author: TURK, Chief Judge.

text:
    EVANGEL KIDDIE KOLLEGE, Plaintiff, v. UNITED STATES of America, Defendant.
    Civ. A. No. 82-0388.
    United States District Court, W.D. Virginia, Roanoke Division.
    Nov. 2, 1984.

      Donald Huffman, Bird, Kinder & Huffman, Roanoke, Va., for plaintiff.
    John P. Alderman, U.S. Atty., Roanoke, Va., for defendant.
   MEMORANDUM OPINION

TURK, Chief Judge.

Plaintiff Evangel Kiddie Kollege brought this action seeking a refund of one hundred forty-four dollars and seventeen cents ($144.17), which it claims represents an overpayment of social security taxes made on behalf of an employee for the quarter ending December 31, 1977. Plaintiff alleges that it is a tax-exempt organization pursuant to § 501(c)(3) of the Internal Revenue Code and thus need not pay social security taxes (Complaint, ¶ 14). Plaintiff claims the refund on the basis of § 3121(k)(4) of the Code. Relying on the same subsection, the United States has filed a counterclaim for the balance of social security taxes due for the quarter.

Until enactment of the new subsection (k)(4) in 1976, organizations that were exempt from federal income taxes under subsections 501(a) and (c)(3) of the Code were likewise exempt from social security taxes. These organizations could file waivers of their statutory exemption, thereby ensuring social security coverage for themselves and their employees. 26 U.S.C. § 3121(k)(4)(A). Plaintiff claims to have been among the estimated 13,000 to 20,000 exempt organizations that paid social security taxes without having filed waivers. See H.R.Rep. No. 1711, 94th Cong., 2d Sess. 2, reprinted in 1976 U.S. Code Cong. & Ad. News 5929, 5930.

Congress recognized the possibility that many of those exempt organizations and their employees would seek refund of social security taxes paid without a formal waiver:

The estimated drain on the social security funds could be from over 100 million to perhaps one billion dollars. In addition, if the organizations refused to be covered, a number of their employees then receiving benefits would lose their present entitlement, and a great number of others would lose their coverage and expectancy of future benefits.

Hospital Data Center of South Carolina v. U.S. 634 F.2d 541, 543, 225 Ct.Cl. 158 (1980) (footnote omitted). In response to these concerns, Congress enacted subsection (k)(4), deeming certain such employers to have filed waivers.

For purposes of this case, § 3121(k)(4) treats as waived the exemption of an organization that paid social security taxes without filing a waiver certificate by October 19, 1976, unless “a refund or credit of any part of the taxes.... has been obtained by the organization or its employees prior to September 9, 1976.” (emphasis added). It is undisputed that plaintiff paid social security taxes from 1973 through the first three months of 1976, (Complaint, ¶ 6), without having formally waived its exemption by October 19, 1976. Nor does the United States deny plaintiff’s allegations that on July 26,1976, it requested from the IRS a refund of all social security taxes paid, (Complaint, ¶ 8), but that such refund was not made until October 11, 1976. (Complaint, ¶ 9).

The parties have thus reduced the issue in both claims to the effect had on plaintiff’s liability for 1977 social security taxes by (k)(4)’s requirement that the refund have been “obtained” before September 9, 1976: did plaintiff’s submitting a refund request before that date satisfy the provision and preclude a statutory waiver of its exemption? Under plaintiff’s proffered construction, subsection (k)(4) would treat as obtained a refund received at any time, as long as it had been requested before September 9, 1976. IRS approval of the request would in effect relate back, at the latest, to when the Service received the request. Plaintiff argues that the statute should not operate so as to deprive an organization of its exemption simply because of arbitrary delay by the IRS in acting on a timely refund request.

Though mildly persuasive, this reading ignores the plain language and purpose of subsection (k)(4). Congress’ choice of the word “obtained” indicates that the refund must actually have been received by the cutoff date. An exempt organization cannot be said to have obtained its refund by the mere filing of a request. By enacting the disputed provision, Congress sought to protect the social security trust fund and those employees whose coverage was threatened. In the face of these considerations, plaintiff has adduced no authority supporting its construction of subsection (k)(4), a construction that would in fact frustrate (k)(4)’s very purpose.

Plaintiff does allege that it paid social security taxes originally in reliance on erroneous representations by an unknown IRS employee that such payments were required, (Complaint, ¶¶ 5-7); the United States should therefore be estopped from asserting a constructive waiver, plaintiff argues. It is settled law that “[a]n officer or agency of the United States to whom no administrative authority has been delegated cannot estop the United States even by an affirmative undertaking to waive or surrender a public right.” U.S. v. Stewart, 311 U.S. 60, 70, 61 S.Ct. 102, 108, 85 L.Ed. 40 (1940). The Fourth Circuit has enforced this principle in cases where a taxpayer has detrimentally relied on an unauthorized agreement with IRS agents. See U.S. v. Davenport, 297 F.2d 284 (4th Cir.1961); Darling v. Commissioner, 49 F.2d 111 (4th Cir.1931), cert. denied, 283 U.S. 866, 51 S.Ct. 657, 75 L.Ed. 1470 (1931). Even assuming arguendo that an IRS employee did instruct plaintiff as alleged, such representations were inconsistent with the law and IRS regulations; thus acting beyond the scope of his authority, the agent would not bind the Government. Plaintiff thus cannot estop the IRS from enforcing the constructive waiver, effected by the court’s plain reading of § 3121(k)(4). Because the parties dispute none of the facts leading to this conclusion, summary judgment in favor of the United States is appropriate.

      . For a more thorough discussion of the legislative history behind § 3121(k)(4), see Burke Mountain Academy, Inc. v. U.S., 715 F.2d 779 (2d Cir.1983); Hospital Data Center, supra at 543. Unlike the plaintiffs in those cases, Evangel Kiddie Kollege requested its tax refund before the cutoff date, established in (k)(4), for obtaining such refunds.


source: Caselaw Access Project

author: JOHNSTONE, District Judge.

license: Public Domain

text:
    Mildred Roberta SMITH, Plaintiff, v. Margaret HECKLER, Secretary of Health and Human Services, Defendant.
    Civ.A. No. 83-0143-0.
    United States District Court, W.D. Kentucky, at Owensboro.
    Nov. 6, 1984.
    D. Todd Littlefield, Western Kentucky Legal Services, Inc., Owensboro, Ky., for plaintiff.
    Mike Spalding, Asst. U.S. Atty., Louisville, Ky., for defendant.
   MEMORANDUM OPINION

JOHNSTONE, District Judge.

This matter is before the court on plaintiff's motion for an award of attorney fees pursuant to the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412. This motion arose out of an action filed in this court against the Secretary of Health and Human Services (Secretary) by Mildred Roberta Smith. In that action Smith sought judicial review of a final decision by the Secretary terminating her disability benefits. Smith prevailed in the action, and this court ordered her benefits to be reinstated. Now, Smith is before the court claiming that under the EAJA, she is entitled to an award of attorney fees.

Jurisdiction over this action is not disputed by either party. It exists under 28 U.S.C. § 1346.

