author: MYRON L. GORDON, Senior District Judge.

text:
    Ralph BUELOW, Petitioner, v. Walter DICKEY, Respondent, and Carol BUELOW, Petitioner, v. Walter DICKEY, Respondent.
    Nos. 85-C-642, 85-C-643.
    United States District Court, E.D. Wisconsin.
    Nov. 20, 1985.

      John Schiro, Milwaukee, Wis., for petitioner.
    Mary Batt, State of Wis. Dept, of Justice, Madison, Wis., for respondent.
   DECISION AND ORDER

MYRON L. GORDON, Senior District Judge.

On January 10, 1984, Carol and Ralph Buelow were convicted in the state circuit court for Fond du Lac County of being parties to the crime of arson. On December 26, 1984, the Wisconsin Court of Appeals affirmed their convictions. State of Wisconsin v. Carol and Ralph Buelow, 122 Wis.2d 465, 363 N.W.2d 255 (Ct.App.1984). On January 30, 1985, the Wisconsin Supreme Court dismissed the Buelows’ petition for review of their convictions as untimely filed. On March 6,1985, the Wisconsin Supreme Court denied their motion for reconsideration.

The Buelows now seek federal habeas corpus relief pursuant to 28 U.S.C. § 2254. They allege that their convictions were obtained in violation of their sixth amendment rights to confront the witnesses against them and to have the assistance of counsel. For the reasons which follow, the writ will be denied.

I. BACKGROUND

On October 11, 1983, three months before they went on trial, the Buelows appeared before a state judge for judicial review of the public defender’s refusal to represent them. The judge reviewed and rejected the Buelows’ claim that they had .placed title to their 600-acre farm in a valid trust, to whose assets they did not have access. He found that the trust was invalid, that the Buelows were not indigent, and that each owned sufficient assets to retain private counsel. The Buelows represented themselves at trial.

In the course of the investigation into the arson, Ms. Honey Lou Suttner gave two separate statements inculpating both herself and the Buelows. She gave the first of these statements to police and the second before a state circuit judge presiding over a “John Doe” hearing about two months later. At trial, the state produced and attempted to question Ms. Suttner. Ms. Suttner took the stand and was placed under oath, but refused to answer any questions on fifth amendment grounds.

After the prosecutor granted her testimonial immunity under sec. 972.08(1) Wis. Stats., the judge ordered her to testify, but she nonetheless persisted in her silence. The judge found her in willful contempt of court and remanded her to the county jail.

After holding her in contempt, the judge found Ms. Suttner unavailable and granted the prosecutor leave to have both of her statements read to the jury. The same individual who took her first statement, Detective Dobyns of the Fond du Lac Sheriffs Department, then read both statements to the jury in question and answer form. After he finished, Carol Buelow extensively cross-examined him. Although offered the opportunity to question Mr. Dobyns, Ralph Buelow declined to do so.

The two statements clearly implicated Ms. Suttner and the Buelows in the destruction of a Wisconsin Department of Natural Resources (DNR) building. Though several other witnesses testified at trial, these out-of-court statements constituted the only evidence adduced by the state directly linking the Buelows to the arson charged. Ms. Suttner’s refusal to testify prevented the Buelows from cross-examining her in the presence of the jury. The state courts treated Ms. Suttner as “unavailable” and found her statements to be reliable and trustworthy so as to satisfy the confrontation clause of the sixth amendment.

The Buelows filed their petition for review with the Wisconsin Supreme Court on January 28, 1985, more than 30 days after the Wisconsin Court of Appeals had affirmed their convictions. Section 809.62(1) Wis.Stat., provides that parties must petition the Wisconsin Supreme Court for review within 30 days of the adverse decision of the Court of Appeals. The Wisconsin Supreme Court dismissed their petition as untimely.

II. WAIVER

Under the law of waiver, when a procedural default bars litigation of a constitutional claim in state court, a state prisoner may not obtain federal habeas corpus relief absent a showing of cause and actual prejudice. Reed v. Ross, 468 U.S. 1, 104 S.Ct. 2901, 2908, 82 L.Ed.2d 1 (1984); Wainwright v. Sykes, 433 U.S. 72, 87, 97 S.Ct. 2497, 2506-07, 53 L.Ed.2d 594 (1977). I am persuaded that the Buelows’ procedural default was the result of inadvertence and that their inability to cross-examine Ms. Suttner, if unlawful, was prejudicial to them. Nutall v. Greer, 764 F.2d 462, 465 (7th Cir.1985).

The fundamental importance of proper confrontation at trial, the significance of the challenged evidence, and the absence of other evidence corroborative of guilt, demonstrate that there was a real possibility of actual prejudice to the Buelows. The character and magnitude of the constitutional infirmities alleged in their habeas petitions thus warrant looking beyond the state procedural forfeiture involved in this case in order to examine the petitioners’ contentions. See Riner v. Owens, 764 F.2d 1253, 1256 (7th Cir.1985).

III. THE CONFRONTATION CLAUSE

Having shown sufficient cause and actual prejudice for their procedural default, the Buelows are entitled to present their constitutional claims to the federal courts for review on the merits. They argue, first, that Ms. Suttner was not unavailable as a witness in the constitutional sense, since she was not given an opportunity to consult counsel after being granted testimonial immunity and ordered to testify; and, second, that even if she was unavailable, neither of her out-of-court statements bore sufficient indicia of reliability to satisfy the confrontation clause.

A. Unavailability

The state produced Ms. Suttner at trial, where she was placed under oath, and sought to question her regarding her relationship with the Buelows. She refused to testify on fifth amendment grounds, in spite of a grant of testimonial immunity. The trial judge then ordered her to testify or be held in contempt, in accordance with state law. She persisted in her silence, defying the judge’s order that she testify, was held in contempt, and declared unavailable.

A witness is not unavailable for purposes of the exception to the confrontation requirement unless prosecutorial authorities have made a good-faith effort to obtain his presence at trial. Ohio v. Roberts, 448 U.S. 56, 74,100 S.Ct. 2531, 2543, 65 L.Ed.2d 597 (1980). But the law does not require the doing of a futile act. The ultimate question is whether the witness is unavailable despite good-faith efforts undertaken prior to trial to locate and present the witness. Id.

Prosecutorial authorities in this case made every effort to obtain Ms. Suttner’s live testimony and thus laid a proper predicate for admission of her two out-of-court statements. Roberts, supra, 448 U.S. at 74, 100 S.Ct. at 2543. Her refusal to testify was no fault of their own, and nothing that they could reasonably be expected to remedy. Indeed, their production of Ms. Suttner and grant of testimonial immunity were the only means reasonably within their power to make her available for direct and cross-examination. For purposes of confrontation clause analysis, her unavailability to testify was established when she persisted in asserting her fifth amendment privilege, despite a prosecutorial grant of immunity, in defiance of an order by the trial court to testify or be held in contempt. United States v. Caputo, 758 F.2d 944, 952 (3rd Cir.1985); United States v. Inadi, 748 F.2d 812, 819-20 (1984), cert. granted, — U.S. -, 105 S.Ct. 2653, 86 L.Ed.2d 271 (1985); see also United States v. Robinson, 635 F.2d 363, 364 (5th Cir.1981).

B. Reliability

The out-of-court statements read to the jury purported to identify the Buelows, one other male, and Ms. Suttner as the perpetrators of the arson which destroyed a building belonging to the Wisconsin DNR. Both statements described how the Buelows and the other male picked Ms. Suttner up in a pick-up truck one evening in late December 1981 and drove to the site of some buildings and sheds belonging to the DNR. Carol Buelow was driving. She dropped the other three individuals off near the buildings. After the fire had been started, she returned to pick them up. Ms. Suttner’s statements also indicated that Ralph Buelow and the other male present belonged to a group called the Posse Comitatus, which did not like the DNR.

The statements further disclosed that Ralph Buelow and the other male broke into two of the DNR buildings, poured gasoline on the floors and furniture inside them, and hurriedly ran out of one just as it burst into flames. They indicated that the buildings out of which the men had run contained jeeps and cars. Ms. Suttner also disclosed that she was the designated lookout and, at the behest of the two men, remained outside while they prepared and ignited the fire.

Ms. Suttner gave the first of the two statements to police in a conference room of the Fond du Lac County Sheriff’s Department. Present were Detective Dobyns of the Fond du Lac County Sheriff’s Department and a Wisconsin Department of Criminal Investigations Fire Marshall. Pri- or to answering any questions, Ms. Suttner read and stated that she understood her Miranda rights. Nonetheless, she was not in police custody and had not been arrested for or charged with committing any crime at the time she gave her statement. In short, Ms. Suttner had volunteered to come forward and speak to the authorities. She had gone to the sheriff’s department of her own free will and had not been threatened, promised anything, or pressured to assist in the investigation. She simply gave her statement and returned home the same evening approximately one-half hour later.

Ms. Suttner returned to the sheriff’s department about a week later. She was not in custody or under any restraint at that time either. Again, no threats, promises, or deals of any kind were intimated or made. Having taped the original interview, Detective Dobyns gave Ms. Suttner a written transcript prepared from the tape and asked her to review it. Ms. Suttner read it, made some corrections, and signed each page of the statement. She then left the department as freely as she came to return home.

Ms. Suttner’s second statement took the form of testimony given before a state circuit judge presiding over a “John Doe” investigative hearing. Although no defense counsel was present to cross-examine her, Ms. Suttner was under oath, and the minutes of her testimony were recorded by an official court reporter.

To be admissible under the confrontation clause, Ms. Suttner’s statements must bear adequate indicia of reliability. Roberts, supra, 448 U.S. at 66, 100 S.Ct. at 2539. However, where the state seeks to introduce hearsay statements, such as these, which are against the declarant’s penal interest, and which also inculpate the accused, those portions of the statements which inculpate the accused must be scrutinized carefully. United States v. Katsougrakis, 715 F.2d 769, 774 (2d Cir.1983), cert. denied, 464 U.S. 1040, 104 S.Ct. 704, 79 L.Ed.2d 169 (1984). Thus, in order to introduce them in a manner that does not offend the confrontation clause, the state must show that the “dual inculpatory” statements fall within a recognized exception to the hearsay rule and that attending circumstances confirm their trustworthiness. Katsougrakis, supra, 715 F.2d at 775.

Under Roberts, where the declarant’s statements do not fall within a well recognized or firmly rooted hearsay exception, “the evidence must be excluded, at least absent a showing of particularized guarantees of trustworthiness.” Roberts, supra, 448 U.S. at 66, 100 S.Ct. at 2539. However, I am persuaded that the statements read to the jury in this case did carry such particularized guarantees. Ms. Suttner made essentially the same statement not only once, but twice, the later time before a judge while under oath and a court reporter who transcribed her testimony. In United States v. Edward Howard and Thomas Cusack, 774 F.2d 838, 846 (7th Cir.1985), the court held that hearsay statements made in this context bear sufficient particularized guarantees of trustworthiness under Roberts and thus meet the requirements for admission under the confrontation clause.

