author: MacMAHON, District Judge.

text:
    INTERNATIONAL WOOD PROCESSORS, a corporation, Plaintiff, v. POWER DRY, INC., a corporation, Power Dry Patent, Inc., a corporation, Drywood Corporation, a corporation, Compton & Cloer Lumber Company, a corporation, General Wood Processors, Inc., a corporation, European Banking Company Limited, a United Kingdom Company, K.N. Hronopoulos, an individual, Delano Compton, an individual, Arthur J. Crowley, an individual, Defendants.
    Civ. No. 82-2115-14.
    United States District Court, D. South Carolina, Greenville Division.
    Nov. 30, 1984.

      See also D.C., 593 F.Supp. 710.

      Sutherland, Asbill & Brennan by John H. Fleming and John A. Chandler, Atlanta, Ga. and Leatherwood, Walker, Todd & Mann by Mark R. Holmes, Greenville, S.C., for defendants Power Dry, Inc., Power Dry Patent, Inc., Compton & Cloer Lumber Co., General Wood Processors, Inc., European Banking Co. Ltd. and Delano Compton.
    Arthur J. Crowley P.C. by Arthur J. Crowley, Los Angeles, Cal. and Love, Thornton, Arnold & Thomason by Jennings L. Graves, Jr. and John R. Devlin, Jr., Greenville, S.C., for defendant Arthur J. Crowley.
    Sedgwick, Detert, Moran & Arnold by Dale E. Fredericks and Rebecca A. Hull, San Francisco, Cal. and Dority & Manning by Julian W. Dority, Greenville, S.C., for plaintiff.
   OPINION

MacMAHON, District Judge.

Plaintiff petitions this court for an award of attorney’s fees and costs, pursuant to Section 4 of the Clayton Act, 15 U.S.C. § 15, based on Rule 54(d), Fed.R.Civ.P., and 28 U.S.C. §§ 1821 and 1920. This case was originally brought in the Central District of California but was subsequently transferred sua sponte to the District of South Carolina.

Plaintiff received a verdict on its antitrust claims against all defendants and was awarded treble damages of $2,700,-000.00, plus interest, and $70,000.00 in punitive damages against three of the defendants. Plaintiff requests an award of $458,-508.00 for fees, representing 4,374.75 hours, and costs in the amount of $39,-146.14. Section 4 of the Clayton Act allows recovery of a reasonable attorney’s fee which is determined by multiplying a reasonable number of hours by a reasonable hourly rate, and then making any necessary adjustments to that lodestar figure. Anderson v. Morris, 658 F.2d 246, 249 (4th Cir.1981).

The first step in determining plaintiff’s fee award is calculating the reasonable number of hours which should have been spent on this case. Plaintiff’s affidavits and exhibits show the number of hours worked from 1982 to 1984 as follows: the California firm of Sedgwick, Detert, Moran & Arnold: attorneys 3,163.7, paralegals 425.9, law clerks 262.2; the South Carolina firm of Dority & Flint: attorneys 446.95, paralegals 63, law clerks 13.

Defendants first contend that the number of hours should be reduced because the time spent preparing the case and the number of lawyers and staff involved were excessive and duplicative.

Contrary to defendants’ assertion that salaries of paralegals and law clerks are always reflected in the hourly rates charged by the attorneys, their salaries may be a proper part of the fee award. Spray-Rite Service Corp. v. Monsanto Co., 684 F.2d 1226, 1250 (7th Cir.1982), cert. denied, — U.S. —, 104 S.Ct. 2378, 80 L.Ed.2d 850 (1984); In re Anthracite Coal Anti-Trust Litigation, 81 F.R.D. 499, 510 (M.D.Pa.1979). Defendants’ contention that it was unnecessary for plaintiff’s attorneys to work as many hours as they did in bringing this case to trial and to a successful conclusion is unpersuasive.

This case involved the conduct of nine defendants, their agents and employees over a period of more than three years, which required interviewing numerous witnesses and reviewing thousands of documents. Based upon this court’s knowledge of the complexity of the issues involved, the expertise required to represent plaintiff adequately in this antitrust litigation, and an examination of time charts, it appears that plaintiffs attorneys utilized their time reasonably and properly. McDonald v. Johnson & Johnson, 546 F.Supp. 324, 331 (D.Minn.1982), aff'd, 722 F.2d 1370 (8th Cir.1983).

Defendants next contest the inclusion in the fee request of time spent travel-ling by plaintiffs attorneys, asserting that there is insufficient evidence documenting that travel time was in fact spent in preparation for trial or discovery. However, review of plaintiffs computer printout of daily time entries provides significant documentation of how travel time was spent. Travel in pursuit of this litigation was necessary. Henry v. Webermeier, 738 F.2d 188, 194 (7th Cir.1984). The practice of plaintiffs attorneys is to charge for travel at the same rate as for other time. To award nothing for travel time would be unreasonable. Id. However, due to insufficient evidence that all travel time involved work on this case, a reduction in hours will be made accordingly.

Defendants also seek to exclude hours for allegedly non-productive efforts of plaintiffs attorneys, including time spent on venue and discovery motions, státe law claims, preparation of this fee petition, and for prolonging the trial.

Defendants claim that attorney time related to the various jurisdictional disputes should be eliminated because the unsuccessful efforts to pursue the case in California are far removed from the antitrust aspects of the case. The procedural disputes, although not directly related to the antitrust claims, nonetheless, did contribute to the resolution of this case and were not totally unproductive or unwarranted. The hours spent on procedural disputes may be partially compensated.

Defendants also request either substantiation of, or a reduction for, work done on the state law claims. Plaintiff contends, although without supporting documents, that it has already deducted from the fee request the state law aspects of the case. Without further substantiation, it is impossible to segregate the amount of time spent on the state law claims, and an appropriate reduction is warranted.

It is within this court’s discretionary power to award fees for time spent preparing this fee petition. Independence Tube Corp. v. Copperweld Corp., 543 F.Supp. 706, 715-716 (N.D.Ill.), aff'd, 691 . F.2d 310 (7th Cir.1982), rev’d on other grounds, — U.S. —, 104 S.Ct. 2731, 81 L.Ed.2d 628 (1984). A review of the computer printout reveals that a brief amount of time was spent in preparing this fee petition, for which compensation will be awarded. In addition, although three weeks is a long time to present a case, because of the magnitude of this litigation, including the number of defendants and witnesses, the amount of material involved, the complexity of the legal issues, and the numerous affirmative defenses, plaintiff’s attorneys are entitled to be compensated for the trial time.

Based on the foregoing discussion, a downward adjustment of seven (7%) percent will be made to the number of attorney’s hours required to pursue this action.

The next step in determining plaintiff's fee award is setting the hourly billing rates used to calculate the award. Plaintiff requests that the current, rather than historical, rate be used, which results in a difference of $16,413.00. Defendants argue that the historical rate should be used in light of the existing fee agreement. However, the terms of the fee agreement should not materially affect the outcome of the fee petition. Farmington Dowel Products Co. v. Forster Mfg. Co., 421 F.2d 61, 90 (1st Cir.1969).

An award is based on current rates usually where there is an inflationary loss because of a long delay in recovery of fees. Glover v. Johnson, 531 F.Supp. 1036, 1045 (E.D.Mich.1982); City of New York v. Darling-Delaware, 440 F.Supp. 1132, 1134 (S.D.N.Y.1977). Since this suit was only started in 1982 and concluded very recently, no basis exists for using current, rather than historical, rates.

The California firm based its request on the rates charged in San Francisco and other major cities as opposed to rates charged in South Carolina. Fees for attorneys with ten to fifteen years’ experience range from $150 to $200 per hour in San Francisco, and from $70 to $100 in South Carolina, while rates for those with three years’ experience range from $60 to $115 in San Francisco, and from $55 to $65 in South Carolina. These fee rates present wide discrepancies.

The fee customarily charged in a community is just one guiding factor in determining the fee award. Chrapliwy v. Uniroyal, Inc., 670 F.2d 760, 769 (7th Cir.1982), cert. denied, 461 U.S. 956, 103 S.Ct. 2428, 77 L.Ed.2d 1315 (1983). It was reasonable for plaintiff to retain California counsel throughout the case since months of work were done before the transfer to South Carolina. However, because the customary rate charged in San Francisco is so much greater than it is in South Carolina and competent local counsel was available and assisted, an adjustment in the hourly rate requested by plaintiff’s California attorneys is required.

Based on the foregoing discussion, the hourly rate allowed for Dale E. Fredericks is $135; for Cynthia H. Plevin the rate is $100 per hour; and for Rebecca A. Hull $75 per hour. For the remaining attorneys in the California firm, the rate allowed is $60 per hour. The rates for the local South Carolina firm will be allowed as requested, as will the rates for all paralegals and law clerks. Multiplying these rates by the reasonable number of hours already found by this court, results in a lodestar of $359,-165.79.

The final step in determining the attorney’s fee award is adjusting the lodestar based on the factors enumerated in Barber v. Kimbrell’s Inc., 577 F.2d 216, 226 (4th Cir.), cert. denied, 439 U.S. 934, 99 S.Ct. 329, 58 L.Ed.2d 330 (1978). Plaintiff does not request that its lodestar be enhanced. However, defendants contend that a downward adjustment should be made because the result obtained was not beneficial to the public interest, since the industry involved was destroyed rather than enhanced.

Although an important factor in determining fees in an antitrust suit is the public benefit, Judice’s Sunshine Pontiac, Inc. v. General Motors Corp., 418 F.Supp. 1212, 1222 n. 30 (D.N.J.1976), there is no clear indication here that the public will not benefit as a result of plaintiff’s efforts. Therefore, no reduction in plaintiff’s fee request is warranted on these grounds.

Having compared the lodestar figure with the remaining Barber factors and finding that there are no “significant circumstances that merit reward or penalty,” Va. Acad. of Clinical Psychologists v. Blue Shield, 543 F.Supp. 126, 147 (E.D.Va. 1982), this court concludes that the lodestar figure should not be adjusted further. In addition, however, plaintiff requests interest, which is granted and will accrue from the date this order awarding attorney’s fees is entered. Copper Liquor Inc. v. Adolph Coors Co., 701 F.2d 542 (5th Cir.), mod. on other grounds, 701 F.2d 542 (5th Cir.1983); Independence Tube Corp., supra, 543 F.Supp. at 716.

Defendant Crowley also claims that little or none of the testimony related to him, and, therefore, only those legal services devoted to prosecution of the claim against him should be charged to him. Absent congressional authority, there is no basis for contribution among antitrust wrongdoers. Texas Industries Inc. v. Radcliff Materials Inc., 451 U.S. 630, 101 S.Ct. 2061, 68 L.Ed.2d 500 (1981).

Plaintiff also moves to recover various costs. Defendants do not deny that some costs are recoverable but contest the amount of costs plaintiff requests. Rule 54(d) requires this court to look to the general taxation of costs statute, 28 U.S.C. § 1920, to determine which costs are recoverable, and to 28 U.S.C. § 1821 for expenses for witnesses.