Those courts which have addressed the issue have determined that the EAJA applies to actions which arise under the Social Security Act. Guthrie v. Schweiker, 718 F.2d 104, 107 (4th Cir.1983); see also, Rawlings v. Heckler, 725 F.2d 1192 (9th Cir.1984); Cornella v. Schweiker, 728 F.2d 978 (8th Cir.1984); Hornal v. Schweiker, 551 F.Supp. 612 (M.D.Tenn.1982).

The EAJA directs courts to award attorney fees to successful parties other than the United States in cases brought by or against the United States. These awards must be granted “unless the court finds that the position of the United States was substantially justified or that special circumstances make the award Unjust.” 28 U.S.C. § 2412(d)(1)(A).

There is no question that Smith was a successful party in an action brought by or against the United States. Smith v. Heckler, No. 83-0143, slip op. (W.D.Ky. Mar. 30, 1984). In addition, the Secretary has not alleged that this case involves special circumstances that would make an award of attorney fees unjust. Therefore, the only remaining issue is whether the Secretary’s decision to terminate Smith’s benefits was substantially justified. If it was not, then this court must award attorney fees to Smith. See 28 U.S.C. § 2412(d)(1)(A).

There is no consensus among the courts as to the exact meaning of a “position that is substantially justified.” However, it is generally agreed that a finding of a lack of substantial evidence to support the government’s position is not alone sufficient to show a lack of substantial justification for the position. Whitman v. Heckler, 582 F.Supp. 221, 222 (E.D.Tenn.1984); Hornal, 551 F.Supp. at 617. “The standard ... should not be read to raise a presumption that the Government position was not substantially justified, simply because it lost the case.” H.R.Rep. No. 1418, reprinted at 1980 U.S. Code Cong. & Ad. News 4953, 4984, 4990; Spencer v. NLRB, 712 F.2d 539, 557 (D.C.Cir.1983); Guthrie, 718 F.2d at 104; Kerr v. Heckler, 575 F.Supp. 455, 457 (S.D.Ohio 1983). Also, there is no dispute that the burden of proving substantial justification is on the government. Environmental Defense Fund, Inc. v. Watt, 722 F.2d 1081,1085 (2d Cir.1983); Ward v. Schweiker, 562 F.Supp. 1173 (W.D.Mo.1983); see, Cornella, 728 F.2d at 984. Congress believed that, “where a party has had to engage in lengthy administrative proceedings before final vindication of his or her rights in the courts, the government should have to make a strong showing to demonstrate that its action was reasonable.” 1980 U.S. Code Cong. & Ad.News at 4997; Environmental Defense Fund, 722 F.2d at 1085.

The disparity among the courts arises when they attempt to define the test for substantial justification. The Congressional reports on the EAJA indicate that the test for substantial justification “is essentially one of reasonableness.” 1980 U.S. Code Cong. & Ad.News at 4984. The government must demonstrate that its position has a reasonable basis in law and fact. Id. Many courts have interpreted this language to mean that the standard is strictly one of reasonableness, and that the wording “substantial justification” does not create a stricter standard. Rawlings, 725 F.2d at 1196; Ceglia v. Schweiker, 566 F.Supp. 118,123 (E.D.N.Y.1983); Kerr, 575 F.Supp. at 457.

There is some evidence, however, that Congress intended the standard to be somewhat more stringent than mere reasonableness. The Senate Committee on Judiciary refused to adopt an amendment which would have changed “substantially justified” to “reasonably justified.” S.Rep. No. 96-253 cited in Hornal, 551 F.Supp. at 617. Some courts have interpreted this action as a rejection of the reasonableness standard in favor of one that is more exacting on the government. See Hornal, 551 F.Supp. 617; Spencer v. NLRB, 712 F.2d at 558.

The only sixth circuit case to address the standard for awarding attorney fees under the EAJA implies that the test is one of reasonableness. Wyandotte Savings Bank v. The National Labor Relations Board, 682 F.2d 119 (6th Cir.1982). However, that case involved NLRB enforcement of an order, and, as the court noted, the NLRB is given broad discretion in its actions. Thus, that case is not necessarily determinative of social security cases.

Without clear sixth circuit precedent, the district courts in our circuit have developed various tests to determine whether a government position is substantially justified. In Jones v. Schweiker, 565 F.Supp. 52 (W.D.Mich.1983), that court ruled that the government fails to meet the standard when there is “no authority for its position.” Id. at 56. The Southern District of Ohio has held that as long as there is at least some evidence to support the government’s actions in contesting the claim, it acts with substantial justification. Kerr, 575 F.Supp. 455 (S.D.Ohio 1983). Finally, in Hornal the court defined the standard as “one that falls in between the common law ‘bad faith’ exception and an automatic award of attorney fees to prevailing parties,” Hornal, 551 F.Supp. at 617, and stated that an award should be made if there is little or no evidence supporting the government’s position. Id.

The government is usually not substantially justified when it fails to apply the correct legal standard to a case. For example, in Howard v. Heckler, 581 F.Supp. 1231 (S.D.Ohio 1984), the court awarded attorney fees because the ALJ had not followed sixth circuit precedent that pain of physical and psychological origins may establish a disability. Id. at 1233. One court’s reasoning was that application of an incorrect legal standard necessarily leads to a position unsupported by law or fact, and therefore, one that is not substantially justified. Gross v. Schweiker, 563 F.Supp. 260, 262 (N.D.Ind.1983); Chee v. Schweiker, 563 F.Supp. 1362, 1365 (D.Ariz. 1983) (holding that the Secretary was not substantially justified in taking a position that was contrary to circuit court precedent). Attorney fees have also been awarded where a case was remanded to the Secretary for a de novo determination giving proper weight to the reports of the treating and consultative physicians. Ceglia v. Schweiker, 566 F.Supp. 118, 122 (E.D.N.Y.1983).

With these definitions of substantially justified before it, the court turns to the history of the present case to discover whether the government’s position was substantially justified.

Mildred Roberta Smith was awarded disability benefits in 1977. Upon review in 1981, the Secretary terminated those benefits. The termination was approved upon reconsideration and by the AU after an administrative hearing. At that hearing the ALJ determined that Smith suffered from mild depressive neurosis, a functional bowel syndrome, and bursitis of the right hip, but that these afflictions did not prevent Smith from performing her past relevant work. He concluded that her claims of disabling pain were not credible. Smith, 83-0143 at 1-2.

On appeal, this court reversed the Secretary’s decision. It found that Smith suffered from severe and chronic pain in her back, hip, and leg, id. at 4, and that a series of medical reports linked that pain to physiological as well as psychological problems. This psycho-physiologic musculoskeletal disorder led to Smith’s original award of benefits and, after the award, Smith’s disability persisted. Her treating physician Dr. Evans saw her frequently and reported that her condition caused severe pain and rendered her incapable of substantial gainful activity. Id. at 5. Moreover, Evans reported that Smith suffers from gastrointestinal problems that prevent her from taking medicine for her pain. Id.