It should also be noted that, whether or not the penal-interest exception to the hearsay rule applies in this situation, “each statement here was in a very real sense self-incriminatory and unquestionably against interest.” Chambers v. Mississippi, 410 U.S. 284, 300-01, 93 S.Ct. 1038, 1048-49, 35 L.Ed.2d 297 (1973). People do not lightly admit a crime and place critical evidence in the hands of police in the form of their admissions, United States v. Harris, 403 U.S. 573, 583, 91 S.Ct. 2075, 2082, 29 L.Ed.2d 723 (1971). In addition, the apparent voluntariness of Ms. Suttner’s statements, their unerring consistency and clear description of the roles the Buelows played in the crime, suggest that “the possibility that cross-examination ... could conceivably have shown the jury that the statements], though made, might have been unreliable was wholly unreal.” Dutton v. Evans, 400 U.S. 74, 89, 91 S.Ct. 210, 220, 27 L.Ed.2d 213 (1970).

Hearsay is constitutionally admissible under the confrontation clause (1) if the witness who offers the hearsay testimony of another person is subject to cross-examination and (2) if the circumstances under which the hearsay statement was made indicate that its content is probably true. United States v. Boulahanis, 677 F.2d 586, 589 (7th Cir.1982). Although Ralph Buelow passed up the opportunity to cross-examine, Carol Buelow extensively questioned Detective Dobyns, the individual who took Ms. Suttner’s first statement and later read both statements to the jury. Further, the challenged statements bear particularized guarantees of trustworthiness, Howard, supra, 774 F.2d at 846, and are reliable, Dutton, supra, 400 U.S. at 89. I believe that the circumstances under which the statements were made indicate that their contents are probably true. Boulahanis, supra, 677 F.2d at 589.

The admission of Ms. Suttner’s hearsay statements thus did no violence to the Buelows’ sixth amendment rights to confrontation. Robinson, supra, 635 F.2d at 365. The statements themselves and contexts in which they were made demonstrate inherent reliability, United States v. Layton, 720 F.2d 548, 561 (9th Cir.1983), cert. denied, 465 U.S. 1069, 104 S.Ct. 1423, 79 L.Ed.2d 748 (1984), and abundant guarantees of trustworthiness. Roberts, supra, 448 U.S. at 66, 100 S.Ct. at 2539. Dutton, supra, 400 U.S. at 88-89. As such, their presentation to the jury was proper.

IV. COUNSEL

The Buelows claim that they were denied their sixth amendment right to counsel on three grounds: a) the trial court erroneously assigned them the burden of proving indigency in evaluating their application for representation by the public defender’s office; b) the evidence presented by those opposing their application was insufficient to support a finding of non-indigency; and c) the trial court failed to secure a valid waiver of their right to counsel.

A. Burden of Proof

The general rule is that where a defendant’s ability to afford counsel has been placed into issue, he has the burden of proving by a preponderance of the evidence that he is financially unable to afford counsel. United States v. Harris, 707 F.2d 653, 661 (2d Cir.), cert. denied, 464 U.S. 997, 104 S.Ct. 495, 78 L.Ed.2d 688 (1983); see also United States v. Celani, 748 F.2d 363, 365 (7th Cir.1984). The Buelows contention that they should not have been required to prove their own indigency is rejected.

B. Sufficiency of the Evidence

On habeas review, the factual findings arising out of state court proceedings are entitled to a presumption of correctness. 28 U.S.C. § 2254(d); Rushen v. Spain, 464 U.S. 114, 120, 104 S.Ct. 453, 456, 78 L.Ed.2d 267 (1983). Such findings must be determined in the first instance by the state courts and deferred to, in the absence of convincing evidence to the contrary. Rushen, supra, 464 U.S. at 120, 104 S.Ct. at 456, citing Marshall v. Lonberger, 459 U.S. 422, 431-32, 103 S.Ct. 843, 849-50, 74 L.Ed.2d 646 (1983).

Here, both the state trial and the appellate courts concluded that the Buelows were able to afford private counsel. They found that the evidence clearly showed the Buelows ownership of an unencumbered 600-acre farm, replete with the equipment and machinery to run it. No evidence sufficient to rebut the presumption of correctness accorded state court findings of fact has been shown. The Buelows simply failed to satisfy their burden of proving that they were foreclosed from liquidating trust assets.

C. Waiver of Counsel

The Buelows’ contention that the trial judge was required to engage them in a colloquy ensuring a knowing and intelligent waiver of their right to counsel cannot be sustained. Immediately after finding them financially able to retain private counsel, the trial judge informed the Buelows that their joint trial would commence on the morning of January 9, 1984, approximately three months hence, whether they appeared with an attorney or not. He told them that they had already received one postponement and that the date was firm. At a subsequent pretrial hearing, moreover, the judge told the Buelows that he could not and would not act as their counsel at trial, and advised them that it would be in both of their interests to obtain private counsel to represent them rather than proceeding pro se.

Therefore, IT IS ORDERED that the Buelows’ petition for a writ of habeas corpus pursuant to 28 U.S.C. § 2254 be and hereby is denied.


source: Caselaw Access Project

author: ALLEN, Senior Judge.

license: Public Domain

text:
    Gloria H. CONLEY, Plaintiff, v. KFC CORPORATION, et al., Kentucky Fried Chicken Corp.; David Klosterman; Stan Pearman; Dennis Royer; and George Karvorkian, Defendants.
    Civ. A. No. C 82-0034-L(A).
    United States District Court, W.D. Kentucky, Louisville Division.
    Nov. 20, 1985.
    As Amended Nov. 22, 1985.
    See also, D.C., 606 F.Supp. 235.
    Isaac Lorean Conley, Jr., Edwin C. Lester, Louisville, Ky., for plaintiff.
    Richard S. Cleary, Louisville, Ky., for defendants.
   MEMORANDUM OPINION

ALLEN, Senior Judge.

The defendants have moved the Court for a judgment entitling them to more than $42,000.00 in attorney’s fees as against the plaintiff, Gloria H. Conley, her attorney-husband, Isaac Conley, and Isaac Conley’s co-counsel of record, Edwin Lester.

The motion of the defendants is based on 42 U.S.C. § 1988, and also on its assertion that the plaintiff and her counsel have been guilty of bad faith in their prosecution of this action.

The record reflects that plaintiff, during a three week trial on a charge of racial discrimination under 42 U.S.C. § 2000e et seq. and 42 U.S.C. § 1981, failed to identify any instance of discriminatory behavior by KFC, with the possible exception of one instance where plaintiff became embroiled in a verbal conflict with two white employees, Happel and Muncy. Significantly enough, however, that conflict was resolved by KFC by transferring all of the employees to other positions on a lateral basis and therefore no racial discrimination occurred.

Although the Court overruled the motion of the defendant for summary judgment, it is apparent from the Court’s own memory that plaintiff transformed what should have been a one week trial into a three week trial; that she failed to attend two depositions of which she was notified; that her counsel failed on numerous occasions to comply with orders of this Court; and that plaintiff’s claims of retaliation and violation of the Equal Pay Act were completely unjustified.

It is noted that plaintiff’s lawyer-husband has not even seen fit to respond to the defendants’ motion for attorney’s fees. Part of his failure may be attributed to the fact that he and his wife have taken bankruptcy. The Court of course recalls the many instances in which some attempt was made to collect the court reporter’s fees for Mrs. Snowden and plaintiff’s rather cavalier response to those efforts.

We are left with little or no doubt that attorney’s fees should be assessed against plaintiff and her attorney-husband. See Brisbane v. Port Authority of N.Y. and N.J., 550 F.Supp. 222 (S.D.N.Y.1982) (defendants in Title VII action entitled to reasonable attorney’s fees as part of costs of defending frivolous lawsuit). See also the Findings of Fact and Conclusions of Law of this Court (and the Court’s comments contained in its memorandum opinion and order of October 26, 1984, commenting on plaintiff’s counsel’s failure to file briefs as ordered by the Court).

Although the defendants have been compelled to expend $42,000 in attorney’s fees, the Court, as did District Judge Owen in Brisbane, supra, takes cognizance of the fact that plaintiff and her husband are probably persons with limited resources judging by the fact that they filed a petition in bankruptcy. For that reason, we will reduce the amount of attorney’s fees to be paid by Mrs. Conley to $5,000.00.

In addition, we believe that Mr. Conley should be held liable under Title 28 U.S.C. § 1927 which states that:

Any attorney or other person admitted to conduct cases in any court of the United States or any territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses and attorney’s fees reasonably incurred because of such conduct. Id., as amended Sept. 12, 1980, Pub.L. 96-349, § 3 (1980), (in response to Roadway Exp., Inc. v. Piper, 447 U.S. 752, 100 S.Ct. 2455, 65 L.Ed.2d 488 (1980)).

Here, it is obvious that plaintiff’s attorney multiplied the proceedings vexatiously by pursuing the retaliation claim four years after plaintiff had been granted several promotions following her charge of racial discrimination. It is also obvious that plaintiff’s claims under the Equal Pay Act were patently baseless, and that plaintiff could easily have discovered that fact prior to trial. Plaintiff’s attorney must certainly be liable for the expenses required to compel his wife’s presence at a deposition after her failure to attend depositions. Also, he probably should be held responsible under 28 U.S.C. § 1927 for disrupting the trial and causing a very lengthy trial by issuing a subpoena as to documents which in no way tended to strengthen or prove the plaintiff’s case, which matters he could have explored long before trial by way of discovery. Furthermore, the Court finds that the conduct of Mr. Conley constituted, or was tantamount to, bad faith justifying the award of attorney’s fees as against him even under the Court’s inherent powers. Roadway Express, supra, 447 U.S. at 766-767, 100 S.Ct. at 2464-65.

We believe that an award of $600.00 ■ per day for ten days would be appropriate in regards to the harassment caused by the subpoena issue and in pursuit of the retaliation issue which was frivolous, and a fee of $250.00 for the expenses caused by plaintiff’s failure to attend depositions, making a total of $6,750.00, to be paid as set out in the judgment.

Finally, in regard to the defendants’ requests to assess fees against Mr. Lester, we do not believe that it would be appropriate to do so. He did take part in the trial and conduct the examination of the plaintiff on direct. However, the record would indicate that the great majority of the decisions that were taken on plaintiff’s behalf were apparently taken by her attorney-husband and not by Mr. Lester. For that reason, we will not award a fee against Mr. Lester.

A judgment in accordance with this opinion has been entered this day.


author: STERN, District Judge.

text:
    SEA-LAND SERVICE, INC., Plaintiff, v. UNITED STATES of America, Commissioner, Internal Revenue Service, G. Glendenning, Kenneth Kramlich and Nelson Sala, Defendants.
    Civ. A. No. 85-825.
    United States District Court, D. New Jersey.
    Nov. 21, 1985.