Plaintiff’s costs for service of process ($794.57), filing fees ($161.00), photocopies ($9,372.19), the originals of deposition transcripts ($5,655.57), and original trial transcripts ($1,101.00) are all specifically allowed under § 1920. Costs for copies of deposition transcripts ($.2,257.42) and of trial transcripts ($565.50) are allowed under § 1920(2) as a part of the stenographic transcript which is necessary for the effective preparation of the trial, as opposed to being a mere luxury or convenience. Principe v. McDonalds Corp., 95 F.R.D. 34, 37 (E.D.Va.1982); Chemical Bank v. Kimmel, 68 F.R.D. 679, 682-684 (D.Del.1975). Plaintiff’s affidavits and exhibits amply support these costs. Witness expenses are generally limited by the provisions of § 1821. Plaintiff is entitled to recover costs for fees, mileage, and subsistence of witnesses who appeared ($991.95) and those who, believed to be necessary, appeared but did not testify ($366.07). Independence Tube Corp., supra, 543 F.Supp. at 722; Principe, supra, 95 F.R.D. at 37.

Although there is a trend in a few jurisdictions to allow recovery of expert fees where that witness’s testimony is crucial or indispensable, Paschall v. Kansas City Star Co., 695 F.2d 322, 338-339 (8th Cir.1982), rev’d on other grounds on reh’g en banc, 727 F.2d 692 (8th Cir.1984), the overwhelming weight of authority remains that such fees are not taxable as costs. Illinois v. Sangamo Construction Co., 657 F.2d 855 (7th Cir.1981). Congress stated in § 1920 that costs include fees for witnesses, and in § 1821 enunciated specific fees. However, in enacting this statutory scheme, congress made no provision for privately retained expert witnesses. Therefore, plaintiff may recover as costs for expert witnesses only the amount specified in 28 U.S.C. § 1821. Sangamo, supra, 657 F.2d at 865.

This court does retain, however, some discretionary authority to award costs not specifically provided for by statute. Farmer v. Arabian American Oil Co., 379 U.S. 227, 235, 85 S.Ct. 411, 416, 13 L.Ed.2d 248 (1964). Plaintiff has also requested an award of costs for computerized legal research ($4,760.37). Computer research, although not essential, replaces many hours of human research and, therefore, is reasonable. Independence Tube Corp., supra, 543 F.Supp. at 723. We find that, an award of costs for computerized research is appropriate.

Accordingly, plaintiff’s motion for an order amending the judgment entered on May 10, 1984 so as to include attorney’s fees and costs is granted to the extent that plaintiff shall recover attorney’s fees in the amount of $359,165.79, with interest accruing from the date of entry of this order, and costs totalling $26,025.64.

So ordered.

APPENDIX
Sedgwick, Detert, Moran & Arnold
-7 % $ Rate $ Total
D.E.F. 1,289.40 1,199.14 135.00 161,884.17
C.H.P. 59.00 54.87 100.00 5,487.00
R.A.H. 1,319.20 1,226.86 75.00 92,014.20
Others 496.10 461.37 60.00 27,682.38
Sub-Total 287,067.75
Law Clerks 13,110.00
Paralegals 14,942.50
Total 315,120.25
Dority & Flint J.W.D.-1982 72.50 67.43 85.00 5,731.12
1983 66.50 61,845.00 100.00 6,184.50
1984 243.75 226.69 110.00 24,935.62
Sub-Total 36,851.25
C.F. 59.70 55.52 85.00 4,719.29
Sub-Total 41,570.54
Law Clerks 585.00
Paralegals 1,890.00
Total 44,045.54
Final Total $359,165.79

       Of the United States District Court for the Southern District of New York, sitting by designation.

       See Appendix attached.


source: Caselaw Access Project

license: Public Domain

text:
    James V. WILLIAMS v. PENNSYLVANIA TURNPIKE COMMISSION.
    Civ. A. No. 84-2393.
    United States District Court, E.D. Pennsylvania.
    Nov. 30, 1984.
    Saul Doner, Philadelphia, Pa., for plaintiff.
    Berle M. Schiller and Richard Limburg, Philadelphia, Pa., for defendant.
   MEMORANDUM and ORDER

JOSEPH S. LORD, III, Senior District Judge.

Plaintiff, an Illinois citizen, alleges he was seriously injured in an accident that occurred on the Pennsylvania Turnpike. Although plaintiff alleges that the accident resulted from the defendant Turnpike Commission’s negligence, plaintiff failed to give notice to defendant until thirteen months after the date of the accident. Defendant asserts that it is a “governmental unit” within the meaning of 42 Pa.C.S.A. § 5522, and that under that statute, plaintiff was required to give notice to it within six months of the accident unless he can demonstrate “reasonable excuse” for his failure to file. Because I believe the Pennsylvania Turnpike Commission is not a “governmental unit” within the meaning of § 5522, I find plaintiff is not bound by the six month notice requirement. I will therefore deny defendant’s motion to dismiss.

The legislation that created the Pennsylvania Turnpike Commission states that the Commission “is hereby constituted an instrumentality of the Commonwealth” and that “the exercise of powers conferred by this Act ... shall be deemed and held to be an essential governmental function of the Commonwealth.” 36 P.S. § 652d. Moreover, defendant notes that 71 P.S. § 732-102, part of the Commonwealth Attorneys Act, includes the Turnpike Commission in a list of independent agencies. Another section of that Act requires the Office of the General Counsel to represent, “upon request, each independent agency.” 71 P.S. § 732-301(3). Contrary to defendant, I do not find these provisions to be dispositive of the issue in this motion because an independent agency is not necessarily a “governmental unit” for the purposes of 42 Pa.C.S.A. § 5522. I turn now to the case law concerning the Turnpike Commission.

Pennsylvania courts have reached vastly contrary conclusions about the role and status of the Turnpike Commission. For example, in Rader v. Pennsylvania Turnpike Commission, 407 Pa. 609, 182 A.2d 199 (1962), the Pennsylvania Supreme Court held that the Turnpike Commission is in many ways the alter ego of the state. Id. at 617, 182 A.2d at 203. In Commonwealth v. Merritt-Chapman & Scott, 432 Pa. 584, 248 A.2d 194 (1968), the court announced, “[I]t has been the position of the legislature and a view of this Court that the Turnpike Commission is to be regarded essentially as an agency of the Commonwealth.” Id. at 587, 248 A.2d at 196. And a lower Pennsylvania court held that an employee of the Turnpike Commission is an employee of the Commonwealth and that the Turnpike Commission is entitled to the same immunity from suits arising out of the negligence of its employees as the Commonwealth. Pickett Unemployment Compensation Case, 177 Pa.Super. 240, 242-43, 110 A.2d 863, 864 (1955).

Other Pennsylvania courts have held, however, that claims against the Turnpike Commission are not chargeable to the Commonwealth and that the Turnpike Commission is a legal entity distinct from the Commonwealth. See, e.g., Lichtenstein v. Pennsylvania Turnpike Commission, 398 Pa. 415, 158 A.2d 461 (1959) and Hunkin-Conkey Construction Company v. Pennsylvania Turnpike Commission, 34 F.Supp. 26 (M.D.Pa.1940). Finally, in 1975, the Pennsylvania Supreme Court attempted to end the confusion by its decision in Specter v. Commonwealth of Pennsylvania, 462 Pa. 474, 341 A.2d 481 (1975). The court decided that the Commission was not' part of the Commonwealth and that the Commonwealth’s immunity from suit did not extend to the Commission. The court noted that although the Commission is exempt from taxation, is permitted to exercise the power of eminent domain, and performs an essential governmental function, the legislature had taken great care to ensure that the Commission and the Commonwealth are financially independent of each other. In addition, after a careful review of the case law, the court concluded that the Commission should be treated as a separate entity from the Commonwealth and that the Commonwealth is not responsible for any liabilities the Turnpike Commission might incur. Id. at 493, 341 A.2d at 490-91.

I cannot agree with defendant that because of the enactment of the Judiciary Act of 1976, Specter is no longer good law. Indeed, it has been cited with approval in several cases that postdate the Act and its holding has not been questioned. See e.g., Yancoskie v. Delaware River Port Authority, 478 Pa. 396, 387 A.2d 41 (1978) and Pennsylvania Turnpike Commission v. Atlantic Richfield Company, 482 Pa. 615, 394 A.2d 491 (1978). Although the Specter opinion does not address the notice requirement of § 5522 that is at issue in this motion, I must respect the Pennsylvania Supreme Court’s painstaking analysis of the Turnpike Commission’s status and its careful efforts to distinguish the Turnpike Commission from the Commonwealth. Therefore, even though defendant Turnpike Commission is an “independent agency” under Pennsylvania law, I find that it is sufficiently distinct from the Commonwealth so as not to be a “governmental unit” within the meaning of 42 Pa. C.S.A. § 5522. Plaintiff was therefore under no statutory obligation to give notice to defendant within six months of the accident, and defendant’s motion to dismiss will be denied.


author: CHARLES R. RICHEY, District Judge.

text:
    WASHINGTON HOSPITAL CENTER CORPORATION, Plaintiff, v. Margaret M. HECKLER, Defendant.
    Civ. A. No. 84-0147.
    United States District Court, District of Columbia.
    Nov. 30, 1984.
    George E. Hart and Edward J. Krill, Washington, D.C., for plaintiff.
    Joseph E. diGenova, U.S. Atty., Royce Lamberth, Asst. U.S. Atty., Henry R. Goldberg, Atty., and Deborah Chaskes, Atty., Dept, of Health & Human Services, Washington, D.C., for defendant.
   CHARLES R. RICHEY, District Judge.

This case has come before the Court on cross-motions for summary judgment. After careful consideration of each party’s motions, as well as memoranda in support thereof and in opposition thereto, the Court, for the reasons set forth below, grants summary judgment for the defendant.

Plaintiff hospital brought suit on January 13, 1984 against the defendant in her capacity as Secretary of the Department of Health and Human Resources, the executive agency with responsibility for overseeing the administration of the Medicare Act 42 U.S.C. § 1395, et seq. The complaint states two separate claims involving the Secretary’s administration of the reimbursement provisions of that Act. The first count, involving services rendered by a “provider of services”, as defined by 42 U.S.C. § 1395cc, to patients in a hospital’s labor/delivery room, was decided by this Court’s opinion of June 29, 1984, which is incorporated herein by reference the same as if herein re-written. In that case, judgment was entered for the plaintiff.

Remaining for decision is Count II of the complaint. That Count involves the procedure under Medicare regulations for determining the extent of nonallowable costs for luxury items and services which must be excluded from Medicare reimbursement. Medicare regulations specifically state that the cost of luxury items and services are not reimbursable in full. 42 C.F.R. § 405.-451(c)(3). Rather, costs associated with luxury items and services are to be reimbursed at the same rate as more common items and services furnished to the majority of a provider’s patients. For example, the cost of a luxury hospital room, fitted with amenities not found in the majority of rooms, would be reimbursed to the provider at the same rate as would one of the provider’s normal two-bed rooms.

Plaintiff does not dispute whether luxury-costs are reimbursable in full, but rather the methodology used by the intermediary to arrive at the proper amount to be disallowed, an amount which fairly represents the excess of luxury over normal costs. The Provider Reimbursement Manual states that this determination is to be made by finding the difference between the cost of luxury items and services actually furnished, and the costs associated with the “usual less expensive items or services furnished by a provider to a majority of its patients.” Manual at § 2104.3. This amount is then deducted by the intermediary from the allowable costs submitted by the provider in the provider’s annual “cost report” at the close of each fiscal year. 42 C.F.R. §§ 405.406(b), 405.454(f).

