author: HAUK, Senior District Judge.

text:
    UNITED STATES of America, Plaintiff-Respondent, v. Eddy Ray MESSIMER, Defendant-Petitioner.
    No. CV 84-6976-AAH. (Ancillary to No. CR 70-6114-AAH.)
    United States District Court, C.D. California.
    Dec. 7, 1984.
    Asst. U.S. Atty. Sharon McCaslin, Los Angeles, Cal., for plaintiff-respondent.

      David Sperber, Encino, Cal., for defendant-petitioner.
   ORDER DENYING Defendant-Petitioner Messimer’s MOTION PURSUANT TO 28 U.S.C. 2255; IN THE ALTERNATIVE, PETITION FOR WRIT OF ERROR, CORAM NOBIS; and AMENDED PETITION FOR CORAM NOBIS

HAUK, Senior District Judge.

. The defendant-petitioner has filed and lodged with this Court some six motions, petitions and applications, variously titled, and consisting of thirty-four pages of bizarre, repetitive and incomprehensible claims, contentions and sometimes gibberish. The Court has analyzed and examined all of this and has concluded that one Motion and one Petition contain and best summarize all of the intelligible claims and contentions of defendant-petitioner. These are:

1. MOTION PURSUANT TO 28 U.S.C. § 2255, AND IN THE ALTERNATIVE PETITION FOR WRIT OF ERROR, CORAM NOBIS, on September 17, 1984.
2. AMENDED PETITION FOR WRIT OF ERROR, CORAM NOBIS, on November 30, 1984.

This Court has made and entered its customary Order Directing the Filing of a Response and Transcript of Proceedings, attached hereto as Exhibit A.

Pursuant to said Order, Assistant U.S. Attorney McCaslin, on November 20, 1984, filed on behalf of plaintiff-respondent a Response,'which includes a verbatim Reporter’s Transcript of proceedings before the Honorable Harry Pregerson, sitting as Criminal Duty Judge of this Court, on June 8, 1970, when defendant-petitioner Messimer pleaded guilty. This Reporter’s Transcript was filed with this Court on November 13, 1984, and is attached hereto as Exhibit B.

Upon review and examination of said Response and Reporter’s Transcript, this Court finds facts as follows:

On June 8, 1970, defendant-petitioner Messimer, entered a plea of guilty to a one-count indictment charging him with theft of mail in violation of 18 U.S.C. § 1708. (R.T. 8). Prior to taking defendant’s plea, the Honorable Harry Pregerson advised all defendants in the Courtroom, including defendant-petitioner Messimer, of their constitutional rights. (R.T. 3-7). The rights explained to defendants included the right: (1) to have assistance of counsel, appointed if necessary, at all stages of the proceedings; (2) to a speedy and public trial by twelve jurors who must return a unanimous verdict, or a trial by the Court if jury is waived; (3) to confront and cross-examine witnesses; (4) to have the Court compel production of evidence and attendance of witnesses favorable to the defense; (5) to testify in one’s own defense, or not to testify because one cannot be compelled to testify against oneself; and (6) to bail except in capital cases. (R.T. 3-4). Judge Pregerson advised defendants that by pleading guilty they waived the right against self-incrimination, right to trial and right to confront witnesses. (R.T. 5).

Judge Pregerson explained to defendants that the law presumes a defendant is innocent, and a defendant is not required to prove his innocence; rather, the burden is on the government to prove every element of the crime charged beyond a reasonable doubt. (R.T. 4). Judge Pregerson further advised defendants that before the Court can accept a guilty plea, it must determine that the plea was made voluntarily, with an understanding of the nature of the charge and consequences of the plea and that there was a factual basis for the plea. (R.T. 6). Further, before accepting a guilty plea, Judge Pregerson told defendants he expected each defendant to have discussed his case fully with his attorney, including possible defenses and the maximum sentence. (R.T. 6). Defense attorneys were told that the Court would ask if they had fully advised their client and if they believed their client’s plea was voluntarily and understandingly made. (R.T. 7).

Judge Pregerson admonished defendants that: (1) they should not plead guilty unless they were in fact guilty of the charges; (2) they should not plead guilty if threats had been made against them or members of their family to force them to plead guilty; and (3) they should not plead guilty if promises of leniency or a particular sentence, probation or any other inducement had been made to get them to plead guilty because only the judge has the authority to impose a sentence or grant probation. (R.T. 7).

Thereafter the Court addressed defendant-petitioner Messimer personally, and asked if he had received and read a copy of the indictment; and twice asked whether he had heard and understood the constitutional rights previously explained. To these questions defendant Messimer responded affirmatively (R.T. 8, 9). Defendant Messimer, after waiving reading of the indictment, pleaded guilty to the charge. (R.T. 8). In the official file, the minute order of June 8, 1970, reflects that defendant Messimer executed a form acknowledging advisement of his constitutional rights.

The Court then asked defendant Messimer if he was fully aware of the nature of the offense charged to which defendant responded affirmatively (R.T. 8, 9).

Defendant Messimer then told the Court what the maximum penalty was for the offense — a $2,000 fine and 5 years imprisonment. (R.T. 9). Defendant Messimer acknowledged that because he was twenty years old he could receive a Youth Corrections Act sentence which could run as long as six years. (R.T. 9).

Defendant Messimer also said he understood by pleading guilty he was waiving his rights to a trial and to confront witnesses and also his privilege against self-incrimination. (R.T. 9, 10). Defendant Messimer denied that he was pleading guilty because of threats made to him or his family and denied that he had been coerced or forced to plead guilty by anyone. (R.T. 10). Defendant Messimer acknowledged he was pleading guilty because he was in fact guilty of the offense charged and for no other reason and that his plea was entirely free and voluntary. (R.T. 10).

Defense attorney, David Sperber, and defendant Messimer agreed that they had fully discussed the case. (R.T. 10). Attorney Sperber also confirmed that no meritorious defenses existed; that defendant’s constitutional rights were observed; that there was a basis in fact for the guilty plea; and that in his opinion the plea was made understandingly and voluntarily. (R.T. 11).

Defendant Messimer was sentenced by Judge Pregerson on July 7, 1970, to 54 days, which was actually the time he had already served. (Official file, minutes and Abstract of Order of Judge Pregerson, July 7, 1970.)

Defendant-petitioner Messimer contends in his aforesaid Motion, Petition and Amended Petition that his sentence upon his plea of guilty should be vacated or corrected because:

(1) he was coerced into making his guilty plea by threats from postal inspectors, the Assistant United States Attorney and his own defense attorney;
(2) he was not informed of his right to a jury trial or privilege against self-incrimination nor did the Court personally address him and ask if he understood the charge, the mandatory sentence, and if the plea was voluntarily entered without threats or promises;
(3) he was denied effective assistance of counsel because his attorney failed to investigate a possible insanity defense; and
(4) that during his incarceration in the Maximum Security Unit of Arkansas State Prison, Tucker, Arkansas, for a State offense, he has met a fellow prisoner, one Teddy Waller, who could have given alibi testimony.

Upon said facts this Court concludes as matters of law the following with respect to defendant-petitioner’s contentions:

A. Coercion to Plead Guilty

Defendant’s allegations of threats and other coercion supposedly causing him to plead guilty are conclusory and insufficient and do not support setting aside or correcting his sentence: United States of America v. Bradford, 238 F.2d 395 (2d Cir.1956). Defendant acknowledged in open Court that he was pleading guilty because he was in fact guilty and that he was not induced to plead guilty because of any threats or promises made to him. (R.T. 10). Such a declaration in open Court carries a strong presumption of truth. See United States v. Moore, 599 F.2d 310, 314 (9th Cir.1979), cert. denied, 444 U.S. 1024, 100 S.Ct. 687, 62 L.Ed.2d 658 (1980).

B. Advisement of Constitutional Rights

The Reporter’s Transcript of the hearing establishes that defendant was given his constitutional rights, including the right against self-incrimination and right to a jury trial. (R.T. 3-7). The transcript also shows that defendant acknowledged that he understood these rights; that he understood the charge and the mandatory sentence (which he recited); and that the plea was voluntarily entered without threats or promises. (R.T. 8, 9, 10).

C. Effective Assistance of Counsel

Defendant Messimer also alleges that his defense counsel was ineffective because he did not explore the possibility of an insanity defense. Defendant acknowledged he had enough time before his plea to discuss his case fully with his attorney. (R.T. 10). Defense counsel Sperber told the Court he was satisfied no meritorious defenses could be raised. (R.T. 11).

To reverse a conviction based on a claim of ineffective assistance of counsel, a defendant must show: (1) acts or omissions of counsel which were not the result of reasonable professional judgment; and (2) that such acts or omissions prejudiced the defense. Strickland v. Washington, 466 U.S. -,---, 104 S.Ct. 2052, 2063-67, 80 L.Ed.2d 674 (1984). In this case defendant has shown neither that his counsel acted unprofessionally or unreasonably in not pursuing an insanity defense; nor that counsel’s acts in any way prejudiced his defense.

D. Purported Alibi Testimony

Since defendant-petitioner pleaded guilty freely and voluntarily on July 7, 1970, the purported “alibi testimony” of the fellow Arkansas State prisoner whom he met for the first time in the Arkansas State Prison in 1984 is irrelevant because moot, by reason of his guilty plea.

This Court therefore makes and enters the following:

ORDER

Pursuant and in light of the foregoing Findings of Fact and Conclusions of Law, it is clear that no evidentiary hearing need be held in this matter. An evidentiary hearing is not required on a motion to vacate sentence if “the motion and the files and records of the case conclusively show that the prisoner is entitled to no relief ...” 28 U.S.C. § 2255. Moreover, the records of this case demonstrate that defendant-petitioner was adequately represented and was not prejudiced by his counsel’s conduct. This is not a situation where a defendant’s counsel failed to show the defendant a presentence report containing factual errors as in United States v. Donn, 661 F.2d 820, 825 (9th Cir.1981). Finally, the Reporter’s Transcript conclusively shows that defendant-petitioner’s claims and contentions of constitutional rights violations and guilty plea coercion are totally incorrect and unfounded.

Equally and beyond any peradventure of a doubt, defendant-petitioner is not and cannot be entitled to a vacation or correction of his sentence upon his voluntary plea of guilty; he is not and cannot be entitled to a new trial; and he is not and cannot be entitled to any relief whatsoever.

NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND DECREED:

1. This Court must and does deny defendant-petitioner’s said Motion, Petition and Amended Petition without an evidentiary hearing.

2. This Court must and does refuse to vacate or correct the sentence imposed on July 7, 1970, by Judge Pregerson, of 54 days, the time theretofore served by defendant-petitioner in custody, and based upon his voluntary plea of guilty on June 8, 1970, with the resultant conviction of the offense of theft from United States mail sacks in violation of 18 U.S.C. § 1708.

3. Any and all relief with respect to said sentence by Judge Pregerson on July 7, 1970, must be and is moot and frivolous, and the Court orders defendant-petitioner Messimer to take notice thereof and to cease and desist from lodging or filing any and all further motions, petitions, applications and requests for any relief from said sentence.

4. The Court further orders and directs the Clerk of this Court to refuse to lodge or file any further such motions, petitions, applications or requests from defendant-petitioner Messimer and to return each and every of the same forthwith, upon receipt, to defendant-petitioner Messimer.

5. The Clerk of this Court is directed to file and enter this Order and serve copies hereof upon defendant-petitioner Messimer, upon Asst. U.S. Atty. Sharon MeCaslin, Los Angeles, Cal., and upon David Sperber, Encino, Cal.

EXHIBIT A

ORDER DIRECTING THE FILING OF A RESPONSE AND TRANSCRIPT OF PROCEEDINGS

The petitioner having filed the attached motion for relief pursuant to 28 U.S.C. § 2255 and motion to treat same as a writ of error coram nobis, and it appearing to the Court that a response should be required,

IT IS ORDERED that the respondent, United States of America, and its counsel of record, the United States Attorney, Central District of California, and David Sperber, attorney for the defendant at the time of petitioner’s plea of guilty before, and sentencing by, the Honorable Harry Pregerson, designated and acting for and on behalf of Judge A. Andrew Hauk on July 7, 1970, shall, within thirty (30) days from the receipt of this order, file and serve such responses to the motions as they deem appropriate, including affidavits and declarations of facts.

IT IS FURTHER ORDERED that Samuel Goldstein, the court reporter at the time of said plea of guilty and sentencing, shall prepare, file and serve a transcript of the proceedings of said plea and sentencing herein, July 7, 1970, which transcript shall be filed not more than thirty days after receipt of this order.

DATED: 10/18/84

/s/ A. Andrew Hauk A. Andrew Hauk Senior U.S. District Judge

EXHIBIT B

IN THE UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

HONORABLE HARRY PREGERSON, JUDGE PRESIDING

UNITED STATES OF AMERICA, Plaintiff,

vs.

EDDY RAY MESSIMER, Defendant.

CR 70-6114-AAH

REPORTER’S TRANSCRIPT OF PROCEEDINGS

Los Angeles, California

June 8, 1970

Reported by:

Samuel Goldstein,

Official Reporter,

United States District Court

Transcribed by:

Samuel Goldstein,

Official Reporter (Retired).

United States District Court

INDEX Page:

Statement by the Court and advisement of constitutional rights to all defendants.............. 997-998

Arraignment and plea of Defendant Messimer................ 998-999

LOS ANGELES, CALIFORNIA; MONDAY, JUNE 8, 1970

THE COURT: Good morning, ladies and gentlemen. I am sorry for the delay this morning. I was tied up in instructing a jury in another court.

Before the arraignment and plea calendar is called I want to explain the procedures followed in this court, and I want to advise all the defendants of their constitutional rights.

Each defendant is here this morning because he has been charged with a violation of federal law and this is the time fixed for arraignment and plea. This means that you will be informed of the charges against you as set forth in the indictment or information, and you will be called upon to plead either guilty or not guilty to the charges.

It is important for each defendant to know that every person charged with a crime has the following constitutional rights: You have the right to be represented by and to have the assistance of an attorney at all stages of the proceedings. If a defendant does not have the funds or means to hire an attorney the Court can and will appoint an attorney to represent the defendant without cost or expense to the defendant.

You have the right to a speedy and public trial. You have the right to a trial by a jury of twelve people or a trial by the Court sitting without a jury if the jury trial is waived. If the defendant is tried by a jury the verdict of the jury must be unanimous on the issue of innocence or guilt.

You have the right to be confronted by all witnesses testifying against you, and you have the right to cross-examine those witnesses.

You have the right to use the power and process of the court to compel the production of any evidence and the attendance of any witnesses in your favor.

You have the right to testify in your own defense, but you cannot be compelled to testify or to be a witness against yourself. And except in capital cases you have the right to be admitted to bail pending trial.

It is also important for you to know that the law presumes a defendant to be innocent of crime, and that a defendant is not required to prove his innocence, but that the burden is always on the Government to prove by competent evidence the defendant’s guilt beyond a reasonable doubt of every essential element of the crime charged.

Now, when your case is called for arraignment you will be asked if you heard and understood the statement of the Court concerning your constitutional rights.

Now, if you enter a Not Guilty plea your case will be transferred to another judge of this court for trial setting and for all further proceedings. The name of the judge will be drawn after your Not Guilty plea. All motions are reserved and must be made before the judge to whom the case is transferred.

Now, if you enter a Guilty plea, then the sentencing will be handled by me.

I might add that I am taking this arraignment and plea calendar for the last time. Judge Hauk, whom I am relieving, will pick it up next Monday.

Now, I also want you to know that by entering a Guilty plea a defendant waives or gives up three of his constitutional rights. And they are, his privilege against compulsory self incrimination, his right to a trial by a judge or jury, and his right to confront the witnesses against him.

Now, in those cases where a defendant enters a plea of Guilty, his case will be referred to the Probation Officer for presentence investigation and report and the matter will be set down for a probation and sentence hearing. And we will have a date for that.

What is the date?

THE CLERK: July 7th, Your Honor.

THE COURT: July 7th.

THE CLERK: One P.M.

THE COURT: At 1:00 P.M.

Now, before accepting a guilty plea, the Court is required to determine whether the plea is made voluntarily and with an understanding of the nature of the charge and the consequences of the plea, and if there is a factual basis for that plea. And if these conditions are met the Court will accept the guilty plea.

Now, with reference to entering a “Guilty” plea I want to admonish you not to plead guilty unless you are in fact guilty of the charge made against you in the indictment or information. Do not plead “Guilty” if there have been any threats made against you or any members of your family by anyone to force you to plead guilty.

Do not plead “Guilty” if there have been any promises of leniency or a particular sentence, probation, or any other inducement of any kind made to you by anyone to induce you to plead guilty. No one has authority to promise leniency, and no one can impose sentence or grant probation except the judge.

Further, before accepting a plea of guilty the Court expects that each defendant has discussed his case fully with his attorney; that he has been advised of any defenses that he might have. And, also, before accepting a guilty plea a defendant will be asked if he has been advised of the maximum sentence which may be imposed by the Court on the charge to which the defendant offers a plea of “Guilty.”

Defendant’s counsel will be asked if he has fully advised the defendant and if he believes the defendant’s offer to plead “Guilty” is voluntarily and understandingly made.

Now, before I call the calendar the Court requests all attorneys, that when your ease is called you indicate immediately whether the plea is to be a “Not Guilty” plea or a “Guilty” plea. If it is to be a Not Guilty plea there will be an immediate assignment. If the plea is to be a guilty plea it will be held for the second calendar call.

All motions for bail or release will be held until the third calendar call. And in presenting any bail motion, please fill out Bail Reform Act form number one.

Now, the clerk has designated members of the indigent panel to represent many defendants here this morning. The attorneys so designated are hereby appointed in the respective cases to which they have been assigned.

Now, the Court will now call the calendar. I will call the priority calendar first.

(Thereupon, other cases were called.)

THE COURT: We will now have the second call of the calendar.

(Thereupon, additional cases were called.)

THE COURT: The next one is 49 on the calendar. U.S.A. vs. Eddy Ray Messimer.

Mr. Sperber. This will be a guilty plea?

MR. SPERBER: Yes, Your Honor.

THE CLERK: Eddy Ray Messimer, is that your true and correct name?

THE DEFENDANT: Yes.

THE CLERK: Did you hear and understand the statement of the Court pertaining to your constitutional rights?

THE DEFENDANT: Yes.

THE CLERK: Did you receive a copy of the indictment?

THE DEFENDANT: Yes.

THE CLERK: Do you wish to have that indictment read to you in open court?

THE DEFENDANT: No.

THE CLERK: Counsel, is the defendant ready at this time to enter a plea?

MR. SPERBER: Yes, he is.

THE CLERK: Eddy Ray Messimer, how do you plead to the one-count indictment, Guilty or Not Guilty?

THE DEFENDANT: Guilty.

THE COURT: You have read the indictment, Mr. Messimer? You have read the indictment?

THE DEFENDANT: Yes.

THE COURT: I take it you are fully aware of the nature of the offense that you are charged with in that indictment?

THE DEFENDANT: Yes.

THE COURT: Has your attorney advised you of the maximum penalty that you could receive?

THE DEFENDANT: Yes.

THE COURT: What is that?

THE DEFENDANT: $2,000 or five years.

THE COURT: Or both?

THE DEFENDANT: Or both.

THE COURT: Is that correct, Mr. McIntyre?

MR. Me INTYRE: Yes it is, Your Honor.

THE COURT: How old are you?

THE DEFENDANT: Twenty.

THE COURT: Do you understand that the Court could sentence you to a Youth Correction Act sentence and that sentence could conceivably run as long as six years; is that clear to you?

THE DEFENDANT: Yes.

THE COURT: Did you hear and understand the Court’s statement'of your constitutional rights?

THE DEFENDANT: Yes.

THE COURT: Is it clear to you that if you plead Guilty you waive three of those rights — your privilege against compulsory self incrimination, your right to a jury trial, and your right to face the witnesses against you, is that clear to you?

THE DEFENDANT: Yes.

THE COURT: Have you discussed the case fully with Mr. Sperber?

THE DEFENDANT: Yes.

THE COURT: Has anyone made any threats against you or any member of your family to force you to plead guilty?

THE DEFENDANT: No.

THE COURT: Is your Guilty plea entirely free and voluntary?

THE DEFENDANT: Yes.

THE COURT: And you are pleading Guilty because in truth and in fact you are guilty as charged in the indictment and for no other reason?

THE DEFENDANT: Yes.

THE COURT: Have you been coerced or forced by anyone to plead Guilty to the indictment?

THE DEFENDANT: No.

