author: GOETTEL, District Judge:

text:
    MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Executor Under the Will of Charles F. Fogarty, Deceased, Plaintiff, v. TEXASGULF AVIATION, INC., Defendant. MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Executor Under the Will of Charles F. Fogarty, Deceased, Plaintiff, v. The GARRETT CORPORATION, Colt Electronics Co., Inc., Phoenix Aerospace, Inc., and Lockheed Corp., Defendants.
    Nos. 82 Civ. 3640 (GLG), 82 Civ. 0816 (GLG).
    United States District Court, S.D. New York.
    March 14, 1985.
    Kreindler & Kreindler, New York City, for plaintiff; Milton G. Sincoff, New York City, of counsel.
    Townley & Updike, New York City, for defendant Texasgulf Aviation; Frederick D. Berkon, New York City, of counsel.
    Haight, Gardner, Poor & Havens, New York City, for The Garrett Corp.; Randal R. Craft, Jr., Gary D. Way, New York City, of counsel.
   MEMORANDUM DECISION

GOETTEL, District Judge:

At an earlier trial on liability only, the jury found the defendants, Texasgulf Aviation, Inc., The Garrett Corporation, Colt Electronics Co., Inc., and Phoenix Aerospace, Inc., liable for the wrongful death of the decedent, Dr. Fogarty. Before the upcoming damage trial, the plaintiff, Morgan Guaranty Trust Company of New York (“Morgan”), executor of Fogarty’s estate, moves in limine for an order to prohibit the defendants from introducing evidence as to the effect of future income tax liability on the decedent’s future earnings. For the reasons stated below, we deny the plaintiffs motion.

The issue before us is whether we should admit evidence that demonstrates the effect of income taxes on the decedent’s estimated future earnings for the purpose of calculating the damage award for a wrongful death. In the instant case, such a demonstration could reduce the decedent’s future earnings, and hence the plaintiff’s recovery, by approximately $5,000,000.

The Court has jurisdiction over this action based upon diversity of citizenship. As we have earlier determined, New York State law applies. See Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Since the New York Court of Appeals has not ruled on this precise issue, the Court must evaluate how New York’s highest tribunal would decide the question. For a general discussion on ascertaining state law, see 1A J. Moore, W. Taggart, A. Vestal & J. Wicker, Moore’s Federal Practice ¶ 0.307[1], [2] (2d ed. 1983).

In New York, section 5-4.3 of the Estate, Powers and Trusts Law governs the calculation of damages in a wrongful death action. N.Y.Est. Powers & Trusts § 5-4.3 (McKinney Supp.1984). The damages awarded should be the “fair and just compensation for the pecuniary injuries resulting from the decedent’s death to the persons for whose benefit the action is brought.” Id. The amount of “fair and just compensation” is strictly a factual determination and should be decided on a case-by-case basis. Rogow v. United States, 173 F.Supp. 547 (S.D.N.Y.1959).

The New York courts have not established a steadfast formula to calculate the proper compensation awarded under section 5-4.3. The courts have, however, enumerated several factors to consider. These factors include: the decedent’s age; his health; his expectations; his earning ability; his income; the possibility of additional income; and the number, age, and situation of those dependent upon the decedent for support, and the manner in which he would have supported them. Dimitroff v. State, 171 Misc. 635, 637, 13 N.Y.S.2d 458 (N.Y.Ct.Cl.1939). See also Tucker v. City of New York, 54 A.D.2d 930, 931, 388 N.Y.S.2d 133, 134 (2d Dep’t 1976); Brooks v. Siegel, 52 A.D.2d 1003, 383 N.Y.S.2d 439, 440 (3d Dep’t 1976); Tenczar v. Milligan, 47 A.D.2d 773, 774-75, 365 N.Y.S.2d 272, 275 (3d Dep’t 1975); Ritter v. State, 74 Misc.2d 80, 91-92, 344 N.Y.S.2d 257, 269-70 (N.Y.Ct.Cl.1972). In summary, the amount of pecuniary damages is based on “ ‘the reasonable expectancy, or lack of it, of future assistance or support,’ to the survivors if decedent’s life had continued.” In re Pridell’s Estate, 206 Misc. 316, 319, 133 N.Y.S.2d 203, 207 (Surr.Ct.1954) (quoting Loetsch v. New York City Omnibus Corp., 291 N.Y. 308, 310, 52 N.E.2d 448, 449 (1943)).

One of the prime considerations in this formula is the amount that the decedent customarily contributes to his dependents. Id. Clearly the amount of monetary support that a wage earner contributes to his family is affected by the income taxes he must pay. After-tax income, as opposed to pre-tax income, yields the only realistic estimate of the decedent’s ability to support his family. Thus, the wage earner’s future income tax liability is an essential component in calculating the financial deprivation incurred by his dependents upon his demise.

This conclusion is buttressed by the decision in Gilliard v. New York City Health and Hospitals Corp., 77 A.D.2d 532, 430 N.Y.S.2d 308 (1st Dep’t 1980). When calculating the amount that the decedent might have contributed during the remainder of his work life, the Gilliard court recognized that out of his wages “income and social security taxes would have to be paid, pension payments and other normal payroll deductions made, and living expenses, such as clothing, carfare, luncheon expense and room rent, however minimal, incurred.” Id. 430 N.Y.S.2d at 309. Thus, the Gilliard court applied the principle that recoveries for wrongful death should be strictly limited to that portion of the decedent’s income which would have been contributed to support his dependents. Louissaint v. Hudson Waterways Corp., 111 Misc.2d 122, 127, 443 N.Y.S.2d 678, 681 (N.Y.Sup.Ct.1981).

Morgan contends that New York is among the jurisdictions that adhere to the principle that lost earning damages are computed on a gross, pre-tax basis. In support of this contention, Morgan cites three personal injuries cases: Sullivan v. Held, 81 A.D.2d 663, 438 N.Y.S.2d 359 (2d Dep’t 1981); Louissant v. Hudson Waterways Corp., supra, 443 N.Y.S.2d 678; Coleman v. New York City Transit Authority, 37 N.Y.2d 137, 332 N.E.2d 850, 371 N.Y.S.2d 663 (1975). However, we are dealing with wrongful death recoveries under section 5-4.3. The considerations that are involved in the calculation of damages for a wrongful death are different from those for personal injury awards. This Court’s holding does not encroach upon the area of personal injury awards since these awards do not fall within the scope of New York’s wrongful death statute. Thus, our decision should be construed narrowly as applying only to wrongful death recoveries. Cf. Louissaint v. Hudson Waterways Corp., supra, 443 N.Y.S.2d at 681 (construing Gilliard as applying only to wrongful death recoveries).

Morgan’s argument is also based on the erroneous belief that Coleman v. New York City Transit Authority, supra, 371 N.Y.S.2d 663, 332 N.E.2d 850, is the leading New York Court of Appeals decision addressing the admission of evidence demonstrating income tax liability on future earnings. Coleman is inapposite. That case dealt with whether or not a judge should charge the jury that any final award to the plaintiff would be free of income taxes. This issue is not before us; rather, we are deciding whether evidence of income tax liability should be considered in calculating the plaintiff’s final award.

Coleman held that a judge need not charge the jury that its award to the plaintiff would be free from income taxes. This holding is consistent with the concern that, by charging the jury as to the taxability of its award, the judge would be calling “a basically irrelevant factor to the jury’s attention.” Norfolk & Western Railway Co. v. Liepelt, 444 U.S. 490, 502, 100 S.Ct. 755, 762, 62 L.Ed.2d 689 (1980) (Blackmun, J., dissenting). Decisions consistent with Coleman recognize that a jury might exaggerate its award for reasons not presented at trial. See Blake v. Delaware & Hudson Railway Co., 484 F.2d 204 (2d Cir.1973); Sullivan v. Held, supra, 438 N.Y.S.2d at 361. Examples of such considerations falling outside the scope of the trial are the defendant’s insurance coverage, attorney’s fees, and as in Coleman, taxability of the final award. Norfolk & Western Railway Co. v. Liepelt, supra, 444 U.S. at 504, 100 S.Ct. at 762 (Blackmun, J., dissenting). The courts are skeptical of burdening and confusing the jury with every extraneous factor as to which it should not overload the damages. Id. This precautionary measure is valid when the contigencies lack any genuine connection to the outcome of the case, but this is not the situation here. This Court is addressing an evidentiary question deeply affecting the accurate calculation of the loss of support incurred by the dependents. The consideration of income tax liability on Dr. Fogarty’s future earnings is a highly relevant factor under section 5-4.3. Any confusion that might be placed upon the jury, through the admission of income tax evidence, is outweighed by the fact that there may be an approximately $5,000,000 gap between decedent’s future pre-tax and after-tax incomes. We are not dealing with factors foreign to the trial, as did Coleman. Our concern is with evidence necessary to determine the proper amount of damages mandated by New York’s wrongful death statute.

Morgan also cites Vasina v. Grumman Corp., 644 F.2d 112 (2d Cir.1981), in support of its argument that evidence demonstrating decedent’s future income tax liability should be excluded under New York law. In denying the admission of income tax evidence, the Vasina court also relied upon Coleman, supra, 371 N.Y.S.2d 663, 332 N.E.2d 850, as the leading New York Court of Appeals decision. As stated above, Coleman did not address the tax issue involved in the instant action. Thus, the Vasina decision should not act as a deterrent to admitting evidence that demonstrates the impact of income taxes on the decedent’s future earnings.

In Shu-Tao Lin v. McDonnell Douglas Corp., 574 F.Supp. 1407, 1415 (S.D.N.Y.1983), aff'd in part, rev’d in part, 742 F.2d 45 (2d Cir.1984), the district court allowed the introduction of income tax evidence. However, the court denied this ruling any practical effect. It offset the future tax liability with the consideration that the income stream produced by the damages award would be subject to taxes in subsequent years. The court of appeals found the district court’s offsetting procedure to be erroneous. But they declined to rule on how the New York Court of Appeals would view the admission of income tax evidence on future earnings in wrongful death actions. Thus, the door was left open for our decision in the case at bar.