In the sixth circuit the reports of treating physicians are entitled to great weight and can be disregarded only if there is persuasive contradictory evidence. Hurst v. Schweiker, 725 F.2d 53, 44 (6th Cir.1984); Allen v. Califano, 613 F.2d 139, 145 (6th Cir.1980); Branham v. Gardiner, 383 F.2d 614 (6th Cir.1967). Yet, the Secretary discounted the reports and opinions of Dr. Evans in favor of the reports of four physicians who saw Smith only once or twice. Three were hired by the Social Security Administration. None indicated that Smith was not in pain or was able to engage in substantial gainful activity. Moreover, although their reports were more detailed they contained the same type of relevant data as that in Dr. Evans’ reports.

One reason treating physicians’ opinions are given greater weight is because treating physicians have more exposure to the patient. In this case Dr. Evans reported that he had known Smith since before she was his patient. He said that, “I know that she is a person who will seek employment and work if it is physically possible for her to do so.” He also noted that he had “known of her doing farm work when she was in so much pain that she could not even be comfortable resting in bed.” T.R. at 293.

In light of the strong evidence from Dr. Evans that Smith suffered from severe and disabling pain, and the clear sixth circuit precedent that treating physicians’ opinions are entitled to great weight, this court must conclude that the Secretary’s position did not have a reasonable basis in law or fact.

The Secretary argues that the AU made a credibility determination that Smith was not in pain, and that an incorrect credibility determination is not alone sufficient to make the Secretary’s position not substantially justified. Lonning v. Schweiker, 568 F.Supp. 1079, 1084 (E.D.Pa.1983). However, the AU’s decision was based only on his observations, the observations of two consultative physicians, and the fact that Smith took only mild analgesics for pain. Smith, 83-0143 slip op. at 8-9. Thus, this decision ignored the reports of Dr. Evans as well as the reports of all other examining doctors, none of which refuted that Smith was in pain. Moreover, the ALJ’s decision did not take into account the fact that there was substantial medical evidence to support Smith’s claims of severe and disabling pain, or that Smith’s gastrointestinal problems prevented her from taking medication for pain.

It is unreasonable for the Secretary to ignore the overwhelming weight of the evidence and focus instead on an isolated part of the government’s case. Cornella, 728 F.2d at 984; Hornal, F.Supp. at 618. This is what the Secretary did in this case.

Therefore, this court holds that the Secretary’s position was unreasonable and not substantially justified. Pursuant to the Equal Access to Justice Act, plaintiff’s motion for attorney fees shall be granted.

The EAJA provides for attorney fees of up to $75.00 per hour and all other reasonable fees and expenses. 28 U.S.C. § 2412(d)(2)(A). Plaintiff’s attorney has submitted affirmations of the hours spent preparing plaintiff’s case, and the usual fee for the work performed by an attorney of his experience. Based on the affirmations, oral inquiry of the court, and observation of counsel’s work, the court finds that $50.00 per hour is a reasonable fee and awards plaintiff $850.00 for 17 hours work.


author: KEADY, Senior District Judge.

text:
    Aaron HENRY, National Association for the Advancement of Colored People (NAACP), Mississippi State Conference of the NAACP, and Coahoma Branch of the NAACP State Conference v. FIRST NATIONAL BANK OF CLARKSDALE; Claiborne Hardware Company, Inc.; Q.H. McDaniel, Jr., doing business as McDaniel Pharmacy; James E. Hudson and George Hudson, doing business as Hudson Bros.; Waddy Abraham, doing business as Jitney Jungle; Joe Ellis, Mrs. Ben Mullin and Miss Ella Ellis, doing business as George Ellis Food Store; Norman N. Ellis and Barbara B. Ellis, doing business as Ellis Variety Store; Murad Nasif and Mildred Nasif, doing business as M & M Super Store & Washateria; W.H. Hay, doing business as O.K. Cleaners & Shirt Laundry; Charles R. Dobbs, doing business as Western Auto Associate Store; Allen Motor Co., Inc.; Port Gibson Lumber & Supply Company, Inc.; and Mrs. Edgar A. McCaa, doing business as Town & County.
    Civ. A. No. DC69-58-WK.
    United States District Court, N.D. Mississippi, Delta Division.
    Nov. 16, 1984.

      David S. Tatel, Hogan & Hartson, Washington, D.C., Barry H. Powell, Gilbert & Powell, Jackson, Miss., for plaintiffs.
    Dixon L. Pyles, Pyles & Tucker, Jackson, Miss., for defendants.
   MEMORANDUM OPINION

KEADY, Senior District Judge.

The court presently has for consideration plaintiffs’ motion for an award of attorneys’ fees and litigation expenses incurred in this civil rights action brought under 42 U.S.C. § 1983 to enjoin defendants (state court plaintiffs) from seeking to enforce the judgment of the Chancery Court of the First Judicial District of Hinds County, Mississippi, granting injunctive relief against the continuation or enforcement of federal plaintiffs’ boycott and picketing of various Port Gibson and Claiborne County, Mississippi, merchants, and awarding damages against the federal plaintiffs for conduct of the boycott. Plaintiffs, as prevailing parties in this federal district court, the United States Court of Appeals for the Fifth Circuit and the United States Supreme Court, seek a fees award totalling $227,302.50, together with expenses of $15,883.93, against defendant Port Gibson and Claiborne County merchants pursuant to the Civil Rights Attorney’s Fees Awards Act of 1976, 42 U.S.C. § 1988 (1981). Defendants object to the entry of any fees award on three grounds: (1) that plaintiffs’ motion is untimely; (2) that § 1988 is inapplicable for lack of any state action to support the underlying § 1983 judgment; and (3) that § 1988 is inapplicable because this action was no longer pending on the effective date of the statute. Alternatively, defendants contest the reasonableness of plaintiffs’ request, alleging duplication of effort on the part of plaintiffs’ counsel. We preface our analysis with a brief procedural history of this protracted litigation.

Plaintiffs filed their amended complaint on October 1, 1976, and on October 20, this court, per Judge Orma R. Smith, issued three preliminary injunctive orders, one of which prohibited the state court plaintiffs from taking any action to enforce the injunction and damages award entered by the Hinds County Chancery Court pending review of the state court judgment by the Mississippi Supreme Court and, if necessary, by the United States Supreme Court. See 424 F.Supp. 633, 639 (N.D.Miss.1976). Judge Smith’s decision was affirmed in all respects by the Fifth Circuit on May 21, 1979. Henry II, 595 F.2d 291, 309 (5th Cir.1979). Defendants’ petition for writ of certiorari was denied by the Supreme Court in January 1980. 444 U.S. 1074, 100 S.Ct. 1020, 62 L.Ed.2d 756 (1980). In the meantime, the state court defendants pursued appropriate avenues of appeal from the judgment of the chancery court. That court’s decision was affirmed by the Mississippi Supreme Court on December 10,1980, NAACP v. Claiborne Hardware Co., 393 So.2d 1290 (Miss.1980), but was subsequently reversed by the United States Supreme Court on July 2, 1982. 458 U.S. 886, 102 S.Ct. 3409, 73 L.Ed.2d 1215 (1982). The chancery court dissolved its injunction and vacated its award of damages on March 22, 1983, making further extensive proceedings in this court unnecessary. We finally dismissed this action on January 12, 1984.