Plaintiff offers, in addition to its usual services, a 12-bed “V.I.P.” unit. The V.I.P. suite is a separate department within the hospital’s general ledger, with revenues and expenses separately identified for that unit. In its cost reports for the years since 1977, plaintiff excluded the difference between the costs of the luxury items and services actually furnished to patients in the V.I.P. suite, and the costs of services furnished to a majority of its patients, using “bed-days”, i.e., the number of beds in the V.I.P. unit per day, as the basis for allocation. The Medicare intermediary adjusted plaintiff’s calculation of nonreimburseable luxury costs using “patient days,” i.e., the actual number of days of care rendered to Medicare beneficiaries in the V.I.P. suite, as the basis of allocation. The result was a reduction in the amount of the Medicare reimbursement amount to which the plaintiff claims it was entitled.

The plaintiff appealed the intermediary’s adjustments to the Provider Reimbursement Review Board. The Board upheld the intermediary’s decision as “correct” and “reasonable.” (Administrative Record at 28). The Board’s decision was affirmed by the Deputy Administrator of Medicare. Subsequently, plaintiff filed this action for judicial relief, pursuant to 42 U.S.C. § 1395oo. Plaintiff seeks to have the Board’s decision set aside as arbitrary, capricious and an abuse of discretion.

The burden of showing that the method of determining the amount to be disallowed for luxury costs is arbitrary, capricious and an abuse of discretion lies with the plaintiff. Diplomat Lakewood Inc. v. Harris, 613 F.2d 1009, 1018 (D.C.Cir.1979). So long as there can be found a rational basis for the method used, the Court is “obliged to affirm the decision below.” Id. When, as here, the agency is interpreting regulations which are part of a complex statutory scheme which it is charged with administering, the Court of Appeals for this Circuit has held that “the arguments for deference to administrative expertise are at their strongest.” Psychiatric Institute of Washington D.C., Inc. v. Schweiker, 669 F.2d 812, 813, 814 (D.C.Cir.1981). Plaintiff, then, must show that there exists no rational basis for the use of this method.

Plaintiff has failed to meet this burden. Initially, the Medicare statute itself specifically authorizes the Secretary to promulgate regulations which determine the cost of services on a “per diem, per unit, per capita, or other basis.” 42 U.S.C. § 1395x(v)(l)(A). The Regulations specifically excluded costs associated with luxury items and services from the definition of “reasonable costs” for which a provider may be reimbursed. 42 C.F.R. § 405.-451(c)(3). The Secretary’s interpretation of the statute and regulations is found in the Provider Reimbursement Manual at section 2104.3(c), which requires that the allowable costs be reduced by the difference between the costs of luxury accommodations and the cost of care provided in the provider’s general routine area.

The “patient-days” basis of allocation method meets the requirements of the statute, the regulations and the Manual. The use of patient-days as the basis for achieving this result is identical to that employed in determining the hospital’s reimbursement for the general routine services provided to Medicare beneficiaries. The cost of such services are determined on a patient-day basis by dividing the total number of inpatient costs for routine services by the total number of inpatient days. 42 C.F.R. § 405.452(d)(9). The use of this method has met with consistent judicial approval. See, e.g., St. Mary of Nazareth Hospital Center, et al. v. Schweiker, 718 F.2d 459, 471 (D.C.Cir.1983).

The use, therefore, of patient-days as the basis for luxury cost allocation is perfectly consistent with the methodology employed to determine plaintiffs Medicare reimbursement for general routine services. In addition, Congress recently amended Medicare to provide that excess costs associated with private rooms, except where medically required, be excluded from a provider’s allowable costs. 42 U.S.C. § 1395x(v)(2). The method used to allocate these excess costs is patient days. 42 C.F.R. § 405.-452(b)(l)(iii). Thus, the use of patient days by the intermediary in this action finds support in several areas of the Medicare statutory scheme.

Plaintiff, far from meeting its burden of showing that there exists no rational basis for the Secretary’s actions, has merely asserted that its preferred method, using bed-days as the basis of allocation, is more equitable. The Court is not in a position to second guess the rational actions of an administrative agency charged with the administration of a complex statutory scheme, as is the.case here. If plaintiff is unhappy with the results of a determination which is consistent with the law, then perhaps the plaintiff should seek Congressional action to have the law changed. The Court, however, declines to so amend the Medicare Act.

Therefore, there being no genuine issue of material facts in dispute, it is by the Court this 30th day of November, 1984, hereby

ORDERED that the defendant’s motion for summary judgment be and the same is granted, and it is

FURTHER ORDERED that the plaintiff’s motion for summary judgment be and the same is denied, and it is

FURTHER ORDERED that this case is dismissed and the clerk shall remove it from the docket of this Court.


author: EDELSTEIN, District Judge:

text:
    Robert McCOY, Wilfredo Rios, Anthony Anzola, John Oliva, Alvin Solomon, Harvey Marshall, Rudolph Marano, Donald R. Stanton, Manny Savidis, Richard Ingraldi, Edward H. Knippenberg, Paul Rosenstein, Robin Salvatore, John F. Sand, Arnold Schoenbrun, John Young, Wallace Wiggins, William Whippet, and Robert O’Brien, Plaintiffs, v. Harrison J. GOLDIN, individually and as Comptroller of the City of New York, Robert Linn, individually and as past General Counsel for the Office of Labor of the City of New York, and as present Director of Labor Relations of the City of New York, and the City of New York, Defendants.
    No. 82 Civ. 3376 (DNE).
    United States District Court, S.D. New York.
    Dec. 3, 1984.

      Carol Mellor, New York City, for plaintiffs.
    Fredrick A.O. Schwarz, Jr., Corp. Counsel, Stephen P. Kramer and Caryn Hirshleifer, Asst. Corp. Counsels, New York City, for defendants.
   MEMORANDUM AND ORDER

EDELSTEIN, District Judge:

PROCEDURAL BACKGROUND

This civil rights suit was originally commenced by twenty-one radio repair mechanics against their employer, New York City (“City”); its Comptroller, Harrison J. Goldin; its Director of Labor Relations, Bruce Mclver; their union, District Council 37, American Federation of State and City Municipal Employees (“the) Union”), and its President, Joseph Zurlo. The municipal defendants counterclaimed to recover amounts allegedly overpaid to plaintiffs. Defendants moved to dismiss the complaint for failure to state a claim. Their motion was denied in a Report and Recommendation dated October 7, 1983 which was adopted by this Court. Stevens v. Goldin, No. 82 Civ. 3376 (S.D.N.Y. Jan. 20, 1984). Pursuant to leave granted in that decision, plaintiffs took limited discovery. The parties then stipulated to discontinue the action with respect to defendants Joseph Zurlo and the Union.

On July 13, 1984, defendants moved for summary judgment on the ground that as a matter of law, plaintiffs have failed to show that defendants are liable under 42 U.S.C. § 1983. Plaintiffs have cross-moved for partial summary judgment on the issue of liability. The parties agreed by stipulation entered into on July 27’, 1984, to discontinue the separate action they had commenced against Robert Linn and the City of New York, Stevens v. Linn, No. 84 Civ. 3079 (LBS), and to amend the complaint in the instant action to add Robert Linn as a defendant. As part of the stipulation, defendant Bruce Mclver was dropped as a defendant. On October 26, 1984, Magistrate Naomi Reice Buchwald issued a Report and Recommendation on the motions for summary judgment. The municipal defendants filed objections to the magistrate’s report. Plaintiffs filed a memorandum in opposition to the defendants’ objections.

FACTS

This litigation arises out of a seven year wage dispute between the City and its radio repair mechanics. The parties’ Rule 3(g) statements and motion papers agree on the following relevant and material facts. There being no genuine disputed issue of fact, the liability issue in this case may be resolved on a motion for summary judgment.

Statutory Background

Plaintiffs are radio repair mechanics who have been employed by various agencies of the City. They belong to a group of municipal workers known as “Section 220” employees, who have the option of having their wages and benefits established pursuant to New York State Labor Law § 220, rather than through individual wage agreements or collective bargaining. Plaintiffs are represented by District Council 37, A.P. S.C.M.E., AFL-CIO, the Union.

Labor Law § 220 provides that covered employees’ wages “shall be not less than the prevailing rate of wages” and their benefits “shall be in accordance with prevailing practices” in the same trade in the same locality. New York Labor Law § 220(3) (McKinney Supp.1982). An employee or his union disagreeing with the City’s judgment as to whether his wages and benefits conform to the mandate of Section 220 may file an administrative complaint with the City Comptroller requesting the Comptroller to determine whether he is being paid according to the prevailing rate and practice. Id. § 220(5)(e), (7).

After a Section 220 complaint is filed, the City and Section 220 employees, through their union, may negotiate wages and benefits and enter into a formal consent agreement known as a “compromise determination,” which embodies the terms of a wage settlement. The compromise determination is then ratified by the Comptroller and has binding force and effect under the Labor Law. Individual employees, however, are traditionally granted the right to reject the terms of a compromise determination by filing a notice with the Comptroller within thirty days of issuance.

Employees or their union who reject a proposed compromise determination may pursue the procedures set forth in Labor Law § 220. Pursuant to these procedures, the Comptroller conducts an investigation and hearing to determine the prevailing wage rate and practice. New York Labor Law § 220(5)(e), (7), (8). The Comptroller’s determination is then subject to judicial review in an Article 78 proceeding. Id. § 220(8).

The Instant Controversy

The genesis of this action is a dispute over the prevailing rate of wages for radio repair mechanics during the years 1976 to 1978. Before January 1976, the City paid its radio repair mechanics at a base rate of $9.32 per hour, pursuant to a compromise determination. In July 1976, all of the City’s radio repair mechanics, including plaintiffs, filed complaints pursuant to Section 220 of the Labor Law demanding that the Comptroller determine the prevailing rate of wages for the period of 1976-1978. In August 1978, pursuant to a compromise determination between the City and the Union, the City offered the radio repair mechanics a base rate of $9.60 per hour for the period of January 1, 1976 through June 30, 1978. The plaintiffs rejected the terms of this compromise determination and elected to pursue their statutory remedies with the City. In September 1980, following an investigation and hearings, the Comptroller found that the prevailing rate of wages was $7.61 per hour as of January 1976, $8.28 per hour as of January 1, 1977, and $9.00 per hour as of January 1, 1978. These rates were less than the rate of wages the City had agreed to pay acceptors of the compromise determination that plaintiffs had rejected. The rate was also less than the actual rate of wages which the City had been paying to those who litigated. The plaintiffs challenged the Comptroller’s September 1980 determination in an Article 78 proceeding, Goldman v. Goldin, 81 A.D.2d 1043, 439 N.Y.S.2d 224 (1st Dep’t 1981), appeal denied, 54 N.Y.2d 608, 427 N.E.2d 951, 443 N.Y.S.2d 130 (1981), which was finally resolved against them.