We have given much thought to the contention that future estimations of tax consequences are too speculative and intricate for a jury’s consideration. In Norfolk & Western Railway Co. v. Liepelt, supra, 444 U.S. 490, 100 S.Ct. 755, the Supreme Court addressed the same problem when it allowed the jury to receive evidence demonstrating future income taxes in a wrongful death action arising under the Federal Employers’ Liability Act. Although Liepelt is not controlling law in the New York state courts, we find the majority’s analysis resolving the issue of the speculative nature of predicting future income taxes as most compelling:

Admittedly there are many variables that may affect the amount of the wage earner’s future income-tax liability.. The law may change, his family may increase or decrease in size, his spouse’s earnings may affect his tax bracket, and extra income or unforeseen deductions may become available. But future employment itself, future health, future personal expenditures, future interest rates, and future inflation are also matters of estimate and prediction. Anyone of these issues might provide the basis for protracted expert testimony and debate. But the practical wisdom of the trial bar and the trial bench has developed effective methods of presenting the essential elements of an expert calculation in a form that is understandable by juries that are increasingly familiar with the complexies of modern life.

Id. at 494, 100 S.Ct. at 757. The importance of the consideration of income taxes under the circumstances in this action is superior to any contention that such evidence is too speculative. However, should cases arise in the future where the impact of future income taxes in calculating pecuniary damages under section 5-4.3 is minimal, a determination should be made as to whether the admission of the evidence causes more confusion than it is worth. Id. at 494-95 n. 7,100 S.Ct. at 757-58 n. 7. See Fed.R.Evid. 403.

In conclusion, the plaintiff’s motion in limine to exclude evidence or mention of income taxes is denied. The defendants are hereby allowed to offer evidence demonstrating the income taxes that would have been imposed on Dr. Fogarty’s future earnings.

SO ORDERED.

      . Section 104(a)(2) of the Internal Revenue Code excludes the amount of any damage award for personal injuries from taxable income. 26 U.S.C. § 104(a)(2) (1982). Section 104(a)(2) is also interpreted to exclude wrongful death awards from taxable income. Rev.Rul. 54-19, 1954-1 C.B. 179. Our decision is consistent with the intent of the legislative benefit behind section 104(a)(2). The final award that the plaintiff will recover is still free from income taxes. We are not altering this grant, but we are allowing the consideration of the impact of future income taxes in order to accurately calculate the dependent’s loss of support. To disallow such evidence and also exclude the final award from taxable income, would unjustly confer a double windfall upon the beneficiaries beyond the intent of section 104(a)(2).


source: Caselaw Access Project

author: CHARLES R. RICHEY, District Judge.

license: Public Domain

text:
    Randall J. MARLOWE, Plaintiff, v. ARGENTINE NAVAL COMMISSION, Defendant.
    Civ. A. No. 84-1870.
    United States District Court, District of Columbia.
    March 14, 1985.
    Robert R. Smiley, III, Smiley, Olson, Gil-man & Pangia, Washington, D.C., for plaintiff.

      Bruno A. Ristau, Joel E. Leising, Kaplan, Russin & Vecchi, Washington, D.C., for defendant.
   CHARLES R. RICHEY, District Judge.

BACKGROUND

Before the Court is defendant’s Motion to Dismiss, opposition thereto, and supporting memoranda. For the reasons herein stated, the Court denies the Motion to Dismiss.

The parties agree as to all facts material to the instant Motion. This suit is based on an alleged breach of a contract for the purchase of two aircraft by the Argentine Armada (Navy) from plaintiff’s assignee, a Panamanian corporation known as Servistan S.A. The contract was negotiated by plaintiff, acting as the seller’s representative, and representatives of the Armada and defendant Argentine Naval Commission (“ANC”). The negotiations took place in Buenos Aires, Argentina, and at the ANC headquarters in Washington, D.C. The contract was signed on behalf of the Armada by the then Acting Chief of the Argentine Naval Commission in Washington, D.C., and it identified the purchaser as “ARMADA ARGENTINA — Argentine Naval Commission having its principal place of business at 630 Indiana Ave., N.W., Washington, D.C. 20004.” The contract was signed on behalf of the seller by the plaintiff, Randall J. Marlowe, and the seller was identified as “SERVISTAN S.A. —P.O. Box 4871 — Panama 5 — República de Panama, represented in this stand by R.J. MARLOWE & ASSOCIATES, having its place of business at Av. Rivadavia 5154— Capital Federal — ARGENTINA.”

At the time the contract was executed, the seller did not have title to, or possession of, the aircraft. The seller was to obtain the aircraft from an Ecuadorian interest for delivery and sale to the buyer. The contract required that payment of the purchase price, expressed in United States currency, be assured by the buyer by an irrevocable letter of credit. Payment under the letter of credit was to be made in several installments, based upon a contractual schedule. The contract further contained detailed provisions for the inspection and technical approval of the aircraft, taxes, warranties, and conditions for excusable delays. Finally, Article 10 of the contract provided, under the heading “MISCELLANEOUS”, as follows:

A. This agreement shall be governed by and construed in accordance with the laws of the District of Columbia, U.S.A.
B. All notices, requests, demands, or other communications to or upon the respective parties hereto shall be deemed to have given or made when deposited in the mail, postage prepaid, or in the case of telegraphic notice when delivered to the telegraph company or when actually sent by Telex, addressed to Seller, or Buyer, as the case may be, at their respective addresses set forth below:

In the case of the Buyer:

ARMADA ARGENTINA
ARGENTINA (sic) NAVAL COMMISSION
630 INDIANA AVE. — N.W.
WASHINGTON, D.C. — 20004
TEL.: 202-626-2100

In the case of the Seller:

SERVISTAN S.A.
P.O. BOX 4871
PANAMA 5 — PANAMA
TELEX: 2769 (DIMAR PG).

Plaintiff filed the complaint in this case on June 19, 1984, alleging breach of contract and fraud. Service of the summons and complaint was made on ANC in Washington, D.C. Service was addressed to:

CHIEF, ARGENTINE NAVAL COMMISSION
630 INDIANA AVE., N.W.
WASHINGTON, D.C. 20001

Although defendant received the service, it did not promptly respond to the complaint, and on September 28, 1984, the Court granted plaintiff’s motion for default judgment. After plaintiff attached some of defendant’s local assets, ANC, on December 3, 1984, moved for relief from the default judgment. By Order of January 30, 1985, the Court, noting the “liberal spirit” of Rule 60(b) as applied to cases involving default judgments, Spann v. Commissioners of the District of Columbia, 443 F.2d 715, 716 n. 1 (D.C.Cir.1970), vacated the default judgment against ANC. ANC has now filed the instant Motion to Dismiss. In this Motion, ANC raises three grounds for dismissal: (1) that ANC lacks the capacity to be sued; (2) that service of process was insufficient under the Foreign Sovereign Immunities Act; and (3) that this Court lacks jurisdiction under that Act. As demonstrated below, all of these arguments fail.

DEFENDANT IS A FOREIGN STATE UNDER FEDERAL LAW, AND THUS IS CAPABLE OF BEING SUED

1. Federal Law Determines the Juridicial Status of ANC.

ANC asserts that to determine whether an entity has the capacity to sue or be sued, reference must be made to that body of law under which the entity exists. In this case, the entity, ANC, was created under Argentine law. Under Argentine law, ANC continues, it is a mere subordinate command of the Argentine Armada, and one of its missions is the procurement of materials, spare parts, and supplies from foreign countries for use by the Armada. ANC has submitted a legal opinion from the legal adviser of the Argentine Embassy, Cesar F. Matas, who concludes, based on the creation and role of the ANC, that under Argentine law ANC lacks the capacity to sue or be sued. The only proper defendant, according to ANC, would be the Republic of Argentina.

This argument rests upon a faulty premise. The juridical capacity of ANC must be determined not by Argentine law, but by “principles ... common to both international law and federal common law.” First National City Bank v. Banco para el Comercio Exterior de Cuba, 462 U.S. 611, 623, 103 S.Ct. 2591, 2598, 77 L.Ed.2d 46 (1983). In First National City Bank, the Supreme Court considered the juridical status of a state-owned Cuban bank. The respondent there offered an argument similar to that presented by ANC here — that the law of the chartering state determined the bank’s juridical status. Rejecting that argument, the Supreme Court stated:

To give conclusive effect to the law of the chartering state in determining whether the separate juridicial status of its instrumentality should be respected would permit the state to violate with impunity the rights of third parties under international law while effectively insulating itself from liability in foreign courts. We decline to permit such a result.

103 S.Ct. at 2597 (footnotes omitted). Instead, the Court held that “the principles governing this case are common to both international law and federal common law, which in these circumstances is necessarily informed both by international law principies and by articulated congressional policies.” Id. at 2598/'

Acceptance of ANC’s argument in the present case might render a result which the Supreme Court has “decline[d] to permit” — that ANC could “violate with impunity the rights of third parties ... while effectively insulating, itself from liability in foreign courts.” Id. at 2597. Therefore, Argentine law does not control this question, and the Court looks to federal law to determine whether ANC may be sued.

2. Under Federal Law, ANC is a Foreign State.

The Federal Sovereign Immunities Act (“FSIA”) is a comprehensive congressional scheme which regulates the amenability of foreign nations to suit in the United States. Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 493, 103 S.Ct. 1962, 1971, 76 L.Ed.2d 81 (1983). This federal law defines some entities as “foreign states”, and others as “agencies or instrumentalities of foreign states”. 28 U.S.C. 1603. Assuming proper service, unless a “foreign state”, or an “agency or instrumentality” thereof, is immune under the Act, this Court has jurisdiction over it in a civil action such as this one. 28 U.S.C. § 1330(a). Therefore, this “articulated congressional polic[y]” determines the juridical status of certain branches of foreign governments. See First National City Bank, 103 S.Ct. at 2598. Accordingly, the Court must determine whether ANC is a “foreign state” or an “agency or instrumentality of a foreign state” under the Act.

The FSIA defines a “foreign state” and an “agency or instrumentality” thereof in 28 U.S.C. § 1603:

For the purposes of this chapter—
(a) A “foreign state”, except as used in section 1608 of this title, includes a political subdivision of a foreign state or an agency or instrumentality of a foreign state as defined in subsection (b).
(b) An “agency or instrumentality of a foreign state” means any entity—
(1) which is a separate legal person, corporate or otherwise, and
(2) which is an organ or a foreign state or political subdivision thereof, or a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision thereof, and
(3) which is neither a citizen of a State of the United States as defined in section 1332(c) and (d) of this title, nor created under the laws of any third country.