      Meyner & Landis, Newark, N.J. by Jeffrey L. Reiner, Geralyn A. Boccher, for plaintiff.
    W. Hunt Dumont, U.S. Atty., United States Attorney’s Office, Newark, N.J., by Edward G. Spell, Asst. U.S. Atty., and Robert L. Handros, Trial Atty., Tax Div., U.S. Dept, of Justice, Washington, D.C., for defendants United States of America and Commissioner, Internal Revenue Service.
   OPINION

STERN, District Judge.

The Court is presented with a suit for declaratory judgment, brought under the Declaratory Judgment Act, 28 U.S.C. § 2201, and the Shipping Laws of the United States, 46 U.S.C. §§ 3 et seq. Plaintiff seeks to prevent the Internal Revenue Service (the “IRS”) from attaching the wages of three of its employees, seamen G. Glendenning, Kenneth Kramlich and Nelson Sala.

Plaintiff and defendants the United States and the IRS Commissioner (the “government”) cross-moved for summary judgment, raising the issue of whether the IRS may garnishee the wages of seamen to satisfy the seamen’s tax liabilities in spite of a provision in the shipping laws exempting seamen’s wages from “attachment or arrestment from any court.” 46 U.S.C. § 11109. The government also moved, as a threshold matter, to dismiss for lack of jurisdiction.

The Court heard oral argument on July 22, 1985. We now deny the government’s motion to dismiss for lack of jurisdiction and grant summary judgment upholding the IRS’s gamisheeing power. We also grant plaintiff’s motion for summary judgment freeing it from liability for honoring such levies. Our decision on these issues renders moot the remaining issue concerning the Court’s power to enjoin the IRS’s attachment powers.

Plaintiff Sea-Land Service, Inc. (“Sea-Land”) operates vessels in foreign and interstate commerce, maintaining approximately 5,000 seamen on its U.S. vessel payroll. Defendants Glendenning, Kramlich and Sala have been employed as seamen aboard Sea-Land’s ships.

Beginning on April 2, 1984, The IRS served Sea-Land with notices of levy on the wages of defendants Glendenning, Kramlich and Sala for taxes, penalties and interest owed to the federal government by the seamen. In each case Sea-Land informed the IRS that it could not honor the levies because the shipping laws precluded the withholding of seamen’s wages. Sea-Land further noted its belief that, in the event it paid over the wages to the IRS, it would be liable for the double wage penalty described in the shipping laws at 46 U.S.C. § 10313(g). When the IRS persisted in its demands, Sea-Land filed this action to ascertain whether it must respect the IRS levies.

The complaint contains three counts. Count one seeks a judgment declaring whether Sea-Land must honor the IRS levies. Count two asks the Court to enjoin the IRS from levying on the wages of Sea-Land’s seamen and from enforcing the levies, pursuant to 26 U.S.C. § 6332(c). Count three seeks a declaration that if Sea-Land must comply with the levies, it will neither violate Title 46, United States Code, Section 11109, nor incur double wage liability under section 10313(g).

The government first moves to dismiss for lack of jurisdiction on counts one and two. Alternatively, it urges the Court to dismiss count one for failure to state a claim upon which relief can be granted. Plaintiff cross-moves for summary judgment, arguing that the levies are invalid under the shipping laws. In the alternative, it seeks summary judgment on count three to bar liability if it is obligated to respect the levies.

DISCUSSION

1. The Government’s Motion to Dismiss for Lack of Jurisdiction.

The government offers the threshold argument that plaintiffs claim in count one is barred by the Declaratory Judgment Act, 28 U.S.C. § 2201. That statute restricts the court’s power to grant declaratory relief by providing that federal courts shall issue declaratory judgments “except with respect to Federal taxes----” 28 U.S.C. § 2201(a).

It is, however, well-settled that the exception for federal taxes does not bar actions by non-taxpayers who seek neither to restrain the assessment of taxes nor to dispute the taxpayer’s ultimate tax liability. Kentucky Welfare Rights Organization v. Simon, 506 F.2d 1278, 1284 (D.C.Cir.1974), rev’d on other grounds, 426 U.S. 26, 96 S.Ct. 1917, 48 L.Ed.2d 450 (1976); Church of Scientology of Celebrity Centre v. Egger, 539 F.Supp. 491, 494 (D.D.C.1982); Henshel v. Guilden, 300 F.Supp. 470, 472 (S.D.N.Y.1969); Hoye v. United States, 109 F.Supp. 685, 686 (S.D.Cal.1953). In Hoye, for example, a city comptroller sought a judgment declaring whether he was required to honor an IRS levy on the wages or pension of a city employee. 109 F.Supp. at 686. The Hoye court recognized that the comptroller faced an intractable conflict between two sets of laws:

[T]he city of Los Angeles merely holds as a trustee the money which is due to the defendant taxpayer, Champion. Furthermore, under the law of the State of California, Sec. 710, Cal.C.C.P., the plaintiff Hoye as City Controller cannot pay money owed by the city of Los Angeles to anyone other then the one to whom the money is due unless and until there is filed with him an authenticated abstract of judgment of a court showing that the person is entitled thereto. If the plaintiff, Hoye, recognized the demand and levy by the Collector and paid the sum of $121.71 therein demanded, the plaintiff, Hoye, would still be liable to pay that same amount to Champion under the terms of Section 710 of the California Code of Civil Procedure.

Id.

The parallel between the Hoye case and the present action is unmistakable. Sea-Land, like comptroller Hoye, is not the taxpayer. Like him, Sea-Land does not ask the Court to declare whether any tax is due the United States or, if so, how much, but only whether it must turn over the unchallenged assessment to the IRS.

Moreover, Sea-Land finds itself, like comptroller Hoye, confronted with two laws that makes observance of both impossible. The Internal Revenue Code requires Sea-Land to obey the IRS orders attaching its employees wages, 26 U.S.C. § 6332(c), and does not specifically exempt seamen’s wages from such levy, 26 U.S.C. § 6334(a). But the shipping laws state that Sea-Land may not withhold from seamen any portion of their full wages, excepting only court-ordered spouse and child support payments. 46 U.S.C. § 11109(a). Furthermore, if an employer wrongfully delays paying a seaman’s wages it faces the imminent threat of double wage liability under 46 U.S.C. § 10313(g). Like comptroller Hoye, therefore, Sea-Land is entitled to a declaration proclaiming whether it must honor the IRS levies. We hold that the relief sought in count one is available under Title 28, United States Code, Section 2201.

II. The Motions for Summary Judgment.

A. Count One

Although the government styled its motion as one to dismiss for failure to state a claim, we treat the motions on count one as cross-motions for summary judgment because they raise the identical legal issue, and the parties appear to agree that no material facts are in dispute. See Fed.R. Civ.P. 56(c).

Sea-Land has refused to honor the IRS levies as a result of 46 U.S.C. § 11109(a), which provides:

Wages due or accruing to a master or seaman are not subject to attachment or arrestment from any court, except for an order of a court about the payment by a master or seamen of any part of the master’s or seaman’s wages for the support and maintenance of the spouse of minor children of the master or seaman, or both. A payment of wages to a master or seaman is valid, notwithstanding any prior sale or assignment of wages or any attachment, encumbrance, or arrestment of the wages.

The government contends, however, that provisions of the Internal Revenue Code, 26 U.S.C. §§ 6334(a) and (c), take precedence over the Shipping Laws provisions. Subsection (a) lists property exempt from federal levies. Seamen’s wages are not included. Subsection (c) states that:

Notwithstanding any other law of the United States (including section 207 of the Social Security Act), no property or right to property shall be exempt from levy other than the property specifically made exempt by subsection (a).

26 U.S.C. § 6334(c) (emphasis added).

The cross-motions for summary judgment ask this Court to resolve the apparent conflict between these two laws.

At the outset we note that we find only one case where this issue has been addressed directly: United States v. Offshore Logistics International, Inc., 483 F.Supp. 1055 (W.D.La.1979). The Offshore court held that section 6334 of the Internal Revenue Code must prevail over the predecessor to section 11109 of the shipping laws. 483 F.Supp. at 1057. It grounded this conclusion in three considerations: (1) as both statutes are “special” statutes, the rule of statutory construction giving “special” statutes priority over “general” statutes does not apply; (2) the plain language of the introductory phrase in section 6334(c)— “notwithstanding any other laws of the United States” — suggests that the list of exempt property enumerated in subsection (a) was intended to be exhaustive; and (3) Congress in 1966 expanded the list of exempt property in subsection (a), but, again, did not include seamen’s wages.

Sea-Land urges us to reject this holding, contending that the Offshore court found an inconsistency in the law where none exists. Section 6334(a), argues Sea-Land, enumerates the types of property exempt from IRS levies; section 11109, on the other hand, exempts from such levies a category of person — seamen. The exemption of seamen’s wages from the attachment power of the IRS, it is argued, thus does not run afoul of the exhaustive list of property exemptions contained in section 6334.

The argument is attractive, but it is based on an untenable distinction. Both section 11109 and section 6334 describe their subject matter as a mixture of both person and property. Section 11109 concerns seamen and their wages. Similarly, section 6334 exempts various sorts of persons — Medal of Honor winners, railroad annuity recipients, any unemployed persons, to name a few — and their property — pension, annuities, and unemployment benefits. The conflict between the statutes cannot be resolved by an unconvincing logical distinction between person and property.

Plaintiff asserts that the treatment of state withholding taxes under the shipping laws shows that even tax claims cannot touch seamen’s wages. We note, however, that the legislative history of the shipping laws reveals no intention to extend the protection of section 11109 to federal tax assessments.

In 1948, a district court held that defendant state commissioners could not enforce state laws requiring income tax withholding from seamen’s wages because the withholding was an “attachment” prohibited by the shipping laws. American Hawaiian S.S. Co. v. Fisher, 82 F.Supp. 193, 196 (D.Or.1948). A year later, a court in Alaska reached the opposite conclusion. Alaska S.S. Co. v. Mullaney, 84 F.Supp. 561, 567 (D.Alaska 1949), aff'd, 180 F.2d 805 (9th Cir.1950). Subsequently Congress amended Title 46 to clarify that section 601, the predecessor to section 11109, prohibited withholding state income taxes from seamen’s wages.

Describing the need for the amendment, Congress cited the conflict between the federal shipping law and the state tax provisions — a conflict exactly analogous to the conflict before the Court today — which left shipowners “faced with a staggering potential legal and financial liability if they do not withhold as apparently required under state tax law.” S.Rep. No. 433, 86th Cong., 1st Sess. 2, reprinted in 1959 U.S. Code Cong. & Ad.News 2530, 2531. But Congress did not apply the same reasoning to federal income taxes. As the Senate Report noted:

S. 1958 would relieve the seamen and the steamship companies of the accounting burden enumerated above; it would also clarify the legal conflict between State and Federal law.
It is to be noted, however, that this legislation will not relieve the seaman of his liability to pay taxes properly due, will not effect [sic] the Federal withholding taxes, and will not in any way impair the general tax authority of the States.