I. Timeliness

Defendants urge the court to deny plaintiffs’ application for attorneys’ fees and expenses as untimely. Defendants’ brief in opposition calculates the date of service of plaintiffs’ motion, February 9, 1984, as being “589 days after the United States Supreme Court reversed and remanded, 1622 days after the mandate of the Fifth Circuit was filed in the district court, and 345 days from the time the Hinds County Chancery Court entered its order,” but ignores the fact that the motion was filed only twenty-eight (28) days after entry of this court’s final order of dismissal on January 12, 1984. The Local Rules of this court provide that

All motions for attorney’s fees to be awarded by law as part of the costs of the action, whether provided for by statute or otherwise, shall be served by the prevailing party to whom costs are awarded not later than 30 days after entry of judgment.

N.D.Miss.R. C-13(2)(a).

Of course, “the district courts [are] free to adopt local rules establishing timeliness standards for the filing of claims for attorney’s fees.” White v. New Hampshire Dept. of Employment Security, 455 U.S. 445, 454, 102 S.Ct. 1162, 1168, 71 L.Ed.2d 325 (1982). Moreover, while recognizing that the final disposition of this lawsuit has consumed fifteen years in the state and federal courts, we find no prejudice or unfair surprise inhering in plaintiffs’ application for fees and expenses at this time, nor is any alleged. Indeed, denial of plaintiffs’ motion as untimely would operate to prejudice plaintiffs, as they were clearly entitled to rely on this court’s policy pronouncements as incorporated in its Local Rules. It may well be that the court could have entered its final order of dismissal at an earlier date; however, our rules provide that a prevailing party shall have thirty days after such entry within which to serve its motion. We therefore reject defendants’ argument that the instant motion is untimely.

II. State Action

Section 1988 provides for the allowance of a reasonable attorney’s fee in the discretion of the court to a party prevailing “[i]n any action or proceeding to .enforce a provision of [section] ... 1983....” 42 U.S.C. § 1988 (1981). As stated, defendants assert that § 1988 is inapplicable in the case sub judice because the named defendants against whom fees are sought are private parties and, as such, there was no state action which would support plaintiffs’ underlying § 1983 judgment. However, the question of state action in this case has already been conclusively resolved unfavorably to defendants, and we are, of course, bound by this earlier determination. As the Fifth Circuit held in Henry II:

The supplemental and amended complaint filed October 1, 1976, alleged that enforcement of the state court’s judgment would infringe rights secured to the federal plaintiffs by the First and Fourteenth Amendments of the Constitution and by 42 U.S.C. § 1983; as such it plainly stated a federal cause of action over which the district court had jurisdiction under 28 U.S.C. §§ 1331(a) and 1343(3). The requisite state action which we found absent in Henry I has since been supplied by entry of the state Chancery Court judgment which is immediately enforceable. The crucial difference between a private party who has merely filed a civil suit in a state forum and the successful litigant who possesses an immediately enforceable state judgment is that in the latter case the full power and authority of the state can be invoked on behalf of the litigant. It is this exercise of state power that provides state action for purposes of the Fourteenth Amendment and section 1983.

595 F.2d at 299; see also 424 F.Supp. at 639. Section 1988 is thus applicable in this § 1983 action to vindicate rights under the First and Fourteenth Amendments, and defendants, having assumed the role of state actors, are jointly and severally liable for any award made by this court pursuant to § 1988.

III. Pendency of the Action

Section 1988, as amended on October 19, 1976, and effective that date, applies to all cases pending on, or commenced subsequently to, the effective date of the amendment. Hutto v. Finney, 437 U.S. 678, 694 n. 23, 98 S.Ct. 2565, 2575, n. 23, 57 L.Ed.2d 522 (1978) (citing H.R.Rep. No. 94-1558 at 4 n. 6 (1976)).

Defendants’ argument that this action was no longer pending on October 19, 1976, is patently without merit. We need only point to the date of Judge Smith’s memorandum of decision and entry of orders of injunction, October 20, 1976, the day following the effective date of the statute, see 424 F.Supp. at 633, to refute defendants’ contention. This action was plainly still pending before the district court on the effective date, as the court had not at that time finally disposed of the substantive motions for preliminary injunction. Furthermore, the Fifth Circuit has held that an action is considered “pending” even if the only issue remaining for resolution on the effective date of the statute is the question of attorneys’ fees. Taylor v. Sterrett, 640 F.2d 663, 668 (5th Cir.1981); Robinson v. Kimbrough, 620 F.2d 468, 475 (5th Cir.1980); see also Knights of the Ku Klux Klan, Realm of Louisiana v. East Baton Rouge Parish School Bd., 679 F.2d 64, 67-68 (5th Cir.1982) (action is pending on effective date of Equal Access to Justice Act, 28 U.S.C. § 2412, where motion for attorneys’ fees is only matter still before the court).

IV. The Johnson Factors

For these reasons, we conclude that plaintiffs, as prevailing parties in this civil rights action, are entitled to recover reasonable attorneys’ fees and litigation expenses from defendants. After considering affidavits and statements of counsel regarding the reasonableness of plaintiffs’ fee request, the court, pursuant to the guidelines established in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir.1974), as modified by Copper Liquor, Inc. v. Adolph Coors Co., 624 F.2d 575, 581-84 (5th Cir.1980) (Copper Liquor II), and Copper Liquor III, 684 F.2d 1087, 1092-97 (5th Cir.1982), finds as follows.

A. Time and Labor Required

As noted, plaintiffs seek an award of attorneys’ fees in the amount of $227,-302.50 for 2510.25 hours of legal services performed by ten attorneys at various stages of the proceedings during the past eight years. Of this total, 593.25 hours were expended by four attorneys at the district court level from September 17, 1976, to October 20, 1976. Nine attorneys rendered 1589.5 hours of legal services related to proceedings in the Court of Appeals from October 18, 1976, through July 1979. Four attorneys spent 97.75 hours in preparing plaintiffs’ opposition to defendants’ petition for writ of certiorari from November 1979 to February 1980, and 104.75 hours were expended by four attorneys in limited district court proceedings following denial of certiorari and in preparing plaintiffs’ motion for attorneys’ fees.

1589.5

At the outset, the court concludes that the 170 total compensable hours claimed by Frank R. Parker of the Lawyers’ Committee should be substantially reduced. Of these 170 hours, 125 were devoted to plaintiffs’ unsuccessful defense of the appeal taken by defendants from Judge Smith’s stay of the state court proceedings in “round one” of this litigation during 1970 and 1971, five years prior to the initiation of the instant proceedings. That aspect of the litigation involved issues fundamentally different from those later successfully advanced by plaintiffs, and should not be included in the calculation of a reasonable attorneys’ fee award. Since plaintiffs did not prevail on the first issue, the court disallows the 125 hours expended by Mr. Parker prior to September 1976.