THE COURT: Have you had enough time to discuss this case fully with Mr. Sperber?

THE DEFENDANT: Yes.

THE COURT: Mr. Sperber, have you fully discussed this case with the defendant?

MR. SPERBER: Yes, I have, Your Hon- or.

THE COURT: Are you satisfied that there are no meritorious defenses that you might raise?

MR. SPERBER: Yes, I am.

THE COURT: Are you satisfied that his constitutional rights have been observed?

MR. SPERBER: Yes, I am.

THE COURT: And that there is a basis in fact for his Guilty plea?

MR. SPERBER: Yes, there is.

THE COURT: Do you concur in his offer to plead Guilty?

MR. SPERBER: Yes, I do.

THE COURT: And that his guilty plea is voluntary and under standingly made, in your opinion?

MR. SPERBER: Yes, it is.

THE COURT: Very well. The Court finds that his guilty plea is freely and voluntarily made with an understanding of the nature of the charge and the consequences of the plea, and that there is a basis in fact for the plea, and the Court orders that the plea be entered and accepted.

MR. SPERBER: Your Honor, I wonder if this might be an appropriate case for immediate sentence. Mr. Messimer is twenty years old. He has had prior criminal involvement. He was on parole for a burglary charge in the State of Texas, he is in violation of that parole, there is a hold on him. Other than that he has had no criminal involvement. Apparently he is going to be going back to Texas.

THE COURT: I am not inclined to do that.

MR. SPERBER: Thank you.

THE COURT: The matter will be referred to the probation office for pre-sentence investigation and report and set on this Court’s calendar. 1:00 P.M., July 7, 1970.

All right. The next matter is 50. Are you ready to move on yours, Mr. Wins-burg?

(Whereupon, the Court proceeded with other court matters.)

REPORTER’S CERTIFICATE

I hereby certify that I am an Official Reporter for the United States District Court, Central District of California (Retired).

I further certify that on the date indicated herein, June 8, 1970, I was a duly appointed, qualified, and acting Official Reporter for the United States District Court, Central District of California, assigned to the courtroom of Honorable Judge Harry Pregerson.

I further certify that I reported the proceedings herein by means of shorthand (Stenotype) and by means of a tape recorder; and that I did on November 9, 1984 personally listen to the tape and personally transcribe the proceedings herein, and that the foregoing 12 pages comprise a true and correct transcript of the proceedings had in the above-entitled cause on the date specified therein.

/s/ Samuel Goldstein Samuel Goldstein Official Reporter (Ret’d.)

Dated at Los Angeles, California this 12th day of November 1984.

       NOTE: The federal archives in Laguna Niguel have informed the Clerk's office in Los Angeles that shorthand notes for this period in 1970 were destroyed in January 1984.


source: Caselaw Access Project

author: GONZALEZ, District Judge.

license: Public Domain

text:
    Catherine T. STOUTT, Plaintiff, v. SOUTHERN BELL TELEPHONE AND TELEGRAPH COMPANY, Defendant.
    No. 84-8555-CIV-GONZALEZ.
    United States District Court, S.D. Florida, N.D.
    Dec. 7, 1984.

      Catherine Brunson, Delray Beach, Fla., for plaintiff.
    Keith Kochler and Harris Anthony, Atlanta, Ga., for defendant.
   ORDER

GONZALEZ, District Judge.

THIS CAUSE has come before the Court upon the defendant’s motion for partial dismissal, which this Court is treating as a motion to strike or dismiss certain paragraphs of plaintiff’s complaint (docket # 3). The Court has considered the defendant’s motion, and being otherwise duly advised, it is

ORDERED AND ADJUDGED that defendant’s motion to strike or dismiss certain paragraphs of plaintiff’s complaint be and the same is hereby GRANTED.

Plaintiff alleges that Southern Bell terminated her employment because she is black, in violation of 42 U.S.C. §§ 1981, 1983, and 2000e et seq., and the Thirteenth and Fourteenth Amendments of the United States Constitution. The subject of defendant’s motion is paragraph 22 of plaintiff’s complaint, which charges defendant with violations of section 1983 and the Fourteenth Amendment. A two-step inquiry is required to resolve claims brought under section 1983: First, whether the conduct complained of was committed by a person acting under color of state law; and second, whether this conduct deprived a person of rights, privileges, or immunities secured by the Constitution or laws of the United States. Parratt v. Taylor, 451 U.S. 527, 535, 101 S.Ct. 1908, 1913, 68 L.Ed.2d 420 (1980); Dollar v. Haralson County, Ga., 704 F.2d 1540, 1543 (11th Cir.1983). The “color of law” inquiry centers on whether a person who is affiliated with a state government or its political subdivision has used his position to deprive another of his constitutional rights. See Monroe v. Pape, 365 U.S. 167, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961), rev’d on other grounds, Monell v. Department of Social Services, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978). Acts of private persons are considered to have been done under “color of law” when the individuals were so significantly and substantially interwoven with state and local governments that a symbiotic relationship existed between the two and the acts of the political state. Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S.Ct. 856, 6 L.Ed.2d 45 (1961).

The fact that Southern Bell’s operations are subject to state regulation, or that the phone company is granted quasi-monopoly status does not transform the company’s conduct into “state action” for purposes of “color of law” analysis. See, e.g., Jackson v. Metropolitan Edison Co., 419 U.S. 345, 95 S.Ct. 449, 42 L.Ed.2d 477 (1974). Plaintiff’s pleadings fall woefully short of that necessary to avoid a motion to dismiss. Likewise, plaintiff’s allegations fail to establish a cause of action under the Fourteenth Amendment. As a private party, Southern Bell is not necessarily subject to liability under the Fourteenth Amendment unless plaintiff can plead and prove that the company acted under color of state law.

Defendant’s argument that plaintiff fails to state a claim for relief in paragraph 21 under the Thirteenth Amendment is unpersuasive. It would be improvident for the Court to dismiss plaintiff’s claim for relief under the Thirteenth Amendment, because the plaintiff does allege facts which, if true, may entitle plaintiff to relief.

In summary, the Court strikes paragraph 22 of the plaintiff’s complaint, in that the Court has dismissed plaintiff’s claim for relief under both 42 U.S.C. § 1983 and the Fourteenth Amendment.


author: JOHN P. MOORE, District Judge.

text:
    Steven L. ZIMMERMAN, Trustee of Center of Hope Foundation, Inc., Center of Hope Hope Church, Inc., Center of Hope Enterprises, Inc., and Center of Hope Retirement Center, Inc., Colorado corporation, v. The BOARD OF PUBLICATIONS OF the CHRISTIAN REFORMED CHURCH, INC., The Christian Reformed Church, Inc., The Christian Reformed Church in North America, Inc., Andrew Kuyvenhoven, and Sandra L. Vander Zicht.
    Civ. A. No. 83-JM-211.
    United States District Court, D. Colorado.
    Dec. 7, 1984.

      Huntington C. Brown, Mark Lewis, Brown & Lewis, Denver, Colo., for plaintiff.
    Thomas B. Kelley, Cooper & Kelley, P.C., Denver, Colo., for Bd. of Publications of the Christian Reformed Church, Inc., Andrew Kuyvenhoven, and Sandra L. Vander-Zicht.
    Fredric A. Ritsema, Arthur R. Karstaedt III, Hall & Evans, Denver, Colo., for the Christian Reformed Church in North America.
   ORDER

JOHN P. MOORE, District Judge.

This matter is before me on defendants’ motion for summary judgment. Plaintiff’s complaint asserts claims in contract, for violation of the antitrust laws, and for libel. Defendants seek summary judgment on all three of plaintiff’s claims. The issues raised here have been fully briefed and the matter is ripe for determination. Jurisdiction is based on 28 U.S.C. § 1332 as well as § 1331.

Plaintiff is the trustee in bankruptcy for Center of Hope Church (COH) and three affiliated organizations, Center of Hope Foundation, Center of Hope Retirement Center, Inc. and Center of Hope Enterprises, Inc. Defendants are the Christian Reformed Church in North America, Inc. (CRCNA); the Board of Publications of the Christian Reformed Church, Inc.; Andrew Kuyvenhoven, editor of The Banner a weekly religious news magazine published by the defendant Board of Publications of the Christian Reformed Church, Inc.; and Sandra L. Vander Zicht, assistant editor of The Banner.

The complaint arises out of two separate incidents. The first occurred during August and September 1980 when the defendant Board of Publications imposed conditions on the further publication in The Banner of advertisements in which the Center of Hope solicited the purchase of unsecured promissory notes. Plaintiff’s first and second claims for relief arise out of this incident, and are against the Board of Publications and the Christian Reformed Church. Plaintiff alleges that the Board’s refusal to continue publication of the promissory note advertisements gives rise to claims for breach of contract (first claim for relief) and also violates sections 1 and 2 of the Sherman Act, 15 U.S.C. § 1 (1982), and Colo.Rev.Stat. § 6-4-101 (second claim for relief).

The second incident occurred on February 8, 1982 when The Banner published an article entitled “Former C.R.C. Complex in Trouble,” and concerning the Center of Hope Church and its affiliates. With respect to the February 8, 1982 article, plaintiff has brought a defamation claim against the Board and the journalist, Vander Zicht, who wrote the article as well as the editor, Kuyvenhoven, who allowed the article to be published (third claim for relief).

Plaintiff in his fourth claim for relief alleges that defendants’ conduct, in both incidents, was outrageous and that such “outrageous conduct” entitles plaintiff to compensatory as well as exemplary damages. Plaintiff’s fourth claim for relief was dismissed as to the defendant CRCNA on the ground that, under Colorado law, the plaintiff corporations are incapable of suffering the “severe emotional distress” necessary to establish the tort of outrageous conduct. Zimmerman v. Board, Minute Order dated September 16, 1983. The other defendants now ask that plaintiff’s fourth claim for relief be dismissed as to them.

I.

The Center of Hope Church was previously known as Fairview Christian Reformed Church. In early 1973, Rev. A1 Haan became its pastor. By 1979 Fair-view’s name had been changed to the “Center of Hope”; it had purchased twelve acres of land in Westminster, Colorado; built a church and two other multipurpose structures on the property; and had begun several capital producing programs, including day care centers, bookstores, employment agencies, and the marketing of energy saving devices. . To accomplish these ambitious goals, three affiliated corporations were created: Center of Hope Foundation, Center of Hope Enterprises, and the Center of Hope Retirement Center. The Center of Hope Foundation, a Colorado not-for-profit corporation, was created to administer the Church’s business and fund raising activities. Center of Hope Enterprises,' Inc., a Colorado for-profit corporation, was created to operate the capital producing programs mentioned above. Lastly, Center of Hope Retirement Center, Inc., was established to develop a retirement home on church property.

