source: Caselaw Access Project

author: LIMBAUGH, District Judge..

license: Public Domain

text:
    NATIONAL FOOTBALL LEAGUE and St. Louis Football Cardinals, Inc., Plaintiffs, v. McBEE & BRUNO’S, Jerrald Guttmann, Michael Badalamenti, Frank & Frank, Inc. and Talayna’s of South St. Louis Inc., Defendants.
    No. 84-2692 C (5).
    United States District Court, E.D. Missouri, E.D.
    Oct. 2, 1985.
    Order Sept. 13, 1985.

      Robert E. Wallace, Jr., Jim J. Shoemake, David W. Harlan, Guilfoil, Petzall & Shoe-make, St. Louis, Mo., John Vanderstar, Margaret Alexander, Covington & Burling, Washington, D.C., for plaintiffs.
    Barry S. Ginsburg, Clayton, Mo., John L. Sullivan, Joanna O. Quinley, Francis M. Nevins, Jr., St. Louis, Mo., for defendants.
   MEMORANDUM OPINION

LIMBAUGH, District Judge..

This civil case, in which injunctive relief is requested, is now before the Court on the merits and the parties have exhaustively briefed and argued the issues. Plaintiffs, in alternate theories, claim defendants have no authority to intercept transmissions of live telecasts of professional football games played in St. Louis, Missouri between the Cardinals and other National Football League teams and show such telecasts at their restaurant or tavern establishments. Plaintiffs allege defendants violate plaintiff’s copyright authority, 17 U.S.C. § 101, et seq., and violate, as well, certain provisions of the Federal Communications Act of 1934, as amended. 47 U.S.C. § 151, et seq. Plaintiffs request permanent injunctive relief and statutory damages under the Copyright Act. Plaintiffs also assert contempt claims against some defendants for alleged violation of the Court’s preliminary order.

Defendants deny any violation of either act and assert numerous affirmative defenses. In addition, they claim damages are due from plaintiffs in a variety of counterclaims.

Trial and a decision on the issues presented by the counterclaims and the contempt assertions are reserved and will not now be dealt with.

On November 19, 1984, the Court entered a temporary restraining order, restraining defendants and their agents from intercepting from satellite, or from any other means, a transmission of a live telecast of the professional football game scheduled to be played in St. Louis, Missouri on November 25, 1984 between the Cardinals and the Philadelphia Eagles, the performance of which game was to be telecast on November 25, 1984 by CBS Sports, Inc.

After a hearing, the Court, on December 7, 1984, issued a preliminary injunction following the general terms of the temporary restraining order, except that another professional football game showing was also enjoined. This was the 1984 season final home game scheduled to be played between the Cardinals and the New York Giants, on December 9, 1984. The basis of the preliminary injunction was that defendants had infringed plaintiffs’ copyrights in National Football League (“NFL”) game programs and there was a reasonable likelihood defendants had violated the provisions of the Federal Communications Act, as well.

Although certain findings of fact were made in the preliminary injunction, many will again be restated or changed in view of new testimony adduced at the trial on the merits.

Plaintiff National Football League is an unincorporated, non-profit association constituted under the laws of New York, with its principal place of business in New York City. The association is composed of 28 member clubs that are engaged in the business of exhibiting professional football games. The clubs are divided into the National Conference and the American Conference. Through the NFL, the member clubs schedule games against each other and manage their affairs as a league.

Plaintiff St. Louis Football Cardinals is a Missouri corporation organized under the laws of the state of Missouri, with its principal place of business at St. Louis, Missouri. The Cardinals is a member club of the National Football League and is a member of the National Conference.

Defendant McBee & Bruno’s, Inc. (“Panama Reds”) is a Missouri corporation that owns and operates Panama Reds, a bar and restaurant located at 2245-7 South Grand in St. Louis, Missouri 63104.

Defendant Frank & Frank, Inc. (“Sandrinas”), is a Missouri corporation that owns and operates Sandrina’s, a bar and restaurant located at 5098 Arsenal in St. Louis, Missouri 63139.

Defendant Jerrald Guttmann (“Guttmanns”) owns and operates, Guttmann’s, a bar and restaurant located at 3609 Juanita in St. Louis, Missouri 63166.

Defendant Michael Badalamenti (“Mr. B’s”) owns and operates Mr. B’s, a bar and restaurant located at 5800 Southwest Avenue in St. Louis, Missouri 63116.

Defendant Talaynas of South St. Louis, Inc. (“Talaynas”) is a Missouri corporation that owns and operates Talaynas, a bar and restaurant located at 3123 Watson, in St. Louis, Missouri 63139.

Each defendant restaurant and bar is equipped with a satellite dish antenna capable of receiving satellite transmissions.

In 1982, the NFL, on behalf of the member clubs, entered into contracts with the three major networks, ABC, CBS and NBC, to provide for the telecasting of live television programs of NFL regular season and post-season games for five seasons commencing in the fall of 1982.

By these contracts, each network obtained exclusive rights to televise certain NFL games, subject to contractual limitations, among them the requirement that unsold out games are not to be broadcast live; that is, that they be blacked-out in the home club’s home territory which is the area within a 75-mile radius of the club’s home playing site. In addition, all of the clubs away games must be broadcast live back to the home city.

All of the defendants’ establishments are located within 75 miles of Busch Stadium which is in the City of St. Louis, Missouri and is the home site of plaintiff St. Louis Football Cardinals.

These exclusive contracts, with their limitations on broadcast rights, serve the NFL and its member clubs’ economic interests in controlling the distribution of the sports entertainment product that the clubs and the NFL create. The contract limitations also foster development of a local following for individual clubs.

The Cardinals played regularly scheduled home games at Busch Stadium during the 1984 season against other clubs including the Los Angeles Rams game on November 4, 1984, the Philadelphia Eagles game on November 25, 1984 and the New York Giants game on December 9, 1984. The Rams, Eagles and Giants’ games were all telecast by CBS to other areas but were blacked out and not shown by the St. Louis CBS affiliate, KMOX TV in the greater St. Louis area.

Each of the Cardinals’ home games are telecast following a regular process. Network cameras in the Stadium capture the video images of the game while the network announcers, team players and others simultaneously create the audio portions of the telecasts. The audio and video signals of the telecasts referred to, which constitute the program, are then transmitted to an earth station located outside the stadium. The earth station then transmits the program to a satellite in geostationary earth orbit at a point on the celestial equator where the satellite is located.

A transponder on the satellite receives the signal and on another frequency transmits it to a network control point in Long Island, New York. This transmission is broad enough that it can be received, with proper equipment, in large portions of the earth in the vicinity of the satellite, including much of the United States. The signal from the earth station to the satellite is called an uplink and that going from the satellite to Long Island is a downlink. At this stage the downlink signal contains no commercials and is occasionally referred to as a clean feed.

On receipt of the clean feed down link at the network control point, the network inserts program material consisting largely of commercials and other sports commentary. The signal is then transmitted from the New York control point back to the original transmitting satellite or to a different satellite also in geostationary orbit. This uplink signal is referred to as a dirty feed because of the insertion of new materials. The dirty feed is then transmitted from the satellite to the same large portions of the earth in the vicinity of the satellite and is then received by the network’s affiliated television stations and broadcast pursuant to the terms of the agreement between the networks and the NFL.

An uplink signal transmitted from an earth station to a satellite is a focused signal with strength directed toward the satellite. The downlink is more of a difused signal which permeates a large area. The satellite downlink signals, whether clean feeds or dirty feeds are transmitted in the so-called C-Band frequency consisting of 3,700 to 4,200 megahertz. Accordingly, downlink signals, intended for a network control point or authorized television stations, can be intercepted with equipment that is now available to the public such as dish antennaes. It is not possible for these transmissions to be intercepted by ordinary home television equipment.

Although satellite dish systems are becoming popular, they are not commonly used in private homes and their use is generally confined to commercial establishments such as hotels, bars and restaurants and to residential areas that are so situated that access to network television stations by standard television antennae is poor. A dish system can be purchased for $1,500.00 but the more sophisticated reliable systems cost much more. Defendants’ systems cost as much as $3,000.00 to $6,000.00 each. There are 125 to 130 million residential television sets in the United States as compared to 1 million or less satellite dish systems.

All defendants have dish antennaes or earth stations capable of receiving either a clean or dirty feed downlink signal. By the use of this equipment, they can receive the signal and convert it to a frequency so that it can be displayed on television sets and viewing screens in their establishments. If the signal is that of the video and audio of a football game, that game can then be displayed by defendants to their customers.

On November 4, 1984, the Cardinals played the Los Angeles Rams in St. Louis and the game was blacked out. The satellite signal of that game was intercepted by all defendants, except Sandrinas, with the use of dish antennaes and shown to their bar and restaurant customers and friends. The signal intercepted was that of the clean feed downlink and viewers did not see commercials or other material added at the network control point. They did view the entire game and heard the simultaneous audio commentary of the sports commentators and announcers.

Sandrinas’, with the use of a television antennae, was able to receive the full game and commercial insertions as broadcast by an affiliated CBS station on Channel 12, located in Cape Girardeau, Missouri, perhaps 100 or more miles away on a point to point measurement. Sandrinas’, Mr. B’s, Panama Reds’ and Talaynas’ all displayed the game so that food and beverage customers could view it and hear the commentary.

Guttmanns’ does not have a Sunday liquor sales license and its establishment was not open for business on Sunday, November 4, 1984. Guttmanns’ did intercept the satellite signal on that date with its dish antennae and showed the game to four persons including the owner and three friends.

All defendants, except Guttmanns’, derive income from increased business as a result of showing blacked out football games to their customers via the systems detailed. Apparently, many establishments in the greater St. Louis area, other than defendants, derive the same benefits from this practice. At the same time, when a game is blacked out, it is not sold out and the Cardinals lose income if there are unsold tickets. Broadcasts of live professional football home games to a home audience produce an extremely adverse affect on live attendance.