Thereafter, in April 1982, the City presented a proposed individual wage agreement to radio repair mechanics covering the period 1978-1982. The proposed agreement provided, inter alia, that on execution of the agreement by either acceptors or rejectors of the compromise determination of August 1978, that the radio repair mechanics would be entitled to receive the following wage rates:

Saturday, Sunday Period Hourly Rate and Holiday Rate
07/1/78 - 9/30/78 $ 9.60 $14.40
10/1/78 - 6/30/78 9.98 14.97
07/1/79 - 9/30/79 10.19 15.285
10/1/79 - 6/30/80 10.60 15.90
07/1/80 - 6/30/81 11.45 17.175
07/1/81 - 6/30/82 12.37 18.555
07/1/82 - 12.727 19.09

Employees who signed the agreement would be entitled to additional wages reflecting nonpensionable cash payments, cost of living adjustments, and other increases.

Moreover, as the above table indicates, all signatories to the proposed agreement would be entitled to substantial back pay for the 1978-1982 period. The City linked a recoupment condition to this back pay entitlement. The recoupment provision required rejectors of the 1976-1978 compromise determination, the plaintiffs, to allow the City to deduct from the 1978-1982 back pay the difference between the amount they actually received during 1976-1978 and the amount determined by the Comptroller to be the prevailing rate for that period.

Most significantly for plaintiffs’ claim, the agreement further stipulated that signatories would waive all rights to litigate or file complaints with the Comptroller about, or otherwise challenge, the terms of the proposal. These waivers and releases applied to the 1976-1978 period for which the City was claiming the right to recoup, as well as the 1978-1982 period.

Defendant Robert Linn, then General Counsel of the New York City Office of Municipal Labor Relations, originated the idea of requiring recoupment and waiver of all rights to litigate or file complaints with the Comptroller on all issues covering the period of 1976-1982. His stated purpose was to “wrap up” the wage agreement for the entire period and preclude further litigation. See March 2, 1984 Deposition of Robert Linn at 26, Exhibit 6 to Defendant’s Memorandum of Law in Support of their Motion for Summary Judgment [hereinafter cited as “Linn Deposition”].

Plaintiffs rejected the April 1982 proposal. As a result, their pay was maintained at $9.32 per hour, as it had been throughout the six-year dispute.

Plaintiffs’ motion for summary judgment asserts that the waiver and recoupment provisions of the April 1982 wage agreement proposal infringed their constitutional right of access to the courts and their right to equal protection. Defendants’ motion contends that plaintiffs have failed to adduce any evidence to support a claim of retaliation or denial of equal protection or to demonstrate that defendants are not entitled to recoupment.

DISCUSSION

Right of Access to the Courts

Defendants’ position is that they are entitled to summary judgment because plaintiffs have failed to demonstrate that the inclusion of a recoupment provision in the 1978-1982 compromise determination amounts to a retaliation or that defendants are not entitled to recoupment. Defendants’ theory is that in order to prevail on a claim of due process based on the right of access to the courts, plaintiffs must prove that the City has threatened to withhold monies to which they are legally entitled solely because they have threatened to or have brought litigation against the City. Defendants reason that because plaintiffs are not legally entitled to the wages offered in the April 1982 proposal for the years 1978-1982, plaintiffs’ due process claim must fail.

The Court agrees with the Magistrate and rejects defendants’ argument. The right of access to the courts and the right to petition the government with grievances find their source in the first amendment’s free speech and right to petition clauses, In re Primus, 436 U.S. 412, 426, 98 S.Ct. 1893, 1901, 56 L.Ed.2d 417 (1978), as well as the due process clauses of the fifth and fourteenth amendments, Bounds v. Smith, 430 U.S. 817, 821, 97 S.Ct. 1491, 1494, 52 L.Ed.2d 72 (1977). Contrary to defendants’ assertion, plaintiff need not prove that plaintiffs had a right to the 1978-1982 wage rates or back pay set forth in the April 1982 wage agreement in order to claim that their right to access was unduly burdened. “[E]ven though a person has no ‘right’ to a valuable governmental benefit and even though the government may deny him the benefit for any number of reasons, there are some reasons upon which the government may not rely. It may not deny a benefit to a person on a basis that infringes his constitutionally protected interests ____” Perry v. Sindermann, 408 U.S. 593, 597, 92 S.Ct. 2694, 2697, 33 L.Ed.2d 570 (1972). Thus, the fact that plaintiffs were not “entitled to the benefits does not in and of itself defeat their constitutional claim. See Northern Pennsylvania Legal Svcs., Inc. v. County of Lackawana, 513 F.Supp. 678 (M.D.Pa.1981).

Magistrate Buchwald relies on Silver v. Cormier, 529 F.2d 161 (10th Cir. 1976) and Northern Pennsylvania Legal Services, Inc. v. County of Lackawana, 513 F.Supp. 678 (M.D.Pa.1981), to support a finding that by making the acceptance of the recoupment provision for the 1976-1978 period a precondition to plaintiffs benefit-ting from the wage agreement covering 1978-1982, defendants infringed on plaintiffs’ right to seek redress and resolution of the recoupment issue through the courts. It is clear that defendants intended to prevent further litigation regarding the wage dispute. Linn Deposition at 25-26. The court finds the Magistrate’s reasoning persuasive. Therefore, that portion of the Magistrate’s Report and Recommendation concerning the violation of the plaintiff’s right of access to the courts is adopted.

Action versus Defendant Linn

The Magistrate recommends that the action against defendant Linn be dismissed based on a qualified immunity. Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 2738, 73 L.Ed.2d 396 (1982). The court agrees. Defendant Linn’s conduct was reasonable and he should therefore enjoy a qualified immunity. Davis v. Scherer, — U.S. —,—-—, 104 S.Ct. 3012, 3018-20, 82 L.Ed.2d 139 (1984). The Magistrate’s Report and Recommendation with respect to the qualified immunity of defendant Linn is therefore adopted.

Recoupment Provision

Defendants’ counterclaim is based on the recoupment provision. Defendants seek to recover money which is claimed to have been overpaid to the plaintiffs. The counterclaim was not directly addressed in the Magistrate’s Report, however, the Magistrate has provided guidance which will permit the counterclaim to be disposed of here. The Magistrate sets forth the factors that affect the decision to abstain and recommends that the court abstain if the issue was presented. The court accepts this recommendation and will abstain because this claim “present[s] difficult questions of state law bearing on policy problems of substantial public import,” Colorado River Water Conservation District v. United States, 424 U.S. 800, 814, 96 S.Ct. 1236, 1244, 47 L.Ed.2d 483 (1976).

The arguments presented by defendants have never been directly addressed by a state court. The Magistrate notes that the cases cited by defendant are either inapposite or do not address the issue of recoupment in the context of Labor Law § 220. The state courts must be given an opportunity to resolve this dispute in the first instance. The right of recoupment should be pursued by defendants in state court. Damages

The Magistrate found that plaintiffs are entitled to out of pocket loss as well as possible damages resulting from emotional distress. This is correct based on Carey v. Piphus, 435 U.S. 247, 264, 98 S.Ct. 1042, 1052, 55 L.Ed.2d 252 (1978). Defendants object stating that the action is one in contract rather than tort and thus should be limited to out of pocket loss. This is not correct. While the factual setting of the action involves a contract dispute, the damages for chilling the exercise of a constitutional right is certainly not limited to out of pocket loss, regardless of the setting in which the case arises. Of course, punitive damages are not recoverable against a municipality. The Magistrate recommends that a hearing be conducted to determine the measure of damages in this ease. The court adopts the Magistrate’s recommendation regarding damages. This matter is hereby referred to Magistrate Buchwald to conduct whatever proceedings she deems appropriate to determine the damages in this case.

CONCLUSION

The Magistrate’s Report and Recommendation is adopted with respect to the issues of the Municipality’s liability under § 1983 for infringement of plaintiffs’ right of access to the courts, dismissal of the claim against defendant Linn, and the need to conduct a hearing on damages. The court departs from the Magistrate’s Report and Recommendation regarding abstention from the issue of recoupment under the contract and abstains from a determination .of defendants’ counterclaim. This matter is hereby referred to Magistrate Buchwald for a hearing on the issue of damages.

SO ORDERED.

      . The Procedural Background and Fact sections are adapted from a Report and Recommendation issued by Magistrate Naomi Reice Buchwald on October 26, 1984 and are to that extent adopted. There is extensive reliance on and quotation of the Magistrate’s thorough report throughout this opinion, however, no specific citations are made.

      . At present there are nineteen plaintiffs. By stipulation dated November 5, 1982, Wendell Stevens, Donald Conlin and Charles Cornetta withdrew as plaintiffs. By stipulation dated July 27, 1984, Robert O’Brien was added as a party plaintiff.

      . During the pendency of this litigation, a new compromise determination was entered into on July 11, 1983, for the period of July 1982 through June 1984. Pursuant to that determination, plaintiffs are currently being paid at the same rate as other radio repair mechanics.

      . In their objection to the Magistrate’s Report and Recommendation, defendants contend that plaintiffs’ right to access to the courts extends only to matters of public concern and that the dispute between the plaintiffs and the City is not a matter of public concern. Defendants rely on Connick v. Myers, 461 U.S. 138, 103 S.Ct. 1684, 75 L.Ed.2d 708 (1983), where the Supreme Court concluded that the first amendment protection of free speech as applied to a public employee was limited to matters of public concern. This limitation on speech, however, does not apply to the right of access to the courts, the central issue in this case. The right of access to the courts cannot be- characterized in terms of "public concern.” Further, the factors considered in an analysis under Connick, see McBee v. Jim Hogg County, Tex., 730 F.2d 1009, 1013—14 (5th Cir.1984) (en banc), are not transferable to an analysis of an infringement of the right of access to the courts. Thus, an analogy between the situation presented by this case and Connick must fail.
      Alternatively, defendants would have the court balance the rights of the defendant with the City’s interest in settling wage disputes. The right of access to the courts cannot be infringed upon or burdened. It is as fundamental a right as any a person may hold. See Silver v. Cormier, 529 F.2d 161, 163 (10th Cir.1976); Adams v. Carlson, 488 F.2d 619, 630 (7th Cir.1973). Certainly, the right may not be limited through a balancing of interests.

      . Defendants contend that the Tenth Circuit has refused to follow Silver v. Cormier, 529 F.2d 161 (10th Cir.1976), based on the decision in Shaw v. Neece, 727 F.2d 947 (10th Cir.), cert. denied, — U.S. —, 104 S.Ct. 2358, 80 L.Ed.2d 830 (1984). This is not a correct reading of Shaw. The court in Shaw simply found that the plaintiffs had not set forth a claim under Silver.

      . The City does not enjoy such qualified immunity for an employee’s action taken pursuant to municipal policy. Monell v. Department of Social Services, 436 U.S. 658, 690-92, 98 S.Ct. 2018, 2035-36, 56 L.Ed.2d 611 (1978). Here the City does not deny that its employees were acting within the scope of their employment and that the employees had full authority to undertake the challenged actions. As the Magistrate noted, the actions represented the City’s policy and thus the City does not enjoy immunity in this case.