Id. at 2532 (emphasis added). Thus Congress adopted the view that withholding wages for state taxes was a type of attachment which encroached on the traditional protection afforded seamen’s wages under federal law. But it chose not to prohibit withholding of federal taxes from seamen’s wages.

We believe this distinction is significant for the federal tax levies at issue here. An IRS levy, like the withholding of taxes, is a type of attachment which at first blush appears to conflict with the prohibitions of section 11109. The legislative history of this section, however, provides reason to think that Congress did not mean those prohibitions to extend to federal tax collection.

We conclude that Congress did not intend Title 46, United States Code, Section 11109 to prohibit the execution of federal tax levies against seamen’s wages. Furthermore, we agree with the Offshore court’s conclusion that section 6334(a) of the Internal Revenue Code provides an exclusive list of property exempt from federal tax levies.

The accumulation of these reasons leads the Court to grant the government’s motion for summary judgment on count one.

B. Count Three

Plaintiff maintains that, should the government prevail on count one, Sea-Land is entitled to summary judgment on count three declaring that it will not violate the shipping laws, nor be subject to the double wage penalty under 46 U.S.C. § 10313(g), nor incur any other obligations with respect to the seamen’s wages paid over to the IRS. The government does not oppose this motion, commenting that section 6332(d) of the Internal Revenue Code protects plaintiff against liability. That section provides:

Any person in possession of (or obligated with respect to) property or rights to property subject to levy upon which a levy has been made who, upon demand by the Secretary or his delegate, surrenders such property or rights to property (or discharges such obligation) to the Secretary or his delegate (or who pays a liability under subsection (c)(1)) shall be discharged from any obligation or liability to the delinquent taxpayer with respect to such property or rights to property arising from such surrender or payment____

26 U.S.C. § 6332(d).

We agree that the language of section 6332(d) relieves Sea-Land of further obligations with respect to the wages it pays over to the IRS due to the notices of levy. Further, it follows from our resolution of count one that Sea-Land does not violate Section 11109 of Title 46 by honoring the levies.

Accordingly, plaintiffs motion for summary judgment on count three is granted.

      . The three seamen are not represented on these motions. Defendants Kramlich and Sala have defaulted and defendant Glendenning cannot be found for service.

      . We do not need to address the jurisdictional issue the government raises concerning this Court’s power to enjoin the IRS from levying on the seamen’s wages. Given our disposition of the other issues before us, this issue is moot.

      . Currently, a separate provision of the shipping laws. Section 11108 of Title 46, explicitly prevents states from withholding taxes from seamen’s wages.


author: BECHTLE, District Judge.

text:
    Bernard F. BYGOTT, Jr.; John Mahalis; John O’Toole; Gregory Patton, and Joseph Snyder v. LEASEWAY TRANSPORTATION CORPORATION; Terminal Personnel, Inc.; Signal Delivery Service, Inc., and Highway Truck Drivers and Helpers Local 107.
    Civ. A. No. 84-2229.
    United States District Court, E.D. Pennsylvania.
    Nov. 21, 1985.

      Judith Chomsky, Ira Katz, Philadelphia, Pa., for plaintiffs.
    Gregory J. Miller, Cleveland, Ohio, for Leaseway Transp. Corp.
    Robert House, Cleveland, Ohio, for Terminal Personnel, Inc.
    Thomas Bender, Philadelphia, Pa., for Signal Delivery Service, Inc.
    William J. Einhorn, Philadelphia, Pa., for Highway Truck Drivers and Helpers Local 107.
   MEMORANDUM

BECHTLE, District Judge.

In the above captioned case, on September 23, 1985, the court denied motions for summary judgment by defendants Highway Truck Drivers and Helpers Local 107 (“Local 107” or the “union”), Leaseway Transportation Corporation (“Leaseway”), Signal Delivery Service, Inc. (“Signal”), and Terminal Personnel, Inc. (“TPI”). The court found then that there were genuine issues of fact as to whether Local 107 fairly investigated and considered the possibility that TPI was an alter-ego of Lease-way or Signal, and that Signal and TPI were single employers.

In this memorandum, the court takes the opportunity to explain the reasoning underlying its September 23, 1985, Order. FACTS:

Plaintiffs are members of Local 107 and employees of Signal. Local 107 is the collective bargaining representative for the truck drivers and platform workers employed by Signal and for the truck drivers and platform workers employed by TPI in Philadelphia, Pennsylvania. Signal and TPI are subsidiaries of Leaseway. Eighty percent of Signal’s stock shares is owned by Leaseway and twenty percent is owned by Sears, Roebuck & Company (“Sears”). All of TPI is owned by Leaseway.

At all times relevant to this case, Lease-way, Signal and TPI had several overlapping members on their Boards of Directors. Charles Marcoux, President and Chief Operating Officer of Leaseway, was Chairman of the Boards of Directors of both Signal and TPI. Robert F. Weber was a member of the TPI and Signal Boards, Treasurer of both TPI and Signal, and a Vice-President at Signal. Robert M. Moss (“Moss”) was on the TPI and Signal Boards. Moss was also a member of the Signal Board in 1979 when he directed for Leaseway the formation of TPI.

Leaseway created TPI in 1979. Since that time, TPI has provided only freight handling services for Terminal Freight Handling Company (“Terminal”). Terminal’s only customer has been Sears.

Until December 31, 1982, most of the freight handling at Terminal’s 2nd Street and Erie Avenue, Philadelphia facility (“Terminal’s facility” or the “Terminal facility”) was performed by employees of Joseph Tropiano (“Tropiano”). Signal provided the rest of the contract carrier services to the Terminal facility. For several years, Signal had been attempting to displace Tropiano from Terminal’s facility and to secure the freight handling for itself. In the early fall, 1982, Signal’s, Maurice Ferraro (“Ferraro”), the regional manager and operating director, hoping that a new collective bargain agreement might make Signal more competitive for obtaining the Terminal facility work, contacted Local 107 to negotiate a new collective bargaining agreement between Signal and Local 107. At the several meetings which followed, in the fall, 1982, Ferraro told the persons attending the meetings, members of Signal’s management personnel, the union’s Mike Facchiano (“Facehiano”) and Joseph Murphy (“Murphy”), and Signal’s stewards, that in order to displace Tropiano the union would have to agree to an hourly rate less than that set by the National Master Freight Agreement and to a seniority list separate from the Master Line Haul Seniority List. Ferraro’s proposal was discussed by the union members at a ratification meeting held in the first week of December, 1982. The union members did not consider the proposal to be worthy of a vote, and no vote was taken.

After the meeting, several union members, hoping that Signal could still secure the Terminal facility contract carrier work, urged Local 107 to continue negotiations with Signal. Signal and union officials continued to negotiate and the negotiations concluded with a second proposal. This proposal provided that the hourly wage rate would be higher than the rate proposed in the first proposal, but it would still be lower than the rate authorized by the National Master Freight Agreement. The second proposal also called for a separate seniority list, but unlike under the first proposal, Local 107 members would be permitted to bid annually in and out of positions covered by the seniority list. The second proposal was ratified by the union membership, and Signal and Local 107 entered into a collective bargaining agreement, effective from January 1, 1983 through March 31, 1985.

Meanwhile, Signal displaced Tropiano and secured the contract carrier services at the Terminal facility.

Local 107’s members on Signal’s seniority list, which included plaintiffs John Mahalis (“Mahalis”) and John O’Toole (“O’Toole”), were given the opportunity to bid for positions at Terminal’s facility. The union members who were not on the seniority list were permitted to sign a “preference” slip to work at the Terminal’s facility-

Both Mahalis and O’Toole bid into positions at Terminal’s facility, but both bid out of the jobs prior to May 1, 1983. Plaintiffs Bernard Bygott (“Bygott”), Gregory Patton (“Patton”) and Joseph Snyder (“Snyder”), who were in Signal’s labor pool and not on Signal’s seniority list, chose not to sign a “preference” slip.

Signal employees began handling the freight at Terminal’s facility on January 1, 1983. In April, 1983, Terminal notified Signal that productivity, as measured in pounds per man hour, was unsatisfactorially low and that the workforce’s turnover rate was unacceptably high. Signal, in turn, informed Local 107 of Terminal’s dissatisfaction. The union responded that the bid provision would not be charged. The union did not inform its membership of Terminal’s complaints.

In the summer and fall, 1983, Signal attempted to investigate what could be done to improve its operations at the Terminal facility. Ferraro visited TPI’s operation in Columbus, Ohio in the summer, 1983, and discussed the deficiencies of Signal’s operations with Thomas Douglas (“Douglas”), TPI’s Operations Manager. At TPI, Douglas had the authority to hire, fire, and discipline freight handlers. Before Ferraro returned to Philadelphia, John Caruso (“Caruso”), Douglas’s supervisor, offered to permit Douglas to go to Philadelphia to observe and correct the situation at the Terminal facility. Douglas accepted this offer. He orally resigned from TPI and filed an application for employment at Signal. Signal hired Douglas, and Douglas began work in Philadelphia in September, 1983. The parties dispute whether Douglas became the terminal manager or the head supervisor at the Terminal facility. Defendants contend that Douglas had no authority to hire, fire or discipline freight handlers. Plaintiffs contend that Douglas had de facto authority to hire, fire, and discipline. Douglas received from Signal more benefits than he had received from TPI.

Terminal continued to be dissatisfied with Signal’s performance. In a letter dated November 16, 1983 (the “Four Point letter”), Terminal informed Signal that Terminal intended to exercise its right to terminate the contract, effective December 31, 1983, unless Signal corrected four problems: (1) Signal’s inability to provide a stable work force; (2) Signal’s inability to maintain an acceptable level of productivity measured in pounds per man hour; (3) the turnover of Signal’s experienced workers was unacceptably continuous; and (4) Signal’s top management was not totally dedicated to Terminal’s account.

Subsequently, still in the middle of November, 1983, Terminal informed TPI that Terminal was prepared to terminate Signal’s contract. Consequently, Caruso advised Ferraro that if TPI was awarded the work at Terminal’s facility, TPI would be willing to assume the existing collective bargaining agreement between Signal and Local 107.

In late November, 1983, Signal officials met with union officials on one or two occasions. Ferraro presented the Four Point letter to the union officials. He informed Local 107 that Signal could not totally devote its top management to the Terminal account and that Signal could not correct the situation before the end of 1983. Ferraro told the union that Signal, therefore, would permit Terminal to terminate the contract. He advised the union, however, that Terminal would award the carrier contract to TPI and that all Signal employees would have a one time opportunity to bid into TPI.