It is apparent from the statutory language that the FSIA substantially equates a “foreign state” with an “agent or instrumentality of a foreign state”. There are significant differences, however, concerning the service of process upon the two under the FSIA. See 28 U.S.C. § 1608. Proper service upon a foreign state, detailed in § 1608(a), is somewhat different from proper service upon an agency or instrumentality of a foreign state, described in § 1608(b). This difference was the issue which recently faced one federal court in a case involving ANC. Unidyne Corp. v. Aerolineas Argentinas, 590 F.Supp. 398 (E.D.Va.1984). In Unidyne, the court dismissed the suit against ANC, a co-defendant, for lack of proper service. In so doing, the court relied on many of the same factual assertions presented by ANC in the present case:

The ANC is a department of the Argentine Navy whose goal is to procure supplies from foreign countries. The ANC maintains an office in the District of Columbia which is staffed exclusively by active duty Argentine Naval officers on two-year assignments from Argentina. These naval officers are treated as diplomatic agents and report directly to the Argentine ambassador. All contracts are negotiated at the express decision and directive of the Argentine Navy itself. ANC’s offices are located in a building owned by Argentina which flies the Argentine flag. The agency has no independent existence in Argentina precluding ANC from owning Argentine property in its own name and from suing or being sued in its official capacity in Argentina. ANC can do no act necessary to justify a finding that it is a separate legal person.
The ANC is part and parcel of the Argentine Navy thereby qualifying as a foreign state or a political subdivision of the Argentine government. The plaintiff has introduced no basis to differentiate ANC’s existence as separate from the Argentine Navy. The ANC has no life other than that derived from Argentina; rather the agency is Argentina within the United States, not an entity independent of it. Cf. Croatan Books, Inc., v. Virginia, 574 F.Supp. 880, 885 (E.D.Va.1983). One may analogize ANC’s position as a department within a larger division, integral, but retaining minimal independent characteristics. Accordingly, ANC is not an “agency or instrumentality” as defined in § 1603(b).

590 F.Supp. at 400.

The Court in Unidyne relied on ANC’s role in its government to conclude that it was a “foreign state” under the FSIA, 28 U.S.C. § 1603(a). 590 F.Supp. at 400-01. It dismissed the case only because the plaintiff therein failed to comply with 28 U.S.C. § 1608(a), the exclusive means of service upon “foreign states”. 590 F.Supp. at 401.

ANC argues that the above-quoted language supports its position that ANC is not a suable entity. In addition to this quotation from Unidyne, ANC cites similar language in the Declaration of Cesar F. Matas to the effect that “the A.N.C. is an integral part, and a subordinate command, of the Argentine Armada (Navy).” Mates Dec. 1111; see also Kelly Aff. II2. Unidyne makes it clear, however, that ANC’s role in the structure of the Argentine government does not demonstrate a lack of juridicial capacity, as ANC suggests. Instead, these facts demonstrate that ANC is a “foreign state” under federal law. See 590 F.Supp. at 400-01. Thus, Unidyne, which was decided after First National City Bank, indicates that ANC, a “foreign state”, is a juridicial entity under federal law. Under the FSIA, it is a proper defendant if it is not immune from suit and if service upon it was proper. See 28 U.S.C. §§ 1608, 1330.

PLAINTIFF PROPERLY SERVED ANC UNDER THE FSIA, 28 U.S.C. § 1608(a)

Because ANC is a “foreign state”, section 1608(a) of the FSIA provides that exclusive means of service. E.g. Unidyne, 590 F.Supp. at 401; H.R.Rep. No. 94-1487, 94th Cong., 2d Sess. 24, reprinted in 1976 U.S.Code Cong. & Ad.News 6604, 6623 (hereafter “House Report”). That section of the FSIA provides, in relevant part:

(a) Service in the courts of the United States and of the States shall be made upon a foreign state or political .subdivision of a foreign state:
(1) by delivery of a copy of the summons and complaint in accordance with any special arrangement for service between the plaintiff and the foreign state or political subdivision; ____

28 U.S.C. § 1608(a).

As previously noted, Article 10 of the contract at issue contained a “special arrangement” providing that “[a]ll notices, requests, demands or other communications to or upon the respective parties” shall be made by mail or telex. The contract provides that such a demand or other communication could be made upon the buyer by mailing it to the following address:

ARMADA ARGENTINA
ARGENTINA (sic) NAVAL COMMISSION
630 INDIANA AVE., — N.W.
WASHINGTON, D.C. — 20004.

Plaintiff in the present case served the summons and complaint by mailing them to the following addressee:

CHIEF, ARGENTINE NAVAL COMMISSION
630 INDIANA AVE., N.W.
WASHINGTON, D.C. 20001

This certainly constitutes substantial compliance with the contractual provision found in Article 10-B. The defendant does not dispute that it received notice of the suit, and, under the circumstances of this case, such notice is sufficient. See Harris Corp. v. National Iranian Radio and Television, 691 F.2d 1344, 1352 (11th Cir.1982) (finding service sufficient even though there was no literal compliance with the provisions of 28 U.S.C. § 1608). Therefore, unlike the plaintiff in Unidyne, Marlowe properly served ANC.

ANC contends that Article 10-B did not constitute a “special arrangement for service” between the two parties within the meaning of section 1608. Because the contract did not specifically provide for service of legal process, defendant argues, this Article did not define an acceptable means of service under the FSIA. The Court finds ANC’s argument to be overly technical. Service of process certainly falls under the contractual language of “notices, requests, demands or other communications to or upon the respective parties.” Because plaintiff substantially complied with this arrangement for service, such service was proper upon ANC, a “foreign state”, under the FSIA, 28 U.S.C. § 1608(a)(1).

BECAUSE ANC WAIVED ITS IMMUNITY FROM SUIT, THIS COURT HAS JURISDICTION

The FSIA grants jurisdiction to district courts over cases against a foreign state with respect to which the foreign state is not entitled to foreign sovereign immunity. 28 U.S.C. § 1330(a). See also Verlinden, 461 U.S. at 489, 103 S.Ct. at 1969. The Act contains several exceptions to immunity for foreign states. 28 U.S.C. § 1604-1607. In the present case, the “waiver” exception of 28 U.S.C. § 1605(a)(1) applies.

In relevant part, 28 U.S.C. § 1605 provides:

(a) A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case—
(1) in which the foreign state has waived its immunity either explicitly or by implication ...

28 U.S.C. 1605(a)(1). In the present case, ANC waived its immunity by stipulating that its contract with plaintiff’s assignor “shall be governed by and construed in accordance with the laws of the District of Columbia.”

This choice of law clause is sufficient to constitute an implied waiver under the Act. In explaining this section of the FSIA, § 1605(a)(1), the House Report states that “[w]ith respect to implicit waivers, the courts have found such waivers in cases where a foreign state ... has agreed that the law of a particular country should govern a contract.” House Report at 18, 1976 U.S.Code Cong. & Ad.News at 6617. This House Report has been generally noted as authoritative legislative history. E.g. Verlinden, 461 U.S. at 488, 103 S.Ct. at 1968; Gilson v. Republic of Ireland, 682 F.2d 1022, 1027-28 (D.C.Cir.1982).

Federal courts have often cited this very section of the House Report. In one such case, Ohntrup v. Firearms Center, Inc., 516 F.Supp. 1281, 1284-85 (E.D.Pa.1981), the court concluded, albeit in dicta, that:

A waiver of sovereign immunity may be inferred from an agreement to arbitrate a dispute in another country or to refer disputes to the laws of another country____ [I]t is reasonable to conclude that an agreement by a foreign country to either arbitrate disputes in or be governed by the laws of the United States constitutes an implicit waiver by that state of the defense of sovereign immunity in the courts of the United States.

Similarly, in Resource Dynamics International v. General People’s Committee, 593 F.Supp. 572 (N.D.Ga.1984), the plaintiff entered into a contract with a foreign defendant. The contract provided that “[t]his Agreement and the performance or breach hereof shall be governed by the procedural and substantive laws in effect in the State of Virginia.” Citing the passage from the House Report, the court held that this provision constituted an implicit waiver of defendant’s sovereign immunity under 28 U.S.C. § 1605(a)(1). 593 F.Supp. at 575.

In Ipitrade International v. Federal Republic of Nigeria, 465 F.Supp. 824 (D.D.C.1978), the parties to a contract agreed that the construction, validity, and performance of the contract would be governed by the laws of Switzerland and that any disputes arising under the contract would be submitted to arbitration by the International Chamber of Commerce in Paris. After a dispute arose, the Swiss arbitrator granted an award to the petitioner in a proceeding which Nigeria refused to attend, relying on the defense of sovereign immunity. In another proceeding in which Nigeria refused to attend, Judge Gasch of this Court, citing the House Report, confirmed the award because the agreement to adjudicate all contractual disputes in accordance with Swiss law constituted a waiver of sovereign immunity under the FSIA. 465 F.Supp. at 826.

Although the contractual language in each of these cases differs somewhat from that in the present case, these cases hold a clear message for this one: if the parties to a contract agree that the laws of one country will govern contractual interpretations, they have implicitly waived the defense of sovereign immunity. In this case, because ANC agreed that the contract would be governed by District of Columbia law, it has implicitly waived its sovereign immunity within the meaning of 28 U.S.C. § 1605(a)(1).

ANC attempts to dismiss the relevant portion of the House Report as “singularly devoid of any authoritative support.” Def. Memorandum at 14. The above-cited cases demonstrate that, at least by this point in time, there is more than adequate authority for the proposition noted in the House Report. Indeed, it is defendant’s position which now seems to lack support.

ANC points to the laws of several nations, as well as the proposals of certain international organizations, to argue that the view that an agreement on the proper law of a contract constitutes an implied consent to the jurisdiction of the state whose law has been chosen does not comport with international law. ANC contends that the established international practice requires express and unambiguous consent to such jurisdiction. This discussion, while somewhat instructive, simply does not represent the current state of the FSIA, which expressly provides for waiver by implication. 28 U.S.C. § 1605(a)(1).