Ordinarily, an action for infringement of the copyright in any work cannot be instituted until registration of the copyright claim has been made following the provisions of 17 U.S.C. In the case of a work consisting of sounds, images or both, the first fixation which is made simultaneous with its transmission, the copyright owner may either before or after such fixation takes place, institute an action for infringement if the owner serves notice on the infringer, not less than ten or more than thirty days before such fixation, identifying the work and the specific time and source of its first transmission and declaring an intention to secure copyright in the work and makes registration for the work within three months after its first transmission. 17 U.S.C. § 411.

After the November 4, 1984, Cardinals-Rams game, plaintiffs applied for the temporary restraining order as to the November 25, 1984 Cardinal-Eagles game and the final home game of the Cardinals and Giants on December 9, 1984. Notice of potential infringement of the November 25th and December 9th games was timely given by plaintiffs to all defendants and proceedings to register the games for copyright purposes have been instituted as provided by the code requirements.

After a Cardinal football game video and audio program is transmitted to satellite and then sent to New York for commercials and other input and the resulting dirty feed is sent out for ultimate network broadcast, it is the dirty feed transmittal that is preserved for copyright registration purposes by plaintiffs. Neither plaintiffs nor the networks, authorized defendants at anytime to intercept plaintiffs’ copyrighted football programs and use them for their own purposes.

This Court has jurisdiction of claims asserting violation of the Copyright Act and the Federal Communications Act. 28 U.S.C. § 1331.

Copyright Act

The telecasts, consisting of the video and audio commentary of Cardinal football games and commercials and other materials added thereto, are copyrightable within the meaning of the Copyright Act. The code specifically provides that copyright protection subsists in original works of authorship which includes “motion pictures and other audiovisual works.” 17 U.S.C. § 102(a)(b); National Association of Broadcasters v. Copyright Royalty Tribunal, 675 F.2d 367, 378 (D.C.Cir.1982).

The N.F.L., on behalf of its member clubs and the Cardinals as to their games, are the owners of the copyrights of the games involved in this case. Such game programs were duly registered in the United States Copyright office and those registrations were valid and enforceable.

Defendants contend there was no infringement. All defendants, except Sandrinas’ displayed for their customers the clean transmission rather than the dirty transmission. Defendants and their customers saw only the football game itself and the commentary thereon. At time-outs or at station breaks, the video was blank and the commercials and other materials inserted then by the networks were not displayed. Had defendants intercepted the dirty signal, they too, would have seen and heard the commercials. As plaintiffs’ copyrighted the dirty signal and defendants intercepted and displayed for their customers the clean signal only, defendants vigorously deny infringement.

As stated, copyright protection subsists in original “works” of authorship. 17 U.S.C. § 102(a). A work is created when it is fixed in a copy or phonograph record for the first time. A work consisting of sounds, images or both that are being transmitted is fixed if a fixation of the work is being made simultaneously with its transmission, 17 U.S.C. § 101. Defendants assert, therefore, that the fixed signal that was copyrighted was the dirty signal. As defendants intercepted and played the clean signal there was no infringement, as the clean signal was neither fixed nor copyrighted.

If defendants’ argument is sound, copyright protection for all forms of live video and audio entertainment can be circumvented. It is obvious that the commercial success of live television entertainment depends substantially on advertising. Advertising is inserted at a network control point. Any live show, including football games, requires at least two satellite transmissions, one with a clean feed of the show itself to the control point and the other of the dirty feed including the show and commercials to broadcast stations. Therefore, any live show can be intercepted by anyone with the proper equipment by intercepting the clean feed, without commercials and then displaying this to customers or others. According to defendants, this is not a transgression of the rights of the copyright owners of those shows.

This Court cannot accept this proposition nor does it appear Congress ever intended this result.

The viewing and hearing public, principally by means of television and radio, enjoy sports, music, theatre and other programming because of the interest in those fields and not because of a desire to watch and listen to commercials and other network insertions. It is the aria from Puccini as sung by Pavarotti at Kennedy Center and the performance of Aida at the Metropolitan and the football game between the Cardinals and another team that the television viewers take delight in and not the inserted commercials. The fixation, therefore, is the “original ‘works’ of authorship” which is the opera, the dance ensemble, the address and the game. The fact that the performance is replete with network commercial insertions does not so restructure the program as to make it a new original work or to give it a new or final fixation.

There is nothing in the legislative history of Chapter 17 U.S.C. that would suggest Congress intended a different interpretation. The Court therefore concludes that defendants’ interception, divulgence and use of plaintiffs’ satellite delivered programming and signals, whether such signals constitute so called clean feed transmissions or dirty feed transmissions violated plaintiffs’ rights under the Copyright Act. 17 U.S.C. § 106(5), 111(b) and 501(a); National Football League and Miami Dolphins, Ltd. v. The Alley, Inc., American Embassy, Inc., et al, Case No. 83-0701-CIV-JWK (S.D.Fla., 1983); Entertainment and Sports Programming Network, Inc., et al. v. Edinburg Community Hotel, Inc., 623 F.Supp. 647 (S.D.Tex.1985).

This finding is not necessarily conclusive as to defendants Guttmann’s and Sandrina’s. Guttmann’s does not now have a liquor license which authorizes beverage sales on Sundays when most of the Cardinals games are played. Guttmann’s, therefore, is not open for business on Sundays and the Court finds this defendant has not infringed plaintiffs’ copyright privilege as only three friends were present watching one of the games in question. While 17 U.S.C. § 106(4) and (5) provide that the owner of a copyright has the exclusive right to authorize the public performance and display of its copyrighted works, this would not preclude a display to three friends. A “public performance” is the performance or display of a work to a substantial number of persons outside a normal circle of family or friends. 17 U.S.C. § 101. While Guttmann’s, on the basis of the evidence now before the Court, has not violated plaintiffs’ copyright privileges, it has the equipment available to do so which will be addressed when the question of injunctive relief is considered.

Defendant Sandrina’s, although it too has the equipment, did not transgress plaintiffs’ copyrights by intercepting a satellite signal. It did receive and show to its customers a broadcast of a game signal from a Cape Girardeau, Missouri located channel. Channel 12, KFVS T.V. is a CBS affiliate in a community 100 or more miles away and that affiliate has the permission from the network and plaintiffs to broadcast the game. Sandrina’s received that channel broadcast by means of a T.V. antennae. Such an interception with T.V. antennae equipment commonly used by the public is not an infringement of plaintiffs’ copyright authority.

Defendants, nevertheless, aver that they are exempt from copyright infringement under 17 U.S.C. § 110(5). That section of the code provides that a communication of a transmission embodying a performance or display of a work by the public reception of the transmission on a single receiving apparatus of a kind commonly used in private homes is not an infringement of copyright. Defendants contend the dish type apparatus used by them is of a kind commonly used in private homes and they are, therefore, exempt.

The evidence does not support defendants’ assertion. There are currently over 125,000,000 residential television sets in use. Home television users receive signals from network stations broadcasting the program and from cable. The common method of reception is by built-in antennae, rabbit ears or outside antennae.

There are less than 1,000,000 dish systems in use, and many of these are confined to commercial establishments. The dishes do have residential use when the home is so situated that access to television station broadcasting by standard television antennae is poor. Television sets can be purchased for $100.00 or more where as dish systems cost no less than $1,500.00 and for desired reception, $3,000.00 to $6,000.00 or more. The Court finds these systems are not the kind commonly used in private homes and defendants are not exempt from copyright infringement under 17 U.S.C. § 110(5). See also H.R.Rep. 94-1476 (Sept. 3, 1976), U.S. Code Cong. & Admin.News 1976, p. 5659.

In copyright infringement cases, “a copyright plaintiff is entitled to a permanent injunction where liability has been established and there is a threat of continuing violations.” Universal City Studios, Inc. v. Sony Corporation of America, 659 F.2d 963, 976 (9th Cir.1981), rev’d on other grounds, 464 U.S. 417, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984). The final injunction should be granted on such terms as the Court may deem reasonable to prevent or restrain infringement of the copyright. 17 U.S.C. § 502(a).

The evidence is clear, as stated even by some of defendants own representatives, that defendants intend to continue intercepting plaintiffs’ satellite signal of football games and show them to their customers. There is even some convincing evidence that one or more defendants intercepted plaintiffs’ signal and showed a game to customers after the issuance of the temporary restraining order.

Injunctive relief should not be granted unless there is a showing that plaintiffs’ legal remedies are inadequate and without the relief plaintiffs would suffer irreparable harm. Rondeau v. Mosinee Paper Corp., 422 U.S. 49, 95 S.Ct. 2069, 45 L.Ed.2d 12 (1975). Although plaintiffs could sue defendants for statutory damages under the Copyright Act each time there is an infringement, such relief would be inadequate as it would produce a multiplicity of suits. The Cardinals play eight or more exhibition and regular season games at home per year. The evidence is that most of these home games are blacked out. If these games are shown by defendants, it would require plaintiffs to bring as many suits for damages as there are games played.

As to irreparable harm, the Court finds that more persons attend the games if a televised showing is not available than if it is. A large live audience not only insures gate revenues, but enhances the marketability of television broadcasts, as well. While it is usually impossible to measure precise damages for copyright infringement, as is the case here, “a copyright holder in the ordinary case may be presumed to suffer irreparable harm when his right to the exclusive use of the copyrighted material is invaded.” American Metropolitan Enterprises of New York, Inc. v. Warner Brothers Records, Inc., 389 F.2d 903, 905 (2nd Cir.1968); Cassidy v. Bowlin, 540 F.Supp. 901, 904 (W.D.Mo.1982).

The basic purpose of the Copyright Act is to afford protection for one who has legally registered his works. Permanent injunctive relief preventing infringement here is the only way plaintiff owners may be protected when defendant infringers threaten continued infringement. Accordingly, defendants and their agents and employees will be permanently enjoined from intercepting, receiving, appropriating, converting to their own use, or retransmitting, divulging or using any satellite-delivered transmissions of plaintiffs’ programming or signals, or copyrighted works, or any satellite-delivered programs which plaintiffs make or could make available to the public through its contracts with the networks, without authorization from plaintiffs and whether such signals constitute clean feed or dirty feed transmissions.

Federal Communications Act

This act, originally known as 47 U.S.C. § 605 was redesignated by congress on October 30, 1984 as 47 U.S.C. § 705. Section 705 became effective December 30, 1984. The act sets out certain prohibited practices as unauthorized publications or uses of communication. The prohibited practices are identical in §§ 605 and 705. Section 705 contains provisions relating to exceptions, definitions and penalties that were not contained in § 605.