On December 1, 1983, Local 107 and Signal signed an agreement which permitted Signal employees a one-time opportunity to bid into TPI, and the union and TPI signed a collective bargaining agreement. The two agreements contained most of the same provisions, but the TPI-Local 107 agreement omitted the Signal-Local 107 agreement’s provisions relating to the seniority list.

Although the bylaws of Local 107 require that all collective bargaining agreements and modifications be submitted to the membership for notification, neither the Signal-Local 107 agreement nor the TPI-Local 107 agreement was submitted for ratification.

Also, on December 1, 1983, notice was posted giving Signal employees a one-time opportunity to bid for eighty positions at TPI as freight handlers. Bidding was to be effectuated by completing and filing TPI employment applications. The notice stated that the right to bid terminated on December 15, 1983.

Fifty-six Signal employees bid into TPI. Each retained the same level and type of benefits which they had received at Signal, but they lost the right to seek reemployment at Signal. The remaining positions were filled by persons not formerly associated with Signal. The personal records of the fifty-six persons who bid into TPI were not transferred from Signal to TPI.

Plaintiffs were given the opportunity to bid into TPI and chose not to do so.

TPI hired Douglas and five supervisors from Signal’s Terminal facility operation. Douglas acquired the authority to hire, fire, and discipline employees, and the supervisors retained at TPI the same authority which they had had at Signal. Douglas and the supervisors received the same benefits at TPI as they had received at Signal.

On January 1, 1984, TPI began handling freight at Terminal’s facility, under an agreement between Terminal and TPI which was virtually the same as the one under which Terminal and Signal operated. TPI performed the same services as Signal had performed, using essentially the same equipment, management personnel, and labor personnel as Signal had used. Also, TPI paid the same level and type of wages and benefits as Signal had paid.

On January 5, 1984, Thomas Lowry (“Lowry”), a Signal driver and shop steward, filed a grievance with Signal’s Robert Monahan and Local 107’s Thomas Ryan (“Ryan”). Lowry complained that Signal had violated the Change of Operations and Seniority provisions of the Signal-Local 107 collective bargaining agreement. One hundred nine Signal employees countersigned the grievance. Plaintiffs Bygott and Snyder signed the grievance, but Mahalis, O’Toole and Patton did not.

Ryan conducted the investigation of the grievance on behalf of Local 107. Ryan read the grievance and questioned Lowry about its background. Ryan testified at his deposition that he also obtained Dun and Bradstreet reports on Signal and TPI (the “D & B reports”) of the business and financial operations of Leaseway, Signal, and TPI. Ryan then referred the grievance to the union’s legal counsel (“counsel”) for further investigation.

On January 17, 1983, counsel met with Local 107’s stewards over breakfast to discuss a variety of matters, including the background of the complaint (the “breakfast meeting”). At that meeting or immediately thereafter, Lowry explained to counsel that Signal’s operation at the Terminal facility was similar in many respects to TPI’s present operation at that facility.

Ryan and counsel drove to the Terminal facility in a snowstorm, but neither Ryan nor counsel got out of their cars or spoke to anyone else involved in the operation of Terminal’s facility in connection with the Lowry grievance after the breakfast meeting. Also, neither Ryan nor counsel took a walking on-site inspection of the Terminal facility.

At the conclusion of its investigation, on January 23, 1983, counsel sent Local 107 a three-page letter (the “opinion letter”) in which counsel expressed his opinion that the grievance lacked merit and recommended that the union not take the grievance to arbitration. In the opinion letter, counsel dismissed the viability of single employer or alter-ego theories against Signal, TPI and Leaseway as follows:

“While in this case Leaseway is the parent of Signal and Terminal Personnel, the two subsidiaries are — according to the best information currently available — two separate and distinct companies with separate lines of supervision, policy and personnel. Accordingly, the termination of a contract for the provision of services within those companies is not different than if a customer had terminated a contract with one company and placed it with an entirely different company____”

The union conducted no further factual or legal investigation nor did it process the grievance to arbitration nor did it advance the grievance in any way.

Shortly thereafter, plaintiffs filed this lawsuit against the union for breach of its duty of fair representation and against Leaseway, Signal, and TPI for breach of the collective bargaining agreement. At the conclusion of discovery, defendants filed the present motions.

Defendants argue that Local 107 fairly, and not arbitrarily or perfunctorily, investigated and considered the factual matter underlying the grievance. Defendants do not challenge in their motion plaintiffs’ assertion that TPI is an alter ego of Lease-way and Signal or that TPI and Signal are single employers.

DISCUSSION:

Defendants’ motion for summary judgment will be granted if the court determines that there are no genuine issues of material fact remaining for trial and that the defendants are entitled to judgment as a matter of law. Ely v. Hall’s Motor Transit Company, 590 F.2d 62, 66 (3d Cir.1978); Fed.R.Civ.P. 56(c). In determining whether genuine issues of material facts exist for trial, the court will review the pleadings, depositions, answers to interrogatories, admissions and affidavits. Fed.R. Civ.P. 56(c). In deciding whether defendants are entitled to judgment as a matter of law, the court will resolve all inferences and questions of credibility against the defendants. Smith v. Pittsburgh Gage and Supply Company, 464 F.2d 870, 874 (3d Cir.1972).

A labor organization, such as Local 107, must represent its members fairly throughout the duration of the grievance procedure as outlined in the collective bargaining agreement. Dorn v. Meyers Parking System, 395 F.Supp. 779 (E.D.Pa.1975) (Bechtle, J.); 29 U.S.C. § 185. The union may not process a grievance in a manner which is “arbitrary, discriminatory, or in bad faith.” Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967); See Electrical Workers v. Foust, 442 U.S. 42, 47, 99 S.Ct. 2121, 2125, 60 L.Ed.2d 698 (1970); Peterson v. Lehigh Valley District Counsel, 676 F.2d 81 (3d Cir.1982). In order to comply with this duty to fairly represent its members, the union must research and consider the factual and legal principles underlying the grievance in a manner which is not arbitrary, discriminatory, or in bad faith. Findley v. Jones Motor Freight, 639 F.2d 953, 959 (3d Cir.1981); Ely v. Hall’s Motor Transit Company, 590 F.2d at 66.

Title 29 U.S.C. § 185, imposes upon labor organizations the duty to represent its members fairly. Union members have only a limited right of action against the union, however. That is, the courts are a proper forum to prosecute the grievance of a member of a labor organization only where the union acted in an arbitrary, discriminatory, or bad faith manner. Where the union’s conduct was merely negligent, mistaken or poor judgment, the courts will not interfere with the grievance procedure of the collective bargaining agreement. Riley v. Carriers Local No. 380, 668 F.2d 224 (3d Cir.1981).

In the present case, defendants are entitled to judgment as a matter of law, if, after resolving all inferences and questions against the defendants, the court finds that the facts undisputably establish that the defendants fairly investigated and considered all the legal and factual matters pertaining to the grievance. Applying this standard, the court believes, that as the union’s investigation of the grievance progressed, it must have been apparent that whether the grievance had merit or not turned upon whether TPI was an alter-ego of Leaseway or Signal; or upon whether TPI and Signal were single employers.

The opinion letter expressly advised the union that the Lowry grievance was without merit only if Leaseway, Signal, and TPI were separate and different companies. In addition, Lowry specifically stated to Ryan and counsel at or after the breakfast meeting that the thrust of his grievance was that TPI’s operation was only a continuation of the Signal operation, under different labels. Accordingly, Local 107 had the duty to investigate and consider fairly whether TPI was an alter ego of Leaseway or Signal and whether Signal and TPI were single employers.

The alter-ego doctrine is intended to prohibit an employer from avoiding its obligations under the labor laws by merely making a technical change in the structure or identity of the employing entity without making a meaningful change in ownership or management. Howard Johnson Co. v. Hotel Employees, 417 U.S. 249, 259 n. 5, 94 S.Ct. 2236, 2242 n. 5, 41 L.Ed.2d 46 (1974). Under the doctrine, the fact-finder must consider whether the first and second employer have a substantial identity of ownership, management, business purpose, operations, equipment, customers, and supervision. N.L.R.B. v. Al Bryant, Inc., 711 F.2d 543, 553 (3d Cir.1983). If the fact-finder, after considering these factors, concludes that, although the two entities are actually distinct, the second employer is merely the first employer in disguise, technically and not meaningfully different, the court will treat the two entities as if they were one employer.

Under the single employer doctrine, if the fact-finder, after considering all the circumstances, determines that the two employers are in truth one enterprise, merely different divisions or departments which do not interact at arm’s length, the original employer will not be permitted to avoid its obligations under the collective bargaining agreement. N.L.R.B. v. Al Bryant, 711 F.2d 543 (3d Cir.1983); N.L.R.B. v. Browning-Ferris Industries, 691 F.2d 1117 (3d Cir.1982). In order to make this determination, the fact-finder focuses on whether the companies’ operations are functionally integrated, whether labor relations are centrally controlled, whether the companies have common management, and whether the companies have common ownership. Id. If the fact-finder, after considering these factors, determines that the employers are single employers, the employers will be barred from avoiding the effects of the labor laws.

In the present case, the court denied defendants’ motions for summary judgment, on September 23, 1985, because it believed that whether the union fairly investigated and fairly considered whether TPI was an alter-ego of Leaseway or Signal and whether TPI and Signal are single employers is a genuine issue of a material fact that must be decided by a jury. Ryan, who investigated the Lowry grievance on behalf of the union, did not recall at his deposition, a year and a half after the investigation, to whom he talked in connection with the investigation, the number or dates of meetings he attended, the persons present at those meetings, or the matters discussed at the meetings. Ryan also was not aware that the persons who directed and managed TPI’s operation were the same persons who directed and managed Signal’s operation. Although Ryan has testified that he ordered the D & B reports on Signal and TPI in the course of the investigation, plaintiffs have set forth evidence which casts doubt upon the credibility of this testimony. Defendants’ answers to plaintiffs’ interrogatories, requesting the specifics of Ryan’s investigation, did not include the assertion that D & B reports were ordered by any union officials. In fact, Ryan’s testimony that he ordered D & B reports did not emerge until the second day of Ryan’s deposition, a month after the first day of Ryan’s deposition. In addition, the opinion letter did not mention that the attorneys, making the recommendation to the union not to process the Lowry grievance, knew of or relied on the D & B reports.

Moreover, there is a genuine dispute as to whether Local 107 conducted an investigation or inspection of the Terminal facility which would have enabled the union to observe TPI’s equipment, freight handling procedures, operations, management, and labor personnel to possibly learn if they were the same as that of Signal. Such a course may also have aided in determining if TPI’s labor relations policy was similar to that of Signal’s or that the source of TPI’s labor relations policy was the same as the source of Signal’s policy. Union officials and agents merely drove through the facility. The court believes that a reasonable jury could find that Local 107 perfunctorily or arbitrarily undertook its investigation duty in violation of its obligation to provide fair representation.