Furthermore, in stark contrast with the precise itemizations of time and labor expenditures submitted by the nine Hogan & Hartson attorneys, Mr. Parker’s affidavit is woefully lacking in any details which would substantiate the time claimed. Particularly disturbing is Mr. Parker’s failure to record daily entries and to instead rely on single line entries for each of the years 1977, 1978 and 1979. For example, the 1977 entry reflects 12 hours devoted to “[c]onferences with clients and co-counsel [and] review of Fifth Circuit briefs,” between January and December 1977, with no indication of the dates of such conferences and study, the number or subject matter of the discussions, or the amount of time consumed by each conference. The entries for 1978 and 1979 are similarly skeletal. While the Fifth Circuit has held that contemporaneous time records are not indispensable, Copper Liquor III, 684 F.2d at 1094; Harkless v. Sweeny Indep. School Dist., 608 F.2d 594, 597 (5th Cir.1979), we believe that a reduction in the remaining hours (45) by one-third is justified where, as here, it is impossible for the court to determine exactly what services counsel has performed. See Hensley v. Eckerhart, 461 U.S. 424, 433, 437-38, 1942 n. 14, 103 S.Ct. 1933, 1939, 1941-42, 76 L.Ed.2d 40, 50, 53-54, 54 n. 14 (1983) (applicant bears burden of documenting appropriate hours expended and should maintain billing time records to enable reviewing court to identify distinct claims). Accordingly, we reduce Mr. Parker’s compensable time to 30 hours.

Hogan & Hartson seeks compensation for the services of nine attorneys who spent a total of 2340.25 hours on this case. In our view, the affidavits and documentation submitted in support of this fee request reflect an unreasonable expenditure of attorney hours in preparation for proceedings in both this court (593.25 hours) and the Fifth Circuit Court of Appeals (1589.5 hours). After careful review of these time records, we conclude that there was substantial duplication of effort by the several attorneys involved which should not be rewarded by this court. Additionally, in numerous instances large blocks of time — often hundreds of hours — were devoted to intrafirm conferences, research, drafting, editing, review, and revision which simply cannot be justified as either reasonable or necessary, notwithstanding the complexity and significant constitutional import of the issues argued and decided. We do not doubt the wisdom or value of having more experienced counsel direct and supervise the efforts of those with less experience, but even so, an examination of the time sheets generated in this cause leaves the court with the stark impression that counsel were engaged in massive legal overkill.

We note that in scrutinizing the actual hours reported by counsel, we must “distinguish ‘raw’ time from ‘hard’ or ‘billable’ time to determine the number of hours reasonably expended.” Ramos v. Lamm, 713 F.2d 546, 553 (10th Cir.1983). As the Ramos court observed,

Compiling raw totals spent, however, does not complete the inquiry. It does not follow that the amount of time actually expended is the amount of time reasonably expended. In the private sector, ‘billing judgment’ is an important component in fee setting. It is no less important here. Hours that are not properly billed to one’s client also are not properly billed to one’s adversary pursuant to statutory authority.

Id. (quoting Copeland v. Marshall, 641 F.2d 880, 891 (D.C.1980) (en banc)) (emphasis in original).

Although this litigation spanned nearly eight years, the actual court proceedings were quite limited. District court action involved only a one-hour ex parte hearing on October 1,1976, on plaintiffs’ motion for a temporary restraining order, and a three-hour hearing on October 8, 1976, on plaintiffs’ motions for preliminary injunction. Necessarily attendant with these two hearings were the preparation and service of plaintiffs’ amended complaint, the several motions and supporting legal memoranda. Three Hogan & Hartson attorneys, Mr. Ta-tel, Mr. Swartz, and Mr. Hammond, performed services either during, or in anticipation of, these two hearings. Of the 237.-75 hours claimed by Mr. Tatel, a minimum of 134 hours were devoted to services generally described by Mr. Tatel as “preparation of court papers, conferences and research.” In almost all instances, the court is not informed of what “court papers” were prepared, what issues were researched, or with whom conferences were held. Because both Mr. Swartz and Mr. Hammond also seek compensation for research, preparation of pleadings and conferences among the three attorneys, we believe that there exists in Mr. Tatel’s records a substantial likelihood of duplicative work. Accordingly, we deduct 67 hours (one-half of the questioned 134 hours) from Mr. Tatel’s claimed compensable time.

The court further finds that the presence of more than one Hogan & Hart-son attorney at the TRO and preliminary injunction hearings in Oxford, Mississippi, on October 1 and October 8, 1976, was not reasonably warranted under the circumstances. Both Mr. Swartz and Mr. Hammond accompanied Mr. Tatel from Washington to the October 1 hearing, thereby generating a large number of additional billable hours, although neither attorney participated in the proceedings there. Mr. Hammond also appeared with Mr. Tatel at the October 8 hearing, again without participating. Defendants should therefore not be compelled to compensate plaintiffs for time spent by Messrs. Swartz and Hammond in traveling to Mississippi or preparing for and attending the Oxford hearings. See Taylor v. Sterrett, 640 F.2d 663, 670 (5th Cir.1981) (time spent by more than one attorney where only one attorney is needed may be discounted); Dunten v. Kibler, 518 F.Supp. 1146, 1151-52 (N.D.Ga.1981) (same). Mr. Swartz’s compensable time will thus be reduced by 87.5 hours to 180.5 hours; likewise, Mr. Hammond’s compensable time will be reduced by 31.5 hours to 36 hours.

Eight Hogan & Hartson attorneys seek compensation from defendants for 1564.5 hours expended in appellate court proceedings. In successfully opposing defendants’ appeal to the Fifth Circuit, plaintiffs’ counsel prepared three briefs and participated in oral argument. As was true of counsel’s conduct of the litigation in the trial court, Hogan & Hartson’s involvement in the appellate proceedings is marked by extravagant usage of time and an utter failure to exercise billing judgment. In determining what time is properly excludable, we follow the compelling guideline expressed in the legislative history of § 1988: the statute “may not be subverted into a ruse for producing ‘windfalls’ for attorneys.” Dowdell v. City of Apopka, 698 F.2d 1181, 1192 (11th Cir.1983) (citing S.Rep. No. 1011 at 1, 94th Cong., 2d Sess. (1976), reprinted in [1976] U.S.Code Cong. & Ad.News 5908, 5912-13).

Without intent to limit our criticism to a single attorney, the time records of Benton R. Hammond are illustrative of the billing abuse that abounds in plaintiffs’ application. Mr. Hammond bore the primary, though by no means sole, responsibility for researching and writing plaintiffs’ initial responsive brief in the Fifth Circuit, charging more than 300 hours to research and approximately 350 more to drafting the brief. The devotion of more than 650 hours to the preparation of plaintiffs’ appellate brief — exclusive of the literally hundreds of hours claimed by other attorneys on the case for consultation, review, editing, and rewriting of the brief — cannot be justified and will not be condoned by the court. We emphasize that Mr. Hammond’s are not the only excesses; they are merely the most visible. The time records submitted by all counsel are replete with duplication and inefficiency. The court accordingly reduces the allowable hours expended at the appellate court level by Hogan & Hartson attorneys as follows:

Hours Attorney Claimed Total Compensable Reduction Hours
Philip A. Bjorlo 77.75 -19.0 58.75
Vincent H. Cohen 32.5 -26.0 6.5
Benton R. Hammond 761.0 -380.5 380.5
Elliott M. Mincberg 64.25 -26.5 37.75
Walter A. Smith, Jr. 313.75 -123.25 190.5
Allen R. Snyder 116.0 -53.5 62.5
David S. Tatel 75.25 -41.5 33.75
Dale P. Swartz 124.0 -47.25 76.75

Finally, the court determines that the number of hours expended at the Supreme Court level and in subsequent district court proceedings, including preparation of the instant attorneys’ fee application, as previously set out in the margin, see supra notes 9 and 10, are reasonable and should be allowed. The court thus finds a total of 1466.75 hours to be compensable.