The Center of Hope Church and its affiliated organizations raised the capital needed to finance their activities through a method of financing that had become popular within the Christian Reformed Church: the running of advertisements for unsecured promissory notes in the CRCNA magazine, The Banner. The Center of Hope and the Center of Hope Foundation placed promissory note advertisements for publication in The Banner from 1974 until August 1980. The advertisements contained a general description of the Center of Hope’s church buildings and church related activities, and indicated what rate of interest would be paid on funds invested. According to Rev. Haan, the Center of Hope organizations raised close to three million dollars from the selling of promissory notes during this period.

During July and August, 1980, The Banner received copy for two promissory note advertisements, one from Center of Hope Enterprises offering a “dry-vent heat retriever,” and the other from the Center of Hope Foundation announcing the opening of several Center of Hope Family Centers. These ads were never published. Instead, on August 12, 1980, A. James Heynan, executive director of the defendant Board of Publications of the CRCNA, sent a letter to Rev. Haan indicating that he was declining to publish both ads on the ground that he felt that publication of these advertisements might impinge on the integrity of The Banner.

The August 12, 1980 letter provided that Mr. Heynan would reconsider his decision not to publish these ads if sufficient corporate and financial documentation were forwarded to him, and this material alleviated his fears as to the financial stability of the Center of Hope. The letter also provided that Mr. Heynan’s decision could be appealed, in writing, to the President of the Board of Publications, Rev. Alvin Hbksbergen.

In response to Mr. Heynan’s letter, several actions were undertaken on behalf of the Center of Hope. Reverend Haan sent a lengthy undated letter to the Board of Publications explaining the “workings” of his church. Les Kaemingk, attorney for COH, sent a letter to the Board, dated August 21, 1980, which explained the Center of Hope’s corporate structure. On August 26, 1980 COH’s CPA, George W. Whitley, sent Mr. Heynan a letter stating that his firm had prepared “unaudited” financial statements for the Center of Hope through April 30, 1979 and that his firm had been retained to prepare “unaudited” statements as of August 31, 1980. Further, COH requested a meeting with the Board of Publications. That meeting was set for September 15, 1980.

Following, these actions by COH, on August 26, 1980 Heynan again wrote Haan (COH) expressing his continued concern over The Banner’s obligation to its readers and, more specifically, that the advertisements tendered by the Center of Hope might be misleading. Heynan’s August 26, 1980 letter stated that pending the September 15, 1980 meeting, Center of Hope’s promissory note ads would be kept out of The Banner. Heynan also reassured Haan that his decision was not a final one.

On September 15, 1980, Haan and four other representatives met with six members of the Board of Publications and National Church in Grand Rapids, Michigan. Nothing seems to have been resolved at this meeting. Following the meeting, Hey-nan again wrote to Haan requesting that the Center of Hope’s financial information be forwarded to The Banner. In response, on September 24,1980, Haan wrote back to Heynan stating that it was the decision of the Center of Hope Church Board that it would “withdraw from any additional discussion of the matter.” Haan’s letter made clear that COH recognized that The Banner would be permanently closed to COH promissory note advertisements.

II

Plaintiff in his first claim for relief argues the cessation of publication of plaintiff's promissory note advertisements in The Banner constituted a breach of contract. To support his claim that a long term contract to publish its ads existed between COH and the defendant Board of Publications, plaintiff relies on four contract theories: implied contract, constructive contract, promissory estoppel, and breach of fiduciary duty.

The law applicable to plaintiff’s contract claims must be determined under Colorado choice of law principles. Klaxon v. Stentor Manufacturing Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Vandeventer v. Four Corners Elec. Co., 663 F.2d 1016 (10th Cir.1981). Colorado has adopted the Restatement (Second) of Conflicts of Laws approach for contract actions, with its “most significant relationship test.” Wood Bros. Homes, Inc. v. Walker Adj. Bureau, 198 Colo. 444, 601 P.2d 1369 (1979); First National Bank in Fort Collins v. Rostek, 182 Colo. 437, 514 P.2d 314 (1973). Applying the “most significant relationship test” and the principles stated in §§ 188 and 196 of the Restatement, it would appear that Michigan law controls. In the case of a service contract, the law of the state where service is to be performed governs. Restatement (Second) of Conflicts of Laws, § 196 (1969) . The complaint alleges that a service contract existed, and that the contract resulted from conduct which occurred and which was to be performed in Michigan, where The Banner is published. Therefore, plaintiffs contractual claims will be analyzed under Michigan law.

Under Rule 56, Fed.R.Civ.P., the moving party is entitled to judgment as a matter of law only if no genuine issue of any material fact is presented. Thus, if plaintiff has raised a genuine issue of material fact as to his contract claims, I must deny defendants’ summary judgment motion relating to these contract claims.

Defendants contend that plaintiff’s contract claims do not present a genuine issue of material fact. I agree. While the complaint raises the question of whether some sort of contractual relationship existed between the Center of Hope and the Board of Publications for publication of the Center of Hope’s advertisements in The Banner, the supporting and opposing affidavits and depositions make clear that no genuine issue of material fact is presented as to the existence of such a contractual relationship. Summary judgment is appropriate even though an issue may be raised formally by the pleadings, where affidavits or other materials show that no genuine issue of material fact exists. Mourning v. Family Publications Service, Inc., 411 U.S. 356, 93 S.Ct. 1652, 36 L.Ed.2d 318 (1973); Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970) .

Plaintiff first alleges that the conduct, representations, actions, and promises of the Board of Publications, during the period when COH placed advertisements in The Banner (1974-1980), constituted an implied in fact contract between COH and defendant Board of Publication. Plaintiff contends that this “contract” granted COH the right to have advertisements for promissory notes published in The Banner as long as COH was affiliated with the defendant National Christian Reformed Church.

An implied in fact contract arises under circumstances which show a mutual intention to contract. In re Munro’s Estate, 296 Mich. 80, 295 N.W. 567 (1941). A contract is implied in fact where the intention as to it is not manifested by direct or explicit words between the parties, but instead must be gathered by implication or proper deduction from the conduct, language used, or things done by them, or other pertinent circumstances attending the transaction. Miller v. Stevens, 224 Mich. 626, 195 N.W. 481 (1923); Erickson v. Goodell Oil Co., Inc., 384 Mich. 207, 208, 180 N.W.2d 798 (1970).

In this ease, plaintiff points generally to the historic dealings between itself and The Banner as giving rise to an implied contract obligating The Banner to publish its ads. Plaintiff, however, has not provided any support for this contention. Plaintiff does not cite any facts showing a mutual intention on the part of COH or the Board to contract, other than on a per advertisement basis. The “conduct, mutual assent, promises, representations, and meeting of the minds,” alleged in plaintiff’s complaint as the basis for its long term implied contract have not been substantiated. As already noted, conclusory allegations which do not state facts in detail and with precision are insufficient to prevent the award of summary judgment. Robin Const. Co. v. U.S., 345 F.2d 610 (3rd Cir.1965).

Other than plaintiff’s general allegation that a long term contract should be implied here, the only evidence offered by the plaintiff in support of his claim are Rev. Haan’s beliefs that a contract existed between COH and The Banner regarding the placement of promissory note ads in that magazine, that other local churches had placed ads in The Banner, and that COH had from time to time over a five year period placed ads in The Banner. Nothing submitted by the plaintiff is at all inconsistent with defendants’ position that COH and The Banner simply entered into a number of contracts for the publication of individual promissory note advertisements. There is no evidence that anyone representing the defendants ever promised or otherwise expressly or impliedly assured the Center of Hope that it had any legal right to advertise in The Banner. Further, plaintiff provides no evidence of any communication between the Board or any of the defendants’ representatives and the Center of Hope regarding the long term placement of promissory note ads in The Banner. Plaintiff's claim is simply bottomed on the fact that the financing of construction of local church buildings through promissory note advertisements in The Banner had become popular in the Christian Reformed Church, and that advertisements submitted by the Center of Hope had always been unconditionally accepted in the past. These facts alone do not raise a genuine issue as to the existence of an implied contract for the continuing publication of COH promissory note ads in The Banner.

Plaintiff’s other contract or quasi-contract theories are similarly without merit. Plaintiff’s second contractual theory of recovery is that of constructive contract. A constructive or quasi-contract is a contract implied in law to prevent unjust enrichment. Only if defendants received from plaintiff a benefit which it is inequitable for them to retain can the plaintiff succeed on a constructive contract theory. Hollowell v. Career Decisions, Inc., 100 Mich.App. 561, 568, 298 N.W.2d 915, 920 (1980). Summary judgment is proper, in this context, where plaintiff fails to offer any evidence that the defendant unjustly received any benefit from the plaintiff greater than the agreed upon exchange. Pearson-Cook, Inc. v. Preferred Properties, Inc., 102 Mich.App. 168, 301 N.W.2d 842 (1981). Here, Rev. Haan admitted that all advertising submitted by COH had been fully paid for and that all paid for advertisements were published by The Banner. (3rd Haan Dep. 209-210, 254-255). Plaintiff offers no evidence that by publishing the COH advertisements the defendants received any benefit other than the fully paid price of the advertising.

Plaintiff’s third contract theory stated in paragraphs 21 through 23 of the complaint, attempts to state a claim for promissory estoppel. Plaintiff argues that the continued and unconditional publication of the promissory note ads for the Center of Hope and other local churches created a “reasonable expectation” that the Board of Publications would continue to accept COH’s promissory ads for publication in The Banner. Michigan recognizes the doctrine of promissory estoppel as an equitable remedy to enforce a promise which produced reliance or forbearance in circumstances where the promise must be enforced to avoid injustice. Estate of Timko v. Oral Roberts, 51 Mich.App. 662, 666, 215 N.W.2d 750, 752 (1974). The key element of promissory estoppel is obviously the promise. Though plaintiff in his complaint states that defendants made “promises and representations” to COH, plaintiff offers no concrete evidence of any specific promise or representations, express or implied, which allegedly induced reliance on the part of COH. Accordingly, plaintiffs promissory estoppel claim must fail.