Furthermore, the evidence presented as a whole does not conclusively show that the union fairly considered whether the TPI and Signal operations at the Terminal facility had the same management and labor personnel, used the same equipment, practiced the same freight handling procedures and operations, and employed the same labor relations policy. The only evidence offered to show that the Union considered the similarities between Signal and TPI, was the comment in the opinion letter that, according to the best information currently available, TPI and Signal had different lines of supervision, policy, and personnel. Drawing all inferences in favor of the plaintiffs, the court believes that a reasonable jury could find that the union and its agents acted arbitrarily in not considering the evidence that Signal and TPI had the same management and labor personnel, the same operational and labor relations procedures, and the same equipment.

For these reasons, the court found that a genuine issue of whether the union fairly investigated and considered the Lowry grievance remained disputed and that a trial was necessary.

One final issue, raised by defendants, must be addressed. Defendants argue that Mahalis, O’Toole, and Patton failed to satisfy the exhaustion requirement because they did not countersign the Lowry grievance or file a grievance of their own. The court believes that the law is clear on this point. Where a union refuses to take a grievance of some of its members to arbitration, and it would be futile for other members to file a grievance on identical grounds, the other members should not be denied access to the courts for their failure to exhaust their contractual remedies on that grievance. Republic Steel Corp. v. Maddox, 379 U.S. 650, 85 S.Ct. 614, 13 L.Ed.2d 580 (1965); Donovan v. International Brotherhood of Electrical Workers, 728 F.2d 610 (3d Cir.1984); Woodward Iron Company v. Ware, 261 F.2d 138 (5th Cir.1958).

CONCLUSION:

For these reasons, the court, on September 23, 1985, denied defendants’ motions for summary judgment in the above-captioned case.

      . Plaintiffs are Bernard Bygott, John Mahalis, Gregory Patton, John O’Toole, and Joseph Snyder.

      . In 1983, Signal’s Board consisted of Robert A. Burgin, Steven G. Goldfarb, Robert K. Healey, Richard C. Knapp, David A. Mackie, Charles R. Marcoux, Gerald C. McDonough, Charles F. Moran, Robert M. Moss, Stephen C. Nieman, Francis J. O’Neill, William J. O’Neill, George Tidmarsh and Leonard P. Wander. TPI’s Board for the same period was comprised by Charles R. Marcoux, Robert M. Moss, and Robert F. Weber. The court notes that each member of TPI's three-member Board were also members of Signal’s fourteen member board.

      . The term contract carrier services is used to designate the service of providing freight handlers to trucking terminals.

      . The record does not reflect the dates of these events. The Court presumes that they occurred in December, 1982. Signal had been a party to the National Master Freight Agreement and the Philadelphia and Vicinity Local Cartage Supplemental Agreement since 1970.

      . The letter was addressed to Leonard P. Wander ("Wander”) and apparently sent by William E. Moss. Wander was President and Board Member of Signal. William E. Moss was Terminal’s President. Coincidentally, on November 16, 1983, the same day on which the letter was dated, Signal’s Board of Directors had met, and that meeting was attended by Wander, William E. Moss and Robert Moss. Robert Moss was TPI’s President.

      . The parties dispute whether there were one or two meetings. They also dispute the date of those meetings and the identities of the persons present at the meetings. The court believes that Ferraro and Robert Monahan, Signal’s regional manager, was present on behalf of Signal. The record indicates, however, that Ferraro also represented TPI at the meeting. The court believes also that Local 107's business agents, Facchiano and Murphy, and several stewards appeared on behalf of the union.

      . Local 107 and TPI officials apparently did not meet to negotiate this collective bargaining agreement between the meeting in late November when Ferraro stated that Signal would not resolve the situation at Terminal’s facility and December 1, 1983 when Local 107 and TPI signed the collective bargaining agreement.

      . The Signal-Local 107 collective bargaining agreement had permitted 25% of Signal’s work force at the Terminal facility to rebid jobs annually. In accordance with this arrangement between January 1, 1983 and April 29, 1983, seventeen workers had bid out of the Terminal facility operation. As early as April, 1983, Terminal believed that the rebidding provision handicapped the Terminal facility operation. An intercompany memorandum of Terminal, dated May 6, 1983, signed C.H. Feeney addressed to WJ. Arigi, stated that labor productivity was low because of the rebidding provision. Under the new TPI-Terminal collective bargaining agreement, productivity was not hindered by the rebidding provision.

      . The parties dispute the number of supervisors employed by Signal at Terminal’s facility. There may have been as few as six supervisors and as many as nine supervisors. The five supervisors who were hired by TPI were Joseph Sinnott, Dennis Gaitley, William Mychko, Jessi Yanni and Micahel Rossano.

      . The Third Circuit has implied that a union, by investigating merely collateral issues and not investigating matters relating to the grievance, has not complied with its duty of fair representation. See Findley, 639 F.2d at 959. In this case, the jury could find that the union’s investigation did not adequately look into certain important matters or did not look into other important matters at all. See Ely, 590 F.2d at 66 n. 10.

      . On November 6, 1985, before this opinion was published, a jury rendered a verdict in this case. The jury, first, found that defendant Local 107 breached its duty of fair representation. Second, the jury found that Signal and TPI were not alter egos or single employers. Leaseway was dismissed as a defendant by the court at the close of plaintiffs case under Rule 50 of the Federal Rules of Civil Procedure.
      In plaintiffs claim against the Union, there was sufficient evidence on the record for a reasonable jury to find that the Union had determined prior to its investigation that the Lowry grievance was without merit. In addition, there was sufficient evidence for a reasonable jury to find that even if the Union’s determination that the grievance was without merit did not come until after its investigation, the Union perfunctorily and arbitrarily failed to investigate the grievance. Local 107 did not research to learn and compare the common features of Signal and TPI even though the Union’s counsel had expressly advised the union that certain particular factors must be considered. The Union’s investigators and counsel drove to the Terminal facility in January, 1983, in a snowstorm, but they did not drive or walk into or through the facility. Neither Local 107 investigators or counsel met or talked with anyone who worked at the Terminal facility after January 1, 1983. In brief, Local 107 did not take even the most minimal investigatory steps.


author: EDWARD C. REED, Jr., District Judge.

text:
    Gary W. HORNING, Plaintiff, v. COUNTY OF WASHOE, a political subdivision of the State of Nevada; City of Reno, a municipal corporation; Paul C. Leo, James Dickinson, Donald Dalton, Cecil Pearson and Alicia Reidel, Defendants.
    No. CV-R-83-201-ECR.
    United States District Court, D. Nevada.
    Nov. 21, 1985.

      Gary C. Backus, Reno, Nev., for plaintiff.
    Jack Angaran of Shamberger, George-son, McQuaid & Thompson, Reno, Nev., for Alicia Reidel and City of Reno.
    Edward Dannan, Asst. Dist. Atty., and Erickson, Thorpe, Swainston & Cobb, Ltd., Reno, Nev., for defendants Leo, Dickinson, Dalton, Pearson and Washoe County.
   MEMORANDUM DECISION AND ORDER

EDWARD C. REED, Jr., District Judge.

The Court directed a verdict in favor of defendant County of Washoe on the plaintiffs federal civil rights claims. The grounds for the ruling were that no custom, policy or practice of the County had been shown as to the 42 U.S.C. § 1983 claims and that no evidence of any invidious animus had been presented as to the 42 U.S.C. § 1985 claims. The defendants’ motion for a directed verdict was denied as to pendent state claims alleging false arrest, false imprisonment and use of unnecessary force, so that those claims were submitted to the jury.

The jury returned unanimous verdicts in favor of all four individual defendants, who were officers and employees of the County’s Sheriff Department. However, the jury also returned a unanimous verdict in favor of the plaintiff against the defendant County, and assessed damages in the sum of $30,000.

No evidence was presented during trial that would support, a verdict against the County based on its own independent tortious conduct. In denying the County’s motion for a directed verdict dismissing the pendent state claims prior to the case being submitted to the jury, however, the Court had pointed out that the four individual defendants had been acting within the scope of their employment; therefore, the jury could reach a verdict against the County based on respondeat superior if it found that any of the individual defendants were liable to the plaintiff.

The issue of the apparent inconsistency of the verdicts was discussed, outside the presence of the jury, prior to the discharge of the jurors. The Court offered to entertain a motion to resubmit the case to the jury for further consideration. The defendants’ counsel stated that he did not wish to make such a motion. Counsel for the plaintiff indicated that he did not feel that inquiry could be made of the jurors as to the reasoning behind their verdicts. The Court advised him that he would be expected, in post-trial papers, to present a theory whereunder the jury could have found independent tortious conduct by the County, in light of the jury’s finding of no liability on the parts of the individual defendants. He has attempted to accomplish this by filing a motion to amend the amended complaint to conform to the evidence. His theory is that the County was negligent in training the four individual defendants (although the § 1983 claim against the County was dismissed because no practice concerning training had been shown). The plaintiff’s injuries, it is contended, give rise to an inference that the handcuffs were improperly applied.

Washoe County Sheriff’s Deputy Don F. Dalton, Jr., testified during the trial that he had given classes in handcuffing to other deputies. He taught that a finger should be put on the wrist as the handcuffs were tightened, so that they would not be adjusted too tightly. Witness Dalton had gone to the scene of the plaintiffs arrest in response to a radioed call for assistance. The witness testified that twice he had run his finger under the plaintiffs handcuffs, and found them to be properly adjusted. He said that he had seen no wrist bruises, but if any bruises were incurred by the plaintiff they would have been self-inflicted during his struggles with the arresting officer. Mr. Dalton also testified that pulling up an arrestee by the handcuffs would be unprofessional, although it would not likely cause injury. Such conduct was not sanctioned by the Sheriffs Department, he said.

Mr. William Savage was called by the plaintiff as a rebuttal witness. After giving his law enforcement and investigative work credentials, he testified that clearance for a finger under handcuffs could be too loose, depending on the size of the finger. If the arrestee was sweating or spit on his hands, he might be able to slip off the handcuffs. Mr. Savage further stated that he has seen suspects pulled up by their handcuff chains.

The plaintiff also has timely filed an Fed. R.Civ.P. 59(e) motion to amend the judgment so as to assess the $30,000 damages against the individual defendants, the same as against the County. In the alternative, he moves for a new trial as to all issues, pursuant to Fed.R.Civ.P. 59(a).