Both §§ 605 and 705 provide that “no person not being entitled thereto shall receive or assist in receiving any interstate or foreign communication by radio and use such communication (or any information therein contained) for his own benefit or for the benefit of another not entitled thereto.” Plaintiffs assert that when defendants intercepted their football game transmissions and showed them to their customers, they were in violation of the Act. Although, the Act was originally intended to prohibit radio and telegraph operators from disclosing the contents of a radiogram or a telegram, United States v. Sullivan, 116 F.Supp. 480 (D.C.1953), the prohibition has been expanded judicially to include modern technology. Movie Systems, Inc. v. Heller, 710 F.2d 492 (8th Cir.1983); Chartwell Communications Group v. Westbrook, 637 F.2d 459 (6th Cir.1980); Allen B. Dumont Laboratories v. Carroll, 184 F.2d 153 (3rd Cir.1950) cert. denied, 340 U.S. 929, 71 S.Ct. 490, 95 L.Ed. 670 (1951).

Defendant Talaynas’ contends that plaintiffs are using a law (§ 705), effective December 30, 1984, to apply retroactively to transactions occurring in the fall of 1984. Although, as stated, the December 30, 1984 law contained certain provisions as to definitions, penalties and remedies not contained in the previous law (§ 605), prior interpretations of § 605 found that aggrieved parties had private causes of action under § 605 for injuries arising from a violation of that section. Movie Systems, Inc. v. Heller, id. The occurrence of the alleged violations before December 30, 1984 do not therefore have ex post facto implications.

Defendants next contend that the prohibited practices shall not apply to the receiving, divulging, publishing or utilizing the contents of any radio communication which is transmitted by any station for the use of the general public. Sections 605 and 705, id. As the satellite downlink, whether clean or dirty, covers virtually the entire continental United States and as it can be intercepted by the one million or less users of dish antennae apparatus, defendants’ contend plaintiffs’ signal must be for the use of the general public as it has mass appeal and defendants’ use thereof is thereby exempt.

It was held, however, in Movie Systems, Inc., that “the crucial factor in determining whether the programming is broadcasting for the use of the general public is not whether the content of the program has mass appeal or mass availability but rather, whether it was intended for the use of the general public.” Id. 494. The Court finds here that even though the football game’s signal may have mass appeal, plaintiffs intended, for obvious economic reasons, that the transmissions with advertising only be broadcast. As the clean feed signal without advertising, which defendants intercepted, was never intended by plaintiffs to be broadcast, it was not for the use of the general public. The sole purpose for the clean feed broadcast was to transmit this signal from satellite so that the network control point could receive it and insert the economically vital commercials. The methodology used by plaintiffs to transmit the clean feed signal to the network control point, which enabled those with dish antennae apparatus also to intercept the signal, does not alter plaintiffs’ intent.

Defendants’ main defense is that if there is an aggrieved party, it is the network rather than the program owners, because the owners are not the senders, originators or transmitters of the work. As the network is not a party to this suit, defendants claim these plaintiffs, as program owners, have no standing to assert violation of the Federal Communications Act.

The basis for defendants’ position is the ruling in Air Capital Cablevision v. Star-link Communications, 601 F.Supp. 1568, (D.Kan.1985). That case involved a suit by two cable television companies against a distributor of earth station satellite dish antennae claiming unlawful interception of television signals transmitted via satellite in violation of the Federal Communications Act. Apparently, plaintiffs were cable television distributors, who by virtue of a license from a television producer, retransmitted for a fee to plaintiffs’ customers, a select portion of satellite signals, such as HBO. There is no showing whether or not the producers or others owned the signals or were the senders, originators or transmitters of the signals.

Although there is some language in the case suggesting defendant was receiving the signals from a satellite signal, such as HBO, that plaintiffs had the license to retransmit, it appears that defendant mainly was a seller or distributor of earth station satellite dish antennae.

On summary judgment, the court ruled for defendant, stating plaintiffs have “no standing to claim violations under former § 605 of the Communications Act because the users of the earth station satellite dishes were not intercepting a transmission originated by or retransmitted by the cable company.” Id. 1572. The court also ruled that defendants as sellers of dish antennae are not required to advise their customers that the equipment it sells could be used in violation of the law.

The court in Air Capital Cablevision attempted to distinguish its opinion from that of prior decisions. National Subscription Television v. S. & H.T.V., 644 F.2d 820 (9th Cir.1981); Chartwell Communications Group v. Westbrook, 637 F.2d 459 (6th Cir.1980); Porter County Cable Co., Inc. v. Moyer, No. S 82-172 (N.D.Ind.1983); Cablevision of Connecticut v. Long Island Wholesale Corp., et al., No. B 83-708 (D.Conn.1983); Movie Systems v. Heller, 710 F.2d 492 (8th Cir.1983); and United States v. Stone, 546 F.Supp. 234 (S.D.Tex.1982). Air Capital suggested these cases finding violations of former § 605 involve the rights of subscription television, cable television or other television programming distributors who either originated the satellite signal or received it and retransmitted it via its own or common carrier equipment, for which use the distributar paid. The offending equipment intercepted or decoded television signals that were originated by or retransmitted by the programming distributor.

The court in Air Capital found that the defendant sellers of earth station satellite dish antennae do not intercept television signals originated by or retransmitted by the plaintiffs cable television companies nor do they hook into a cable company’s telecommunication network and pirate away or decode the cable company’s transmissions. Thus, Air Capital held, in effect, that the satellite dish seller defendant did not violate former § 605 of the Communications Act as the signal intercepted was not originated by or retransmitted by the plaintiff cable companies. The main basis for the court’s ruling was the Congressional intent set out in the new act, § 705(b), effective December 30, 1984. The new Act provides that prohibited practices of communication interception shall not apply “to the interception or receipt by any individual ... of any satellite cable programming for private viewing” if the programming involved is not encrypted and a marketing program is not established. Id. § 705(b).

In the case at bar, the networks prepare and transmit the football game signals. Defendants maintain, therefore, that as plaintiffs are merely the owners of the work and are not the senders, originators or transmitters they have no standing to bring this case following the rationale of Air Capital Cablevision. This Court disagrees. Section 705(d)(3)(A) of the new Communication Act provides that “Any person aggrieved by any violation of subsection (a) of this section may bring a civil action in a United States district court____” In this subsection, Congress merely codified what had previously been held to be the law in at least three circuits in the construction of former § 605. Movie Systems, Inc. v. Heller, 710 F.2d 492 (8th Cir.1983); National Subscription Television v. S. & H. T. V, 644 F.2d 820, 821 n. 1 (9th Cir.1981); Chartwell Communications Group v. Westbrook, 637 F.2d 459, 466 and n. 5 (6th Cir.1980).

It is this Court’s opinion that plaintiffs, as the copyright owners of the signal in this case, are “an aggrieved party” within the meaning of old '§ 605 and “any person aggrieved” as set out in § 705(d)(3)(A). Certainly this is in keeping with Senate floor debate on the § 705 amendment, when Senator Goldwater commented “Next, I wish to discuss the terms ‘any person aggrieved’, ‘aggrieved party’ and ‘party aggrieved’ in § 705(d)(3), relative to civil actions. These terms may be broadly construed to include all those who own the rights in the programming being transmitted, as well as those who own the rights for satellite transmission. But, it does not include those entities which possess limited rights of reception and retransmission to the programming, such as cable systems and other purchasers of the right to receive it after satellite transmission.” 98 Cong. Rec.S 14284 (daily ed. Oct. 11, 1984).

This construction should not do violence to the rationale of Air Capital Cablevision. Obviously, Senator Goldwater was reasoning, as did the court in Air Capital, that owners of a program and the sender come within the definition of aggrieved parties. An owner and a sender, therefore, may be the same or separate entities. But, cable systems and other program purchasers after satellite transmissions are not aggrieved parties and do not fall within the purview of § 705 or former § 605.

Plaintiffs, here, in addition to being the program owners, are the originators of the work. Plaintiffs cause the game to be played. They create the works of art which are the games. The networks simply provide the technical apparatus to place the game on a video system which ultimately can be broadcast by their affiliate stations. The networks, therefore, are the senders or the transmitters of the original works. It would stretch the constructive process to conclude that a sender or transmitter of an original works can only claim violation of the Communications Act while an originator of the works who is also the owner is barred from so doing. Plaintiffs, as the originators and owners of the program, do have standing to assert the violations which are present in this case. Although the specific objections raised in this case have not been addressed in other reported cases, there is some authority supporting the conclusions set out here. See National Football League and Miami Dolphins, Ltd. v. The Alley, Inc., American Embassy, Inc., et al. and Entertainment and Sports Programming Network, Inc., et al. v. Edinburg Community Hotel, Inc., supra.

Damages

Although the Court finds that plaintiffs have and will suffer irreparable harm if defendants are not enjoined from intercepting plaintiffs program, a sufficient showing has not been made to warrant a finding of statutory damages under the Copyright Act. Statutory damages can be awarded for each infringement of the Act. 17 U.S.C. § 504(c)(1). The purported violations involve three separate games which were the Cardinal-Rams game of November 4, 1984, the Cardinal-Eagles game of November 25, 1984, and the Cardinal-Giants game of December 9, 1984. Notices of potential infringement were given by plaintiffs to defendants with respect to the November 25th and December 9th games thereby authorizing plaintiff to bring suit. 17 U.S.C. § 411(b). Defendants were barred from intercepting those game programs by temporary restraining order and preliminary injunction. Although there is some evidence, as noted before, of possible willfull violation of those orders by two defendants, the evidence is incomplete and the issue of violation of the Court’s prior orders was not to be considered at this stage in any event. 17 U.S.C. § 504(c)(2). The Court finds, therefore, the evidence now available is insufficient to demonstrate a violation which would give rise to an award of statutory damages. The issue of the purported willfull violation of the Court’s preliminary orders will be decided after further hearing at a later date.