Defendant also suggests that, even assuming ANC waived its defense of sovereign immunity, it still has insufficient contacts with the United States for this Court to obtain personal jurisdiction over it. International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945); Gilson, 682 F.2d at 1028. The defense of lack of personal jurisdiction, though, may be waived by a party. Petrowski v. Hawkeye-Security Insurance Co., 350 U.S. 495, 496, 76 S.Ct. 490, 490, 100 L.Ed. 639 (1956). Because the FSIA governs both personal and subject matter jurisdiction, Verlinden, 461 U.S. at 485 n. 5, 103 S.Ct. at 1967 n. 5, ANC’s implicit waiver of immunity under § 1605(a)(1) constituted a waiver of the defense of lack of personal jurisdiction. Petrowski, supra. This result obtains in the absence of the normally required minimum contacts. Gilson, supra. As the House Report states, after noting the concerns raised by International Shoe, “each of the immunity provisions in the bill, sections 1605-1607, requires some connection between the lawsuit and the United States, or an express or implied waiver by the foreign state of its immunity from jurisdiction.” House Report at 13, 1976 U.S. Code Cong. & Ad. News at 6612 (emphasis supplied).

Moreover, the contract in this case clearly demonstrates that ANC has sufficient “minimum contacts” in the United States. International Shoe, 326 U.S. at 316, 66 S.Ct. at 158. ANC- maintains its headquarters, i.e., its “principal place of business”, in Washington, D.C. The contract was negotiated, at least in part, in Washington. Any demands or notices were to be sent to ANC’s Washington address. Defendant has availed itself of the benefits and privileges of District of Columbia law. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295, 100 S.Ct. 559, 566, 62 L.Ed.2d 490 (1980); Gilson, 682 F.2d at 1028-29. In short, nothing about this Court’s assertion of jurisdiction over ANC “offend[s] ‘traditional notions of fair play and substantial justice.’ ” International Shoe, 326 U.S. at 316, 66 S.Ct. at 158, quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 342, 85 L.Ed. 278 (1940). Accordingly, the Court has personal jurisdiction over defendant.

CONCLUSION

The Court today holds that the defendant herein, the Argentine Naval Commission, is a “foreign state”, and thus a juridicial entity under the Foreign Sovereign Immunities Act. Because defendant was properly served, and waived its sovereign immunity, this Court has both subject matter and personal jurisdiction in this case. See Verlinden, 461 U.S. at 485 n. 5, 103 S.Ct. at 1967 n. 5. Accordingly, the Court has today issued an Order denying defendant’s Motion to Dismiss.

        . At a status conference held on January 29, 1985, wherein the Court articulated its reasons for vacating the default judgment against ANC, the Court noted that these arguments presented colorable jurisdictional questions. The Court, of course, did not at that time rule on those questions.

      . In addition to the legal opinion and an affidavit, ANC submits a response by the Argentine Embassy to a State Department inquiry as to the legal status of ANC. The December 4, 1984, response by the Embassy asserts that the role of ANC is that of a "subordinate command of the Argentine Navy", the function of which "consists mainly in arranging training courses and procuring materiel for the Argentine Navy as well as overseeing its repair.” The Court does not necessarily doubt the veracity of these assertions, cf. United States v. City of Glen Cove, 322 F.Supp. 149, 154 (E.D.N.Y.), aff’d mem., 450 F.2d 844 (2d Cir.1971), but the legal significance of these facts must be determined in accordance with federal law. See First Nat'l City Bank v. Banco para el Comercio Exterior de Cuba, 103 S.Ct. 2591, 2597-98 (1983), and the discussion which follows, infra pp. 705-706.

      . Plaintiff's argument that District of Columbia law governs the juridical capacity of ANC also misses the mark. In First Nat’l Bank, 103 S.Ct. at 2597-98 n. 11, the Supreme Court held that state law does not determine the "amenability of a foreign sovereign to suit in United States courts.”

      . Indeed, the Court noted, 103 S.Ct. at 2598, that international law "‘is part of our law quoting The Paquete Habana, 175 U.S. 677, 700, 20 S.Ct. 290, 299, 44 L.Ed. 320 (1900).

      . Of course the Court does not today pass on the merits of this case.

      . In opposing defendant’s earlier motion for relief from the default judgment, plaintiff had stated that ”[n]o special arrangements for process and service of process on the ANC exists between plaintiff and defendant; for that reason paragraph 1608(b)(1) [which is substantially similar to § 1608(a)(1) ] is inapplicable.” Plaintiff now admits, however, that at that time he had overlooked that clause in the contract. Because plaintiff did, in fact, comply with that provision, the Court holds that service was proper.

      . The plaintiff also asserts that the "commercial activities” exception to immunity applies in this case. 28 U.S.C. § 1605(a)(2). While defendant admits that during negotiations there were some contacts between ANC in Washington and Servistan S.A.’s representative in Panama and Ecuador, the record is not clear as to the extent of these contacts as they have bearing on § 1605(a)(2). The Court does hold, infra pp. 709-710, that there are sufficient minimum contacts to satisfy due process. Although the record is insufficient to permit a ruling on the § 1605(a)(2) issue, the Court’s holding that ANC waived both its immunity and its defense of lack of personal jurisdiction renders such a ruling unnecessary.


author: CAFFREY, Chief Judge.

text:
    Thomas S. CLARK, Plaintiff, v. William P. BISSONNETTE, et al., Defendants.
    Civ. A. No. 84-2105-C.
    United States District Court, D. Massachusetts.
    March 14, 1985.

      Paul J. Moriarty, Norwell, Mass., for plaintiff.
    Lee G. Ambler, Bellingham, Mass., Paul R. DeRensis, John C. Foskett, Deutsch, Williams, Glass, Brooks & DeRensis, Boston, Mass., for defendants.
   MEMORANDUM

CAFFREY, Chief Judge.

This is a civil action brought by Thomas H. Clark, the owner and developer of certain real estate located in the Town of Bellingham, Massachusetts. Mr. Clark alleges, inter alia, that town officials have frustrated his efforts to obtain building permits, use and occupancy permits, and water connection permits, all in violation of his constitutional rights. The complaint purports to state claims under 42 U.S.C. §§ 1983, 1985 and 1986, as well as pendent state tort claims. Federal jurisdiction is claimed under 28 U.S.C. §§ 1331 and 1343. The matter is now before the Court on defendants’ motion to dismiss for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6).

Pertinent portions of plaintiff’s complaint allege a series of events surrounding his attempts to obtain the necessary permits to develop and utilize three parcels of land located in the Town of Bellingham. The defendants are five Town Selectmen, four present and former Building Inspectors, the Superintendent of the Town Water Department, three Water Commissioners and the Special Town Counsel. The plaintiff alleges that the Town Building Inspectors issued numerous “stop work” orders at construction sites, that the town Plumbing Inspector refused to issue a plumbing permit, that Building Inspectors have twice denied applications for a permit to build a wall, that the town Water Commissioners have failed to provide water service, that the Selectmen have voted to refuse water service, and that Building Inspectors have revoked building permits, refused to inspect property and have refused to grant occupancy permits. It is further alleged that on several occasions the responsible officials undertook such unfavorable actions as the result of instructions given by the Selectmen and/or a Building Inspector. The complaint also alleges that on four occasions the plaintiff appealed the Building Inspector’s unfavorable determinations to the Massachusetts State Building Code Appeals Board (“Board”) and obtained favorable orders from that Board each time. Plaintiff claims that the defendants have failed to obey two of the Board’s orders. Furthermore, the Town is alleged to have instituted a civil action against the defendant in malice and bad faith which it failed to prosecute, resulting in judgment and execution for Mr. Clark.

The complaint is rife with allegations that the defendants acted with malice and in bad faith for the purpose of penalizing “the plaintiff for developing real estate contrary to the wishes of some or all of the defendants.” The alleged result of the defendants actions has been to deprive the plaintiff of property without due process of law. Additional allegations which pertain to plaintiff’s pendent state law claims need not be addressed for the purposes of this motion.

On a rule 12(b)(6) motion, all allegations in the complaint are taken as true. Furthermore, “a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957).

Section 1983 Claim

Federal courts are generally reluctant to use § 1983 as a means of reviewing the actions of local zoning or licensing authorities. E.g. Raskiewicz v. Town of New Boston, 754 F.2d 38 (1st Cir.1985); Chiplin Enterprises, Inc. v. City of Lebanon, 712 F.2d 1524 (1st Cir.1983); Cloutier v. Town of Epping, 714 F.2d 1184 (1st Cir.1983); Creative Environments, Inc. v. Estabrook, 680 F.2d 822 (1st Cir.), cert. denied, 459 U.S. 989, 103 S.Ct. 345, 74 L.Ed.2d 385 (1982). The Court of Appeals for the First Circuit has stated the rule unequivocably: “federal courts do not sit as a super zoning board or a zoning board of appeals.” Raskiewicz, 754 F.2d at 44.

This rule is sound for several reasons. Even assuming that a plaintiff has a cognizable property interest in the issuance of a permit or other authorization, state zoning schemes generally provide for hearings at the local board level as well as administrative and judicial review of any adverse action. In other words, the state procedure provides for adequate procedural due process. See Creative Environments, Inc., 680 F.2d at 829-832. Moreover, even where an issuing authority fails to obey state law this does not necessarily give rise to a constitutional claim. Chiplin Enterprises, Inc., 712 F.2d at 1527, citing Paul v. Davis, 424 U.S. 693, 96 S.Ct. 1155, 47 L.Ed.2d 405 (1976). A claim that denial of a permit or variance “was improperly motivated, unsupported by an allegation of the deprivation of a specific constitutional right, simply raises a matter of local concern, properly and fully reviewable in the state courts.” Id.

Plaintiff Clark seeks to distinguish this case from the ordinary zoning dispute on the ground that although he has successfully pursued the administrative and judicial remedies provided by Massachusetts law, intransigent town officials continue to deny him the permits to which he is entitled. In particular, Clark points to his appeals to the State Building Code Appeals Board pursuant to M.G.L. c. 23B § 23. Clark avers that he received favorable rulings from the Board on four occasions, but that the Town Building inspector has failed to act in accordance with two of the Board’s orders. Clark also claims that town officials have based their refusal to grant permits on grounds which were adjudicated in his favor in the earlier state civil suit. Accordingly, Clark maintains that because he has successfully pursued state remedies he has no adverse decision to appeal and is therefore foreclosed from obtaining effective relief in the state courts.