Defendant Washoe County has filed its own timely motion to alter or amend the judgment, under Rule 59(e), so as to reflect no liability on the part of the County. Its position is that, as a matter of law, the verdict against the County cannot stand when the jury has exonerated the agents through which it acted. The concluding sentence of the County’s reply points and authorities sets forth clearly the relief it seeks: “Therefore, the COUNTY OF WASHOE respectfully requests that this Court correct the inconsistency by vacating the judgment against the COUNTY and entering a judgment in favor of WASHOE COUNTY and against the Plaintiff, GARY HORNING.”

There is authority to support defendant Washoe County’s position that a Rule 59(e) motion to alter or amend the judgment encompasses the situation where the movant asks not only that the existing judgment be vacated but also, as here, that a new judgment in favor of the moving party be entered. Greengrass Enterprises, Inc. v. Rotfeld, 83 F.R.D. 159, 161 (E.D.Pa.1979); Steward v. Atlantic Refining Co., 235 F.2d 570, 572 (3rd Cir.1956); Smith v. Hudson, 600 F.2d 60, 62 (6th Cir.1979). The denial of the County’s motion for a directed verdict as to the pendent state claims was conditioned on the plaintiff being able to present a theory that would support the verdict against the County in light of the jury verdicts finding that the individual County employees were not liable to the plaintiff. This he has not succeeded in doing. There was not sufficient evidence presented to go to the jury as to any negligence on the part of the County in training its employees. Nor was there sufficient evidence that such training was the proximate cause of the plaintiff’s injuries. In the procedural posture of this case, the Court feels that the County’s motion to alter or amend the judgment is more appropriately treated as a Fed.R. Civ.P. 50(b) motion for judgment notwithstanding the verdict (judgment n.o.v.). A technically perfect formal motion, although desirable, is not absolutely essential. Shaw v. Hines Lumber Co., 249 F.2d 434, 439 (7th Cir.1957); First Safe Deposit Nat’l Bank v. Western Union Tel. Co., 337 F.2d 743, 746 (1st Cir.1964); Bachtel v. Mammoth Bulk Carriers, Ltd., 605 F.2d 438, 441-42 (9th Cir.1979), jdgmt. vac. on oth. gds. 451 U.S. 978, 101 S.Ct. 2301, 68 L.Ed.2d 835 (1981); West v. Shizuko Tan, 208 F.Supp. 708, n. 1 (D.Haw.1962). The County did make a timely motion for a directed verdict at the close of the evidence. It also made a timely motion to vacate the judgment against it and enter one in its favor against the plaintiff. Therefore, the conditions precedent to a Rule 50(b) motion have been met. The Court will resolve the instant motion in accordance with the sentence of the Rule that reads: “If a verdict was returned the court may allow the judgment to stand or may reopen the judgment and either order a new trial or direct the entry of judgment as if the requested verdict had been directed.”

Where a plaintiff's claim for relief is predicated on wrongful acts of employees which are attributable to their employer under respondeat superior, and all the employees are exonerated of blame by the trier of fact, the employer may not be held liable. Vaughn v. Texaco, Inc., 631 P.2d 1334, 1337 (Okla.App.1981); Seaboard Air Line Railroad Co. v. Coastal Distributing Co., 273 F.Supp. 340, 343 (D.S.C.1967); Thoma v. Gasper, 89 Nev. 170, 509 P.2d 967, 968 (1973). This being the exact situation in the instant action, the jury verdicts and the judgment based thereon cannot stand.

In a case where the verdict was in favor of the plaintiff, but in the court’s judgment no case has been proved by the plaintiff, the court may set the judgment aside and order judgment in favor of the defendant pursuant to Rule 50. Guerrero v. American-Hawaiian Steamship Co., 222 F.2d 238, 244 (9th Cir.1955). In ruling on a motion for a directed verdict or for a judgment n.o.v., the court must view the evidence and all reasonable inferences that may be drawn therefrom in the light most favorable to the plaintiff. Shaw v. Hines Lumber Co., at 249 F.2d 439. It is essential that the issue of the sufficiency of the evidence have been directly before the court. Bachtel v. Mammoth Bulk Carriers, Ltd., at 605 F.2d 441-42. The memoranda of points and authorities in support of and in opposition to the instant motions argue in considerable detail the sufficiency of the evidence to support the verdict and judgment against the County. Also, it is imperative that the plaintiff has been afforded a meaningful opportunity to urge the court to order a new trial, rather than to award a judgment n.o.v. Shaw at 249 F.2d 438. The plaintiff’s points and authorities have argued vigorously the impropriety of awarding judgment to the County in this case, in that the law allows only the granting of a new trial. As discussed above, the Federal Rules of Civil Procedure, and especially Rule 50(b), do not so limit the Court’s options.

It was the plaintiff’s burden at trial to persuade the jurors by a preponderance of the evidence that at least one of the County’s employees acted unlawfully toward the plaintiff. The jury returned verdicts finding in favor of all four of the employees who were named as defendants. Nor was there any evidence that any unnamed County employee had wronged the plaintiff. There was no evidence of any independent tortious conduct by the County; the best the plaintiff could do was to speculate that the plaintiff’s injuries may have resulted from improper handcuffing. The verdicts in favor of the individual defendants necessarily imply that the jury found to the contrary. Because the County is entitled to a judgment n.o.v., there is no need to discuss the plaintiff’s motions to amend the amended complaint, and to alter or amend the judgment or, in the alternative, to order a new trial.

IT IS, THEREFORE, HEREBY ORDERED that the Judgment entered August 21, 1985, as amended September 11, 1985, in favor of the plaintiff and against defendant County of Washoe be vacated and set aside. The Judgment in favor of defendants James Dickinson, Donald Dalton, Paul C. Leo and Cecil Pearson shall not be disturbed by reason of this Order.

IT IS FURTHER ORDERED that Judgment be entered in favor of defendant County of Washoe and against the plaintiff.

IT IS FURTHER ORDERED that in the event the Judgment for defendant County of Washoe to be entered herein is reversed on appeal, the alternative motion of the plaintiff for a new trial be denied because his failure to take advantage of the opportunity to resubmit the case to the jury before the jurors were discharged constituted a waiver of his right to complain of inconsistent verdicts.

IT IS FURTHER ORDERED that the plaintiff's motion to alter or amend the Judgment be denied.

IT IS FURTHER ORDERED that the plaintiff’s motion to amend the amended complaint to conform to the evidence be denied.


author: HADEN, Chief Judge.

text:
    Ernest EMSWILER, Plaintiff, v. Ira McCOY, Wayne Lumber Company, Gary Osburn and the State of West Virginia, Defendants.
    Civ. A. No. 3:85-0462.
    United States District Court, S.D. West Virginia, Huntington Division.
    Nov. 21, 1985.

      Michael C. Allen, Allen & Bibb, Charleston, W.Va., for plaintiff.
    George D. Beter, Huntington, W.Va., for McCoy.
    R. Carter Elkins & R.G. McNeer, Campbell, Woods, Bagley, Emerson, McNeer & Herndon, Huntington, W.Va., for Osburn and State of W.Va.
   MEMORANDUM OPINION AND ORDER

HADEN, Chief Judge.

Pending are the motions for summary judgment filed on behalf of each of the Defendants. The Plaintiff is the owner and operator of Kanawha Landscaping Service, which has been engaged in specialty contracting in West Virginia since 1970. In September, 1983, the Plaintiff was completing a landscaping at Beechfork Lake Campground. The Plaintiff went to Wayne Lumber Company, where he had done business before, to order mulch. Emswiler told a clerk that the entire sum owing for the mulch, which was ordered by the truckload, would be paid for at the conclusion of the project. The Plaintiff did not deal directly with Ira McCoy. The clerk said nothing about cash on delivery. Emswiler’s employees did not report to Emswiler any demand for payment upon delivery of the mulch.

Ira McCoy, the owner of Wayne Lumber Company, as sole proprietor, states that he sold mulch to Emswiler in September, 1983, and that Emswiler agreed to pay him for five loads of mulch — with payment in full upon the fifth load. Emswiler was not present at the delivery of the fifth load and thereafter left the area where the work was being done. McCoy states he sent three statements requesting payments from September, 1983, through April, 1984 —none of which were paid. McCoy states he resorted to filing a criminal complaint under W.Va.Code, § 61-3-24 because he believed a crime had been committed.

In October or November, 1983, Emswiler was paid by the West Virginia Department of Natural Resources for the Beechfork project and he thereafter directed payment on all outstanding bills. Emswiler does not recall receiving a bill or invoice, and he is not able to find one on file. Emswiler states that he never refused to pay, he simply forgot and was not reminded by a bill, phone call or any other attempt to collect until arrested and charged for a felony violation of W.Va.Code, § 61-3-24, charging taking of property under false pretenses.

McCoy holds no public office nor does he have any other association with the State of West Virginia. He states he acted alone and denies any conspiracy with a public official. Also, Defendant Magistrate Gary Osburn and the State of West Virginia offer as exhibits to the complaint the summons and warrant signed by McCoy and Osburn, and the warrant for arrest signed by Osburn. From this transaction, Emswiler files this complaint claiming violation of 42 U.S.C. § 1983 against McCoy, Osburn and the State of West Virginia.

42 U.S.C. § 1983 provides in pertinent part:

“Every person who under color of any statute, ordinance, regulation, custom or useage, of any state or territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in the action at law, suit in equity, or other proper proceeding for redress.”

The claim against the State of West Virginia raises three problems. First, a state is not a “person” under Section 1983. Monell v. New York City Department of Social Services, 436 U.S. 658, 690 n. 54, 98 S.Ct. 2018, 2035, 56 L.Ed.2d 611 (1978); Ligon v. State of Maryland, 448 F.Supp. 935, 939 (D.Md.1977). Second, the Eleventh Amendment bars an action for damages against a state. Edelman v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974); Moreno v. University of Maryland, 645 F.2d 217, 220 (4th Cir.1981). And third, the state cannot be made liable under a theory of respondeat superior. Monell, 436 U.S. at 691, 98 S.Ct. at 2036.

With respect to Defendant Osburn, the issue of judicial immunity is raised. Judges are absolutely immune from damage liability for judicial acts unless done in clear absence of all jurisdiction. Stump v. Sparkman, 435 U.S. 349, 98 S.Ct. 1099, 55 L.Ed.2d 331 (1978); Pierson v. Ray, 386 U.S. 547, 87 S.Ct. 1213, 18 L.Ed.2d 288 (1967); Cogar v. Strickler, 570 F.Supp. 34 (S.D.W.Va.1983).

With respect to Defendant McCoy, the issue of whether McCoy is a person acting under color of state law is raised. A private person who institutes proceedings against another does not thereby become a state actor. Monroe v. Pape, 365 U.S. 167, 185, 81 S.Ct. 473, 483, 5 L.Ed.2d 492 (1961); Wolfe by Hedges v. Bias, 601 F.Supp. 426, 428 (S.D.W.Va.1984). State action is present if the conduct allegedly causing the deprivation of federal rights may be fairly attributable to the state. Lugar v. Edmondson Oil, 457 U.S. 922, 937, 102 S.Ct. 2744, 2753-54, 73 L.Ed.2d 482 (1982).