B. Novelty and Difficulty of the Issues

The instant case involved application of established but highly complicated legal principles in a difficult factual context. Plaintiffs’ counsel were required to address serious jurisdictional and constitutional questions concerning the scope of the First Amendment, the standards for granting federal injunctive relief against the enforcement of a state court judgment and the applicability vel non of the Anti-Injunction Act, 28 U.S.C. § 2283 (1976), and the equitable doctrine of federal abstention articulated in Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971).

C. The Skill Requisite to Perform the Legal Services Properly

The court finds that plaintiffs’ counsel ably and skillfully performed the professional services rendered on behalf of their clients.

D. Preclusion of Other Employment by the Attorneys Due to Acceptance of the Case

Plaintiffs’ counsel expended a total of 2510.25 hours in furtherance of this action, 1466.75 of which we have found to be compensable, during the course of eight years. There were unquestionably periods of peak activity, as well as periods of relative dormancy. While some attorneys involved in this case apparently worked on little else during the pendency of the action, as we have previously stated, the extremely large number of hours devoted to this litigation was not reasonably necessary to accomplish the same result; if Hogan & Hartson suffered preclusion of other employment thereby, the choice was clearly its own to make. As regards Mr. Parker, we find this factor to be of little, if any, significance.

E. The Customary Fee

The court is required to select an hourly rate of compensation for each attorney which reflects the “customary fee for similar work in the community.” Johnson, 488 F.2d at 718. Plaintiffs’ counsel seek compensation at hourly rates ranging from $65 to $155 per hour, depending upon the experience of each individual attorney. As explained by the affidavit of Mr. Tatel, the requested billing rates are “current equivalent” rates — the standard rate which Hogan & Hartson would currently charge for work done by attorneys with experience equivalent to that possessed by attorneys working on this case at the time the services were rendered. While we agree with plaintiffs that current rates are properly chargeable to offset delay in payment for services rendered in the past, cf. Copeland v. Marshall, 641 F.2d 880, 893 (D.C.Cir. 1980) (en banc) (delay in receipt of payment may be incorporated into contingency adjustment), we believe that the rates allowed by this court for legal work performed in this judicial district should reflect the customary fee here rather than the standard rates in Washington, D.C. The court observes that reasonable hourly rates for professional services prevailing in this district fall generally within the $60 to $100 range, depending upon the experience, skill and reputation of the particular attorney involved. Accordingly, we reduce the claimed hourly rates as follows:

F. Whether the Fee is Fixed or Contingent

Plaintiffs’ counsel represented plaintiffs on a pro bono basis, and will receive no other compensation than that awarded by this court.

G. Time Limitations

The nature of the remedy sought by plaintiffs in the district court, temporary and preliminary injunctive relief, and the immediacy of enforcement of the state court judgment, required plaintiffs’ counsel to work under severe time limitations at the district court level. Thereafter, time limitations imposed either by the clients or by the circumstances of the case were not a significant factor.

H. The Amount Involved and the Results Obtained

Plaintiffs achieved total success at all stages of this litigation. The grant of injunctive relief by Judge Smith, affirmed on appeal, prevented enforcement of a state court judgment which would have substantially infringed plaintiffs’ First Amendment rights and very possibly resulted in the NAACP’s bankruptcy.

I. Experience, Reputation and Ability of the Attorneys

Plaintiffs’ counsel enjoy a fine reputation in federal civil rights litigation and, true to their collective reputation, handled this case with skill and ability. The hourly rate allowed each attorney reflects that attorney’s degree of experience.

J. Undesirability of the Case

This factor is not relevant in this case.

K. Professional Relationship with the Client

This factor is not relevant in this case.

L. Awards in Similar Cases

Our awards of $65, $90 and $100 per hour fall within the range of prevailing rates in this judicial district and are consistent with hourly rates recently awarded in other civil rights cases before this court. See, e.g., Hart v. Walker, No. WC 80-82-WK-P, Order of July 13, 1984 ($75 per hour); Quarles v. St. Clair, No. GC 77-37-K, Order of July 2, 1984 ($75 per hour); Gates v. Collier, No. GC 71-6-K, Order of September 12, 1983 ($60 and $75 per hour).

Under the method adopted by the Fifth Circuit in Copper Liquor, Inc. v. Adolph Coors Co., 624 F.2d 575, 583 (5th Cir.1980) (Copper Liquor II); see Copper Liquor III, 684 F.2d 1087, 1092-93 (5th Cir.1982), directing the district court to give “special heed” to the Johnson factors of time and labor involved, the customary fee, the results obtained, and the experience, reputation and ability of counsel, in arriving at a “lodestar” figure, which should then be adjusted on the basis of other relevant Johnson factors, we determine that an appropriate attorneys’ fee award in this case is $112,096.25, allocable as follows:

After reviewing the other relevant Johnson factors, we decline to adjust this award either upward or downward. Despite the exceptional nature of this case, an enhancement of the fee should not be allowed because of the undue number of attorneys who claim an extraordinary amount of time for services rendered for what amounts to essentially one appeal. We are confident that the allowance made represents adequate compensation for the legal services rendered on behalf of plaintiffs. Such an award compares very favorably with awards this court has made in similar cases and, as discussed above, the various hourly rates allowed counsel are in line with the prevailing rates in this district.

V. Expenses

Plaintiffs’ counsel also seek an award of $15,883.97 for out-of-pocket litigation expenses incurred in this cause through January 31, 1984. All reasonable expenses that would customarily be billed to a fee-paying client may, of course, be recovered by plaintiffs as prevailing parties under 42 U.S.C. § 1988. Loewen v. Turnipseed, 505 F.Supp. 512 (N.D.Miss.1980). As such, we allow reimbursement as follows:

Premium on $110,000 injunction bond, $863.00 per year for 8
years $ 6,904.00
Court costs 59.68
Photocopying 1,361.21
Telephone and telegraph 472.24
Computer research 741.81
Printing 355.53
Postage 144.15
TOTAL $10,038.62

We exclude $270.60 in “miscellaneous” expenditures and also those elements of counsel’s application which are properly attributable to office overhead and would not normally be passed on to fee-paying clients: local transportation ($202.60) and secretarial overtime ($2,472.97). See Dowdell v. City of Apopka, 698 F.2d at 1192 (expenses allocable to routine office overhead may be excluded). The court also excludes plaintiffs’ claim for $2,899.18 for out-of-town travel expenses as inadequately documented. We have previously disallowed compensation for the presence of two attorneys at out-of-town hearings, believing their representation to be superfluous, and it is impossible to determine from the face of plaintiffs’ claim the attorneys who were required to travel, the destination of the travelers, or the purpose and dates of the trips made.

VI. Conclusion

To summarize, we today conclude that plaintiffs, as prevailing parties in this civil rights action, are entitled to recover from defendants the sum of $122,134.87, representing an award of attorneys’ fees in the amount of $112,096.25 and litigation expenses in the amount of $10,038.62.

Let an order issue accordingly.

