production Supervisors until formally modified. The NMB expressly chose not to give its ruling prospective effect, noting that in the immediate-future the status of the Production Supervisors could change significantly. Thus its 1980 decision only involves the question of the Production Supervisor’s status at that specific time. Furthermore, the NMB’s decision was intended only to determine whether- or not an election should be held; it was not intended to establish the parameters within which Pan Am could retaliate against its employees for union activity. In any event, Pan Am’s actions during the intervening years may have been influenced by the knowledge that the NMB itself had noted that it expected changes to be made in the job status Supervisor in the immediate future.

Because neither NMB’s decision resolves the factual question of whether the Production Supervisors were “employees or subordinate officials” at the time of their dismissal, this court must make as independent determination based on criteria established by the NMB. Podlesnick v. Airborne Express, supra, 550 F.Supp. 906; Lum v. China Airlines, supra, 413 F.Supp. 613. This is an analysis that cannot be undertaken at this stage of the proceedings: Pan Am’s motion to dismiss for failure to state a claim must therefore be denied as to the Production Supervisors.

Statute of Limitations

Pan Am has also argued that even if the plaintiffs in this case are entitled to the protections of the R.L.A., their cause of action is barred by the statute of limitations. Section 2, Fourth of the R.L.A. does not contain a statute of limitations. The general rule in such a situation is .that timeliness should be determined “by reference to the appropriate state statute of limitations.” United Auto Workers v. Hoosier, 383 U.S. 696, 705, 86 S.Ct. 1107, 1113, 16 L.Ed.2d 192 (1966). In this situation, the most applicable New York statute is N.Y.C.P.L.R. § 214(2) (McKinney’s 1972), which creates a three-year limitations period for actions to recover upon a liability imposed by statute. See, e.g., Hornblower and Weeks-Hemphill, Noyes v. Burchfield, 366 F.Supp. 1364 (D.C.N.Y.1973).

Pan Am contends, however, that the exception to this general rule created by the Supreme Court in Del Costello v. International Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 2294, 76 L.Ed.2d 476 (1983), should apply in this situation. In Del Costello, the Court chose to apply the six month statute of limitations for unfair labor practices under § 10(b) of the National Labor Relations Act, as amended, 29 U.S.C. § 160(b), rather than the applicable state statute, to a “hybrid § 301/fair representation claim” against employers and unions for breach of contract and breach of the duty of fair representation. The Court noted that “when a rule from elsewhere in federal law clearly provides a closer analogy than available state statutes, and when the federal policies at stake and the practicalities of litigation make that rule a significantly more appropriate vehicle for interstitial law making we have not hesitated to turn away from state law.” Id. 103 S.Ct. at 2294. Because of “[t]he importance of uniformity in the labor law field” and the “family resemblance” between an unfair labor practice and a breach of the duty of fair representation, id. 103 S.Ct. at 2293, the Court decided that the six month period established by § 10(b) of the NLRA should be applied in hybrid § 301/fair representation cases.

Pan Am argues convincingly that the “family resemblance” between claims brought under section two, Fourth of the R.L.A. and the NLRA is even stronger than that in Del Costello, since violations of Section 2, Fourth are very closely akin to unfair labor practices. However, this resemblance in itself is not sufficient to bring this case within the reasoning of Del Costello. The court’s principal motivation in applying the six month period was that the applicable state statute was one governing an action to vacate an arbitration award in a commercial setting, and “state arbitration statutes typically provide very short times in which to sue for vacation of arbitration awards____” Id. 103 S.Ct. at 2291. Because hybrid § 301/fair representation suits involve those difficult situations where an employee is challenging not only his employer’s actions but also his union’s representation, and the employee is therefore often without adequate representation, the Court held that a very short limitations period would “fail to provide an aggrieved employee with a satisfactory opportunity to vindicate his rights under § 301 and the fair representation doctrine.” Id. Since the applicable state statute would conflict with important federal policies, the Court decided to apply the longer limitations period provided by the analagous NLRA statute.

In this case, the court is not confronted with a state statute that conflicts with federal policy or interferes with the “practicalities of litigation.” Applying a three year limitations period would prejudice neither the employee nor the employer. While uniformity may be an important goal in the labor field, and while § 10(b) may provide a close analogy to these type of R.L.A. cases,Congress chose not to impose a uniform federal statute of limitations to eases arising under Section 2, Fourth of the R.L.A. The Court in Del Costello expressly noted that its decision was not intended to require the imposition of a uniform statute in labor cases:

We stress that our holding today should not be taken as a departure from prior practice in borrowing limitations periods for federal causes of action, in labor law or elsewhere. We do not mean to suggest that federal courts should eschew use of state limitations periods anytime state law fails to provide a perfect analogy-

Id. 103 S.Ct. at 2294. Where, as here, a state’s limitation period does not conflict with relevant federal policy, there is no reason to deviate from the general policy of applying the applicable state statute of limitation.

For the foregoing reasons, Pan Am’s motion to dismiss for failure to state a claim and for untimeliness is denied as to plaintiffs Robinson, Adams, Wolf anger, Rahn, and Fregara; Pan Am’s motion to dismiss for failure to state a claim is granted as to plaintiff Hill.

IT IS SO ORDERED.