      . Defendants contended that the Magistrate should abstain from deciding Plaintiffs’ constitutional claim because it is based on the recoupment provision. The Magistrate was correct in determining that plaintiffs’ claim could be resolved without resolving the controversy regarding the recoupment provision. Defendants’ counterclaim, however, squarely presents the issue. Therefore, the Magistrate’s recommendation that the court need not reach the abstention question is not followed.


author: CALDWELL, District Judge.

text:
    Robert PAPPAS, Plaintiff, v. Margaret M. HECKLER, Secretary of Health and Human Services, Defendant.
    Civ. A. No. 83-0642.
    United States District Court, M.D. Pennsylvania.
    Dec. 3, 1984.
    Peter B. Macky, Sunbury, Pa., for plaintiff.
    Albert R. Murray, Jr. Asst. U.S. Atty., Scranton, Pa., for defendant.
   MEMORANDUM

CALDWELL, District Judge.

Plaintiff’s counsel in the above-captioned Social Security matter has filed for attorney fees under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d). Upon review of the record and applicable law, we shall make a fee award subject to the discussion that follows.

We note initially that this court filed two orders, dated September 6, 1984, and October 24, 1984, to set schedules for filing briefs. Plaintiff’s brief was timely filed pursuant to our first order. Our second order, which was filed after the Secretary failed to comply with our September order, stated that the Secretary would be given a further opportunity to file a brief “[a]s ‘substantial justification’ of the Secretary for her position is a key issue in an EAJA fee award.” To date no brief has been filed to address this important point. Thus the fee petition is unopposed.

The attorney fee provision of the EAJA, 28 U.S.C. § 2412(d)(1)(A) provides for a fee award to a “prevailing party” such as plaintiff “unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.” Under 28 U.S.C. § 2412(d)(2)(A)(ii) attorney fees may not exceed an hourly rate of $75.00 per hour unless the court determines that higher amounts are warranted.

This court has examined and discussed the “substantial justification” issue at length several times, most notably in our fee decisions in Renshaw v. Heckler, 580 F.Supp. 836 (M.D.Pa.1983) and Kauffman v. Schweiker, 559 F.Supp. 372 (M.D.Pa. 1983). The Kauffman case also dealt with the propriety of EAJA fee awards to legal service organization counsel.

We have examined the “substantial justification” issue in light of these decisions and find plaintiff’s averments well-taken that the Secretary’s position in the present matter was not substantially justified. As we have indicated, the Secretary has chosen not to address the issue and plaintiff’s arguments are thus uncontroverted.

Neither has the Secretary elected to discuss the amount of the fee request. Plaintiff’s counsel has asked to be reimbursed at the maximum hourly rate ($75.00) permitted by the statute absent a determination that higher fees are warranted. The hourly rate requested has frequently been awarded and is fully commensurate with counsel’s experience and fees charged in the area where plaintiff’s counsel practices. As in other cases, however, we are concerned with the amount of time expended in brief writing. We commend counsel on a carefully prepared, thorough brief in support of his client’s summary judgment motion, but feel that the brief could have been more expeditiously prepared. Accordingly, we shall award fees for a total of 22.5 hours rather than the 28 hours claimed for a total award of $1,687.50.


author: LEISURE, District Judge:

text:
    DERO ENTERPRISES, INC., Plaintiff, v. GEORGIA GIRL FASHIONS, INC., Defendant.
    No. 84 Civ. 7757 (PKL).
    United States District Court, S.D. New York.
    Dec. 4, 1984.

      Edwin Sivin, Ganz, Hollinger & Towe, New York City, for plaintiff.
    Donald Nussbaum,- Surowitz & Nussbaum, New York City, for defendant.
   MEMORANDUM & ORDER

LEISURE, District Judge:

This is an action for goods sold and delivered. The defendant, Georgia Girl Fashions, Inc. (“Georgia Girl”) has moved for an order pursuant to Rule 12(b)(2) F.R.Civ.P. to dismiss this action on the ground this Court lacks personal jurisdiction over the defendant.

The plaintiff, Dero Enterprises, Inc. (“Dero”) alleges jurisdiction on the ground of diversity of citizenship and the requisite amount in controversy. By order dated March 9, 1984, Judge Gerard Goettel denied, with leave to renew at a more appropriate time, the defendant’s motion to dismiss the action for lack of personal jurisdiction. Thereafter, the parties conducted discovery and took the depositions of William Byrd, Georgia Girl’s president (“Byrd deposition”) and Edward Aguirre, Dero’s sales representative and supervisor of inventory control (“Aguirre deposition”). The parties have submitted affidavits with regard to the motion. Dero has also submitted copies of the two depositions described above.

In response to Georgia Girl’s motion, Dero contends that the Court has jurisdiction according to New York Civil Practice Law and Rules (“CPLR”) § 302(a)(1), which gives New York courts jurisdiction over a non-domiciliary “who in person or through an agent ... transacts any business within the state,” as to any cause of action arising from such transaction. Dero argues that Georgia Girl transacted business in New York through its agent O.P.’s Only Fashions, Inc. (“O.P.’s Only”), or that Georgia Girl transacted business “in person” within New York. Dero also argues that Georgia Girl is “doing business” in New York for the purposes of CPLR § 301.

The following facts are presented by the affidavits and depositions. Dero, a New York corporation whose principal place of business is in New York County, is a wholesaler of women’s garments. Georgia Girl, a Georgia corporation whose principal place of business is in Norcross, Georgia, is a retailer of women’s apparel. Its business is confined to Georgia and it has no offices, officers, employees or designated agents in New York, and neither advertises nor solicits customers in New York. O.P.’s Only is a New York corporation whose principal place of business is located in New York County. O.P.’s Only is an independent off-price fashion buying service, which means it acts as an intermediary or broker in the women’s garment industry, representing many different companies on a commission basis.

Georgia Girl has engaged the services of O.P.’s Only on several occasions to locate in the New York City market women’s garments in which Georgia Girl has expressed an interest in buying. After locating the desired type of goods, O.P.’s Only would notify Georgia Girl and Byrd would visit New York. If the goods were satisfactory, he would make a purchase. O.P.’s Only usually received commissions of 5% as a result of such a transaction. Byrd has been to New York a total of 70-80 times on corporate business.

In late May or early June, 1983 Dero had on hand in two New York City warehouses approximately 25,000 to 30,000 wool lined skirits manufactured in South America. Dero obtained the names of several off-' price buying services from a directory of women’s fashion buyers and in that manner contacted O.P.’s Only to tell them Dero had skirts it wanted to sell. Dero customarily contacts such buying services when it has a quantity of goods to sell. This was the first time that Dero did business with O.P.’s Only. O.P.’s Only represented themselves as able to place orders for other companies on goods Dero had in stock. No one told Dero that O.P.’s Only was Georgia Girl’s New York buying office, although the listing for O.P.’s Only in the women’s fashion buying guide indicated it is a “Paid Resident Buying Office.” O.P.’s Only had approximately 30 accounts.

After representatives of O.P.’s Only viewed the goods, O.P.’s Only called at least 20 retailers to inquire if they were interested in the skirts. On or before June 10, 1983 Byrd received an unsolicited telephone call from Bernard Pachter of O.P.’s Only asking if Georgia Girl would be interested in buying the skirts. Byrd told Pachter that he would come to New York in a few weeks to look at the goods, but Pachter replied that if he did not act quickly the line of skirts would be completely sold. Later that same day Byrd called Pachter and without having seen the goods placed an order. After receiving 18 orders, O.P.’s Only recorded them on its form and delivered the orders to Dero on June 10,1983 or thereabouts. Two more orders were filled within a few days.

Dero made two shipments to Georgia Girl, one on June 20, 1983 and the other on June 27, 1983. Within one week of the first shipment Georgia Girl called Dero and reported that some of the skirts were defective. These skirts were returned and Georgia Girl received a credit. Later, Dero contacted Georgia Girl requesting payment, which Dero considered overdue. By letter dated August 25, 1983 Byrd notified Dero that from 25% to 50% of the skirts were defective and requested to return the entire lot. By letter dated September 2, 1983 Byrd notified Dero that the skirts were “not as purchased by our agent, O.P.’s Only.”

DISCUSSION OF LAW

In an action based on diversity of citizenship, the law of the state in which the action is begun determines whether the federal court has personal jurisdiction. Arrowsmith v. United Press International, 320 F.2d 219 (2d Cir.1963). In New York CPLR §§ 301 and 302 set forth the bases upon which New York courts may assert personal jurisdiction over a non-domiciliary corporation.

A. Georgia Girl Is Not “Doing Business” In New York.

Under CPLR § 301, a New York court may assert personal jurisdiction over a foreign corporation which is doing business in New York “not occasionally or casually, but with a fair measure of permanence and continuity.” Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 267, 115 N.E. 915, 917 (1917); Liquid Carriers Corp. v. American Marine Corp., 375 F.2d 951, 953 (2d Cir.1967). This means the foreign corporation is carrying on systematic and regular activities within New York. Id. at 953. The only evidence of Georgia Girl’s activities in New York consists of the 70 to 80 buying trips to New York taken by its president. There is no indication of the period of time during which these trips were taken, but in any event such activity does not amount to carrying on systematic and regular activities within the state. Indeed, the Supreme Court recently stated in Helicopteros Nacionales de Colombia, S.S. v. Hall, — U.S. —, 104 S.Ct. 1868, 1874, 80 L.Ed.2d 404, 413 (1984) that “purchases and related trips, standing alone, are not a sufficient basis for a State’s assertion of jurisdiction”. See Rosenberg Bros. & Co. v. Curtis-Brown Co., 260 U.S. 516, 43 S.Ct. 170, 67 L.Ed. 372 (1923); Greenberg v. Lamson Bros., 273 A.D. 57, 75 N.Y.S.2d 233 (1st Dep’t 1947). See also Meyer v. Gas Magazines, Inc., 49 A.D.2d 864, 374 N.Y.S.2d 322 (1st Dep’t 1975); Loria & Weinhaus, Inc. v. H.R. Kaminsky & Sons, 495 F.Supp. 253 (S.D.N.Y.1980). Based upon the foregoing, the Court holds that Georgia Girl was not doing business for the purposes of CPLR § 301.

B. Georgia Girl Did Not Transact Business In New York In Person.

Section 302 of the CPLR subjects non-domiciliary corporations to the jurisdiction of the New York courts if they transact business in New York in person or through an agent, as to any cause of action arising from such transaction. The fact the non-domiciliary was never physically present in New York in connection with the contract sued upon is not controlling. So long as the defendant’s contacts with New York have been purposeful and designed to permit it to conduct activities within New York, the court will have personal jurisdiction. See Ehrlich-Bober & Co. v. University of Houston, 49 N.Y.2d 574, 427 N.Y. S.2d 604, 404 N.E.2d 726 (1980); Parke-Bernet Galleries, Inc. v. Franklyn, 26 N.Y.2d 13, 308 N.Y.S.2d 337, 256 N.E.2d 506 (1970); L.F. Rothschild, Unterberg, Towbin v. Thompson, 78 A.D.2d 795, 433 N.Y.S.2d 6 (1st Dep’t 1980); China Union Lines, Ltd. v. American Marine Underwriters, Inc., 454 F.Supp. 198 (S.D.N.Y.1978). The placing of an order by a telephone call to New York is insufficient to constitute the transaction of business within New York. M. Katz & Son Billiard Products v. G. Correale & Sons, 20 N.Y.2d 903, 285 N.Y.S.2d 871, 232 N.E.2d 864 (1967); L.F. Rothschild, Unterberg, Towbin v. McTamney, 89 A.D.2d 540, 452 N.Y. S.2d 630 (1st Dep’t 1982), aff'd, 59 N.Y.2d 651, 463 N.Y.S.2d 197, 449 N.E.2d 1275 (1983); General Instrument Corp. v. TIE Manufacturing, Inc., 517 F.Supp. 1231, 1232 (S.D.N.Y.1981); Total Sound, Inc. v. Universal Record Distributing Corp., 286 F.Supp. 123, 124-25 (S.D.N.Y.1968).