      . Plaintiff-movants are Aaron Henry, the National Association for the Advancement of Colored People (NAACP), the Mississippi State Conference of the NAACP, and the Coahoma Branch of the NAACP State Conference.

      . This figure represents 2510.25 hours of claimed compensable time multiplied by a weighted average hourly rate of $90.55 per hour. Plaintiffs seek compensation for legal services rendered at various stages of the litigation by ten attorneys, nine of whom are employed by the Washington, D.C., law firm of Hogan & Hartson, and the tenth by the Lawyers’ Committee for Civil Rights Under Law (Lawyers' Committee).

      . The defendants against whom fees are sought are: Claiborne Hardware Company, Inc.; Q.H. McDaniel, Jr., doing business as McDaniel Pharmacy; James E. Hudson and George Hudson, doing business as Hudson Bros.; Waddy Abraham, doing business as Jitney Jungle; Joe Ellis, Mrs. Ben Mullin and Miss Ella Ellis, doing business as George Ellis Food Store; Norman N. Ellis and Barbara B. Ellis, doing business as Ellis Variety Store; Murad Nasif and Mildred Nasif, doing business as M & M Super Store & Washateria; W.H. Hay, doing business as O.K. Cleaners & Shirt Laundry; Charles R. Dobbs, doing business as Western Auto Associate Store; Allen Motor Co., Inc.; Port Gibson Lumber & Supply Company, Inc.; and Mrs. Edgar A. McCaa, doing business as Town .& Country. Plaintiffs do not seek fees from the First National Bank of Clarksdale and other bank defendants who were mere stakeholders in this action.

      . This action was commenced on November 7, 1969. On June 10, 1970, Judge Smith of this court entered his memorandum opinion, enjoining the state court plaintiffs from prosecuting the action filed in the Chancery Court of Hinds County on October 31, 1969. Henry v. First Nat’l Bank of Clarksdale, 50 F.R.D. 251 (N.D.Miss. 1970). The Fifth Circuit reversed the district court’s judgment on June 23, 1971, vacating the injunction and remanding the case with instructions to dismiss for lack of subject matter jurisdiction. 444 F.2d 1300 (5th Cir.1971) (Henry I). The Supreme Court denied certiorari, 405 U.S. 1019, 92 S.Ct. 1284, 31 L.Ed.2d 483 (1972), and the district court subsequently dissolved its injunction and dismissed the action, thereby concluding "round one” of this litigation. Trial on the merits in the state court suit commenced on June 11, 1973, and the chancellor’s decree, prohibiting the federal plaintiffs from continuing the boycott and assessing damages incurred as a result of the boycott, was entered on August 19, 1976, precipitating the filing of the amended complaint in this action on October 1, 1976.
        See Henry v. First Nat'l Bank of Clarksdale, 595 F.2d 291, 295-97 (5th Cir.1979) (Henry II) (detailing procedural history).
      With the exception of a comparatively small number of hours claimed by Frank R. Parker, Esquire, of the Lawyers’ Committee for services rendered on the appeal in Henry I, the fees and expenses claim which is the subject of the present motion does not seek any compensation for work performed prior to September 1976, when "round two” of this litigation began.

      . The second order reinforced and effectuated those parts of a December 15, 1969, preliminary injunction prohibiting the state court plaintiffs from interfering with funds claimed by the State Conference and Local Branches of the NAACP on deposit in various defendant state banks. See Henry II, 595 F.2d at 305-06.
      The third order, entered on behalf of the United States as intervenor, enjoined the state court plaintiffs from executing the state court judgment against or otherwise interfering with funds in the possession of Mississippi Action for Progress (MAP), which operated a federally funded Headstart Program in Mississippi. See Henry II, 595 F.2d at 307.

      . The total number of hours includes 125 claimed by Frank R. Parker of the Lawyers’ Committee for work at the Court of Appeals and Supreme Court levels in 1970-71. See infra text following note 10.

      . District Court Proceedings:
      Benton R. Hammond 67.5 hours
      Frank R. Parker (Lawyers Committee) 20.0
      David S. Tatel 237.75
      Dale F. Swartz 268.0
      593.25

      . Court of Appeals Proceedings:
      Philip A. Bjorlo 77.75 hours
      Vincent H. Cohen 32.5
      Benton R. Hammond 761.0
      Elliott M. Mincberg 64.25
      Frank R. Parker (Lawyers Committee) 25.0
      Walter A. Smith, Jr. 313.75
      Allen R. Snyder 116.0
      David S. Tatel Dale F. Swartz 75.25 124.0

      . Supreme Court Proceedings:
      Elliott M. Mincberg 23.5 hours
      Walter A. Smith, Jr. 65.5
      Allen R. Snyder 4.75
      David S. Tatel 4.0
      97.75

      . Further District Proceedings and Attorneys' Fees:
      Elliott M. Mincberg 29.75 hours
      Katherine A. Schoff 63.25
      Walter A. Smith, Jr. 1.0
      David S. Tatel 10.75
      104.75

      . We note that our objection to the sufficiency of Mr. Parker’s records with regard to time logged after September 1976 would be equally applicable to the 125 hours he claims for work done in 1970 and 1971 had we not disallowed those hours on other grounds.

      . Plaintiffs were also represented at both Oxford hearings by counsel from the NAACP and the Lawyers' Committee. It is reasonable to assume that any of the duties performed by Messrs. Swartz and Hammond in Mississippi, including service of pleadings and orders, could have been accomplished by these attorneys.


author: HAROLD H. GREENE, District Judge.

text:
    NATIONAL COAL ASSOCIATION, et al., Plaintiffs, v. William CLARK, et al., Defendants. NATIONAL COAL ASSOCIATION, et al., Plaintiffs, v. William CLARK, et al., Defendants. NORTHERN PLAINS RESOURCE COUNCIL, et al, Plaintiffs, v. William CLARK, et al., Defendants.
    Civ. A. Nos. 83-2985, 83-3320 and 83-3330.
    United States District Court, District of Columbia.
    Nov. 28, 1984.

      Arnold Levy, Jerome H. Simonds, John S. Lopatto, III, Freedman, Levy, Kroll & Simonds, Washington, D.C., for plaintiffs Nat. Coal Ass’n and Mining and Reclamation Council of America; Robert Stauffer, Peter A. Gabauer, Deputy Gen. Counsel, Thomas Altmeyer, Washington, D.C., of counsel.
    Robert D. Daniel, Sp. Litigation Counsel, Land and Natural Resources Div., U.S. Dept, of Justice, Washington, D.C., for federal defendants; John J. McHale, Energy and Resources, U.S. Dept, of the Interior, Washington, D.C., of counsel.
    Russell H. Carpenter, Jr., Laird Hart, Covington & Burling, Washington, D.C., for defendants Rocky Mountain Energy Co., Union Pacific Corp., and Union Pacific R. Co.
    Steven P. Quarles, Thomas R. Lundquist, Crowell & Moring, Washington, D.C., Stephen H. Foster, Holland & Hart, Billings, Mont., for defendant Meridian Land and Mineral Co.
    Guy R. Martin, Perkins, Coie, Stone, Olsen & Williams, Washington, D.C., for defendants Burlington Northern, Inc., and Burlington Northern R. Co.
    David Charles Masselli, Washington, D.C., James A. Patten, Patten & Renz, Billings, Mont., Thomas France, National Wildlife Federation, Northern Rockies Natural Resource Center, Missoula, Mont., for plaintiff Northern Plains Resource Council.
   MEMORANDUM ORDER

HAROLD H. GREENE, District Judge.