In the instant action, the State of West Virginia is not proceeded against because of any policy or custom it possesses, but only because the state employs Magistrate Osburn. Emswiler’s argument that “a state can act only through its agents” fails to recognize the clear ruling of Monell. Emswiler claims only money damages and is, therefore, further barred by the Eleventh Amendment. Lastly, Emswiler fails to confront the problem of West Virginia’s status as a sovereign and not as a person under Section 1983. As Emswiler’s complaint fails to state a cause of action against the State of West Virginia, and because upon the undisputed facts it appears that the State of West Virginia is entitled to judgment as a matter of law, the State of West Virginia’s motion for summary judgment is granted.

Osburn is a magistrate and is, therefore, entitled to judicial immunity. Logan v. Shealy, 660 F.2d 1007, 1013 (4th Cir.1981); Timmerman v. Brown, 528 F.2d 811, 812 (4th Cir.1975); Hearn v. Hudson, 549 F.Supp. 949, 961 (W.D.Va.1982). No question has been raised as to Osburn’s constitutional or statutory authority as a magistrate to issue warrants for arrest or to certify that a complaint for summons was filed under oath. Cf. Adkins v. Adkins, 459 F.Supp. 406 (S.D.W.Va.1978). The only claim against Osburn is for money damages and, therefore, Osburn is wholly immune to this action under the undisputed facts and Osburn’s motion for summary judgment is granted.

Emswiler mentions conspiracy once in his complaint without suggesting factually the element of agreement. Further, the complaint states only that the Defendants “acted together.” Emswiler encountered the affidavit of McCoy in preparing his response to McCoy’s motion for summary judgment, and Emswiler asked for an opportunity to file a counter-affidavit (Reply Memorandum of Law in Opposition to Defendant Ira McCoy’s Motion to Dismiss filed July 5,1985 at p. 4). Despite Emswiler’s opportunity to contradict McCoy’s statement that he had not agreed with anyone and he did not have an illegal purpose, Emswiler does not present any factual refutation of this claim.

Emswiler does file an affidavit which states that he does not remember being billed three times for the goods he purchased, and he further states that he forgot that he owed Wayne Lumber Company sums of money for the mulch for several months. This does not place in issue the fact that McCoy had an unpaid debt, a debtor which had moved away from the job site where McCoy had his only dealings with Emswiler besides McCoy’s own store, and a debtor that had disregarded three invoices. McCoy, therefore, had reason to believe that he had been deprived of his goods by a false promise to pay.

Emswiler argues that Voytko v. Ramada Inn of Atlantic City, 445 F.Supp. 315 (D.N.J.1978) supports his theory that McCoy acted under color of state law and that this action states a claim under 42 U.S.C. § 1983. Voytko is distinguishable from this case in at least three respects. First, the district court addressed the issue as follows: “The narrow question now considered is whether the action by a hotel and its agents in filing and prosecuting a criminal complaint under a defrauding on innkeeper statute, when the hotel’s retained attorney acts as prosecutor, amounts to state action.” 445 F.Supp. at 321. McCoy here only filled out the complaint alleging criminal activity. Emswiler’s complaint itself does not claim that McCoy took any action further than this.

Second, Voytko concerned a debt which was disputed. Emswiler admits that he owed the debt sought to be collected by McCoy. Third, Voytko states that criminal process had issued without probable cause; in this action, the undisputed facts show that probable cause existed.

These matters are in addition to the fact that McCoy did not retain a private attorney to act as prosecutor in the matter, and that he had no role in prosecuting the action beyond the filing of the criminal complaint.

The Court further notes that while Wayne Lumber Company is nominally charged as a Defendant, it is not cited with independent wrongful conduct. Wayne Lumber Company occupies the same position of McCoy and is, therefore, properly entitled to summary judgment on the same grounds as McCoy’s summary judgment. Additionally, Wayne Lumber Company could only conceivably be charged here under the same defective respondeat superi- or theory alleged against the State of West Virginia and for this reason is also entitled to judgment as a matter of law.

Accordingly, upon the undisputed facts, the Court determines that each of the Defendants is entitled to judgment as a matter of law on Count One of the Plaintiff’s complaint alleging violation of Section 1983.

Count Two of the Plaintiff’s complaint alleges a cause of action for malicious prosecution. As these parties are not diverse, and as the Court has determined that there is no federal question involved in this action, the Plaintiff’s second cause of action will be dismissed without prejudice for lack of subject matter jurisdiction.

The Court determines that there exists the remaining issue of whether the Plaintiff’s complaint is frivolous under 42 U.S.C. § 1988 and without basis in fact or law under Rule II, Federal Rules of Civil Procedure, with regard to the Plaintiff’s claims against Defendants Osburn and the State of West Virginia. Accordingly, the Court would direct that the Plaintiff Emswiler file a memorandum and/or documents with this Court not later than twenty-one days after the date this Order is entered to demonstrate why fees should not be awarded against the Plaintiff in this action on behalf of Defendants Osburn and the State of West Virginia. The Court may deem the issue ripe for ruling upon the passing of twenty-one days, or the Court may request further briefing from counsel for the Defendants on this issue.

The Clerk is directed to send a certified copy of this Memorandum Opinion and Order to counsel of record.


author: BARKER, District Judge.

text:
    James WAGNER, as Administrator of the Estate of Douglas K. Jones, Deceased, Plaintiff, v. FREIGHTLINER CORPORATION, Defendant. Richard GOUDY, as Executor of the Estate of Patricia E. Beaver, Deceased, Plaintiff, v. FREIGHTLINER CORPORATION, Defendant.
    Nos. IP 83-1673-C, IP 83-1674-C.
    United States District Court, S.D. Indiana, Indianapolis Division.
    Nov. 21, 1985.
    Phillip J. O’Shea, Jr., Eugene C. Tenney Law Offices, Buffalo, N.Y., John T. Hume, III, Smith & Jones, Indianapolis, Ind., for plaintiff.
    James K. Wheeler, Coots, Henke & Wheeler, Carmel, Ind., for defendant.
   ENTRY

BARKER, District Judge.

This matter comes before the Court on defendant Freightliner Corporation’s (“Freightliner”) October 1, 1985 Motion for Determination of Choice of Law. Plaintiffs filed their memorandum of law and supplemental brief in opposition to this motion on October 25, 1985. This matter became fully briefed with the filing of Freightliner’s reply brief on November 14, 1985.

The cause of action in the present case arises out of an incident that occurred on November 16, 1981, while Douglas K. Jones was operating a 1979 Freightliner tractor on Interstate 65 in Jasper County, Indiana. Patricia E. Beaver was a passenger in the Freightliner tractor. Both Jones and Beaver were killed when the Freight-liner tractor allegedly overturned and burst into flames. In Count I, plaintiffs seek to hold Freightliner liable on a strict liability in tort theory for designing and manufacturing a product that was allegedly unreasonably dangerous to the purchasers and users. In Count III, plaintiffs attempt to hold Freightliner liable for the alleged negligent design and manufacture of the tractor, specifically, with its breaking system and crashworthiness.

The motion currently before the Court raises one issue: whether with respect to tort cases Indiana’s choice of law rule is the lex loci delicti (“the place of the tort”) rule or the most significant contacts rule. Freightliner argues that Indiana has adopted the doctrine of lex loci delicti commisse, and that because the alleged tort occurred in Indiana, the statutes of Indiana should apply in resolving these issues. Plaintiffs on the other hand, rely on the Seventh Circuit Court of Appeals decision in Watts v. Pioneer Corn Company, Inc., 342 F.2d 617 (7th Cir.1965), in arguing that Indiana applies the most significant contacts rule in deciding what law applies in tort cases. Plaintiffs contend that the undisputed facts demonstrate that the significant contacts of the parties in the present case have been with the State of Ohio and, therefore, that Ohio law should apply in resolving these tort issues.

It is now well settled that in diversity cases, such as the one presently before the Court, the district courts are to apply the law of the forum state, Erie Railroad Company v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), including the conflict of laws rule of that forum state. See Klaxon Co. v. Stentor Electric Manufacturing Co., Inc., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). The Indiana Court of Appeals has recently made it clear that Indiana’s choice of law rule with respect to actions sounding in tort is the rule of lex loci delicti, which means that the law of the place where the tort arose is the law to be applied. See Eby v. York-Division, Borg-Warner, 455 N.E.2d 623, 626 (Ind.App.1983); Snow v. Bayne, 449 N.E.2d 296, 298 (Ind.App.1983); Lee v. Lincoln National Bank & Trust Co., 442 N.E.2d 1147, 1148 (Ind.App.1982); Maroon v. State Department of Mental Health, 411 N.E.2d 404, 409 (Ind.App.1980). A strict liability cause of action accrues when the seller places a defective product into the stream of commerce and a reasonably foreseeable user or consumer is harmed thereby, Wojcik v. Almase, 451 N.E.2d 336 (Ind.App.1983), and a tort action for negligence arises when injury or death has occurred. See Maroon, 411 N.E.2d at 409. In the present case, the injuries to plaintiffs’ decedents arose here in Indiana when the tractor incident occurred. Thus, under Indiana’s choice of law rule this Court must apply Indiana law in resolving these issues.

Plaintiffs argue that this Court is bound by the Seventh Circuit Court of Appeal’s decision in Watts v. Pioneer Corn Co., 342 F.2d 617 (7th Cir.1965), wherein the Court held that Indiana’s choice of law rule with respect to tort actions was the most significant contacts rule. Subsequent to that case, the Indiana Court of Appeals in Witherspoon v. Salm, 142 Ind.App. 655, 237 N.E.2d 116 (1968), applied the most significant contacts rule. However, Witherspoon was later reversed on other grounds by the Indiana Supreme Court. It now appears that the Indiana Appellate Courts have ignored the Witherspoon decision and the application of the most significant contacts rule, and have elected to adopt the rule of lex loci delicti. See Maroon, supra. As noted by Judge Sharp in Eaton Corp. v. Appliance Valves Corp., 526 F.Supp. 1172, 1178 (N.D.Ind.1981), the Seventh Circuit declined the opportunity to reaffirm its reasoning in the Watts decision, wherein the Court stated that Indiana applies the most significant contacts approach. See Sharp v. Egler and Bill Hanka Auto Sales, Inc., 658 F.2d 480 (7th Cir.1981). In light of this and the fact that the Indiana Court of Appeals have clearly adopted the rule of lex loci delicti, the Court is compelled to apply the rule of lex loci delicti with respect to determining which state’s law applies in resolving these tort issues.

Accordingly, Freightliner’s motion for a determination of choice of law is GRANTED, and the Court finds that Indiana law shall apply in resolving the tort issues presented by this case.