Georgia Girl’s activities in connection with the contract at issue consisted of placing an order by means of a telephone call, returning certain of the unsatisfactory goods, placing several other telephone calls and sending letters to Dero. These actions do not rise to the level of purposeful activity in New York that is required to confer personal jurisdiction under § 302(a)(1). Mayes v. Leipziger, 674 F.2d 178, 184-85 (2d Cir.1982). In connection with the subject contract, Georgia Girl did not physically enter New York, it did not initiate contact with the actors who were in New York and it was solicited by O.P.’s Only after Dero requested O.P.’s Only to find buyers for Dero’s goods. These circumstances do not, in our opinion, justify the exercise of jurisdiction over a Georgia defendant that did not physically enter New York. McKee Electric Co. v. Rauland-Borg Corp., 20 N.Y.2d 377, 283 N.Y.S.2d 34, 229 N.E.2d 604 (1967); Katz & Son Billiard Products, supra; Total Sound, Inc., supra; Mayes v. Leipziger, supra.

C. Georgia Girl Did Not Transact Business In New York Through An Agent.

Dero argues that O.P.’s Only acted as an agent for Georgia Girl in this transaction. It bases this position on Georgia Girl’s use of O.P.’s Only on previous occasions, O.P.’s Only’s representation that it was Georgia Girl’s New York buying office, the designation in the buying guide that O.P.’s Only was a “Paid Resident Buying Office,” and a specific reference to O.P.’s Only as Georgia Girl’s agent in Byrd’s September 2, 1983 letter.

The term “through an agent” as used in § 302(a)(1) has not yet been definitively interpreted by New York’s highest court. See Mayes v. Leipziger, 674 F.2d at 180-83. After surveying the leading state and federal cases that have considered this issue, Joseph M. McLaughlin, now District Judge, synthesized the following rule:

when the action is between a third party who dealt with a representative of the non-domiciliary in this state, the activities of that representative will be imputed to the non-domiciliary when he requested the performance of those acts in New York and those acts benefit him, and this is true without regard to whether the representative is an agent or an independent contractor.

McLaughlin, Practice Commentaries on § 302, C302:3, 7B N.Y.C.P.L.R. at 46 (McKinney Supp.1983-84). See Mayes v. Leipziger, 674 F.2d at 181-82; East New York Savings Bank v. Republic Realty Mortgage Corp., 61 A.D.2d 1001, 402 N.Y. S.2d 639, 641 (2d Dep’t 1978); Orient Mid-East Lines, Inc. v. Albert E. Bowen, Inc., 297 F.Supp. 1149, 1152 (S.D.N.Y.1969). In addition, the acts performed by the representative must be sufficient to constitute “purposeful activity” undertaken with the knowledge and consent of the non-domiciliary. See Ringers’ Dutchocs, Inc. v. S.S.S.L. 180, 494 F.2d 678, 680-81 (2d Cir.1974); Louis Marx & Co. v. Fuji Seiko Co., 453 F.Supp. 385, 390 (S.D.N.Y.1978).

Dero argues that Georgia Girl’s action led to an agency by estoppel in that O.P.’s Only represented itself as defendant’s New York buying office, the goods were purchased by O.P.’s Only for the defendant, and Byrd described O.P.’s Only as Georgia Girl’s agent in the September 2, 1983 letter. Cullen v. BMW of North America, Inc., 490 F.Supp. 249, 253 (E.D.N.Y.1980), rev’d on other grounds, 691 F.2d 1097 (2d Cir.1982). “An essential element of such an estoppel is a finding that the person sought to be charged intentionally or carelessly caused the plaintiff to believe in the authority of the purported agent____” Karavos Compania Naviera S.A. v. Atlantica Export Corp., 588 F.2d 1, 11 (2d Cir.1978). In addition the reliance must be reasonable. Id. There is no evidence that Georgia Girl intentionally or carelessly caused a belief that O.P.’s Only had authority to act for it. According to the Aguirre deposition, O.P.’s Only did not state that it was Georgia Girl’s New York buying office, the invoices used indicate that the goods were sold directly to Georgia Girl and not to O.P.’s Only, and the September 2, 1983 letter was sent almost two months after the transaction took place. Dero cannot reasonably claim that it relied upon such a subsequent representation when it concededly had previously asked O.P.’s Only to find buyers for its skirts. Besides, under New York law, what the parties call O.P.’s Only “matters little — the formal trappings of agency are not as important as the realities of the situation.” Louis Marx & Co., 453 F.Supp. at 390.

The determination of the issue whether O.P.’s Only was Georgia Girl’s agent turns on which party requested the services of O.P.’s Only and for whose substantive benefit or business purpose the transaction was conducted. The evidence presented by the depositions indicates that Dero requested O.P.’s Only to find buyers for its skirts. Dero obviously benefited economically from the sales that resulted from the efforts of O.P.’s Only. However, even assuming arguendo that O.P.’s Only was Georgia Girl’s agent, its actions as Georgia Girl’s “eyes” in the New York City marketplace do not rise to the level of meaningful or purposeful activity required for the assertion of jurisdiction under New York’s long-arm statute. See Ringers’ Dutchocs, Inc., 494 F.2d at 680-81; cf. Galgay v. Bulletin Co., 504 F.2d 1062, 1065 (2d Cir.1974). This is especially true considering that O.P.’s Only had no authority to complete orders for Georgia Girl. For example, the court in Ringers’ Dutchocs held that the appointment of a New York claims agent by a non-domiciliary insurer to “survey and report the amount of damages only, not to pay or reject claims” did not constitute “purposeful activity.” 494 F.2d at 680-81 (emphasis in original).

The Court is not unmindful of the rule that on a motion to dismiss for lack of personal jurisdiction, the pleadings and affidavits are to be construed in the light most favorable to plaintiff. On a pretrial motion to dismiss, plaintiff need only make a prima facie showing of jurisdiction through affidavits and supporting materials. Mayes v. Leipziger, 674 F.2d at 182 n. 3; Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir.1981); Visual Sciences, Inc. v. Integrated Communications, Inc., 660 F.2d 56, 58 (2d Cir.1981). After reviewing the documents submitted in opposition to the motion, the Court concludes that plaintiff has failed to make a prima facie showing of jurisdiction. Dero’s contention that O.P.’s Only represented itself as Georgia Girl’s buying office is not supported by the responses in the Aguirre deposition to questions addressing that subject. The September 2, 1983 letter describing O.P.’s Only as Georgia Girl’s agent was written seven weeks after the date of the transaction. Finally, the Byrd and Aguirre depositions are consistent about the fact that Dero approached O.P.’s Only to arrange the sale of its skirts, not the converse.

Based upon the foregoing, Georgia Girl’s motion to dismiss the complaint for lack of personal jurisdiction is hereby granted.

SO ORDERED.


author: HENRY WOODS, District Judge.

text:
    Billy Joe HIGBEE, a Resident of the State of Arkansas, Plaintiff, v. Joe Fred STARR d/b/a Poultry Growers, Inc. and/or Bi-State Energy, Inc.; Tyson Foods, Inc., An Arkansas Corporation; George Harmon, a resident of the State of Arkansas, Defendants.
    No. 82-5072.
    United States District Court, E.D. Arkansas, Fayetteville Division.
    Dec. 4, 1984.

      See also 8 Cir., 698 F.2d 945.
    John Arens, Fayetteville, Ark., for plaintiff.
    James M. Roy, Jr., Michael H. Mashburn, Cypert & Roy, and James B. Blair, Spring-dale, Ark., for defendants.
   MEMORANDUM OPINION

HENRY WOODS, District Judge.

Suit was filed on April 27, 1982, by plaintiff Billy Joe Higbee against defendants Joe Fred Starr d/b/a Poultry Growers, Inc. and/or Bi-State Energy, Inc. (hereafter “Starr”); Tyson Foods, Inc.; and George Harmon. Mary Ruth Sallee was later added as a party defendant. Jurisdiction is predicated on 28 U.S.C. § 1331 and 33 U.S.C. § 1365(a), with pendent jurisdiction over related state-law claims. Higbee alleged the following causes of action: 1) Discharge of pollutants into navigable waters of the United States without a permit, in violation of 33 U.S.C. § 1311(a); 2) violation of permit conditions set forth in permits issued by the Arkansas State Department of Pollution Control and Ecology, in violation of 33 U.S.C. § 1342; 3) battery (offensive touching by pollutants); 4) trespass (intrusion by pollutants); 5) negligence; 6) nuisance; 7) intentional infliction of emotional distress; 8) interference with contract; and 9) retaliatory eviction. Civil penalties and injunctive relief were requested.

Higbee’s claims for retaliatory eviction and interference with contract were based upon her allegations that her rental agreement with Sallee was interfered with by some or all of the defendants herein, in retaliation for her having instituted this lawsuit. On March 11, 1982, Sallee sued Higbee for unlawful detainer in Washington County Circuit Court, Civil Action number 82-228. That case was heard on the merits on July 19, 1982, and a final order issued by the Honorable Maupin Cummins in which it was found that Higbee was in default on rental payments and Sallee was entitled to possession of the property. No appeal was taken by Higbee from that final determination. This Court found that the state court conclusively adjudicated all issues regarding the propriety of Higbee’s eviction from the Sallee property against Higbee, and granted summary judgment in favor of defendants on the claim of retaliatory eviction. At the trial of this matter on September 20, 1984, Higbee put on no evidence directly related to her claims of interference with contract, battery, or intentional infliction of emotional distress. Therefore, this Court finds that those counts were abandoned by Higbee.

The operation which Higbee alleged was causing pollution consists of 10 hog finishing houses with a capacity of 350-400 hogs per house. Young hogs are housed there, and fed out to slaughter weight.. Waste produced by the hogs falls through the slats in the floors of the houses, and is collected in holding basins, each of which will hold approximately 70,000 gallons of wastewater. These basins are periodically pumped out, and the accumulated liquid, known as “honey” or hog litter, is then spread on pastureland for fertilizer. The hog finishing operation is known as the Low Gap Hog Farm.