Lastly, plaintiff alleges that there existed a “confidential and fiduciary relationship” between COH and defendant Board of Publications and that the Board and CRCNA breached this duty by imposing conditions on the continued publication of COH promissory note ads in The Banner. “A fiduciary relationship arises when one reposes faith, confidence and trust in another’s judgment and advice.” Fassihi v. Sommers, Schwartz, Silver, Schwartz & Tyler, 107 Mich.App. 509, 515, 309 N.W.2d 645, 648 (1981). Relief is proper when such position of influence has been acquired and abused. Smith v. Saginaw Savings and Loan Association, 94 Mich.App. 263, 288 N.W.2d 613, 618 (1979). There is no evidence whatsoever that a confidential or fiduciary relationship existed between COH and The Banner, and therefore, no genuine issue of material fact has been raised in support of the claim for breach of fiduciary duty.

III.

Plaintiff, in his second claim for relief, alleges that the defendants’ actions violate § 1 and § 2 of the Sherman Act, 15 U.S.C. §§ 1 & 2 (1982), and Colo.Rev.Stat. § 6-4-101 (1973). As the basis for his section 1 and state law claims, plaintiff alleges that “defendants and co-conspirators combined and conspired in unreasonable restraint of interstate trade to prohibit the Center of Hope from placing any advertisements for the sale of promissory notes in The Banner ... or to condition any advertisements for the sale of promissory notes in The Banner upon terms which were unreasonable, unjustified and served no legitimate purpose which defendant did not require of other advertisers____” Plaintiff’s section 2 claim is based on plaintiff’s assertion that The Banner held a monopoly position in the market for advertisement of low interest unsecured promissory notes by local congregations. Beginning in August 1980 and continuing until February 1982, The Banner “misused [its] power to control the market ... by precluding Center of Hope from advertising its notes in The Banner ”, thereby preventing the COH from effectively competing in the market for the sale of such notes, (complaint paragraphs 37 & 40).

The two essential elements of any § 1 claim are: (1) a contract, combination or conspiracy, resulting in; (2) an unreasonable restraint of trade. 15 U.S.C. § 1 (1982). Because the pleadings, affidavits and other materials in the case at bar belie the existence of the first essential element, only it need be considered here.

It is clear that § 1 of the Sherman Act reaches unreasonable restraints of trade effected by a “contract, combination or ... conspiracy” only between separate entities, and it does not reach conduct that is wholly unilateral. Copperweld Corp. v. Independence Tube Corp., — U.S. —, 104 S.Ct. 2731, 81 L.Ed.2d 628 (1984). Here, the defendants who allegedly conspired, the Christian Reformed Church of North America, Inc. and the Board of Publications of the Christian Reformed Church, Inc., do not operate as separate entities; and therefore, are not capable, as a matter of law, of conspiring under § 1 of the Sherman Act. As a religious denomination, the Christian Reformed Church of North America (CRCNA) is organized into a number of boards and agencies, one of which is the defendant Board of Publications (Board). The various branches or “classes” of the denomination appoint the members of the Board of Publications and the governing body of the CRCNA (“the Synod”) appoints the editors. The Board is thus a division or subsidiary of defendant CRCNA. Because the Board and CRCNA are considered a single entity, the activities of which plaintiff complains cannot violate

Plaintiff’s allegations are not cognizable under § 2 of the Sherman Act as well. Although a summary judgment motion dismissing antitrust claims is not generally to be granted, the motion may be granted when the allegedly unlawful practice does not exist and it is plain that plaintiff’s claim is without merit. Hartford v. Olsten Corp., 506 F.2d 658 (2d. Cir.1974). To allege that a religious denomination, whose church publication acting out of concern for the readers of its church publication and its own credibility, violates § 2 of the Sherman Act by conditioning future sales of promissory note advertising space upon receipt of satisfactory assurances of financial stability of a local congregation is patently ludicrous.

Regardless of whether defendants hold a monopoly position, the Sherman Act is not aimed at reasonable conduct. It is simply not unreasonable for a newspaper or magazine to refuse advertising on the ground that it might be misleading to its readers. Homefinders of America, Inc. v. Providence Journal Co., 621 F.2d 441 (1st Cir.1980). In the case at bar, the record clearly shows that defendants acted reasonably when they asked for assurances of plaintiff’s financial stability before continuing to publish COH advertisements. Even with the benefit of substantial discovery, plaintiff can portend no support for his contention that defendants acted other than out of legitimate “business” concern. In fact, plaintiff admits that the form of fund raising COH was engaged in is of questionable legality under the federal securities laws. In light of the First Amendment and the reasonable business justification articulated by defendants, there is no question that the antitrust laws were not intended, and cannot be used to compel The Banner to publish advertising against its will.

IV.

Plaintiffs third claim for relief involves the publication by defendants Board of Publications, Vander Zicht, and Kuyvenhoven of an allegedly defamatory article about COH and its affiliates. Under Colorado conflict of law rules, the law to be applied in a libel action is that of the state having the most significant relation with the parties in communication. First National Bank of Fort Collins v. Rostek, supra. In defamation cases this is usually the state of the plaintiffs domicile. Hanley v. Tribune Publishing Co., 527 F.2d 68 (9th Cir.1975). In this case the allegedly defamatory article, though printed in Michigan, was “published” in Colorado; The Banner was distributed in Colorado; the subjects of the article, COH and its affiliated organizations, are Colorado residents; and the harm allegedly suffered by COH, et al., was suffered in Colorado. In light of these factors and Colorado’s important interest in protecting its citizens from defamation, it is clear that Colorado bears the most significant relationship to plaintiff’s claim of defamation; and thus, Colorado law applies here.

Despite the fact that summary judgment is a drastic remedy, Jones v. Nelson, 484 F.2d 1165, 1168 (10th Cir.1973), the Colorado and federal courts have found summary judgment to be particularly appropriate in defamation actions. See, Manuel v. Fort Collins Newspaper, Inc., 42 Colo.App. 324, 599 P.2d 931, 934 (1979) rev’d on other grounds, 631 P.2d 1114 (1980); Walters v. Linhof, 559 F.Supp. 1231 (D.Colo.1983). This is especially true in cases such as this, where the New York Times v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964), standard of proof applies. In such cases, to survive a motion for summary judgment, plaintiff must come forth with strong evidence that the defendant knew the statements published were false or that the defendant had reckless disregard of whether they were true or false. DiLeo v. Koltnow, 200 Colo. 119, 613 P.2d 318, 321 (1980). Otherwise, if plaintiff is allowed to escape summary judgment by simply a minimal showing, the threat of protracted litigation might have a “chilling effect” on the full and free exercise of the First Amendment. Manuel v. Fort Collins Newspaper, supra.

In a defamation action, under Colorado law, the New York Times standard of proof is to be applied in all cases involving a media defendant and, where: (1) plaintiff is a public figure; or (2) plaintiff is a public official; or (3) plaintiff is a private individual and the case involves matters of public interest or general concern. Diversified Management v. Denver Post, Inc., 653 P.2d 1103 (Colo.1982). The New York Times standard requires plaintiff prove by a preponderance that defendant published the allegedly defamatory statements, and that the statements caused the plaintiff actual damages. Further, plaintiff must prove by clear and convincing evidence that the substance or “gist” of the statement was false at the time it was published and that it was made with actual malice. In this context “malice” means the defendant either knew that the statements were false or they were made with reckless disregard as to whether they were false. Lastly, under St. Amant v. Thompson, 390 U.S. 727, 88 S.Ct. 1323, 20 L.Ed.2d 262 (1968), and Diversified Management, supra, in all three types of cases, proof that defendants acted with reckless disregard for whether a statement is true, requires a showing by clear and convincing evidence that defendants entertained serious doubts about the truth of its publication.

Because I conclude in this case that the material alleged to be defamatory involves matters of public or general concern, the more difficult question of whether the Center of Hope and its three affiliates can be considered to be “public figures” need not be addressed.

The question of whether the activities in the present case are a “matter of public interest and general concern,” is one for the court. Walker v. Colorado Springs Sun, Inc., 188 Colo. 86, 538 P.2d 450, 459 (1975). While the Colorado Supreme Court in Diversified Management v. Denver Post, supra, declined to precisely define the terms “public or general concern,” it did find the activities in that case within the scope of the terms. In that case, the activities which were the subject of the two Denver Post articles complained of, were alleged widespread and ongoing land development schemes of questionable propriety. In finding that the matter was of “public or general concern,” the court focused on the fact that the public had an abiding interest in the matter. The court noted that since the project was an ongoing one, and all the lots were not yet sold, the public contained a number of potential buyers. It held that the interest of these unknown potential buyers was sufficient to bring the case within the bounds of “matters of public or general concern.”

As in Diversified Management, the matters involved in the present case which form the basis of The Banner’s February 8, 1982 article involved financial schemes of questionable propriety; specifically the offering of unsecured promissory notes for sale in The Banner. Further, thousands of The Banner’s readers invested millions of dollars in promissory notes with COH or its affiliates. As investors, they had a continuing and tangible stake in COH’s financial stability and well being. Such an abiding financial interest clearly makes the matter one of “public or general concern.” Diversified Management v. Denver Post, supra.

Application of the law, as set out above, to the facts of this case requires a determination of whether, in fact, the statements complained of are capable of bearing a defamatory meaning and whether plaintiff has offered sufficient evidence on the issue of actual malice in order to meet the New York Times standard of proof. In the present case, defendants argue that the statements made in the February 8, 1982 Banner article are not defamatory as a matter of law. Plaintiff, in his complaint, alleges that The Banner article contains numerous references to the Center of Hope and its agents which are defamatory and false. More specifically, plaintiff alleges that the article falsely communicated to Banner readers that COH was insolvent and in a position of financial embarrassment caused by fraud, dishonesty, and inept management on the part of COH and its agents.

The Banner article is entitled “Former CRC Complex in Trouble: Investors Fear Collapse of Center of Hope, Denver, Colorado.” The Banner article, authored by reporter Sandra Vander Zicht, seeks to provide The Banner readers with a financial history of the Center of Hope and its affiliates, and the history of COH’s connection with the National Church (CRCNA).

In this jurisdiction, a publication is considered defamatory if it impeaches the honesty, integrity, or reputation of the plaintiff and thereby exposes him to public hatred, contempt or ridicule. Knapp v. Post Printing and Publishing Co., 111 Colo. 492, 144 P.2d 981 (1943). Both an individual and a corporation or other business entity are capable of being defamed. The question of whether a communication is capable of bearing a defamatory meaning is a legal issue to be decided by the court. Walters v. Linhof, supra at 1236.