As a matter of Massachusetts state law, this is simply not the case. Massachusetts has ample remedies for persons aggrieved by local officials. A local building inspector’s failure to act, as well as his affirmative acts, are reviewable before the State Building Code Appeals Board. M.G.L. c. 23B § 23. Decisions by plumbing inspectors are, pursuant to a different statutory scheme, reviewable by the Board of State Examiners of Plumbers. M.G.L. c. 142 § 9. Judicial review of final administrative action is available in the commonwealth’s courts pursuant to M.G.L. c. 30A § 14. There is also precedent for judicial review of the Water Commissioners failure to provide water to plaintiff’s property. Rounds v. Board of Water & Sewer Commissioners of Wilmington, 347 Mass. 40, 196 N.E.2d 209 (1964).

Perhaps most pertinent to plaintiff’s dilemma is the availability of relief in the nature of mandamus. M.G.L. c. 249 § 5. There is case law that where a building inspector acts outside the scope of his authority and the plaintiff has no administrative remedy, the appropriate means of redress is through a petition for mandamus. Ouellette v. Building Inspector of Quincy, 362 Mass. 272, 277, 285 N.E.2d 423 (1972). Moreover, mandamus has been granted in situations similar to plaintiff’s, where a city official has ordered the building inspector to wrongfully withhold a permit. Fellsway Realty Corporation v. Building Commissioner of Medford, 332 Mass. 471, 125 N.E.2d 791 (1955).

From the above it is apparent that Massachusetts affords a full panoply of administrative and judicial remedies of which plaintiff may avail himself. Because adequate procedural due process is available, this case is not of constitutional dimension. and plaintiff’s complaint fails to state a claim for which relief can be granted pursuant to § 1983.

In so ruling, I note that this case is inapposite to the case of Roy v. City of Augusta, 712 F.2d 1517 (1st Cir.1983), in which the court allowed a § 1983 remedy because the peculiar circumstances of the case foreclosed the possibility of relief in the state courts. The plaintiff in Roy was denied a renewal of his pool hall license by local officials in Augusta, Maine. After a protracted period of litigation, the Maine Supreme Judicial Court ordered that the license be issued, whereupon the local authority issued an expired license to the plaintiff. The court of Appeals for the First circuit held that because the plaintiff had established his right to the license in the Maine Supreme Judicial Court, he had a constitutionally cognizable property interest in it. The failure of the Augusta officials to issue a valid license at that point, rather than the original denial, constituted a deprivation of property. Because Roy had since been forced to sell the pool hall and the officials were immune from suit for money damages under state law, he had no effective state remedy to pursue.

In contrast, plaintiff Clark still owns the land in question, and is therefore still in a position to benefit from grant of the requested permits.

Section 1985 and 1986 Claims

Plaintiff’s §§ 1985 and 1986 claims need be addressed only briefly. In order to state a claim under § 1985(3) it is necessary to allege that the defendants’ acts were motivated by “a class-based, invidiously discriminatory animus ...” Griffin v. Breckenridge, 403 U.S. 88, 102, 91 S.Ct. 1790, 1798, 29 L.Ed.2d 338 (1971). To meet this burden, the plaintiff must show that he was discriminated against because of his membership in a class. It is insufficient that the plaintiff is a member of a class of persons similarly situated, or that he was treated differently from other members of a class. Creative Environments, Inc., 680 F.2d at 834, citing Harrison v. Brooks, 519 F.2d 1358 (1st Cir.1975). By this standard, plaintiff Clark’s complaint fails to state a claim under § 1985. With no underlying § 1985 claim, the § 1986 claim must also fail. Creative Environments, Inc., 680 F.2d at 835.

Because no federal claim remains before the court, I rule that plaintiff’s pendent state claims should be dismissed as well. United Mine Workers of America v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966).

Order accordingly.


author: JAMES C. FOX, District Judge.

text:
    Susan M. CHAPMAN, Plaintiff, v. James E. VANDE BUNTE, Defendant.
    No. 84-1243-CIV-5.
    United States District Court, E.D. North Carolina, Raleigh Division.
    March 14, 1985.
    John V. Hunter, III, Raleigh, N.C., for plaintiff.
    James E. Vande Bunte, Lansing, Mich., pro se.
   ORDER

JAMES C. FOX, District Judge.

Plaintiff, (hereinafter Chapman), instituted a special proceeding before the Clerk of Superior Court of Wake County, North Carolina, seeking, the sale of personal property which belongs equally to the parties and the division of the proceeds thereof, Chapman’s petition stating that because of the nature of the property it cannot be divided without injury to the parties. Such a special proceeding for the partition of personal property is authorized by the General Statutes of North Carolina, §§ 46-42 et seq. Defendant (hereinafter Vande Bunte) filed a petition for removal of the proceeding to this court pursuant to 28 U.S.C. § 1446, alleging original jurisdiction by virtue of diversity of citizenship (which diversity neither party disputes) and further alleging that the amount in controversy exceeds $10,000. Following removal, Vande Bunte moved to dismiss this action, pursuant to F.R.Civ.P. 12(b)(2), because of lack of jurisdiction over the person and property of Vande Bunte. Alternatively, Vande Bunte has moved to transfer this action to the United States District Court for the Western District of Michigan pursuant to 28 U.S.C. § 1404, contending that the proceeding might have been brought in that district and that the interests of justice and the convenience of parties and witnesses so require. Chapman has moved to have this proceeding remanded to the Wake County Superior Court contending that (a) the action is not a case or controversy within the original jurisdiction of the court under Article III of the Constitution of the United States, and (b) the amount in controversy does not exceed $10,000.

The undisputed facts appear to be as follows:

On or about May 15, 1980, Chapman and Vande Bunte, both residents and citizens of Michigan and members of its state bar, executed an agreement in Ingham County of said state. This agreement conferred upon each party a one-half undivided interest in artifacts theretofore and thereafter removed by Treasure Salvors, Inc. (situated in Florida), from the shipwreck believed to be the Santa Margarita. An artifact theretofore recovered, to-wit, a gold bar in joint possession of the parties, was placed in a safe deposit box in Ingham County, where it remains to this date.

In June, 1983, Chapman moved to North Carolina and became a resident and citizen of Raleigh. Now a practicing attorney there, she avers she has no intention of returning to or practicing law in Michigan. Chapman does continue to own real property situated in the latter state, however.

Subsequent to June, 1983, Treasure Salvors recovered (or otherwise came into possession of) additional artifacts valued in excess of $20,000, to-wit, a gold chain, 29 silver Spanish coins, and a large silver bar, from the Santa Margarita. The parties were not able to agree as to the disposition or division of these artifacts, and thereafter they were sent to Chapman at her sole request and without Vande Bunte’s knowledge, consent or concurrence, and possibly over his express objection and instruction to the contrary. Vande Bunte has had no contact whatsoever with the State of North Carolina, and has never intended for or consented to the artifacts’ transfer to this state. On October 4, 1984, Chapman instituted the subject partition proceeding which was removed to this court. Chapman is willing to have the artifacts sold, provided that he is afforded, pursuant to the agreement, a right to purchase the artifacts at whatever proves to be the highest bona fide price offered therefor.

In the court’s view, the issues raised by the pleadings should be resolved in the following order:

1. Is an in rent proceeding for the partition of personal property a case or controversy within the subject matter jurisdiction of this court?

2. If so, does the amount in such controversy exceed $10,000?

3. If a case or controversy involving the requisite amount is properly before this court, does the court have jurisdiction over the person or property of the defendant which comports with due process of law?

4. If so, should this case be transferred to the Michigan District Court?

In determining the first issue, the court notes that:

1. The parties’ joint ownership of the subject property is undisputed; neither seeks to deprive the other of his or her interest therein.

2. The property is lawfully possessed by Chapman; neither party seeks to recover the property from the unlawful possession of another. Chapman did not engage in any fraudulent action in having the artifacts delivered to her in North Carolina.

3. An in rem partition proceeding is a legal process utilized to enable a joint owner to sever that relationship and to enjoy his or her property interest in severalty.

4. In such a proceeding, the parties do not seek the resolution of any legal question — i.e. the determination of a question of law, but rather ask the court to perform an administrative function pursuant to legal parameters established by the State of North Carolina.

5. The partition proceeding will not affect Vande Bunte’s ability to assert any breach of contract claim against Chapman in either Michigan or North Carolina, nor will it affect the in personam jurisdiction of those states over the respective parties.

As indicated by the foregoing, the partition proceeding does not present a dispute in an adversary context, nor is it one which will cause Vande Bunte injury in fact or otherwise. Vande Bunte does not contend that North Carolina’s partitioning process is procedurally impermissible under federal law, nor does he complain of its being improperly applied or executed with regard to his interest in the property. Manifestly, the partition proceeding will not result in Vande Bunte’s suffering an injury from any putatively illegal action of Chapman. For these reasons, the court does not view the in rem partition proceeding as a case or controversy within the subject matter of this court and Chapman’s motion to remand will therefore be ALLOWED. In view of this conclusion, it is not necessary to consider whether or not the special proceeding affects property or an interest in an amount in excess of $10,-000.

The special proceeding having been improvidently removed to the federal court, the remaining issues raised by Vande Bunte would, appear to be moot. The court notes in passing, however, that Vande Bunte’s motion for removal essentially requests the federal court to assume command of the in rem partitioning process on the one hand, while his motion to dismiss suggests that it would be impermissible to apply the process to his property and to him on the other. While not contending that the in rem partition proceeding will per se result in any injury to him, he contends that it should not be allowed to inconvenience him and cause him attendant expense absent any contact by him with the North Carolina forum. Thus, the question arises as to what alternatives are available.

No sovereign power of Michigan or the federal government extends to the artifacts, in and of themselves, situated in North Carolina. The fact that such articles became so situated without his consent does not affect the validity of the in rem partition proceeding, for the location could have been caused by wind, wave or other act of God which no human mind intended and to which no human act contributed. In the last analysis, nothing else appearing, things must be the subject of a jurisdiction capable of affecting their form, location, possession, existence, etc. It would be abstract justice to determine the interests of people in things without a jurisdiction capable of effecting such determination.

North Carolina has a legitimate governmental interest in the title to any chattel brought within its borders. Each state has the constitutional authority to make its own laws with respect to persons and events within its own borders, see Magnolia Petroleum Company v. Hunt, 320 U.S. 430, 436-7, 64 S.Ct. 208, 88 L.Ed. 149 (1943), and any dealing with the artifacts in question in North Carolina is an event within said state. The presence of this governmental interest in the context of an in rem proceeding insures compliance with the Due Process Clause. The regular special proceeding initiated against the artifacts gives Vande Bunte adequate notice and opportunity to be heard.