When the abandoned or previously decided causes of action are extracted from the pleadings, this lawsuit boils down to one issue: whether Starr, Tyson, and Harmon, separately or in concert, operated the Low Gap Hog Farm in such a manner as to violate the provisions of the Clean Water Act, 33 U.S.C. § 1251, et seq. The Low Gap Hog Farm is a “concentrated animal feeding operation,” as defined by 40 C.F.R. § 122.23 (App. B). The hog farm is located near the top of a hill, at the base of which is located the property owned by defendant Mary Ruth Sallee. At the time suit was filed, Higbee rented a small house and yard on the Sallee property, where she lived with her three children and a rather large collection of domestic animals. Higbee alleged that substandard practices on the Low Gap Hog Farm were causing pollution of the water sources at her residence, and in navigable waters of the United States. The practices complained of were: 1) construction of the hog houses according to plans and specifications which were not approved by and did not meet the standards of the Arkansas Department of Pollution Control and Ecology; 2) negligence in allowing the holding basins which collect hog waste to overflow onto the ground where the waste could be washed away down the hill by rainwater runoff; 3) negligence in spreading the liquid hog waste on pastureland as fertilizer in such a manner that it would be washed away by rainwater runoff; and 4) disposal of dead hogs in “dead pits” without adequate cover or precautions to prevent accumulated water in the pits from percolating or running off down the hill into Higbee’s water sources.

Trial was held on September 20, 1984, and the case was taken under advisement. All parties except Sallee have submitted proposed findings of fact and conclusions of law, and the Court has exhaustively reviewed the submissions of the parties and the exhibits of record. The matter being ripe for decision, this Court makes the following findings of fact and conclusions of law.

FINDINGS OF FACT

1. Billy Joe Higbee is, and at all times relevant to this lawsuit was, a citizen and resident of Washington County, Arkansas.

2. Joe Fred Starr (Starr) is, and at all times relevant to this action was, a citizen and resident of Washington County, Arkansas.

3. Bi-State Energy, Inc. is a corporation organized and existing under the laws of the State of Arkansas; Joe Fred Starr is the president of Bi-State Energy, and at all times relevant to this suit acted as the agent, servant, employee or officer of Bi-State Energy, Inc.

4. At all times relevant to this lawsuit, Bi-State Energy, Inc. owned and leased to Poultry Growers, Inc. the hog finishing houses at Low Gap Hog Farm.

5. Poultry Growers, Inc. is a wholly-owned subsidiary of Tyson Foods, Inc.

6. Tyson Foods, Inc. is, and at all times relevant to this action was, an Arkansas Corporation with its principal place of business in Washington County, Arkansas.

7. George Harmon is, and at all times relevant to this action was, a citizen and resident of Washington County, Arkansas; he is presently an employee of Tyson Foods, Inc., and was, for a portion of the time relevant to this lawsuit, an employee of Bi-State Energy, Inc. Harmon was employed as resident manager of the Low Gap Hog Farm.

8. Defendant Mary Ruth Sallee is a citizen and resident of Washington County, Arkansas. She is the owner of certain real property, more particularly described as:

10 acres situated in the Southwest quarter (SWVk) of Section 17, Township 14 North, Range 29 West, in Washington County, Arkansas.

9. The Sallee property is located approximately two miles northeast of the town of Brentwood, Washington County, Arkansas. It is situated at the base of a hill below the Low Gap Hog Farm. A small ravine, which conducts the flow of runoff in wet weather, runs downhill from the Low Gap Hog Farm past the Sallee property and into London Creek, thence into the West Fork of the White River. The terrain between the farm and the Sal-lee property, with the exception of the road and ravine, is covered with a thick growth of vegetation and forestation.

10. Higbee rented a portion of the Sal-lee property in November, 1978, and resided there until October, 1982, when she was evicted. Higbee and her three children repaired and occupied a dilapidated shack on the property.

11. The Sallee property occupied by Higbee possessed the following sources of water: a shallow, hand-dug well; the ravine or drainage ditch previously described; and a ground-spring which welled up and filled a tiny pond constructed by Higbee and her friends. Of these sources of water, only the spring provided water demonstrably fit for human consumption.

12. Higbee was warned, at the time that she moved onto the Sallee property, that the well behind the house was not fit for use as a source of drinking water. The water in this well was unfit for human consumption long before construction began on the hog houses located on the Low Gap Hog Farm.

13. Higbee utilized the Sallee property not only as living quarters for herself and her family, but also as a shelter for a large brood of domestic animals. She stated in answer to interrogatories that between November, 1978, and July, 1982, she kept approximately 75 dogs, 40 cats, 2 horses, 30 goats, 8 pigs, 400 chickens, 4 peacocks, 130 turkeys, 1 cow, 30 pigeons, 60 rabbits, 35 ducks, and 30 geese. (PX 9.)

14. Higbee prided herself on the fact that she did not keep her animals in pens, but allowed them to have the free run of her yard and of her house. She testified that goats, as well as cats and dogs, urinated and defecated in her house, and the record includes pictures of chickens frolicking among the Christmas packages underneath the tree.

15. With few exceptions, Higbee permitted her animals unrestricted access to drink from, to swim and bathe in, and to foul all of the water sources on her property. She testified that she also drank from these water sources, and that she felt that if the water was clean enough for her “critters” to drink, it was clean enough for her and her family to drink.

16. During the period of time when Higbee, her family, and her animals lived on the Sallee property, the ground surrounding the Higbee home was contaminated by large quantities of animal feces and urine from the animals kept there by Higbee.

17. Higbee maintained two outhouses in the yard of her dwelling on the Sallee property, which were periodically repositioned when the spots in which they were located had become fouled. In order to avoid visiting one or the other outhouse at night, chamber pots were kept in the house. These were emptied each morning on or near the family garden plot, which was located 15-20 feet from the spring.

18. Higbee complained that after the Low Gap Hog Farm commenced operations, her previously pure water supply became polluted and could no longer be used for drinking or bathing. She stated that her house smelled of hog waste, and that her children went to school each day smelling of hogs.

19. The water sources on the Sallee property did not have any unpleasant odor when tested by representatives of the State of Arkansas or by plaintiffs experts. Nor could any hog smell be detected by these experts while standing on the Sallee property. These experts visited the Sallee property some two years after Higbee and her menagerie vacated the property. The Low Gap Hog Farm had been in operation during this entire time.

20. The Low Gap Hog Farm is located in Sections 17, 18, and 19 of Range 29 West, Township 14 North, of Washington County, Arkansas, about 13 miles south southeast of Fayetteville and D/2 miles north northeast of Brentwood in a lightly populated area (PX .2.). It lies lk to V2 of a mile above the Sallee property occupied by Higbee from 1978-1982.

21. The Low Gap Hog Farm is a hog finishing operation where hogs are raised to slaughter weight in closed, slatted-floor houses. Waste produced by the hogs falls through the slats in the floor, and is collected in a holding basin. There are 10 houses, with a capacity of 350-400 hogs each. The basins will hold approximately 70,000 gallons of wastewater per house. These basins are periodically pumped out, and the waste, a suspension of solid wastes in water called “honey” or “hog litter,” is then spread on pasture land. This litter makes excellent fertilizer. (PX 2.)

22. Defendants have not applied for or obtained a National Pollutant Discharge Elimination System permit from the United States Environmental Protection Agency. Defendants did, however, obtain from the Arkansas Department of Pollution Control and Ecology a “no discharge” permit for the operation of their waste disposal system at the Low Gap Hog Farm. This permit set out various requirements and conditions for operation of the farm. The “no discharge” status provided that animal waste would be spread on pastureland rather than discharged into waterways.

23. The permit to construct, operate and maintain a waste disposal system at the Low Gap Hog Farm was issued by the Arkansas Department of Pollution Control and Ecology to Bi-State Energy, Inc., on December 3, 1980. The permit provided that it could be modified or revoked “whenever it is necessary, in the opinion of the Department, to prevent or abate pollution of any waters of the State.” There has been no modification or revocation of this permit.

24. Bi-State Energy, Inc. had a comprehensive plan for the spreading of the waste from the Low Gap hog houses. This plan took into consideration the seasons appropriate for spreading hog litter, avoided unnecessary concentrations of litter on any one farm or field, provided for lighter application to sloping areas than flat areas to minimize runoff, protected newly-cleared land from over-application to minimize runoff, and was developed in light of requirements specified in the permit by the Arkansas Department of Pollution Control and Ecology and basic conservation practices. (PX 2.)

25. Joe L. Gaston, District Conservationist for the United States Department of Agriculture Soil Conservation Service in Fayetteville, Arkansas, advised Starr on September 12, 1980, to spread waste from the Low Gap Hog Farm on the Low Gap farm and on the C.L. Truelove farm, and designated a third farm adjoining U.S. Highway 71 as a backup spreading location. He stated that “none of the land on these three farms is subject to flooding and run-off will cause a minimum amount of water pollution.” (DX 30.)

26. Prior to filing suit, attorneys for Higbee notified the Arkansas Department of Pollution Control and Ecology of alleged problems at the Low Gap Hog Farm. The Arkansas Department of Pollution Control and Ecology investigated these allegations in depth and at length.

27. The report of Jim Rush, Agricultural Permit Inspector for the Arkansas Department of Pollution Control and Ecology, concluded that as of January 28, 1981, the Low Gap Hog Farm was being operated in a manner satisfactory to the Department. (PX 2.)

28. The report of District Field Inspector R. David Orr of the Arkansas Department of Control and Ecology dated February 18, 1981, found that the Low Gap Hog Farm was a “Good operation with adequate amount of pasture suitable for waste disposal.” Orr’s memorandum submitted with his report stated that “No water pollution was observed that could be attributed to this operation.” (PX 2.)

29. On March 19, 1981, Inspector Orr submitted a follow-up report on the Low Gap Hog Farm - to plaintiff’s attorneys, stating that he had again inspected the farm, paying particular attention to dead animal and waste disposal. He found no problems existing at the farm, either with dead animal disposal or with waste disposal, and stated “I saw nothing which could cause the results you mention (children going to school each morning smelling like hogs).” (PX 2.)

30. Reports by Inspector Orr dated July 29, 1981, and August 17, 1981, found the basic operation of the farm was satisfactory, but stated that lack of cover on the dead hog pits was a serious problem. (PX 2.)

31. During 1980-82, defendants maintained several dead hog disposal pits on the Low Gap Hog Farm. At times there was insufficient cover on the contents of these pits, and the Arkansas Department of Pollution Control and Ecology recommended that a more acceptable alternative for dead hog disposal be developed. In 1982, these pits were replaced by a rendering service which removes dead hogs from the Low Gap Farm Hog Farm on a twice or thrice weekly schedule. (Depo. Harmon, 26-28.)

32. The Arkansas Department of Pollution Control and Ecology continued to make regular inspections at the Low Gap Hog Farm, because of the problem with dead animal disposal. Plaintiff’s exhibit 2 contains reports and correspondence dealing with inspections dated February 18, 1982, February 19, 1982, March 1, 1982, and August 30, 1982. On none of these inspections was any problem found concerning the hog houses themselves, or the disposal of waste from the houses. The inspectors consistently concluded that the hog finishing operation at the Low Gap Hog Farm was not a source of water pollution.

33. In a report dated March 18, 1981, Joe L. Gaston, indicated that his soil tests revealed the following: the soil on the Low Gap Farm is Enders stony loam, and the subsoil is red, plastic clay with sandstone over shale. Permeability is very slow. The report concluded that there was little chance of water pollution from the “dead pits” because of the slow permeability of the soil. (PX 2.)

34. Harmon, the resident manager, testified that he lived on the Low Gap Hog Farm, along with his wife and two children. He stated that they had no health problems related to the hog finishing operation.