Although defendants did infringe on plaintiff’s copyright as to the game of November 4, 1984, the evidence is not conclusive that adequate notice was given by plaintiffs to defendants pursuant to the requirements of 17 U.S.C. § 411(b). The Court finds, therefore, that no award of statutory damages under the Copyright Act should be awarded plaintiffs as to the three games in question.

The foregoing constitutes findings of fact and conclusions of law as required by rule.

ORDER

In accordance with Memorandum Opinion which will be entered by the Court within ten days from the date of this Order,

IT IS HEREBY ORDERED that plaintiff shall be granted leave to amend their complaint by interlineation as requested in motion filed March 14, 1985 and to conform to the evidence as moved on May 17, 1985.

IT IS FURTHER ORDERED that defendants’ interception, divulgence and use of plaintiffs’ satellite-delivered programming and signals, whether such signals constitute so called clean feed transmissions or dirty feed transmissions, violated plaintiffs’ rights under the Copyright Act, 17 U.S.C. § 101 et seq., and the Federal Communications Act of 1934, as amended, 47 U.S.C. § 151 et seq.

IT IS FURTHER ORDERED that defendants and its partners, subsidiaries, affiliates, officers, agents, representatives, servants, employees, privies and all persons in active concert and participation with them are permanently enjoined from:

1. Intercepting, receiving, appropriating, converting to their own use, or retransmitting, divulging or using any satellite-delivered transmissions of plaintiffs’ programming or signals, or any satellite-delivered programming which plaintiffs make or could make available to the public through its contracts with ABC, CBS and NBC, without authorization from plaintiffs and whether such signals constitute so called clean feed transmissions or dirty feed transmissions;

2. Assisting, aiding, abetting or conspiring with any person to intercept, receive, appropriate, convert, or retransmit, divulge or use plaintiffs’ programming or signals without their authorization whether such signals constitute so called clean feed transmissions or dirty feed transmissions;

3. Intercepting, receiving, appropriating, converting to its own use, or retransmitting or using any copyrighted works or programming transmitted in plaintiffs’ satellite transmissions without their authorization; and

4. Assisting, aiding, abetting or conspiring with any person to intercept, receive, appropriate, convert or retransmit, divulge or use plaintiffs' copyrighted works, programming or signals transmitted by satellite, without their authorization.

IT IS FURTHER ORDERED that judgment shall be entered for the defendants as to the request for statutory damages under the copyright act and no statutory damages shall be awarded.

IT IS FURTHER ORDERED that defendants’ motion to strike shall be DENIED.

IT IS FURTHER ORDERED that the issues involving the counterclaim, the request for citations for contempt and damages and attorneys’ fees and any other pending motion not rendered moot by this order shall be set for trial on November 25, 1985. The regular pre-trial order of this Court shall be applicable for that hearing.

IT IS FINALLY ORDERED that while this judgment and order shall be in full force and effect from date it shall not be final for the purposes of calculating time requirements for post trial motions or appeal until the memorandum opinion is entered.

Dated this 13th day of September, 1985.


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

text:
    AETNA CASUALTY & SURETY COMPANY, a Connecticut corporation, Plaintiff, v. RASA MANAGEMENT COMPANY, INC., a California corporation, doing business as Tahoe Junction, Inc., a Nevada corporation; Ralph A. Spinelli, and Eleanor A. Fondren, Defendants.
    No. CV-R-84-380-ECR.
    United States District Court, D. Nevada.
    Oct. 3, 1985.

      Louis A. Demers, Sacramento, Cal., and Alfred H. Osborne, Reno, Nev., for plaintiff.
    Fred D. Gibson, III, Reno, Nev., and Richard J. Matthews, Elko, Nev., for all defendants except Fondren.
    Mark H. Hungerson, Reno, Nev., and Kim Hagerty, Incline Village, Nev., for Fondren.
   ORDER

EDWARD C. REED, Jr., District Judge.

On October 3, 1983, fire destroyed real and personal property at Tahoe Junction Restaurant, 931 Tahoe Boulevard, Incline Village, Nevada. RASA Management Company, Inc., (RASA) doing business as Tahoe Junction, Inc., held a lease on these premises and operated the restaurant. At the time of the fire, a multi-risk insurance policy issued by plaintiff Aetna Life & Casualty Company (Aetna), a Connecticut corporation, was in effect, covering the stock, equipment, fixtures, and personal property at the restaurant. Aetna filed this declaratory judgment action to determine whether it is obligated to indemnify defendants under the insurance policy for losses incurred in the fire. Jurisdiction is based upon diversity. Aetna alleges that defendant Ralph Spinelli, sole incorporator, shareholder and director of RASA, set the fire and, therefore, Aetna has no obligation under the policy.

Before this Court is a motion to dismiss the complaint against Ralph Spinelli. Spinelli argues that Aetna has not asserted any claim for relief against him individually and that there is no actual controversy between Aetna and himself.

Matters outside the pleadings were submitted by both parties and this Court accordingly converted Spinelli’s motion to dismiss to a motion for summary judgment pursuant to Fed.R.Civ.P. 56. Both parties have submitted additional pleadings and the matter is ripe.

Analysis

In an action by a liability insurer for declaratory judgment to determine the insurer’s liability to an insured party, the insured is, of course, a necessary and indispensable party. Thus, there is no dispute that RASA is a necessary and indispensable party. The question presented in this case is whether Spinelli should also be considered the “insured” and, as such, a necessary party.

All interested parties should be joined in a declaratory judgment action whenever possible and a declaratory judgment should not be entered unless it disposes of a controversy and serves a useful purpose. State Farm Mutual Automobile Insurance Co. v. Mid-Continent Casualty Co., 518 F.2d 292, 296 (10th Cir.1975). Although Spinelli is an interested party to this declaratory judgment action, there must be a case of actual controversy between Spinelli and Aetna. 28 U.S.C. § 2201; Fed.R.Civ.P. 20.

Aetna argues in its opposition to dismissing the complaint against Spinelli that he is the alter ego of RASA and, therefore, is an appropriate party before this Court. Aetna urges this Court to pierce the corporate veil and hold that Spinelli is the alter ego of RASA.

In order to apply the alter ego doctrine to pierce the corporate veil, Nevada law requires the following factors be met: “(1) the corporation must be influenced and governed by the person asserted to be its alter ego; (2) there must be such unity of interest and ownership that one is inseparable from the other; and (3) the facts must be such that adherence to the fiction of a separate entity would under the circumstances, sanction fraud or promote injustice.” Rowland v. Lepire, 99 Nev. 308,

316-317, 662 P.2d 1332, 1337 (1983). Aetna has failed to allege the facts in its complaint which would support its argument. Aetna alleges that Spinelli is the sole incorporator, shareholder, and director of RASA. Aetna also alleges that Spinelli was the restaurant’s owner and manager. These allegations are insufficient.

In any event, dismissing the complaint against Spinelli in no way precludes Aetna from arguing that any alleged illegal actions of Spinelli should be imputed to RASA, thus, absolving Aetna’s liability under the insurance policy.

“When ... the beneficial owner of practically all of the stock in a corporation, and who has the absolute management and control of its affairs and property, ... sets fire to the property of a corporation, or causes it to be done, there is no sound reason to support the contention ... that the corporation would be allowed to recover on a policy for the destruction of the corporate property by fire so occasioned.” Erlin-Lawler Enterprises, Inc. v. Fire Insurance Exchange, 267 Cal.App.2d 381, 73 Cal.Rptr. 182, 185 (1968); Continental Insurance Co. v. Gustav’s Stable Club, 211 Neb. 1, 317 N.W.2d 734 (1982).

Although an arsonist’s status as an officer, stockholder or employee or agent of an insured corporation does not necessarily preclude the corporation from recovering on policy of insurance, an analysis is made in each case to see if the arsonist will benefit by recovery on fire policy, either directly or indirectly. Erlin-Lawler Enterprises, 267 Cal.App.2d 381, 73 Cal.Rptr. 182, 185 (1968). In order to make this analysis Spinelli is not a necessary party to this action.

As a corporation, RASA may be held liable for the willful acts of its employees or agents. See Dart Industries, Inc. v. Liberty Mutual Insurance Co., 484 F.2d 1295, 1296 (9th Cir.1973). Therefore, dismissing the complaint against Spinelli does not prejudice any arguments that Aetna may make regarding its liability to pay on the insurance policy with RASA. Aetna contracted with RASA, not with Spinelli.

Spinelli is not a necessary party before this Court.

IT IS, THEREFORE, HEREBY ORDERED that the complaint against Ralph Spinelli is DISMISSED.


author: HAIGHT, District Judge:

text:
    R. DEVINE, Plaintiff, v. Arthur W. LONSCHEIN, Robert J. Sise, as Administrator of the Unified Court System of the State of New York, State of New York, Defendants.
    No. 84 Civ. 6684-CSH.
    United States District Court, S.D. New York.
    Oct. 10, 1985.

      Robert Devine, Hollis, N.Y., pro se.
    Robin Faine, Associate Counsel, Unified Court System, New York City, for defendants Lonschein & Sise.
    Robert Abrams, Atty. Gen., New York City, for State of N.Y.; Randolph Volkell, Asst. Atty. Gen., of counsel.
   MEMORANDUM OPINION AND ORDER

HAIGHT, District Judge:

This is an action allegedly founded upon 42 U.S.C. §§ 1981 and 1983. Complaint, 114. Plaintiff Robert Devine, appearing pro se, is an attorney admitted to practice in New York State. Defendant Arthur W. Lonschein is a Justice of the Supreme Court of the State of New York,' with chambers in Jamaica, New York. Defendant Robert J. Sise is the Chief Administrative Judge of the Unified Court System of the State of New York. The complaint also identifies the State of New York as a defendant.

Defendants Lonschein and Sise now move to dismiss the complaint pursuant to Rules 12(b)(1) and 12(b)(6), F.R.Civ.P. Both motions introduce by affidavit evidentiary materials which fall outside the boundaries of the complaint. Accordingly I treat the motions as motions for summary judgment under Rule 56.

The papers supporting and opposing the motions reveal the following facts. On September 19, 1984, Mr. Devine appeared before Justice Lonschein in Special Term, Part Two of the Supreme Court, Queens County. Mr. Devine represented an infant plaintiff in a personal injury action, Khan v. Williams, Index No. 952-82. Mr. Devine appeared with his clients before Justice Lonschein for the purpose of obtaining the court’s approval of the compromise of the claim.