In rem jurisdiction must exist, at times, without regard to the contact of individuals to the jurisdictional forum. In a true in rem proceeding, in order to subject property to a judgment in rem, due process requires only that the property itself have certain minimum contacts with the territory of the forum such that maintenance of the proceeding affecting that property, as opposed to a resolution of a dispute between parties concerning an interest therein, does not offend traditional notions of fair play and substantial justice.

For the foregoing reasons, this matter is remanded to the General Court of Justice of Wake County, North Carolina, Superior Court Division, before the Clerk.

SO ORDERED.

      . On September 11, 1984, Vande Bunte instructed Treasure Salvors to make no distribution of the artifacts without his concurrence. It is unclear whether their distribution to Chapman occurred prior to or after Treasure Salvors' receipt of Vande Bunde’s instruction in this regard.

      . An adversary case or controversy normally involves complex legal and factual issues necessitating research, discovery, evidentiary hearings and advocacy. It also requires extensive preparation and intensive participation by one affected thereby. The foregoing are not attendant upon an in rem partition proceeding, and the latter is without the expense and inconvenience attendant to the usual resolution of adversary issues.

      . For example, an adversary dispute as to the interpretation of the agreement, or to the interests of the parties in the property, or the right to possession — in short a case or controversy.


author: SPIEGEL, District Judge:

text:
    Kevin GRIFFIN, et al., Plaintiffs, v. O’NEAL, JONES & FELDMAN, INC., et al., Defendants.
    No. C-1-84-1228.
    United States District Court, S.D. Ohio, W.D.
    March 14, 1985.
    Stanley M. Chesley, Waite, Schneider, Bayless & Chesley, Cincinnati, Ohio, for plaintiffs.
    James Q. Doran, Cincinnati, Ohio, Charles R. Janes, Trial Atty., Knepper, White, Arter & Hadden, Columbus, Ohio, for defendants; Michael R. Gallagher, Gallagher, Sharp, Fulton & Norman, Cleveland, Ohio, of counsel.
   OPINION AND ORDER GRANTING MOTION TO DISMISS

SPIEGEL, District Judge:

This matter came on for consideration of the motion to dismiss filed by defendants Carter-Glogau Laboratories, Inc. and Reveo D.S., Inc. (doc. 6). A brief in opposition has been filed by plaintiffs (doc. 11), to which defendants have replied (doc. 13). For the reasons set forth below, we hereby Order that counts four and six be stricken from plaintiffs’ Complaint and, consequently, that plaintiffs’ Complaint be dismissed in its entirety, as we are without jurisdiction to hear their case.

Plaintiffs Kevin and Maureen Griffin, individually, and as Next Friends and Guardians of their minor daughter Meghan, seek recovery from all defendants based on events that had their inception when Meghan was born prematurely at Good Samaritan Hospital in Cincinnati, Ohio. They sue for damages for themselves and for Meghan that stem from injuries suffered by her as a result of the administering of E-Ferol Aqueous Solution to her for an extended period of time following her birth. Plaintiffs assert seven causes of action: negligence; breach of the warranty of merchantibility and fitness for an intended purpose; strict liability; violation of the Federal Food, Drug and Cosmetic Act (FDCA); fraud; violation of Title IX of Organized Crime Control Act (hereinafter the Racketeer Influenced and Corrupt Organizations Act or RICO); and willful and wanton conduct. There exists no diversity of citizenship between the parties. Rather, plaintiffs claim jurisdiction by way of 28 U.S.C. § 1331, citing their allegations of liability grounded on the FDCA and RICO, both federal statutes, and upon the doctrines of pendent and ancillary jurisdiction.

Through their motion to dismiss, defendants challenge sufficiency of plaintiffs’ federal claims under the FDCA and RICO, arguing that no private cause of action can be implied under the former and that the facts of this case are inapplicable to the latter. If defendants are correct on both counts, we would lack federal question or “arising under” jurisdiction. Absent diversity of citizenship, this case would warrant dismissal, thus leaving plaintiffs to their remedies in state court.

Specifically, pursuant to Rules 12(b)(1) and 12(b)(6), Fed.R.Civ.P., defendants move for an order striking counts four (FDCA) and six (RICO) of plaintiffs’ Complaint and then for dismissal of plaintiffs’ Complaint for lack of subject matter jurisdiction. The standard of review by which we are bound has been set forth in Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). A motion to dismiss ought not to be granted “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Id. at 45-46, 78 S.Ct. at 101-102 (footnote omitted). In addition, we must “accept as true all the well-pled allegations in the complaint under attack.” Great Lakes Steel v. Deggendorf, 716 F.2d 1101, 1105 (6th Cir.1983); Westlake v. Lucas, 537 F.2d 857, 858 (6th Cir.1976). It is within this framework that we evaluate defendants’ motion.

I

The Federal Food, Drug and Cosmetic Act (FDCA), 21 U.S.C. § 301 et seq., is a public protection statute, one designed, among other things, to keep misbranded and/or adulterated articles from entering interstate commerce. See United States v. Walsh, 331 U.S. 432, 434, 67 S.Ct. 1283, 1284, 91 L.Ed. 1585 (1947). Congress has provided criminal penalties to be imposed on those found to violate the prohibited acts set forth in § 331. It is clear from the face of the statute that no civil private right of action exists. Notwithstanding this omission, plaintiffs ask this Court to imply a cause of action because “there is no language contained <in the statute that prohibits a civil claim” (doc. 11, p. 4, emphasis ours). In response, defendants represent that no court considering the issue has ever implied a civil cause of action under the FDCA and that we ought to rule similarly.

Our research confirms, and plaintiffs do not dispute, defendants’ contention that there is no legal precedent supporting plaintiffs’ theory that private citizens may bring suit against alleged violators of the FDCA. See, e.g., Pacific Trading Co. v. Wilson and Co., Inc., 547 F.2d 367 (7th Cir.1976); National Women’s Health Network, Inc. v. A.H. Robins Co., Inc., 545 F.Supp. 1177 (D.Mass.1982); Keil v. Eli Lilly and Co., 490 F.Supp. 479 (E.D.Mich.1980); Gelley v. Astra Pharmaceutical Products, Inc., 466 F.Supp. 182 (D.Minn.), aff'd on other grounds, 610 F.2d 558 (8th Cir.1979). While it is true that none of these cases serve as binding precedent upon us, we are inclined to follow them. In particular, we believe that Judge Nelson’s treatment of the question presented is a correct application of the legal issues at hand. See National Women’s Health Network, 545 F.Supp. at 1178-80.

Assuming we were not wont to adopt the findings of the Seventh Circuit and the district courts listed above, we could undertake an independent analysis of whether we ought to imply a private right of action under the FDCA pursuant to Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975), and its progeny. In Cort, of course, the Supreme Court teaches that four factors merit attention when divining a private remedy: (1) did the legislature intend for plaintiffs to be within the protected class; (2) did the legislature intend, in any fashion, to create a private cause of action; (3) would the legislative purpose be compromised if a private right were implied; and (4) would an implied right under federal law interfere with a state’s province to regulate a particular area? Id. at 78, 95 S.Ct. at 2088. See also Cannon v. University of Chicago, 441 U.S. 677, 689-709, 99 S.Ct. 1946, 1953-1964, 60 L.Ed.2d 560 (1979). These four factors, however, do not command equal weight. Rather, the intent of Congress looms as the all-important inquiry. See Daily Income Fund, Inc. v. Fox, 464 U.S. 523, 104 S.Ct. 831, 839, 78 L.Ed.2d 645 (1984); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Curran, 456 U.S. 353, 377, 102 S.Ct. 1825, 1838, 72 L.Ed.2d 182 (1982); Middlesex County Sewerage Authority v. National Sea Clammers Ass’n, 453 U.S. 1, 13, 101 S.Ct. 2615, 69 L.Ed.2d 435 (1981); Northwest Airlines, Inc. v. Transport Workers Union of America, 451 U.S. 77, 91, 101 S.Ct. 1571, 1580, 67 L.Ed.2d 750 (1981); Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 23-24, 100 S.Ct. 242, 249, 62 L.Ed.2d 146 (1979); Touche Ross & Co. v. Redington, 442 U.S. 560, 568, 99 S.Ct. 2479, 2485, 61 L.Ed.2d 82 (1979). As a result of these recent rulings, it is apparent that the Supreme Court intends to limit the availability of private causes of action, a trend recognized by our parent circuit. See, e.g., Rauchman v. Mobil Corp., 739 F.2d 205, 207 (6th Cir.1984); Howard v. Pierce, 738 F.2d 722, 731 (6th Cir.1984) (Engel, J., dissenting).

In support of the position that the FDCA permits a private civil cause of action, plaintiffs proffer policy arguments. They maintain that the Food and Drug Administration (FDA) is overworked and underfunded; consequently, society is exposed to unapproved — and presumably unsafe— drugs. Plaintiffs present their case as the “perfect” example of the FDA’s impotence to afford protection to citizens using licit drugs. They allege that defendants

marketed more than fifty (50) unapproved drugs despite government warnings ... [;] improperly marketed more than a dozen other drugs in unapproved strengths and sizes as well as thirty-four (34) vitamin and mineral products... [;] [and received] sixteen (16) letters between 1976 and 1981 informing [it that the FDA] considered some of its products unsafe or ineffective,

(doc. 11, p. 5), all without FDA sanction. Plaintiffs characterize the FDA’s inaction as a helpless inability instead of a deliberate unwillingness to act. Naturally defendants have a differing view of the significance of these facts, assuming, for argument’s sake, that they are true. We need not resolve said conflict, however. In essence, plaintiffs ask us to imply a private remedy because, in so doing, we only would be furthering Congress’s purpose in enacting the FDCA — that is, preventing introduction of misbranded and/or adulterated drugs into the stream of commerce. Plaintiffs thus urge that we focus on Factor Three of the Cort v. Ash analysis. But because the recent relevant Supreme Court case law forbids us from considering Cort’s third factor before we are satisfied that we have met the second, we cannot adopt the reasoning urged upon us by plaintiffs.