After a careful review of the article, and with the foregoing standard in mind, I conclude without reservation that the February 8, 1982 article and the statements within it, are not susceptible, as a matter of law, of a defamatory meaning. Plaintiff has not offered any evidence that the “gist” or “sting” of The Banner article, read as a whole, is untrue. Gomba v. McLaughlin, 180 Colo. 232, 237, 504 P.2d 337 (1972). Plaintiffs efforts in this regard consist solely of attempts to conjure up a defamatory meaning by pulling individual words or phrases out of the article’s context. This approach is unpersuasive and contrary to the law as set out above. Further, when read in their entirety and in their ordinary meaning, the statements in the article which are alleged to be defamatory, do not hold COH and its affiliates up to hatred, contempt or ridicule.

Even if I were to determine that the statements in The Banner article are defamatory, I would find that plaintiff has not offered any evidence whatsoever of actual malice or reckless disregard on the part of the defendants in preparing the February 8, 1982 article, and therefore, plaintiff could not, as a matter of law, meet the New York Times standard of proof as outlined above. Conversely, defendants, through the affidavit of reporter Sandra Vander Zicht, as well as numerous supporting depositions and exhibits, have clearly established that they conducted as extensive an investigation as was reasonable under the circumstances, and made a sincere effort to interview Haan to obtain his views prior to publication. Further, it is clear from these materials that virtually every statement in the article was supported by one or more sources and that the reporting was limited to the mainstream of the factual flow which developed from the reporter’s inquiries. Defendants were not obligated to do more.

Upon the foregoing, it is

ORDERED plaintiff’s fourth claim for relief is dismissed as to all defendants.

FURTHER ORDERED defendants’ motion for summary judgment is granted. The Clerk shall enter judgment in favor of defendants and against plaintiff on all claims in plaintiff’s complaint. Defendants shall have their costs upon the filing of a bill of costs within ten days of entry of judgment.

FURTHER ORDERED plaintiff’s motion to file briefs in excess of the 10 page limit is granted.

FURTHER ORDERED defendants’ motion to file a reply brief is granted.

      . Plaintiffs claim that an implied contract exists is in direct conflict with the fact that every edition of The Banner, at least since 1974 when COH began its promissory note advertisements, carried the following legend on the masthead page: "The views and opinions of the writers and advertisers herein, do not necessarily represent the position of this magazine nor of the Christian Reformed Church. All copy may be edited, condensed or refused for publication____” (emphasis added).

      . Even were such a contract to exist, plaintiff offers no evidence to support his contention that defendants’ actions in placing conditions on the future publication of COH promissory note ads was improper, or in fact would be sufficient to constitute a breach of the alleged contract.

      . Plaintiff's claim that The Banner had a duty or obligation to continue publishing its promissory note ads flies in the face of the general principle that a newspaper or magazine has a general right to decide what advertisements it will and will not accept. Fitzgerald v. National Rifle Association, 383 F.Supp. 162, 163 (D.N.J.1974); “Newspaper publishers may refuse to publish whether advertisements they do not desire to publish and this is true even though the newspaper in question may enjoy a virtual monopoly in the area of its publication.” Newspaper Printing Corp. v. Galbreath, 580 S.W.2d 777, 779 (Tenn.1979). See Generally, Herald Co. v. Seawell, 472 F.2d 1081, 1094-1095 (10th Cir.1972); Annot., Right of Publisher of Newspaper or Magazine, in Absence of Contractual Obligation, to Refuse Publication of Advertisement, 18 A.L.R.3d 1286 (1968).

      . Section § 6-4-101 of the Colorado Revised Statutes states in full:

        Illegal Restraint of Trade. Every contract or combination in the nature of a trust or conspiracy in restraint of trade or commerce is declared illegal. Every combination, conspiracy, trust, pool, agreement, or contract intended to restrain or prevent competition in the supply or price of any article or commodity constituting a subject of trade or commerce in this state which controls in any manner the price of any such article or commodity, fixes the price thereof, or limits or fixes the amount or quantity thereof to be manufactured, produced, or sold in this state, or monopolizes or attempts to monopolize any part of the trade or commerce in this state, is declared an illegal restraint of trade.
      In view of the fact that Colo.Rev.Stat. § 6-4-101 parallels § 1 of the Sherman Act, and that the federal and state statutes serve complimentary purposes, my analysis of plaintiffs § 1 claim applies equally to plaintiffs state claim. People v. North Ave. Furn. and Appliance, Inc., 645 P.2d 1291 (Colo.1982).

      . Whether organized as parent and subsidiary, or into divisions, for purposes of § 1 of the Sherman Act, the alleged coordinated actions of the Board and CRCNA must be viewed as that of a single enterprise. Copperweld Corp. v. Independence Tool Corp., supra, at 2742. Nor does it matter that the Board and CRCNA are separately incorporated. Substance not form determines whether a separately incorporated entity is capable of conspiring in violation of the Sherman Act. Copperweld Corp. v. Independence Tool Corp., supra at 2743.

      . (3rd Haan depo. 19-20, 25-26). Further, solicitation of promissory notes through newspaper advertisements has since been declared to run afoul of the Michigan securities statutes. On October 19, 1983, the Michigan Department of Commerce, Corporation & Securities Bureau issued to plaintiff a “Final Order to Cease and Desist and to Revoke and Deny Exemptions Pursuant to the Michigan Uniform Securities Act.” The Bureau determined that publishing promissory note advertisements in The Banner violated § 301 of the Michigan Uniform Securities Act by offering and selling unregistered, nonexempt securities within Michigan. Publication of promissory note ads in The Banner by the plaintiff was also found to violate § 101(2) of the Michigan Act by omitting to state a material fact in connection with the offer and sale of securities with Michigan.

      . For the reasons stated below, I conclude that the New York Times v. Sullivan, supra, and its progeny, are applicable in this case. This standard of proof applies equally at the summary judgment stage of the judicial proceedings. DiLeo v. Koltnow, supra.

      . In Colorado, where defendant is a member of the media and matters of public and general concern are involved, the New York Times standard controls whether or not the allegedly defamed parties are public figures.

      . Further, the Haan depositions submitted in this case indicate that Haan has admitted the truth of many, if not most, of the statements made in the Banner article.

      . Sandra Vander Zicht, in paragraph 21 of her affidavit, states that she was in Denver as part of her investigation in late January 1982. She phoned Haan and "spoke very briefly with him.” The Haan-Vander Zicht conversation was transcribed and submitted with defendants’ brief in support of their motion for summary judgment. (G.R. Ex. 84). This exhibit makes clear that Vander Zicht informed Haan of the planned article, and offered Haan an opportunity to give his side of the story. Haan responded, "I don’t have anything to say.”


author: SCHNACKE, District Judge.

text:
    Donald J. BESSEE, Plaintiff, v. HOTEL AND RESTAURANT EMPLOYEES AND BARTENDERS UNION, LOCAL 2, et al., Defendants.
    No. C-82-6980 RHS.
    United States District Court, N.D. California.
    Dec. 7, 1984.

      Dan Siegel, Siegel, Friedman, Dickstein & Yee, Oakland, Cal., for plaintiff.
    Matthew D. Ross, Neyhart, Anderson, Nussbaum, Reilly & Freitas, San Francisco, Cal., for Hotel & Restaurant Employees & Bartenders Union, Local 2.
    David C. Carr, Carr, McClellan, Ingersoll, Thompson & Horn, Burlingame, Cal., for Bay Meadows Catering Co.
   FINDINGS OF FACT AND CONCLUSIONS OF LAW

SCHNACKE, District Judge.

The above case came on to be tried before the Court without a jury from December 3, 1984 to December 6, 1984, with all parties and their counsel present. After considering the pleadings, the evidence, the argument and briefs from counsel, the Court files herewith its Findings of Fact and Conclusions of Law.

FINDINGS OF FACT

1. Plaintiff Donald J. Bessee, hereafter “Bessee”, is a former employee of defendant Bay Meadows Catering Co., hereafter “Bay Meadows”, and a member of defendant Hotel and Restaurant Employees and Bartenders Union, Local 2, hereafter “Local 2”.

2. Defendant Bay Meadows is the catering company at Bay Meadows Race Track, located in San Mateo County, California.

3. Defendant Local 2 is a labor organization representing employees in an industry affecting commerce and is located in San Francisco, California.

4. At all relevant times herein, Bay Meadows and Local 2 had a collective bargaining agreement which covered the wages and other terms and conditions of employment for certain Bay Meadows employees, including the plaintiff during his employment at Bay Meadows. According to the terms of the collective bargaining agreement, Bay Meadows, or Local 2, could file and prosecute grievances with the other party concerning disputes arising under the collective bargaining agreement, including but not limited to disputes concerning the discharge or termination of employees represented by Local 2.

5. On October 7, 1980, plaintiff was dispatched to defendant Bay Meadows for employment by defendant Union as a “Second Cook”.

6. On October 7, 1980, defendant Bay Meadows did not have a position for a “Second Cook”, but for a “Pantry” worker.

7. On October 7, 1980, plaintiff was employed by defendant Bay Meadows and was thereafter paid in the position of “Pantry” worker and was assigned to a kitchen position that called for a Pantry employee.

8. Plaintiff was paid as a “Pantry Worker” during his period of employment at Bay Meadows, but very shortly after his termination (and after he had complained to the defendant Union of the disparity in his pay), he was paid the differential between the two wage rates by Bay Meadows.

9. On November 5, 1980, the twenty-first working day of plaintiffs employment and the thirtieth calendar day after his employment, plaintiff was informed that he was to be terminated in his employment effective on November 6, 1980.

10. On November 5, 1980, plaintiffs supervising employee, Mr. William Jones, requested from the accounting department of defendant Bay Meadows a termination check for plaintiff. Plaintiffs final check was to include payment through November 6, 1980.

11. On November 6, 1980, when plaintiff appeared for work, he was notified again that he was terminated and was given his termination check for wages through November 6, 1980.

12. Plaintiff worked less than a total of thirty working days at Bay Meadows.

13. The collective bargaining agreement in effect between defendants was for the term January 1, 1977 to December 31, 1981. Said Agreement is hereafter referred to as the “1977 to 1981 Agreement”. The 1977 to 1981 Agreement provided that either Bay Meadows or Local 2 could reopen the 1977 to 1981 Agreement for negotiations and possible amendments or modifications of the economic terms, on January 1, 1980, by giving the other party written notice of a desire to negotiate changes in the economic terms at least 90 days prior to January 1, 1980.