The transcript submitted with the motion papers reflects that when Mr. Devine first appeared in chambers before Justice Lonschein, he was not wearing a necktie. Justice Lonschein asked Mr. Devine “to step out and to come back into this room properly dressed,” by which, the record makes' clear, the judge meant wearing a necktie. Mr. Devine thereupon stated that he wished to make a statement for the record. A court reporter was summoned. The record reflects Mr. Devine’s contention that Justice Lonschein was subjecting him to sex discrimination, since “women attorneys are not required to wear ties before this Court or any other court____” Tr. at 3. Justice Lonschein adhered to his position. Mr. Devine thereupon produced a necktie out of his coat pocket, put it on, and the Khan matter proceeded.

The complaint filed by Mr. Devine in this Court alleges that he was “subjected to, and the victim of, discrimination, on the basis of sex,” ¶ 9, in that Justice Lonschein ordered him to wear a tie, and requires other male attorneys to do so, although he does not require female attorneys to wear a tie. ¶¶ 10-11. The complaint contains comparable allegations of discrimination in respect of the wearing of jackets and removal of hats or headwear upon entering the courtroom, ¶¶ 11-15, although those particular acts of alleged discrimination do not appear to be implicated in the case.

Justice Lonschein is sued as the perpetrator of allegedly discriminatory acts. Justice Sise is sued on the theory that, in his supervisory position, he “establishes the policy and procedure to be adhered to in the daily operation of the Courts of the defendant State of New York.” Complaint, ¶ 8.

Plaintiff seeks compensatory and punitive damages, and injunctive relief.

Although the complaint invokes 42 U.S.C. § 1981 as well as § 1983, it is clear that no cause of action arises under § 1981. Plaintiffs claim is solely one of sex discrimination. Section 1981 addresses discrimination on the ground of race. It does not address categories of selectivity based on sex. Runyon v. McCrary, 427 U.S. 160, 96 S.Ct. 2586, 49 L.Ed.2d 415 (1976). Accordingly, the claim, if cognizable at all, falls under § 1983. Plaintiffs theory is that the Equal Protection clause of the United States Constitution is implicated. Complaint, 1119. Pendent state claims are asserted under the New York State Constitution and Civil Rights Law. Id. at H 18.

The defendant judges enjoy an absolute immunity from plaintiffs claims for damages. Accepting the allegations of the complaint as true, it cannot be argued that either judge lacked jurisdiction over the subject matter before him. The judges are, in consequence, immune from claims for money damages. That immunity extends to § 1983 actions. Dennis v. Sparks, 449 U.S. 24, 101 S.Ct. 183, 66 L.Ed.2d 185 (1980); Stump v. Sparkman, 435 U.S. 349, 98 S.Ct. 1099, 55 L.Ed.2d 331 (1978); Pierson v. Ray, 386 U.S. 547, 87 S.Ct. 1213, 18 L.Ed.2d 288 (1967).

To the extent that plaintiff seeks prospective injunctive relief, judicial immunity is not a bar. Pulliam v. Allen, 466 U.S. 522, 104 S.Ct. 1970, 80 L.Ed.2d 565 (1984).

Accordingly the question arises, under Rule 12(b)(6), as to whether the compláint states a claim upon which relief can be granted. I conclude that it does not.

There is apparently no case directly in point. However, two federal appellate cases arising out of the job discrimination area are instructive.

In Longo v. Carlise DeCoppet & Co., 537 F.2d 685 (2d Cir.1976), plaintiff brought a Title VII sex-discrimination action. Plaintiff, a male employee of defendant, alleged that he was fired because of the length of his hair, which would be permissible on a female employee. The Second Circuit, in a per curiam opinion, agreed with four other courts of appeals in holding “that requiring short hair on men and not on women does not violate Title VII.” 537 F.2d at 685 (citing cases). The complaint was dismissed for failure to state a claim.

In Carroll v. Talman Federal Savings and Loan Association of Chicago, 604 F.2d 1028 (7th Cir.1979), the female employees of defendant bank brought a charge of sex discrimination because of differences in dress. The bank designed, and required women employees to wear, a two-piece uniform. In contrast, comparable male employees were permitted to wear business suits, business-type sports jackets with pants and ties, or leisure suits with a “suitable shirt and tie.” 604 F.2d 1029-30. A divided panel of the Seventh Circuit held that this rule of dress was “based on offensive stereotypes prohibited by Title VII.” Id. at 1033.

While § 1983 constitutes a different component of the federal civil rights laws, allegations of sex discrimination in the Title VII context are sufficiently analogous to constitute useful precedent.

Longo v. Carlise DeCoppet & Co., supra, rejects by implication a rule that any distinction in dress or grooming based upon sex is per se violative of federal law. Because that is so, an employer may permit women employees to wear their hair longer than it permits male employees.

However, the majority opinion in Carroll, supra, stands for the proposition that when an employer requires women employees to wear stereotype-creating uniforms, while permitting male employees a wide variety of apparel, the line of impermissible discrimination based on sex has been crossed.

In the case at bar, did Justice Lonschein cross that line? I am not persuaded that he did. Justice Lonschein shares with all judges the inherent power to ensure proper conduct in his courtroom. Indeed, that power is cast in terms of obligation in section 100.3(a)(2) of the Rules of the Chief Administrative Judge, 22 N.Y.C.R.R. § 100.3(a)(2), which states that: “A judge shall maintain order and decorum in proceedings before him or her.” Justice Lonschein, in respect of proceedings in his courtroom and chambers, apparently takes the position that male attorneys should wear neckties; but he does not impose that requirement upon female attorneys. In making that distinction, Justice Lonschein cannot reasonably be charged with impermissible sex discrimination. He is saying no more, and no less, than that a male attorney appearing without a necktie is lacking in decorum, whereas a female attorney who does not wear a necktie is not lacking in decorum.

The distinction is, in my view, the functional equivalent of the distinction upheld in Longo, where the employer concluded, without violating the civil rights laws, that long hair on male employees constituted impermissible grooming, whereas long hair on female employees did not. Neither case rises to the level of enforced stereotyping by dress implicated in Carroll.

At least until that dreadful day when unisex identity of dress and appearance arrives, judicial officers such as Justice Lonschein are entitled to some latitude in differentiating between male and female attorneys, within the context of decorous professional behavior and appearance. I may judicially notice that, in this year of grace 1985, virtually all male attorneys admitted to the bar wear neckties (four in hand or bow) when they appear in court or in a judge’s chambers, whereas only a distinct minority of female attorneys do so. And these differences in style of dress result not from mandates imposed upon the male and female attorneys by some coercive authority (as in the case of the female bank employees in Carroll), but rather because this is the current fashion. Because contemporary fashions are different, a judge may permissibly conclude that a male attorney appearing in court without a necktie is lacking in proper decorum, whereas a female attorney not wearing a necktie is not subject to that criticism.

Accordingly the constitutional claim against both defendants fails, and must be dismissed. The pendent state claims will be dismissed as well.

Except as noted in the margin, I reach no other issue.

Because the complaint raised a claim of some arguable constitutional merit, I deny defendants’ application for costs and attorneys’ fees.

The Clerk of the Court is directed to dismiss the complaint with prejudice and without costs.

It is SO ORDERED.

      . Justice Sise has submitted an affidavit to the effect that the Chief Administrative Judge, apart from the general provision in the rule quoted in text, has issued no policy with respect to codes of dress in courtrooms. It is left to each individual judge to establish rules and policies that will promote "order and decorum" in his or her courtroom. That includes discretion in each individual judge to determine whether he or she wishes to establish a dress code. Sise affidavit at ¶¶ 4, 5. These allegations are not controverted. This demonstrated lack of personal participation by Justice Sise in the acts complained of furnishes an alternative basis for dismissal of the complaint, in all its aspects, as against him. Rizzo v. Goode, 423 U.S. 362, 96 S.Ct. 598, 46 L.Ed.2d 561 (1976).


author: OBERDORFER, District Judge.

text:
    The GEORGE HYMAN CONSTRUCTION COMPANY, Plaintiff, v. WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY, et al., Defendants.
    Civ. A. No. 85-0550.
    United States District Court, District of Columbia.
    Oct. 11, 1985.
    Order Nov. 6, 1985. .
    William W. Goodrich, Jr., Richard J. Webber, Arent, Fox, Kintner, Plotkin & Kahn, Washington, D.C., for plaintiff.
    Sara E. Lister, Gen. Counsel, Robert L. Polk, Associate Gen. Counsel, Thomas B. Dorrier, Asst. Gen. Counsel, Washington, D.C., for defendants WMATA and Carmen Turner.
   MEMORANDUM

OBERDORFER, District Judge.

The matter is before the Court on plaintiff’s request for damages and related relief against defendant Washington Metropolitan Area Transit Authority (“WMATA”). By this action plaintiff challenges WMATA’s General Manager’s “Final Decision” resolving a contract dispute between the parties. Currently pending are plaintiff’s motion for partial summary judgment and defendants' cross motion for summary judgment. This memorandum addresses those motions.

I.

The plaintiff, George Hyman Construction Company (“Hyman”), in 1974 contracted with WMATA for the “finish work” on the Metro’s Pentagon Station. After commencing work under the contract, Hyman was, for various reasons, on a number of occasions denied access to some parts of the site. Although Hyman was never completely foreclosed from the site as a result of the partial and intermittent interruptions, the project required 941 days to complete rather than the 480 days originally estimated by Hyman. See generally id. at 89,337-41.

Construction began in 1974. Between 1975 and 1978, Hyman submitted claims to WMATA based on additional costs allegedly incurred because of WMATA’s failure to provide timely access to the site. The parties negotiated unsuccessfully from 1978 to 1980 with respect to these claims. See Plaintiff’s Statement of Material Facts as to Which There Is No Genuine Issue at Hfl 4-6. Hyman then resorted to the “Disputes” clause in the contract. In 1981, WMATA’s Contracting Officer denied the relief sought by Hyman and assessed liquidated damages. The dispute was then submitted to the United States Army Corps of Engineers Board of Contract Appeals (“Board”), which decided the dispute in plaintiff’s favor after an extensive trial-type proceeding conducted January 25— February 12, 1982. The Board’s lengthy decision was rendered January 10, 1985, and addressed Hyman’s claim and the claims of its subcontractors.