We have established that the plain language of the FDCA implies no civil private right of action. Neither plaintiffs nor defendants cite any legislative history to the Court. Judge Nelson, though, in National Women’s Health Network, indicates that a rejected version of the FDCA would have incorporated a private right of action for damages. 545 F.Supp. at 1179-80. Given this legislative indication, albeit indirect, and the actual statutory language, we do not hesitate in concluding that Congress intended no private remedy under the FDCA.

There being “no set of facts” entitling plaintiffs to relief on their claim grounded on a violation of the FDCA, defendants’ motion to dismiss is granted in part and plaintiffs’ fourth cause of action is Ordered stricken from the Complaint.

II

Plaintiffs’ Complaint also claims jurisdiction arising under Title IX of the Organized Crime Control Act of 1970, the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq. Defendants maintain that plaintiffs’ RICO cause of action is wrought with infirmities and cannot stand; generally, they state that plaintiffs have no cognizable RICO injury and that plaintiffs have not alleged the necessary enterprise. After setting forth the pertinent statutory sections, we will proceed to discuss the questions defendants present.

RICO has both a criminal and civil component. Its civil remedy, the one sought by plaintiffs herein, reads as follows:

Any person injured in his business or property by reason of a violation of section 1962 of this chapter ... shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney’s fee.

Id. § 1964(c). Section 1962(c) is reproduced below:

It shall be unlawful for any person employed by or associated with any enterprise engage in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt.

These definitions are relevant to the statute now under scrutiny:

(1) “racketeering activity” means ... (B) any act which is indictable under any of the following provisions of title 1, United States Code: ... section 1341 (relating to mail fraud);
(3) “person” includes any individual or entity capable of holding a legal or beneficial interest in property;
(4) “enterprise” includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity;
(5) “pattern of racketeering activity” requires at least two acts of racketeering activity, one of which occurred after the effective date of this chapter and the last of which occurred within ten years.

Id. § 1961(1), (3), (4), (5).

The Sixth Circuit has broken down § 1962(c) into this list of elements:

[A person]
(1) engaging in an enterprise,
(2) affecting interstate commerce,
(3) conducted through a pattern of racketeering, and
(4) involving two or more statutorily-named racketeering crimes.

See United States v. Sutton, 642 F.2d 1001, 1008 (6th Cir.1980), cert. denied, 453 U.S. 912, 101 S.Ct. 3143, 69 L.Ed.2d 995 (1981). We will use these elements to order our examination of defendants’ contentions.

Defendants quarrel not with the notion that they each, as corporations, may be considered a “person.” They do dispute, however, that they can be considered simultaneously a “person” and an “enterprise.” Their reading of the statute contemplates interaction of a “person” with an “enterprise,” but as completely separate, conceptually discrete entities.

Defendants’ position parrots that taken by this Court in Bays v. Hunter Savings Ass’n, 539 F.Supp. 1020, 1023-24 (S.D.Ohio 1982), wherein we relied on, among other cases, Sutton to conclude that the “person” must be distinct from the “enterprise.” We refer the parties to our Opinion in that case for a full-blown analysis. Upon examination, we glean nothing from plaintiffs’ Complaint from which we can infer that there exists a “person” apart from an “enterprise;” in fact, we read plaintiffs’ memorandum in opposition to state as much {see doc. 11, p. 12).

Not every court considering the issue has ruled as we did in Bays. See, e.g., United States v. Hartley, 678 F.2d 961, 986 (11th Cir.1982), cert. denied, 459 U.S. 1170, 103 S.Ct. 815, 74 L.Ed.2d 1014 (1983); United States v. Benny, 559 F.Supp. 264 (N.D.Cal.1983). But a sufficient number has approved and adopted our reasoning, and we are satisfied that, until a contrary decision issues from our parent circuit or the Supreme Court, our thinking remains sound. The fact that plaintiffs do not — and presumably cannot — allege a “person” separate from an “enterprise” impedes them from setting forth all the elements necessary under § 1962(c). Absent a proper allegation of a § 1962(c) violation, no recovery may be had under § 1964. See Bays, 539 F.Supp. at 1023. Under the Conley v. Gibson standard, then, plaintiffs’ sixth cause of action, in addition to the fourth, must be stricken from their Complaint.

Ill

Our ruling today strikes plaintiffs’ fourth and sixth causes of action from their Complaint. These were the causes of actions on which federal jurisdiction was based; those claims remaining are state claims and were pendent to those dismissed. Accordingly, on the principles set forth in United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966), plaintiffs’ causes of action must be litigated in state court. As we are without subject matter jurisdiction in this case, it is hereby dismissed.

SO ORDERED.

      . We note that both Justice Stevens and Justice Blackmun bemoan the evolution of the Cort v. Ash multifactor test into a single-step touchstone that pivots upon the ever elusive concept of Congressional intent. See Middlesex County, 453 U.S. at 25, 101 S.Ct. at 2629 (Stevens, J., concurring in part and dissenting in part).

      . Even assuming we could have mustered the necessary Congressional intent and thus met Factor Two in the Cort analysis, Factor One would present a problem. Laws enacted for the benefit of the general public stand apart from those designed to focus on and protect only indentifiable members of a protected class. The Supreme Court has made clear that, in the former, private causes of action ought not to be implied. See Cannon, 441 U.S. at 690-93, 99 S.Ct. at 1954-55; Howard, 738 F.2d at 725-26. We read the FDCA as a statute enacted to protect our citizenry at large. On balance, therefore, we conclude that plaintiffs fall far short of satisfying the test in Cort, as modified or not. Furthermore, we observe with interest that part of the Sixth Circuit’s reasoning that recognizes whether other courts have implied private remedies with respect to particular federal statutes. See, e.g., Jennings v. Alexander, 715 F.2d 1036, 1040 (6th Cir.1983); Chartwell Communications Group v. Westbrook, 637 F.2d 459, 466 (6th Cir.1980). Under this "standard,” if it can be so labelled, and with our previous string citation in mind, plaintiffs in the instant case surely would fail.

      . Although plaintiffs do not reference specifically § 1962(c) in their Complaint, of the four subsections available, (c) strikes us as most appropriate in light of plaintiffs’ allegations.

      . Commonly cases such as Hartley and Benny that hold that a “person” and an “enterprise" can coincide in identity are criminal rather than civil. See Saine v. A.I.A., Inc., 582 F.Supp. 1299, 1306 n. 7 (D.Colo.1984). But see United States v. Computer Sciences Corp., 689 F.2d 1181, 1190 (4th Cir.1982), cert. denied, 459 U.S. 1105, 103 S.Ct. 729, 74 L.Ed.2d 953 (1983). And we note that Judge Peckham in Benny is not opposed completely to our viewpoint as he states, in dictum, that “[t]he argument against identification of defendant and enterprise might be viable where [as here and in Bays ] a corporate defendant is involved.” 559 F.Supp. at 268.

      . See Lopez v. Dean Witter Reynolds, Inc., 591 F.Supp. 581, 585-86 (N.D.Cal.1984); Saine v. A.I.A., Inc., 582 F.Supp. 1299, 1306-07 (D.Colo.1984); Kaufman v. Chase Manhattan Bank, N.A., 581 F.Supp. 350, 357-58 (S.D.N.Y.1984); Willamette Savings & Loan v. Blake & Neal Finance Co., 577 F.Supp. 1415, 1426-27 (D.Or.1984); D & G Enterprises v. Continental Illinois National Bank and Trust Co., 574 F.Supp. 263, 270 (N.D.Ill.1983); Barker v. Underwriters at Lloyd’s, London, 564 F.Supp. 352, 356 (E.D.Mich.1983). At this point we are obliged to mention that the Seventh Circuit apparently takes exception to our reasoning in Bays. In a case scheduled for argument before the Supreme Court {see infra note 6), Judge Cudahy, writing for the panel, determined that the "person” must be distinct from the “enterprise,” unless the “corporation[-enterprise] is also a perpetrator.” Haroco, Inc. v. American National Bank and Trust Co., 747 F.2d 384, 402 (7th Cir.1984), cert. granted, — U.S. -, 105 S.Ct. 902, 83 L.Ed.2d 917 (1985). Here, obviously, plaintiffs allege that the defendant corporations are "perpetrators.” While citation to Haroco is absent from their brief in opposition, we trust they would seek the benefit of that court’s favorable ruling.
      Having considered the Seventh Circuit’s analysis in which subsection (a) of § 1962 is read together with subsection (c), we indicate only our respectful disagreement. From our reading United States Law Week's list of questions presented on certiorari, the person/enterprise identity issue will. not be considered on appeal. Therefore, we are comfortable in so grounding our decision in the instant case.

      . While we rule based on the person/enterprise identity issue, we recognize that defendants proffer alternative grounds in derogation of plaintiffs’ RICO count. Defendants assert additionally, and urge us to agree, that plaintiffs have no cognizable RICO injury as required by § 1964(c), for one or both of these arguments. First, they claim that plaintiffs must demonstrate they have suffered harm over and above that incident to the predicate offense. Second, they contend that plaintiffs’ damages, properly characterized, actually are no more than the accoutrements of a personal injury suit and thus are not recoverable under the "business or property” injury standard set forth in RICO.
      For reasons that we hope will become evident in the balance of this footnote, we make no ruling on the additional grounds defendants raise. Further, we take this opportunity to clarify on what other grounds we do not resolve this matter. In their papers the parties squabble over whether the fact that there has been no allegation of a link between defendants and organized crime ought to have a bearing on our decision. While this issue has been the topic of much debate, see, e.g., Lopez, 591 F.Supp. at 589 n. 6, we recognize that, in a recent case, the Sixth Circuit declined to "address the issue of whether a business entity must be affiliated with organized crime in order to be liable for damages in a private civil RICO action." Bender v. Southland Corp., 749 F.2d 1205 at 1216 n. 9 (6th Cir.1984). As an organized crime link really is not pertinent to our ruling with respect to the deficiencies identified in plaintiffs' RICO cause of action, for the record we state that said link — or lack thereof — played no part in our deliberations.
      To suggest that the scope of civil RICO is a current legal issue would be an absurd understatement. As expected, our research has unturned scores of cases relevant to the question of how far the statute should be construed to reach. The Supreme Court itself will be deciding a conflict that has arisen between the Second and Seventh Circuits, as certiorari has been granted in the cases of Sedima, S.P.R.L. v. Imrex Co., Inc., 741 F.2d 482 (2d Cir.1984), cert. granted, — U.S. -, 105 S.Ct. 901, 83 L.Ed.2d 917 (1985) and Haroco, Inc. v. American National Bank and Trust Co., 747 F.2d 384 (7th Cir.1984), cert. granted, — U.S. -, 105 S.Ct. 902, 83 L.Ed.2d 917 (1985). (Sedima is part of a trilogy of cases decided by the Second Circuit, and the only one in which certiorari has been granted.) The other two cases are Bankers Trust Co. v. Rhoades, 741 F.2d 511 (2d Cir.), petition for cert. filed, 53 U.S. L.W. 3367 (U.S. Oct. 24, 1984) (No. 84-657) and Furman v. Cirrito, 741 F.2d 524 (2d Cir.1984).
      Of course we cannot predict which questions of law the Supreme Court will chose to resolve. Those presented include whether conviction of a predicate act listed in § 1961(1) is a prerequisite to civil suits by a private litigant under § 1964(c) and whether a civil RICO plaintiff must prove injury to business or property beyond that resulting from the underlying acts of racketeering, a notion otherwise elusively dubbed proof of "racketeering enterprise injury.” Possibly the Justices will determine whether an organized crime nexus is the sine qua non of recovering civil damages under RICO. Whatever the breadth of the inquiry the Court elects to take, however, its opinion will provide lower courts with welcome answers to many of these troubling issues. As we are able to resolve the matter presently before us on much narrower grounds — grounds that presumably will not be addressed at oral argument before the Court — and given that much needed guidance as to the reach of civil RICO will be forthcoming, we think it prudent for us not to rule on defendants’ alternative grounds to dismiss plaintiffs’ sixth cause of action. On this note, then, we conclude our discussion.