14. Upon written notice duly given, Local 2 and Bay Meadows reopened their contract for possible amendments on the economic items and negotiated over such economic proposals, from December 1979 to February 1980. As was allowed by the 1977 to 1981 Agreement, Local 2 members engaged in a strike and work stoppage in support of its economic demands. The strike was settled when the Amendments to the 1977 to 1981 Agreement were concluded and ratified in February 1980.

15. In the course of negotiating over changes in the economic terms of the 1977 to 1981 Agreement, Bay Meadows proposed and Local 2 agreed to memorialize a past practice and unwritten agreement between the parties, which was that all newly hired employees at Bay Meadows were “probationary employees” for their first thirty working days, whether worked consecutively or spread over an entire racing meet. During the newly hired employee’s probationary period, the probationary employee could be terminated by Bay Meadows without just or sufficient cause, i.e., for virtually any reason. Only after the newly hired employee completed his or her probationary period did Bay Meadows have to have cause to terminate the employee, according to this long-standing and mutually acknowledged practice at Bay Meadows.

16. Bay Meadows proposed and the Union agreed to memorialize in writing this long-standing practice at the same time that a settlement was reached on the economic terms in February of 1980. The parties’ agreement with respect to the thirty working days probationary period for new hires was set forth in a Memorandum of Agreement.

17. Both the 1980 Amendments to the 1977 to 1981 Agreement concerning economic items and the Memorandum of Agreement setting forth the probationary period for new hires, were fully bargained, agreed upon and ratified by the union membership in February of 1980 and were in effect at the time of plaintiffs employment at Bay Meadows in October and November of 1980. The formal written documents expressing the parties’ agreement on the economic items and the probationary period were misplaced by the parties and were not signed by either party until March of 1981, and then only by the President of Local 2, Charles Lamb, because of a change in administrative personnel and oversight on the Union’s part, and a disagreement between the parties over a term concerning holiday pay not relevant to this action.

18. Pursuant to the 1980 amendments to the 1977 to 1981 Agreement, Bay Meadows implemented the wage increases negotiated and ratified in February 1980, retroactively to January 1, 1980, and prospectively on January 1, 1981, despite the fact that the formal documents memorializing these wage increases and the probationary period were not executed by either party until March of 1981.

19. Plaintiff was discharged before completing his probationary period because his employer, Bay Meadows, did not like his attitude towards his work and the fact that the Company felt Bessee did not get along with his fellow employees. Bay Meadows did not discharge Bessee for any reasons of discrimination or alleged Union activities.

20. Before and after his discharge from Bay Meadows, plaintiff complained to Local 2 business agents Robert Jacobs and Harry Steiner that he was not being paid the proper wages for his classification of Second Cook. Bay Meadows was paying plaintiff the lesser wages provided for in the Agreement for a “Pantry” position. In addition, plaintiff complained to Jacobs and/or Steiner that he had not been paid his uniform cleaning allowance by Bay Meadows. Jacobs and/or Steiner assisted plaintiff in obtaining his proper wages and uniform allowance and met with Bay Meadows’ representatives for this purpose.

21. Defendant Union filed a written grievance concerning plaintiff’s discharge on June 10, 1981. The 1977 to 1981 Agreement between Bay Meadows and Local 2 required grievances to be filed within ten days of the discharge. Defendant Union did not initially file a written grievance because it was convinced the grievance was unwinnable because of plaintiff’s probationary status. A grievance was ultimately filed on June 10, 1981 only because, being aware of plaintiff’s litigious propensities, defendant Union sought to prevent the filing of legal action.

22. Mr. DiGuglielmo was replaced as the Manager at Bay Meadows before the June 10, 1981 written grievance could be processed to arbitration. At the arbitration of this grievance, Mr. DiGuglielmo’s replacement, Mr. Rodney Fraser, denied that Mr. DiGuglielmo or anyone connected with Bay Meadows agreed with Jacobs to extend the contractual time limits for filing written grievances concerning discharges. The arbitration hearing on the Union’s grievance was a bifurcated hearing limited to the issue of the timeliness of the Union’s grievance. On August 30,1982, Arbitrator John Kagel made and entered his decision that the written grievance was not timely filed and dismissed the grievance. Arbitrator Kagel expressed no opinion on the merits of the underlying grievance, the significance of plaintiff’s probationary status, or other issues involving the merits of the grievance.

CONCLUSIONS OF LAW

1. This is a hybrid action for breach of contract against defendant Bay Meadows and breach of the duty of fair representation against Defendant Local 2. Jurisdiction lies in this Court pursuant to 29 U.S.C. § 185(a).

2. After consideration of all the evidence, including the testimony of a professional labor arbitrator called as an expert witness, the Court concludes that plaintiff’s grievance concerning his discharge from Bay Meadows in November of 1980 was so unmeritorious and frivolous as to justify judgment in favor of defendants whether or not the Union’s handling of the grievance was so egregiously arbitrary or unfair as to constitute a breach of the duty of fair representation.

3. At the time of his discharge, plaintiff was a probationary employee. According to long-standing practice at Bay Meadows and the terms of the Memorandum of Agreement negotiated and ratified in February of 1980, Bay Meadows did not have to have just or sufficient cause to discharge plaintiff. Thus, the Court concludes that the underlying grievance altogether lacked merit. The Court is further convinced that there is no reasonable possibility that a professional labor arbitrator would have applied different considerations or might have reached a different conclusion on the merits of the underlying grievance. The employer was free to terminate plaintiff for virtually any reason at all until after he completed his probationary period of thirty working days and it is extremely doubtful that a professional labor arbitrator would have decided the merits of the case in favor of the Grievant had the grievance been decided on the merits.

4. Based on these findings, the Court need not decide whether the Union’s handling of the grievance breached the duty of fair representation. If the Court was obligated to make that determination, the Court would take into account the lack of merit of plaintiff’s grievance in evaluating the sufficiency of the Union’s representation because the more important and meritorious the grievance, the more substantial the justification for the Union’s handling of the grievance must be. [Gregg v. Chauffeurs, Teamsters & Helpers Union, Local 150, 699 F.2d 1015, 1016, (9th Cir.1983) quoting from Robesky v. Qantas Empire Airways Ltd., 573 F.2d 1082 at 1092 (9th Cir.1978)]. It follows that for less meritorious and insubstantial grievances, a less exacting standard should be applied to judge the Union’s performance. In this case, the grievance was so obviously without merit that the Union representative's delay and reluctance to proceed with a written grievance is understandable. In any case, the complete lack of merit in plaintiff’s grievance demonstrates that plaintiff suffered no prejudice in the untimely filing of the grievance and warrants judgment for defendants because there is no duty to represent a member in respect to a frivolous claim. Dutrisac v. Caterpillar Tractor Co., 749 F.2d 1270 (9th Cir.1983), citing Stanton v. Delta Air Lines, Inc., 669 F.2d 833, 838, 109 LRRM 2739 (1st Cir.1982) for the proposition that there is no breach of duty of fair representation where the underlying claim is so meritless as to be frivolous for there is no duty to represent a member in respect to a frivolous claim.


author: MIHM, District Judge.

text:
    Andrew J. HOLLE, Plaintiff, v. MOLINE PUBLIC HOSPITAL; the Neurology Clinic, S.C.; E.D. Lardner, M.D.; Donovan D. Stiegel, M.D.; and Felipe Enriquez, M.D.; and Margaret M. Heckler, Secretary of Health and Human Services, Defendants.
    No. 84-4042.
    United States District Court, C.D. Illinois, Peoria Division.
    Dec. 10, 1984.

      John Malvik, Rock Island, Ill., for plaintiff.
    Michael J. O’Leary, Asst. U.S. Atty., Peoria, Ill., Robert A. Latham, III, Moline, Ill., Jonathan R. Zell, Asst. Regional Atty., U.S. Dept, of Health & Human Services, Chicago, Ill., for defendants.
   ORDER

MIHM, District Judge.

On March 1, 1984, Plaintiff Andrew Hollé filed in Illinois circuit court a “Petition for Adjudication of Rights of Lienholders and Adverse Parties” naming several Defendants, including the Secretary of the United States Department of Health and Human Services. On March 8, 1984, the federal Defendant removed the matter to this Court.

Plaintiff sought an order specifying the amounts of money that he had to pay to each of the Defendants for medical services they paid for or provided to the Plaintiff arising out of an automobile accident. On September 13, 1983, Plaintiff was involved in an automobile accident from which he sustained serious and permanent injuries. He was employed at the time of his accident and lost wages from the date of his accident until his return to work in December of 1983. He receives income from Social Security payments, payable as a result of his father’s death, because he is a dependent adult of his parents. As a Social Security recipient, the Plaintiff was eligible for Medicare benefits at the time of his accident. Several doctors and the Moline Public Hospital received payment for medical services from Medicare. Pursuant to Title XVIII of the Social Security Act, 42 U.S.C. § 1395 et seq., commonly known as the Medicare program, Blue Cross and Blue Shield of Illinois and E.D.S. Federal Corporation (“EDSF”) paid a total of $19,-380.77 in Medicare benefits.

On February 13, 1984, a settlement was reached between the Plaintiff and John Deere Insurance Company on behalf of the driver of the automobile which hit the Plaintiff. The insurance company agreed to pay Plaintiff the sum of $50,000, the insurance policy limits for liability. Five providers of medical services to the Plaintiff served Plaintiff's attorney with notices of lien pursuant to Chapter 82 of the Illinois Revised Statutes for the amount of their services rendered which remained unpaid. The Secretary of Health and Human Services also’ claimed an interest in the proceeds of the personal injury settlement entered into between the Plaintiff and John Deere Insurance Company.

After oral argument, the Court, analogizing this case to United States v. Lorenzetti, — U.S. —, 104 S.Ct. 2284, 81 L.Ed.2d 134 (1984), denied the Plaintiff’s motion for summary judgment insofar as it related to Defendant Margaret Heckler. The Court held that Defendant Heckler was entitled to distribution in the amount of $19,380.77, less her proportionate share of the costs involved in obtaining the settlement fund. Thus, Plaintiff was ordered to distribute to the United States the sum of $12,881.41. Defendants other than Margaret Heckler and the Moline Public Hospital were defaulted for their non-appearance and failure to respond to this action.