In its decision, the Board reached two conclusions that constitute the central issues in this action. First, the Board applied the so-called Eichleay formula to calculate Hyman’s claim for extended home office overhead. See Board Decision at 89,353-54. Second, the Board decided that Hyman wás entitled to recover interest on equity capital used to finance the increased costs occasioned by the delay. See Board Decision at 89,355.

After, the Board issued its decision, the General Counsel of WMATA prepared a staff memorandum for WMATA’s General Manager, who is empowered to make the final decision under the disputes clause of the contract. This memorandum recommended that the General Manager ratify most of the Board’s decision, but concluded that “the recommendation for allowance of ‘Eichleay’ overhead and interest are erroneous as a matter of law.” Notice of Administrative Record Submittal, “Counsel’s Memos” at 2. On May 1, 1985, the General Manager issued a five-page decision which denied Hyman’s Eichleay and cost-of-capital claims. The General Manager noted that she had considered the Board’s opinion, the General Counsel’s memorandum, and a reply letter from Hyman’s attorney. Notice of Administrative Record Submittal, Final Decision at 1.

Under the terms of the disputes clause, the General Manager’s Final Decision is “final and conclusive unless determined by a court of competent jurisdiction to have been fraudulent, or capricious, or arbitrary, or so grossly erroneous as necessarily to imply bad faith, or is not supported by substantial evidence.” The matter is now before the Court on plaintiff’s motion for partial summary judgment and defendants’ dispositive summary judgment motion. Plaintiff’s statement of material undisputed facts is not contradicted by defendants.

The question before the Court is a legal one: whether the General Manager erred as a matter of law by refusing to apply the Eichleay formula and by disallowing the cost of equity capital. The plaintiff’s pending motion for summary judgment is partial in that the plaintiff asks only for a ruling on these disputed issues of law. The question of damages is to be addressed in further proceedings. The defendants’ cross-motion, which would simply uphold the General Manager’s decision, is dispositive.

II.

A.

Plaintiff contends that the Board properly relied on the “Eichleay method” in reaching its decision on Hyman’s claims for certain costs attributable to overhead. The Eichleay method requires that the total overhead pool of the contractor be multiplied by a percentage derived by dividing the billings on a particular contract by the contractor’s total billings for the contract period. The resulting “allocable” overhead is divided by the total days of performance to determine the daily overhead rate. The daily overhead rate is then multiplied by the number of days in the delay period to determine the overhead allocable to that period. The Eichleay method has been endorsed as a rule of thumb for attributing overhead costs to a delay period — it serves as an approximation that substitutes for a line-by-line determination, of how much of the home office overhead was actually devoted to the delayed project during the period of delay. See, e.g. Capital Electric Co. v. United States, 729 F.2d 743 (Fed.Cir.1984).

WMATA’s General Manager concluded, however, that

[t]he main problem with the [Board’s] decision is that it simply assumes that Hyman and its subcontractors are entitled to an “Eichleay” type recovery without any showing of damage. The [Board] failed to analyze the period of delay to determine whether Hyman or its subcontractors were precluded from obtaining other work to absorb their overhead____ Further, and more importantly, the [Board] failed to analyze the extended period to determine if the fact that this work was pushed to a later period by WMATA caused delay and somehow precluded these contractors from obtaining what would have been their regular work during this period, resulting in a net loss of total work to absorb the overhead.

Final Decision at 2. The General Manager went on to hold that “[f]or the reason that there is no showing of impact or damage, I am rejecting the Eichleay type award for Hyman and the other subcontractors____” Id. at 3.

B.

Our Court of Appeals has held that a contractor seeking to recover overhead costs in a breach of contract action “must show, at the minimum, that the delay somehow affected [its] operations so that it was not practical to undertake the performance of other work even had it been available.” W.G. Cornell Co. of Washington, D.C. v. Ceramic Coating Co. Inc., 626 F.2d 990, 994 (D.C.Cir.1980). If this view is applied to an equitable adjustment case like this one, plaintiff may recover damages attributable to home office overhead costs and calculated by the Eichleay method only if the General Manager wrongly concluded that the Board failed to make a determination that Hyman had actually been damaged by the delay. Under the disputes clause, the General Manager’s decision on this issue is “final and conclusive” unless, inter alia, it is determined to be “not supported by substantial evidence.” Conversely, if substantial evidence in the record indicates that the Board did make findings on this point, the General Manager was wrong when she concluded that the Board’s decision was unsupportable because it “simply assumes that Hyman and its subcontractors are entitled to ‘Eichleay’ type recovery without any showing of damages.”

Hyman contends that the Board scrutinized the effect of the delays on Hyman and the individual subcontractors and awarded costs only where there was a causal relationship between delay and damages. The Board’s decision does, in fact, draw a distinction between those subcontractors that were able to show a harm attributable to WMATA’s delay and those that were not. In the case of Potomac Iron Works (one of Hyman’s subcontractors), for example, the Board noted:

We find no sufficient causal relationship between delayed performance of the Hyman construction contract on site and the increase of Potomac’s overhead rates in later years to support an equitable adjustment on that basis.

The Board therefore disallowed .Potomac’s claim for increased overhead. Board Decision at 89,361.

The Board’s treatment of subcontractor Fischbach & Moore (“F&M”) similarly demonstrated the Board’s intention to link its award to damages actually occasioned by delay. The Board stated in reference to F & M:

To think that its home office devoted any energies to this project during the lengthy period it had left the job and was performing no work whatsoever, would be illogical. Back-up from the home office would be needed and could be expected while work was being performed and, to some degree, in a ratio proportionate to the amount of work being performed.
The subcontractor’s entitlement to extended home office (overhead) expenses is not necessarily coterminous with that of the prime contractor. In this instance we think they are not. Considering the time and level of actual work on the project by F&M as compared to those anticipated at time of proposal (bid) and award, we conclude that F & M is entitled to extended home office overhead for an additional 270 days at the agreed daily rule of $79.04 or $21,340.80.

Board Decision at 89,357. In yet another example, C & H Contracting (another Hyman subcontractor) was held to be entitled to overhead costs for a period of 440 days because “it agreed to accept no, or virtually no, new work while the work for Metro was proceeding.” Board Decision at 89,-360. The record thus supports Hyman’s contention that the Board did, before awarding damages attributable to overhead costs, inquire into whether the contractor had been actually harmed by the delay and considered the extent to which the contractors were precluded from obtaining other work. Consequently, the General Manager’s conclusion that the Board “simply assume^]” the application of the Eichleay formula to the period of delay appears to be incorrect.

The Board’s decision further clarifies that the Board considered and rejected WMATA’s arguments that Hyman had not adequately demonstrated that Hyman was precluded from obtaining other work to absorb its overhead during the period of delay. The Board noted at 89,343 that “[WMATA] disputes allowance of extended overhead on a number of bases. It contends that Hyman did not incur any additional overhead expense because its auditor was unable to determine that there was any ‘unabsorbed overhead.’ ” (citation omitted). Indeed, WMATA repeatedly argues that Hyman was extremely busy during the period of delay, thereby suggesting that home office overhead would have been absorbed by other projects. The Board’s decision, however, demonstrated that it considered this factor in rendering an Eichleay type award in favor of Hyman: “availability of or engagement in other work — other contracts performed by the contractor will increase the denominator of the allocation fraction and reduce the portion of the overhead to be charged to a particular job.” Board Decision at 89,354. Again, the record belies the General Manager’s conclusion that the Board “simply assume[d]” application of the Eichleay formula without careful consideration of the actual damage visited upon Hyman by the delays.

In addition, there is authority for the proposition that the threshold question of whether the delay actually occasioned damage may not be relevant as a matter of law. Judge John Lewis Smith has pointed out that W. G. Cornell, supra, is not applicable to a case like this one because

price adjustments under the suspension of work clause of a contract are not “limited to what would be recoverable in damages for breach of contract.”

Excavation Construction,. Inc. v. WMATA, No. 83-1125, slip op. at 10 (D.D.C. June 21, 1984) (quoting Board of Contract Appeals Reconsid. at 3). Moreover, the Federal Circuit, in a case in which a contractor sought to recover extended overhead under the suspension of work clause of a contract, rejected the notion that Eichleay requires the contractor to bear the burden of proving the fact of injury before the formula may be applied. Capital Electric Co., supra, at 745-46. The latter case intimates that, upon the “mere showing” of such facts as plaintiff notes in this record, the Eichleay formula presumes, unless the defendants prove otherwise, that a contractor is injured by delay. The Eichleay formula then provides a method, justified by generally accepted principles of accounting, of estimating the damages so presumed. Id. at 745-47; 747-48 (Friedman, J. concurring).

These cases suggest that it may be unnecessary to decide whether the Board found that Hyman proved that it had been damaged by delay, and support summary judgment for Hyman on this issue. Even without this line of authority, however, Hyman must on this issue prevail. As discussed above the record contains substantial evidence that the Board did not award damages attributable to overhead costs without first finding that damage was occasioned by delay.

As set forth above, the General Manager was not supported by the record in her primary objection and conclusion that the Board “simply assume[d]” application of the Eichleay formula without first making a careful examination of the damage occasioned by the delay. Given the Board’s careful analysis (based on an extensive record, see supra note 9) and the recent endorsement of use of the Eichleay method in similar circumstances by the Federal Circuit, it is concluded that the Eichleay method was appropriately applied by the Board in calculating the amounts properly reimbursed to Hyman and the subcontractors.

Accordingly, the accompanying order will grant plaintiff’s motion for partial summary judgment on this issue. With the benefit of this decision, the parties should be able to determine the amount due for office overhead resulting from the delay between themselves. To facilitate this process, the accompanying order will schedule a conference between counsel followed, if necessary, by a status conference in court.

III.