author: SCOTT O. WRIGHT, Chief Judge.

text:
    Walter J. BLAIR, Plaintiff, v. Bill ARMONTROUT, Defendant.
    No. 85-0155-CV-W-5.
    United States District Court, W.D. Missouri, W.D.
    March 14, 1985.
    Bernard Rhodes, Gage & Tucker, Kansas City, Mo., for plaintiff.
    John Ashcroft, Atty. Gen., State of Mo., Jefferson City, Mo., for defendant.
   ORDER

SCOTT O. WRIGHT, Chief Judge.

Petitioner Walter Junior Blair has brought this action seeking federal habeas corpus relief pursuant to 28 U.S.C. § 2254. Blair was convicted of capital murder in the Circuit Court of Jackson County, Missouri, and the Missouri Supreme Court has scheduled Blair’s execution for March 20, 1985. Before the Court is the petitioner’s motion for a stay of execution pending resolution of his habeas corpus petition. For the following reasons, the petitioner’s request for a stay will be granted.

Initially, the Court notes that there is no question but that the petitioner is entitled, as a matter of law, to a stay of execution pending completion of habeas corpus review. The petitioner was found guilty of the capital murder charge on October 16, 1980, and the jury assessed the death penalty. This sentence was formally imposed by the trial court on January 14,1981. The petitioner’s conviction and sentence were affirmed on direct appeal by the Missouri Supreme Court. State v. Blair, 638 S.W.2d 739 (Mo.1982). The. United States Supreme Court thereafter denied certiorari on direct review.

The petitioner then challenged his conviction by filing a motion pursuant to Mo.Rule of Crim.Proc. 27.26 on May 13, 1983. An evidentiary hearing was held by the Circuit Court of Jackson County, and the petitioner’s 27.26 motion was denied. The Court of Appeals for the Western District of Missouri affirmed the trial court’s denial of the 27.26 motion, and on January 15, 1985, the Missouri Supreme Court denied the petitioner’s application for transfer.

On February 4, 1985, prior to the petitioner’s filing of his request for habeas corpus relief, the Missouri Supreme Court held a hearing to set the petitioner’s execution date. The petitioner appeared personally and was represented by counsel at the hearing. The following day the Missouri Supreme Court scheduled the petitioner’s execution for March 20, 1985. On February 11, 1985, the petitioner filed a pro se petition for a writ of habeas corpus with this Court. Shortly thereafter the petitioner filed a motion with the Missouri Supreme Court requesting a stay of execution pending habeas corpus review. The Missouri Supreme Court summarily overruled the petitioner’s request for stay without an opinion on February 28, 1985.

By refusing the petitioner’s request for a stay of execution, the Missouri Supreme Court has in effect authorized the execution of a condemned prisoner without affording him the opportunity to exercise his constitutional right of federal habeas corpus review. In so doing, the Missouri Supreme Court ignored its responsibility to stay executions while federal judicial review is pending. See McDonald v. Missouri, — U.S. -, 104 S.Ct. 567, 568, 78 L.Ed.2d 538 (1984). In McDonald, Justice Blackmun, sitting in his supervisory capacity as Circuit Justice of the Eighth Circuit, granted a stay of execution of four individuals whose execution dates had been set by the Missouri Supreme Court. Justice Blackmun noted that the Missouri Supreme Court had denied stays of execution of the four convicts despite the fact that each prisoner had filed with the United States Supreme Court a timely petition for certiorari on direct review. Justice Blackmun stated that, if a federal question is involved, the process of direct review includes the right to petition the Supreme Court for a writ of certiorari. Id., 104 S.Ct. at 567. See also Williams v. Missouri, 463 U.S. 1301, 103 S.Ct. 3521, 3522, 77 L.Ed.2d 1282 (stay of execution granted by Justice Blackmun following denial of same by Missouri Supreme Court where condemned inmate had filed a petition for certiorari on direct review).

In McDonald, Justice Blackmun noted that if a state schedules an execution to take place before the filing and resolution of a petition for certiorari with the United States Supreme Court, such execution must be stayed as a matter of course pending completion of direct review. McDonald, 104 S.Ct. at 567. Justice Blackmun observed that

Every defendant in a state court of this Nation who has a right of direct review from a sentence of death, no matter how heinous his offense may appear to be, is entitled to have that review before paying the ultimate penalty. The right of review otherwise is rendered utterly meaningless. It makes no sense to have the execution set on a date within the time specified for that review, (cites omitted) and before the review is completed.

Id. at 567-68. Justice Blackmun then reiterated his statements previously made in Williams and discussed the responsibility of state and federal courts in considering requests for stays of execution while direct review is pending:

I thought I had advised the Supreme Court of Missouri once before, in Williams, that, as Circuit Justice of the Circuit in which the State of Missouri is located, I, upon proper application, shall stay the execution of any Missouri applicant whose direct review of his conviction and death sentence is being sought and has not been completed. I repeat the admonition to the Supreme Court of Missouri, and to any official within the state’s chain of responsibility, that I shall continue that practice. The stay, of course, ought to be granted by the state tribunal in the first instance, but, if it fails to fulfill its responsibility, I shall fulfill mine.

McDonald, 104 S.Ct. at 568.

In the instant case, there is no valid reason justifying the Missouri Supreme Court’s failure to grant a stay of execution. To the limited extent that the granting of a stay may depend on the probability of success on the merits, see Barefoot v. Estelle, 463 U.S. 880, 103 S.Ct. 3383, 3392, 77 L.Ed.2d 1090 (1983), the petitioner in this case specifically advised the Missouri Supreme Court that federal habeas review was being sought pursuant to the recent Eighth Circuit United States Court of Appeals decision in Grigsby v. Mabry, 758 F.2d 226, (8th Cir.1985), in which it was held that the use of death-qualified juries to determine a criminal defendant’s guilt constituted a per se violation of the Sixth and Fourteenth Amendments. Although the death-qualification issue was specifically litigated before the Missouri Supreme Court on direct appeal, see State v. Blair, 638 S.W.2d 739, 751-52 (Mo.1982), the petitioner’s request for a stay was denied by the same court notwithstanding the Eighth Circuit’s holding in Grigsby.

Substantive considerations aside, it is evident that the petitioner is entitled to a stay of execution on procedural grounds alone. Habeas corpus review is the exclusive federal remedy by which a convicted state prisoner may test the legality of his incarceration or sentence. The guilt or innocence of the prisoner is not to be re-examined on habeas corpus review, rather, the purpose of habeas corpus is to remedy fundamental unfairness at trial or the infringement of important constitutional rights. “The writ of habeas corpus is the fundamental instrument for safeguarding individual freedom against arbitrary and lawless state action.” Harris v. Nelson, 394 U.S. 286, 89 S.Ct. 1082, 1086, 22 L.Ed.2d 281 (1969). The right to petition federal courts for habeas corpus review is guaranteed by the Constitution. Preiser v. Rodriguez, 411 U.S. 475, 93 S.Ct. 1827, 1834, 36 L.Ed.2d 439 (1973). A state prisoner sentenced to death is constitutionally entitled to habeas corpus review, and, as Justice Blackmun observed in McDonald regarding stays pending direct review on certiorari, a condemned prisoner is entitled to have that review before the death penalty is carried out, no matter how heinous the offense may appear to be. “The right of review otherwise is rendered utterly meaningless. It makes no sense to have the execution set on a date within the time specified for that review____” McDonald, 104 S.Ct. at 567.

Finally, the Court is compelled to take notice of complaints issued recently by state courts concerning “unwarranted” federal intrusion into state court proceedings. Like all federal courts, this Court subscribes to the principle of comity, which requires federal courts to afford state courts the opportunity to perform their duties. See Webb v. Webb, 451 U.S. 493, 101 S.Ct. 1889, 1893, 68 L.Ed.2d 392 (1981). It is evident that the Missouri Supreme Court has a significant responsibility concerning the timing of executions because the supreme court is charged by state law with the scheduling of executions, see Mo. Rule of Crim.Proc. 29.08(d), and because an appropriate request for a stay of execution “ought to be granted by the state tribunal in the first instance____” McDonald, 104 S.Ct. at 568. Although the principle of comity is not specifically implicated in this litigation, it is apparent that the very foundation on which the theory is based will be jeopardized if the Missouri Supreme Court continues to ignore its well-defined responsibility concerning requests for stays of execution due to pending federal review. Since the Missouri Supreme Court has failed to accept its responsibility, I shall accept mine.

Accordingly, it is hereby

ORDERED that the petitioner’s request for stay is granted, and the petitioner's execution previously set for March 20, 1985 is stayed pending resolution of the petitioner’s request for habeas corpus relief.