35. Harmon testified that the holding basins beneath the hog houses are never allowed to overflow, though on occasion they become perilously full and even on a few occasions have “seeped” over the top. When the basins are full, he calls Tyson and requests prompt help. A pump truck is not long in forthcoming, which is why the pits do not overflow.

36. Two of the ten hog houses developed small cracks in the concrete around their bases, but the cracks were repaired when the defects were discovered. On one occasion, one house began to seep over with the accumulated waste in its pit, but the seepage was small and did not flow anywhere. (Depo. Harmon, 31-86.)

37. The accumulated litter in the waste pits is pumped into a “honeywagon” about twice a year and spread on surrounding fields as fertilizer. Harmon testified that even in the amounts spread as fertilizer, there would not be runoff from the Low Gap Hog Farm that would affect the Sallee property, because the litter would soak into the ground, especially considering the expanse of forest between the two locations. (Depo. Harmon, 69-70.)

38. Higbee engaged three experts for the purpose of taking water samples from various locations involved in this lawsuit and testing these samples for various forms of pollution. The most pertinent tests were those for fecal coliform colonies, which are masses of colon bacilli excreted in the feces of warm-blooded animals. Other tests were done to detect the presence of heavy metals and other chemical pollutants. The testing methods were flawed, and the results were totally inconclusive.

39. Two geologists testified regarding the physical hydrology of the Low Gap area. Dr. Ken Steele is a geologist and physical hydrologist from the University of Arkansas at Fayetteville. Dr. Steele tested 19 water sources. Ten were in the immediate vicinity of the Low Gap Hog Farm, the ravine along the Low Gap Road, and the Higbee residence. Nine were control sites in the Brentwood area. Dr. Steele examined the samples taken from these sources for specific conductivity and alkalinity, and for the presence of sodium chloride, lead, calcium, nitrates, phosphates, sulfates, manganese, iron, cobalt, nickel, cadmium, zinc, potassium, and strontium. While the readings taken from the samples fluctuated, they were basically within normal values. The Higbee well did test out at slightly over the norm in lead content. (Depo. Dr. Steele, 109.) However, Dr. Steele stated that there was not “enough of the right kind of data to make meaningful interpretations in terms of fecal coliform or lead content or nitrate or whatever.” (Depo. Dr. Steele, 150.) He could not assert with any degree of conviction that the Low Gap Hog Farm was polluting any of the water sources he tested. His final conclusion, based on his expertise in physical hydrology, is the undisputed fact that water flows downhill.

40. In addition to Dr. Steele, Leslie E. Mack, a geologist and Director of the Arkansas Water Resources Research Center of the University of Arkansas, also testified for the plaintiff. Mr. Mack did not run any tests, and relied on Dr. Steele’s data to form his opinions. He had no other evidence to support his conclusions. Like Dr. Steele’s testimony, Mr. Mack’s testimony established little more than the fact that water runs downhill.

41. Mr. Joe D. Henry, a microbiologist with American Interplex Corporation, was plaintiff’s expert in the area of fecal coliform testing. Mr. Henry indicated that fecal coliform bacteria originate in the gut of warm-blooded animals, including such common Northwest Arkansas denizens as hogs, cattle, chickens, dogs, deer, and humans.

42. Mr. Henry personally collected samples from five water sources in the vicinity of the Higbee residence, and from six other sites in the Brentwood area. No one except one of plaintiff’s attorneys was present when these samples were collected. In addition, Mr. Henry also ran fecal coliform tests on some of the water samples collected by Dr. Steele. With the exception of the Higbee well, no site was sampled more than twice, and most were only sampled once. Mean values reported were based on only two samples. No results were reported on some of the samples collected. Mr. Henry’s fecal coliform counts fluctuated wildly. An “unnamed creek” tested out at 113 fecal coliform counts per 100 ml. of water on June 19, 1984, but showed 1333 counts on June 21, 1984. Greasy Creek went from 22 counts to 1162. Hutchins Creek, in the same time period, dropped from 1280 to 610. The four counts from tests of the Higbee well were 132 on June 19, 1984; 80 on June 21, 1984; 0 on July 29, 1984; and 68 on August 12, 1984. (PX 28). No explanation was given for these variations in test results.

43. Data developed by testing water sources is the very essence of the proof required in a water pollution case. Such data should be thorough, should be based on scientifically acceptable methodology, and should be in readable form. The proof in this case falls far short of these requirements. The data collected by plaintiff’s experts is inadequate, in terms of both quantity and methodology, to establish as fact plaintiff’s allegation that waste produced on the Low Gap Hog Farm was the cause of any pollution which might exist in her water sources, or in any navigable stream or water of the United States. Monitoring data collected on the West Fork of the White River by the Arkansas Department of Pollution Control and Ecology, contained in plaintiff’s exhibit 19, utilizes 20 samples to determine a mean fecal coliform count. The samples ranged from 8.0 to 600.0 fecal coliform count, for a mean of 49.7. Mr. Henry’s technique, utilizing only two samples, could' have produced a mean value of 304.0 based on those readings. The fewer samples tested, the less accurate the results. Such methodology is at best inaccurate, and the results of such tests are not probative.

CONCLUSIONS OF LAW

1. All parties to this lawsuit are citizens and residents of Washington County, Arkansas. Jurisdiction in this Court is predicated upon 28 U.S.C. § 1331 and 33 U.S.C. § 1365(a). The alleged source of discharge is located in Washington County, Arkansas, and venue is therefore proper in this Court pursuant to 33 U.S.C. § 1365(c)(1).

2. Higbee alleges that the ditch or ravine running down Low Gap Road past her former residence feeds into London Creek, as does the spring, and that London Creek feeds the West Fork of the White River, which eventually flows into Beaver Lake. Higbee contends that all these waterways are navigable waters of the United States for purposes of the Clean Water Act. The defendants did not contest this allegation, and for the purposes of this litigation we assume these waterways to be covered by the provisions of the Clean Water Act.

3. On February 8, 1982, Higbee gave notice to Starr, Tyson and Harmon that she intended to file suit against them for violations of the Clean Water Act. This notice was given pursuant to 33 U.S.C. § 1365(b), and was sufficient to comply with statutory requirements.

4. 33 U.S.C. § 1311(a) provides that “except as in compliance with this section and sections 1312, 1316, 1317, 1328, 1342, and 1344 of this title, the discharge of any pollutant by any person shall be unlawful.” 33 U.S.C. § 1362 includes in its definition of person “an individual, corporation, partnership, association____” Pollutant includes “agricultural waste.” The term “discharge of a pollutant” means “any addition of any pollutant to navigable waters from any point source.” Point source includes a “concentrated animal feeding operation.” 33 U.S.C. § 1362. The Low Gap Hog Farm is a concentrated animal feeding operation, and the hog waste which accumulates in the holding basins is agricultural waste. Any discharge of hog waste by the Low Gap Hog Farm into tributaries of the White River violates 33 U.S.C. § 1311 unless done in compliance with the mandates of the Clean Water Act.

5. 33 U.S.C. § 1342 provides for the issuance of discharge permits either by a federal agency, or by a state agency, once the state agency has promulgated federally acceptable guidelines. Discharge of pollutants without such a permit is a violation of the Clean Water Act. No federal or state discharge permit has been shown to be issued to the Low Gap Hog Farm. However, the Low Gap Hog Farm was issued Permit No. 2485-W by the Arkansas Department of Pollution Control and Ecology on December 3, 1980. This permit authorized construction, operation and maintenance of a “no discharge” waste disposal system in connection with the hog finishing operation. The “no discharge” system provided for waste disposal by spreading on specified pasturelands, within guidelines designed to prevent runoff and to promote conservation. The permit may be revoked or modified as necessary to prevent water pollution. No such revocation or modification has been necessary, in the opinion of the Arkansas Department of Pollution Control and Ecology. Numerous investigations and inspections, many of them occasioned by this lawsuit, have revealed no permit violations, with the exception of the “dead pits” which have been eliminated. Because the Low Gap Hog Farm is a closed, “no discharge” system, the discharge permit provisions of 33 U.S.C. § 1342 do not apply to it.

6. Higbee failed to show a causal connection between the hog finishing operation at the Low Gap Hog Farm and the presence of any pollution which was detected in her water supply. There was, furthermore, no credible evidence that any pollutants from the Low Gap Hog Farm have ever been discharged into any navigable waters of the United States. Therefore, on the evidence adduced, the defendants are not in violation of any provisions of the Clean Water Act. Because it is the finding of this Court that the Low Gap Hog Farm did not discharge pollutants into any waterway, it must also be the finding of this Court that the defendants are not liable for battery or trespass by pollutants, or for infliction of emotional distress as alleged in the complaint.

7. The Court further concludes that the evidence of pollution in the West Fork of the White River is far short of conclusive, as is evidence of pollution of any water found on the Low Gap Hog Farm. The evidence of water pollution on the Sallee property is only slightly more probative. Upon thorough review and consideration of all the evidence, this Court concludes that any pollution existing in the water sources on the Sallee property was caused by the unsanitary practices of Higbee and her family, both in regard to their placement, rotation, and disposal of outhouses and human wastes, and in regard to the husbandry of her animals, which were allowed to roam freely, and drink, swim and bath in, and foul all of her water sources.

CONCLUSION

In conclusion, there does not seem to be any substantial disagreement over the law which governs the discharge of pollutants by an operation such as the Low Gap Hog Farm. If any such discharge is made, it must be made pursuant to a permit, and must meet specified conditions set forth in the permit, based on state and federal statutes. It is not contested that the Low Gap Hog Farm did not possess permits to discharge wastes. What Higbee failed to establish is that a discharge of pollutants was in fact being made by the Low Gap Hog Farm. Quite the contrary. Water samples taken for the purpose of demonstrating that pollutants were discharged from the Low Gap Hog Farm are inconclusive. Photographs of the hog farm taken to demonstrate such discharge of pollutants reveal a clean and efficient operation. The only seepage ever found and photographed is a small amount (maybe one-half gallon) which leaked from house number 9 on one occasion. On one other occasion, a pipe leading out from the holding basin in house number 5 was broken off by a mower, and some of the liquid waste escaped. A photograph of the spill was made before the pipe was repaired. No other evidence that any liquid had escaped from the holding basins was adduced. As for the spreading of the waste on nearby pastures, it was established that this created an offensive odor, but the odor was temporary, and did not affect very many area residents. Spreading was done under carefully drafted standards to prevent runoff and to promote conservation. Higbee put on evidence that on one, or perhaps two, occasions the litter was spread during wet weather, which violated spreading guidelines. George Harmon testified that this had to be done if the basins reached their capacity in such weather, and no house-to-house transfer of the waste was possible. Wet-weather spreading clearly was not the policy of the farm, and no pollution was traced to the spreading of waste during wet weather. As for the disposal of dead hogs, prior to 1982, dead hog disposal via “dead pits” was indeed substandard. However, no pollution was linked/to the substandard disposal practices, and they have since been altered to conform to state and federal standards. Plaintiff has simply failed to establish causality, an essential element in proving liability in any of plaintiff's causes of action. It is the finding of this Court that any pollution around the Higbee residence during 1978-1982 was caused by unsanitary practices of the Higbee family themselves. Because the defendants are not responsible for any such pollution, the issue of damages need not be reached in this opinion. The case is hereby dismissed as to all defendants.