Hyman also claims that it is entitled to recover the cost of capital expended in financing the increased costs caused by WMATA’s delays. The Board held that the distinction between the cost of borrowed capital and the cost of equity capital was not important, and that Hyman was entitled to interest on the equity capital Hyman had to use to finance the increased costs occasioned by the delays. According to the Board, this charge is readily discernible because of Hyman’s practice of putting its surplus capital into certificates of deposit at American Security Bank. WMATA’s General Manager in her final decision rejected the cost of capital theory on which the Board relied, and added that none of the signatories of the WMATA Compact have laws that permit the award of prejudgment interest on an unliquidated debt. Final Decision at 3-4. Hyman disputes both of these propositions, and argues that the contractual suspension of work clause encompasses recovery for cost of capital.

The Suspension of Work Clause provides for contractor reimbursement whenever a delay occasioned by the Contracting Officer in the administration of the contract results in “any increase in the cost of performance,” although such adjustment will “exclud[e] profit.” Hyman reasons that the loss of the use of the capital that it had to consume to finance the increased costs of performance itself constituted an increased cost of performance, because Hyman was prevented from putting the capital to more profitable uses.

Hyman attempts to distinguish adverse precedent in the area of federal procurement law on the ground that most of the precedent cases held that interest on claims against the United States could not be awarded unless expressly provided for in a contract or statute. The statutory provision on which this principle was based, 28 U.S.C. § 2516(a) (1976), has since been effectively overridden in the contract dispute context. See Contract Disputes Act of 1978, 41 U.S.C. § 611 (1978). Hyman contends that 41 U.S.C. § 611 was based on a congressional realization that contractors must be compensated for their capital costs when progress payments are delayed. Plaintiff further contends that 41 U.S.C. §611 also invalidates Court of Claims precedent which suggests that interest cannot be recovered absent an express contractual or statutory provision. Hyman finally notes that, in any event, WMATA was never subject to 28 U.S.C. § 2516 or any similar provision.

Plaintiff similarly attempts to distinguish adverse precedent found in Judge Smith’s recent conclusion in a similar case that a contractor’s claim for interest was really a claim for lost profit and that the contractor therefore could not recover for the cost of capital. See Excavation Construction,

Inc. v. WMATA, No. 83-1125, slip op. at 5 (April 19, 1985). Plaintiff argues that Judge Smith incorrectly relied on federal procurement precedent which was rendered irrelevant by 41 U.S.C. § 611. Hyman also argues that the case before Judge Smith was in a different posture, because in that case both the Board and WMATA’s General Counsel had ruled against the contractor. See id. at 4-5.

Equally persuasive, however, is WMA-TA’s contention that plaintiff’s demand for reimbursement of cost of capital expended as a result of the delay is essentially a claim for prejudgment interest. As plaintiff itself stated in its pleadings, its cost of capital claim is as large as it is because

[sjince performance of the contract work during the years 1974-1977, WMATA has required Hyman to pursue an extremely lengthy administrative appeal process which has consumed seven years ... only to then reject the most important conclusions reached after a lengthy trial. Meanwhile, WMATA refuses to pay even undisputed amounts, while it argues that it is not liable for interest on any amount.

Memorandum of Points and Authorities In Support of Plaintiff's Renewed Motion for Partial Summary Judgment at 29.

WMATA is an agency and instrumentality of Maryland, Virginia and the District of Columbia, and as such might enjoy certain incidents of sovereign immunity. Cf. Morris v. WMATA, 702 F.2d 1037, 1041 (D.C.Cir.1983); Heffez v. WMATA, 569 F.Supp. 1551, 1555-56 (D.D.C. 1983). One such incident of sovereign immunity is that prejudgment interest is not allowable against the. state or its instrumentalities absent a statutory or contractual waiver of that immunity. No Virginia statute expressly subjects the Commonwealth to liability for prejudgment interest. Moreover, precedent in this Court supports the conclusion that the capital cost reimbursement claim is in essence one for lost profit, the award of which is precluded by the Suspension of Work clause in this case. Compare Excavation Construction, Inc. (April 19, 1985), supra, with General Railway Signal, supra. In view of these principles and the ample authority cited by WMATA in support thereof, it cannot fairly be said that the General Manager’s decision to disallow plaintiff’s claim for the loss of the use of its capital was arbitrary and capricious, without substantial evidence to support it or contrary to law. Accordingly, the accompanying order will grant defendants’ motion for summary judgment on this issue.

ORDER

For reasons more fully stated in the accompanying Memorandum, it is this 10th day of October, 1985, hereby

ORDERED, ADJUDGED, and DECREED; that plaintiff’s motion for partial summary judgment is granted in part and denied in part; and it is further

ORDERED, ADJUDGED, and DECREED: that defendants’ motion for summary judgment is granted in part and denied in part; and it is further

ORDERED: that the parties shall, on or before October 25, 1985, confer in a good faith effort to determine the amount of the overhead cost due to plaintiff as a result of this decision; and it is further

ORDERED: that a status conference will be held at 9:30 A.M. on October 30, 1985, in Courtroom No. 3, U.S. Courthouse, Washington, D.C.

SUPPLEMENTAL ORDER

The issues in this case which were at controversy between the parties having been decided by Memorandum dated October 11, 1985, and it appearing that the parties have agreed that the amount due in accordance with the Court’s Memorandum is $105,360.10, it is this 5th day of November, 1985, hereby,

ORDERED, that judgment is entered for plaintiff against defendant Washington Metropolitan Area Transit Authority in the amount of $105,360.10, plus interest to accrue from date of judgment.

      . The finish work included, inter alia, architectural features and finishes, mechanical and electrical systems, paving and painting. This work was to be done after another contractor had completed the station structure. See The George Hyman Construction Company, 85-1 B.C.A. (CCH) ¶ 17,847, Fdg. 2 at 89,336 (January 10, 1985) [Armed Services Board of Contract Appeals Decisions] (hereinafter “Board Decision”).

      . The disputes clause provided as follows: DISPUTES
      (a) Except as otherwise provided in this contract, any dispute concerning a question of fact arising under this contract which is not disposed of by agreement shall be decided by the Contracting Officer, who shall reduce his decision to writing and mail or otherwise furnish a copy thereof to the Contractor. The decision of the Contracting Officer shall be final and conclusive unless, within 30 days from the date of receipt of such copy, the Contractor mails or otherwise furnishes to the Contracting Officer a written appeal addressed to the Board of Directors. The decision of the Authority Board of Directors or its duly authorized representative for the determination of such appeals shall be final and conclusive unless determined by a court of competent jurisdiction to have been fraudulent, or capricious, or arbitrary, or so grossly erroneous as necessarily to imply bad faith, or is not supported by substantial evidence. In connection with any appeal proceeding under this article, the Contractor shall be afforded an opportunity to be heard and to offer evidence in support of his appeal. Pending final decision of a dispute hereunder, the Contractor shall proceed diligently with the performance of the contract and in accordance with the Contracting Officer’s decision.
      (b) This Disputes article does not preclude consideration of questions of law in connection with decisions provided for in paragraph
      (a) above. Nothing in this contract, however, shall be construed as making final the decisions of the Board of Directors of [sic] its representative on a question of law.

      . WMATA has designated the Board to hear contractors’ appeals from contracting officers’ decisions. WMATA’s General Manager, acting under delegated authority, reviews Board Opinions and renders final decisions such as the one here challenged. See Plaintiff’s Statement of Material Facts as to Which There Is No Genuine Issue at ¶¶ 8-9.

      . See Eichleay Corp., 60-2 BCA ¶ 2688 (1960), aff’d on reconsideration, 61-1 BCA ¶ 2894.

        . See supra note 2.

      . The present suit is an action for "equitable adjustment” under the contract’s dispute clause.
      No breach of contract is alleged.

      . See e.g., Defendant’s Opposition to Plaintiffs Renewed Motion for Partial Summary Judgment and Defendants’ Cross-Motion for Summary Judgment at 2.

      . It is additionally noted that ample evidence in the record, reflected in the Board’s lengthy decision, supports Hyman’s contention that the intermittent delays were unpredictable and of uncertain duration. See Board Decision, Findings 3, 6, 8, 10-17 at 89,336-41. The nature of the delays, adequately detailed in the record, bolsters Hyman’s argument and the Board’s implicit conclusion that Hyman could not have easily acquired replacement employment during the periods of delay and should not be denied extended home office overhead costs because of WMATA’s allegation that Hyman has failed to show that Hyman could not have obtained other work to absorb that overhead.

      . While judicial review herein focuses upon the record before the General Manager (and upon which she made her decision), it is noted that even a cursory review reveals substantial evidence in the much larger record before the Board that supports its determination that there were extended home office overhead costs attributable to the delays and properly recovered by Hyman and its subcontractors under the Eichleay method. See e.g. Administrative Record: Transcript Volume 4 at 6-20 (testimony of James Joseph Brogan, Project Manager), 120-25 (testimony of Edward Stefanik, Senior Project Manager); Transcript Volume 6 at 121— 28 (testimony of Dennis J. Kakol, consultant to F & M); Transcript Volume 7 at 71-72 (Kakol), 163-72 (testimony of Lewis L. Pierce, President of Pierce Associates, Inc.); Transcript Volume 9 at 68-72 (testimony of Charles A. Merica, Vice President, Hyman Construction Company), 217-21 (testimony of Robert B. Heap, Jr., President of C & H Contracting).

      . See supra at note 9; see also supra at 901-902.

      . See Capital Electric Co., supra, 729 F.2d at 744-47, in which it is noted that “the Eichleay method has been the prevailing method adopted by the contract appeals board.” Id. at 744.

      . The Suspension of Work clause provided: SUSPENSION OF WORK
      (a) The Contracting Officer may order the Contractor in writing to suspend, delay, or interrupt all or any part of the work for such period of time as he may determine to be appropriate for the convenience of the Authority.
      (b) If the performance of all or any part of the work is, for an unreasonable period of time, suspended, delayed, or interrupted by an act of the Contracting Officer in the administration of this contract, or by his failure to act within the time specified by this contract (or if no time is specified, within a reasonable time), an adjustment shall be made for any increase in the cost of performance of this contract (excluding profit) necessarily caused by such unreasonable suspension, delay, or

        interruption and the contract modified in writing accordingly____

        See Memorandum of Points and Authorities in Support of Plaintiff’s Renewed Motion for Summary Judgment at 5 note 3 (emphasis added).