Plaintiff now seeks an order from this Court specifying the amount of money that he must pay to Defendant Moline Public Hospital (“Hospital”) for medical services it provided to the Plaintiff arising out of Plaintiff’s accident. Plaintiff requests that this Court void the lien of the Hospital with regard to any proceeds of the liability insurance settlement between the Plaintiff and the John Deere Insurance Company and that the Moline Public Hospital be found to be indebted to Plaintiff in the sum of $2,000 minus deductibles plus the costs of these proceedings. Plaintiff seeks the sum of $2,000 on the basis that Plaintiff’s private medical insurance carrier, American Republic Insurance Company, paid that sum to the Hospital for Medicare-covered services provided to the Plaintiff. This sum was paid after the Hospital had already been paid by Medicare.

Since the Hospital is a participating provider in the federal Medicare program, the Hospital billed Medicare for the services provided to Hollé pursuant to the Hospital’s provider agreement with Medicare. This agreement provides that Medicare will pay the hospital charges incurred by a Medicare beneficiary for Medicare-covered expenses, except for deductible and co-insurance amounts which must be paid by the beneficiary. Medicare paid the Hospital in full for Medicare-covered expenses. Medicare’s reimbursement was, pursuant to statute and regulation, determined on a per diem basis based on the number of days over a period of time that all Medicare eligible patients were rendered covered services of any kind by the Hospital. Medicare reimbursed the Hospital a sum based on that calculation, irrespective of the actual services rendered.

Pursuant to the Illinois Hospital Lien Act, Ill.Rev.Stat., ch. 82, § 97 et seq. (1983), the Hospital filed a lien against the proceeds of Holle’s settlement claiming that it is entitled to payment by Hollé for the entire amount of the charges. The Hospital objects to writing off a substantial sum generated by the Plaintiff for hospitalization when state law provides a remedy which, the Hospital believes, is consistent with Medicare. The total amount unpaid to date is $20,121.17. Additionally, if the Hospital must convey to the Plaintiff the $2,000 that it received from the Plaintiff’s health insurance carrier, it faces a deficit of $22,121.17 on the Plaintiff’s account.

The lien asserted by the Hospital is for $16,666.67, one-third of Plaintiff’s personal injury recovery of $50,000. This amount, Defendant submits, can be satisfied out of the Plaintiff’s recovery to which the lien attaches, as can the Plaintiff’s attorney’s fees and Medicare’s reimbursement. Alternatively, the Hospital argues that it is entitled to receive from the personal injury recovery the sum of $401.30, an amount representing the deductibles and co-insurance for which Plaintiff is liable, pursuant to 42 U.S.C. § 1395cc(a)(2)(A).

The Hospital contends that its recovery of excess charges under its lien is not inconsistent with the Medicare Act and that that Act does not preempt the Illinois Hospital Lien Act. The Secretary of Health and Human Services, in an amicus brief, argues that the Hospital may only collect from the Plaintiff the deductible and co-insurance amounts relating to covered services it provided to him and may not collect for any other charges for covered services.

A hospital that participates in the Medicare program is termed a “participating provider”. See 42 U.S.C. § 1395x(u), 42 C.F.R. § 489.2(b) (1982). To be a participating provider, the hospital must enter into an agreement with Medicare. See 42 U.S.C. § 1395cc, 42 C.F.R. § 489. The first requirement of the agreement is that the provider promise “not to charge ... any individual or any other person for items or services for which such individual is entitled to have payment made under this sub-chapter ....” 42 U.S.C. § 1395cc(a)(l)(A). It is the Secretary’s position that this means that, for the items or services that Medicare has agreed to furnish to a Medicare eligible beneficiary, the provider must charge Medicare and not the beneficiary. See § 3313 of the Medicare Intermediary Manual. The only exception is that the provider may charge the beneficiary for any deductible or co-insurance amounts.

Plaintiff places his reliance on several cases interpreting 42 U.S.C. § 1395cc: Niles v. American Banker’s Insurance Co., 229 So.2d 435 (La.App.1969), Appleman v. National Ben Franklin Life Insurance Co. of Illinois, 84 Cal.App.3d 1012, 1014, 149 Cal.Rptr. 117 (Cal.Ct.App.1978), and Holmes v. California State Automobile Association, 135 Cal.App.3d 635, 185 Cal.Rptr. 521 (Cal.Ct.App.1982). These cases provide only indirect support for the Plaintiffs position since they are concerned with the obligation of a private insurer to pay to the insured the expenses incurred by the insured where those expenses have been paid, at least in part, by Medicare. Holmes states, however, that:

“when a legal obligation to pay was created upon the rendition of services, the Medicare agreement became applicable and the hospital was bound by its commitment ‘not to charge,’ i.e., not to enforce against the patient liability for the costs incurred by the patient.” 185 Cal. Rptr. at 524.

The Defendant Hospital relies heavily on Gordon v. Forsythe County Hospital Authority, Inc., 409 F.Supp. 708 (D.N.C.1976), aff’d and rev’d on other grounds, 544 F.2d 748 (4th Cir.1976). In Gordon, at issue was the Hospital Survey and Construction Act, Pub.L. No. 79-725, 60 Stat. 1040 (1946), presently codified as Title VI of the Public Health Service Act, 42 U.S.C. § 291, commonly known as the Hill-Burton Act. Under the Hill-Burton Act, states wishing to obtain federal financial assistance for the construction and modernization of public or non-profit community hospitals were required to submit to the Surgeon General for his approval a state plan for carrying out the Congressional purpose. 42 U.S.C. § 291d. The Act also required the state plan to make provision for adequate health facilities for all persons residing in the state and to furnish necessary services to persons unable to pay. 42 U.S.C. §§ 291c, 291e, American Hospital Assoc. v. Schweiker, 721 F.2d 170, 173 (7th Cir.1983).

One of the class action plaintiffs in Gordon sought to have declared invalid a lien filed pursuant to North Carolina statute by a treating hospital. After the time that she was determined to be a “Hill-Burton eligible payment” and after she was provided with “substantial free medical care,” the plaintiff had initiated a state court action against various alleged tortfeasors who caused her injuries. 409 F.Supp. at 718. The prayer for relief in the state suit included an amount for medical services rendered. After the suit was filed, the defendant hospital cancelled its previous write-off of the plaintiff’s bill, deducted the corresponding credit it had made to the Hill-Burton account, and filed a lien against recovery obtained by the plaintiff in the amount of medical services rendered to her. Plaintiff argued that the lien should not be permitted to stand because HEW regulations and the procedure adopted by the hospital to comply with Hill-Burton regulations prohibited collection efforts made toward patients who have been determined to be eligible for free medical care.

In holding that the lien was valid, the Gordon court found no inconsistency between the Hill-Burton Act and hospital procedure and the North Carolina Hospital Lien statute. The Gordon court stated that:

“It would be unconscionable to permit the taxpayers to bear the expense of providing free medical care to a person and then allow that person to recover damages from a tortfeasor and pocket the windfall.” 409 F.Supp. at 719.

The court recognized that North Carolina’s lien statute was enacted to prevent this result and added that:

“Such lien attaches to the recovery, if any, and is not a general lien against the assets of the alleged debtor.” 409 F.Supp. at 719.

While the facts in Gordon are somewhat similar to those in the case at bar, the statutory differences between the Hill-Burton Act and Medicare legislation make the holding of the Gordon case inapplicable here. Under the Hill-Burton Act, payments on behalf of recipients are not made. In Gordon, for example, no payment of funds was ever made on behalf of the recipient; the hospital merely wrote off the plaintiff’s bill. After the plaintiff filed her state court action and included a demand for compensation for medical services rendered, the hospital cancelled that write off. There was never any reimbursement of the government for services provided under the Hill-Burton Act. No one had actually paid for the services rendered to the patient.

Here, the Hospital received payment from Medicare for the medical services rendered to the Plaintiff. The Secretary of Health and Human Services will be reimbursed by the Plaintiff for medical services it paid on behalf of the Plaintiff, minus a proportionate share of the costs involved in obtaining the settlement fund.

Under its agreement with Medicare, the Hospital may not file a lien for amounts that represent charges for covered services for which Medicare has been billed by the provider, except for deductible or co-insurance amounts. Payment of the provider’s charges by Medicare extinguishes the beneficiary’s debt to the provider. Since the Hospital has been paid by Medicare, it has no claim against Hollé except for the deductible or co-insurance amounts. Further, although the Hospital intends to repay the money received from Medicare if the Hospital is successful in pursuing its present claim, the Hospital is presently in possession of the money received from Medicare and by its action seeking payment from Hollé of the charges in question, the Hospital is engaging in impermissible double billing.

In reaching this result, the Court is not unmindful of the equities favoring the Hospital’s position. While Medicare regulations permit the government to be fully reimbursed by the Plaintiff, the Hospital is required to bear a substantial portion of the Plaintiff’s actual hospital bills. Defendant argues that that unpaid portion will ultimately be borne by the taxpayers. The Hospital, however, bound itself by agreement with Medicare not to charge any other person for items or services for which that person is entitled to have payment made by Medicare. Pursuant to the Medicare program, the Hospital has received payment for “reasonable costs and customary charges.” If allowed to enforce its lien, the Hospital would violate 42 U.S.C. § 1395cc(a)(l)(A) and the duties it assumed by contract and would flaunt Medicare regulation and public policy aimed at protecting beneficiaries of the Medicare program. Accordingly, the lien of the Moline Public Hospital with respect to the proceeds of the liability insurance settlement between the Plaintiff and John Deere Insurance Company is void. Beyond any deductible still owed, Plaintiff has no obligation to the Hospital.

Plaintiff requests that the $2,000 paid by the American Republic Insurance Company to the Hospital be applied to the deductibles owed by Hollé with the remaining amount due to the Plaintiff. The record, however, is insufficient to determine whether Plaintiff is entitled to have the amount representing the deductibles paid out of the $2,000. The parties are directed to tender to the Court their position on that issue.

Based on the foregoing, IT IS HEREBY ORDERED:

1. The lien of Moline Public Hospital with regard to any proceeds of the liability insurance settlement between Andrew Hollé and John Deere Insurance Company is void.

2. Andrew Hollé is not indebted to the Hospital for any further payments for Medicare covered services.

3. The parties are directed to tender to the Court within ten (10) days their position on payment of the amount representing the deductibles out of the $2,000 insurance payment by American Republic Insurance.