      . 41 U.S.C. § 611 provides in part that "[ijnterest on amounts found due contractors on claims shall be paid to the contractor from the date the contracting officer receives the claim pursuant to section 605(a) of this title from the contractor until payment thereof.”

      . See United States v. North Carolina, 136 U.S. 211, 10 S.Ct. 920, 34 L.Ed. 336 (1890); General Railway Signal Co. v. WMATA, No. 84-1717, slip op. at 5 (D.D.C. May 29, 1985).

        General Railway Signal Co., in which Judge Gerhard A. Gesell found that waiver of immunity from prejudgment interest could be found by virtue of equitable adjustment language in a contract, is distinguishable from this case. The equitable adjustment clause in that case did not exclude profits, as does the suspension of work clause in this case. See supra note 12; Compare General Railway Signal Co., supra, with Excavation Construction, Inc. v. WMATA, No. 83-1125, slip op. at 5 et seq. (D.D.C. April 19, 1985).

      . Although the parties have not fully briefed the issue as to which jurisdiction’s law governs this contract, they appear to assume that Virginia’s law applies. As there is no indication as to where the contract was executed and it was substantially performed in Virginia, Virginia law will be applied in analyzing this issue. Application of state law is indicated by section 80 of the WMATA Compact, which provides that:
      The Authority shall be liable for its contracts ... in accordance with the law of the applicable signatory.
      D.C.Code § 1-2431 (1981).

      . In Virginia the award of prejudgment interest generally is within the discretion of the court or jury. Code of Virginia § 8.01-382 provides that:
      ... [I]n any action at law or suit in equity ... the judgment or decree of the Court, may provide for interest on any principal sum awarded, or any part thereof, and fix the period at which interest shall commence. [Emphasis added.]
      The Virginia Supreme Court refers expressly to “broad discretion” given to the jury both as to the allowance of interest and fixing the date at which it shall commence. Beale v. King, 204 Va. 443, 132 S.E.2d 476, 480 (1963) (referencing § 8.01-382's precursor); see also Edmund J. Flynn Co. v. LaVay, 431 A.2d 543, 550 n. 6 (D.C.App.1981); Orient Overseas Line v. Globe-master Baltimore, Inc., 33 Md.App. 372, 365 A.2d 325, 343 (1976).
      Defendant contends that § 8.01-382 would not permit an award of prejudgment interest against the Commonwealth or its instrumentalities as it fails to expressly include them within its provisions, citing Yancey v. North Carolina State Highway & Public Works Commission, 222 N.C. 106, 22 S.E.2d 256 (1942) and Meadows v. Jamestown Foundation and Comptroller of the Commonwealth, Circuit Court of the City of Richmond, Case No. 7307 (February 13, 1976). See Defendants’ Opposition to Plaintiffs Renewed Motion for Partial Summary Judgment and Defendants’ Cross-Motion for Summary Judgment at 19.

      . See, e.g., City of Lynchburg v. Amherst County, 115 Va. 600, 80 S.E. 117 (1913); Railway Express Agency v. Commonwealth, 196 Va. 1059, 87 S.E.2d 183, 187 (1955). See also supra notes 14, 16.


author: BARRINGTON D. PARKER, District Judge.

text:
    INTERNATIONAL BROTHERHOOD OF PAINTERS AND ALLIED TRADES UNION and Industrial Pension Fund, et al., Plaintiffs, v. BEST PAINTING AND SANDBLASTING COMPANY, INC., et al., Defendants.
    Civ. A. No. 85-2124.
    United States District Court, District of Columbia.
    Oct. 11, 1985.
    David J. Cohen, Barr & Peer, Washington, D.C., for plaintiffs.
    Wade J. Gallagher, Martel Donnelly, Grimaldi & Gallagher, Washington, D.C., Richard Alexander, Mobile, Ala., for defendants.
   ORDER DENYING MOTION TO DISMISS OR TO TRANSFER

BARRINGTON D. PARKER, District Judge.

This action was initiated by plaintiffs International Brotherhood of Painters and Allied Trades Union and Industrial Pension Fund and its.Trustees (“Pension Fund”), pursuant to sections 502 and 515 of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended, 29 U.S.C. §§ 1132, 1145 (1982), and section 301 of the Labor-Management Relations Act, 29 U.S.C. § 185 (1982). Plaintiffs seek to collect pension, contributions allegedly owed by defendant Best Painting and Sandblasting Company, Inc. (“Best”), a private employer located in Mobile, Alabama. Named as defendants in addition to Best are its president, Harold C. Dalton, and the Insurance Company of North America, surety for a wage and fringe benefits bond provided by Best pursuant to its collective bargaining agreements with the International Union. Defendants have asked the Court to dismiss the case because a declaratory judgment action posing similar issues is already pending in the United States District Court for the Southern District of Alabama. In the alternative, defendants request that this case be transferred to the Southern District of Alabama, where the earlier suit is being heard. For the reasons set forth below, the defendants’ motion is denied.

DISCUSSION

The plain language of ERISA authorizes the plaintiff Pension Fund, the offices of which are in Washington, D.C., to bring suit to collect delinquent contributions in this district: “[A]n action under this title ... may be brought in the district where the plan is administered____” 29 U.S.C. § 1132(e)(2) (1982). Since venue is proper, this case will not be dismissed. See 28 U.S.C. 1406(a) (1982).

Defendants' alternative motion to transfer pursuant to 28 U.S.C. § 1404(a) causes the Court more concern. The burden of establishing that a case should be transferred is on the movant. See Illinois Tool Works, Inc. v. Sweetheart Plastics, Inc., 436 F.2d 1180, 1188 (7th Cir.1971), cert. dismissed, 403 U.S. 942, 91 S.Ct. 2270, 29 L.Ed.2d 722 (1971). The plaintiff’s choice of forum is due substantial deference and, unless the balance of convenience is strongly in favor of the defendants, should rarely be disturbed. Gross v. Owen, 221 F.2d 94, 95 (D.C.Cir.1955); Aiken v. Lustine Chevrolet, Inc., 392 F.Supp. 883, 887 (D.D.C.1975). Since Congress has enacted a special venue provision to allow multiemployer pension plans to more efficiently collect delinquent contributions, the burden on the defendants in this case is especially heavy.

Defendants claim that holding trial in the Alabama district court will be more convenient for the witnesses that they intend to call. An affidavit by defendants’ counsel alleges that the testimony of these witnesses will be necessary to show that the local Unions breached their collective bargaining agreements with Best. Such a defense, however, is irrelevant to this suit by the Pension Fund. Federal labor policy dictates that defenses available against a union are generally not available against third-party beneficiaries of collective bargaining agreements such as pension funds. See Lewis v. Benedict Coal Corp., 361 U.S. 459, 471, 80 S.Ct. 489, 496, 4 L.Ed.2d 442 (1960); Southern California Retail Clerks Union v. Bjorklund, 728 F.2d 1262, 1265-66 (9th Cir.1984); Chicago District Council of Carpenters Pension Fund v. Dombrowski, 545 F.Supp. 325, 326-27 (N.D.Ill. 1982); cf. Kaiser Steel Corp. v. Mullins, 455 U.S. 72, 102 S.Ct. 851, 70 L.Ed.2d 833 (1982) (where the very act of making contributions would be unlawful, defense can be raised). Since the contract defense, at least as outlined in counsel’s affidavit, is unavailable to Best, this proceeding may well be amenable to disposition by summary judgment. In that case, it will be unnecessary for defendants to call any witnesses.

In addition, if this case does go to trial, plaintiffs as well as defendants will call witnesses. The Pension Fund is administered in the District of Columbia, so all of its records, including those that pertain to this case, are located here. Thus, the witnesses that will testify to the issues central to the case are found in this district. Combs v. Pembro Fuel, Inc., 4 E.B.C. 2610, 2612 (D.D.C.1983).

Defendants’ motion is similar to those made and rejected in other cases in this district. See, e.g., Combs v. Adkins & Adkins Coal Co., Inc., 597 F.Supp. 122 (D.D.C.1984); Combs v. Pembro Fuel, Inc., 4 E.B.C. 2610, 2612; Konyha v. Isco, Inc., 3 E.B.C. 1768 (D.D.C.1981). Only the pendency of defendants’ declaratory judgment action in Alabama makes this case any different. Defendants characterize plaintiffs’ bringing suit here when that action was already pending as “unwarranted harassment” intended to “make the expense of defending this action to [sic] costly and hence, bring pressure to bear upon Best to pay the monies demanded.” That the action is intended to pressure Best into paying the money it allegedly owes is undeniable. But given Congress’ express decision to permit such actions to be brought in this district, the Court cannot agree that plaintiffs by filing suit here have engaged in anything other than forcefully and legitimately pursuing their interests. This Court will not permit the defendants’ tactical maneuver to prevent the Pension Fund from exercising in the jurisdiction of its choice the rights that Congress has specifically bestowed upon it.

Accordingly, it is this 10th day of October, 1985,

ORDERED

That defendants’ motion to dismiss or, in the alternative, transfer this case to the United States District Court for the Southern District of Alabama is denied.

That the defendants shall file an answer to the complaint in this proceeding by October 21, 1985. A status call will be held on October 25, 1985 at 11:00 a.m.

      . Best Painting and Sandblasting Company, Inc. v. International Brotherhood of Painters and Allied Trades Union, No. 85-0874-C (D.D.Ala.).

      . In Central States Southeast and Southwest Area Pension Fund v. Brown, 587 F.Supp. 1067 (N.D.Ill.1984), cited by the defendants as authority for the transfer of an ERISA action because of the location of witnesses, the defendant employer denied that it was party to the collective bargaining agreement. This was a valid and substantial defense, in contrast to the defense proposed by Best in this case. The persuasive power of the decision in Central States for this case is therefore slight.

      . The Court has been advised in a pleading filed by the Pension Fund on October 7, 1985 that the United States District Court for the Southern District of Alabama has stayed any ruling on venue in Best's declaratory judgment action until this Court rules on the present motion. The stay, entered at the request of Best, in effect allows this Court to determine the proper venue in both cases.