These three cases involve challenges to decisions of the Department of the Interior to exchange federal property containing substantial coal reserves for property owned by entities which are subsidiaries of, or otherwise controlled by, major railroads. In No. 83-2985, plaintiffs, which are trade associations representing coal producers, challenge the Department’s “Corral Canyon” (Wyoming) exchange with defendant Rocky Mountain Coal Company, a subsidiary of the Union Pacific Railroad. In No. 83-3320 the same plaintiffs challenge the Interior Department’s “Circle West” exchange of land in Montana with defendant Meridian Land and Mineral Company, which is owned by defendant Burlington Northern Railroad Company. And in No. 83-3330, the same “Circle West” exchange is challenged by a number of environmental and community organizations.

The major claim asserted by plaintiffs in all three cases — and indeed, the only major common legal claim in these cases — is that the exchanges do not satisfy the “public interest” requirement of the Federal Land Policy and Management Act of 1976 (FLPMA), 43 U.S.C. § 1716(a), in that they violate policies embodied in other federal statutes which prohibit common carrier railroads from holding federal coal leases or transporting coal that they have themselves mined. Plaintiffs seek declaratory and injunctive relief, including a declaration that the Interior Department’s construction of the relevant statute and its approval of the exchanges were contrary to law and invalid.

Plaintiffs have moved to consolidate the cases, primarily on the ground that all three turn on the common FLPMA legal issue. The motion is opposed on the ground that the pending motions by the private defendants in both Nos. 83-3320 and 83-3330 to dismiss for lack of personal jurisdiction and for improper venue, and by the government in No. 83-3320 to dismiss for lack of standing, place the “Circle West” cases in different procedural postures than the “Corral Canyon” case, so that consolidation would neither be fair nor promote judicial economy and efficiency.

The motions to dismiss for lack of personal jurisdiction and improper venue obviously constitute threshold challenges to this Court’s appropriateness as a forum for deciding these cases. Accordingly, the Court will consider these issues before considering the other pending motions.

I

In determining whether it possesses personal jurisdiction over the private defendants in the “Circle West” cases, the Court must begin by inquiring whether the contacts of these defendants with the District of Columbia are sufficient to establish personal jurisdiction under District of Columbia law, the source of the Court’s power of personal jurisdiction over non-resident defendants. Fed.R.Civ.P. 4(d)(3), 4(e); see Lott v. Burning Tree Club, Inc., 516 F.Supp. 913, 915 (D.D.C.1980); 4 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure Civil §§ 1112-18. It is undisputed that none of these defendants resides, is incorporated, or maintains its principal place of business in the District. Accordingly, the only conceivable bases for the Court’s exercise of personal jurisdiction over them are those enumerated in the District of Columbia “long-arm” statute, 4 D.C.Code Ann. § 13-423 (1981 and Supp. 1984).

On the various grounds set forth in the statute for asserting “long arm” jurisdiction over a foreign defendant, the only one potentially applicable here is that set out in subsection (a)(1) of section 423. This subsection permits a court in the District of Columbia to exercise personal jurisdiction over a person, who acts directly or through an agent, as to a claim arising from that person’s transaction of business in the District. 4 D.C.Code Ann. § 13-423(a)(1), (b). Plaintiffs here claim that the written and oral contacts of the private defendants with Interior Department officials in the District constitute business transactions sufficient to render defendants amenable to jurisdiction under subsection 423(a)(1). In the view of this Court, that claim fails adequately to take account of the effect of the long-recognized “government contacts” exception to that provision.

The government contacts exception exempts from consideration as business transactions upon which section 423(a)(1) “long-arm” jurisdiction may be based contacts of a non-resident defendant in this District which are made solely with the federal government. As the District of Columbia Court of Appeals has explained, two major considerations underlay the development of the “government contacts” exception. First, the court was concerned with protecting the important First Amendment right to petition the national government for the redress of grievances, which arguably would have been impermissibly burdened by a “long-arm” statute that permitted such contacts, standing alone, to subject a non-resident to the jurisdiction of local courts. See Rose v. Silver, 394 A.2d 1368, 1373-74 (D.C.1978). Second, the Court of Appeals noted that, absent the government contacts exception, subsection 423(a)(1) would effectively transform the District of Columbia into a national judicial forum whose courts would rapidly be inundated with lawsuits — a result not intended by Congress in enacting the “long-arm” statute. See Environmental Research International, Inc. v. Lockwood Greene Engineers, Inc., 355 A.2d 808, 813 (D.C.1976).

Although the articulation and application of the government contacts exception by the local Court of Appeals may have been somewhat inconsistent over the years, the federal Court of Appeals for this Circuit recently concluded upon a careful analysis of the District of Columbia case law both that the government contacts exception remains the law in the District of Columbia and that this exception applies to contacts with all branches of the federal government, not merely to contacts with the Congress.

In Naartex Consulting Corp. v. Watt, 722 F.2d 779 (D.C.Cir.1983), cert. denied, — U.S. —, 104 S.Ct. 2399, 81 L.Ed.2d 355 (1984), the relevant jurisdictional facts of which are strikingly similar to those of the “Circle West” cases, the Court of Appeals determined that a foreign corporate defendant, whose only contacts with the District consisted of the maintenance of an office used for monitoring legislative and regulatory matters and of several appearances before the Interior Department, lacked sufficient non-governmental, business contacts to be amenable to suit in this District under subsection 423(a)(1). Id. at 786-87. And with respect to another issue of relevance here, the court further concluded that the protection of the defendants under the government contacts exception was in no way diminished by the circumstance that their contacts concerned the protection of their own proprietary interests.

Naartex clearly controls the “Circle West” cases. In these cases, as in Naartex, the undisputed affidavits submitted by the private defendants establish that their only contacts with the District of Columbia were the maintenance of a governmental affairs office and limited personal and written communication with Interior Department officials concerning the challenged exchanges. These contacts are insufficient under Naartex to satisfy the jurisdictional prerequisites of subsection 423(a)(1), and the Court therefore lacks personal jurisdiction oyer the private defendants in the “Circle West” exchange cases. These defendants must therefore be dismissed as to those cases.

II

Having concluded that it lacks personal jurisdiction over the private defendants in the “Circle West” cases, the Court must consider next whether these defendants are necessary and indispensable parties within the meaning of Rule 19, Fed. R.Civ.P. It is clear that at least one such defendant — Meridian Land and Mineral Company (Meridian) — is both a necessary and an indispensable party.

Meridian is clearly a necessary party within the meaning of Rule 19(a). Meridian negotiated the challenged land exchange with officials of the Interior Department’s Bureau of Land Management, and Meridian obviously has a strong interest in the “Circle West” actions, which call into question both the legality of the exchange and Meridian’s title to the land it received as a result of the exchange. It follows that the disposition of these actions in favor of the plaintiffs would impede Meridian’s ability to defend its fee interest in the land. Such a disposition could also subject the government to conflicting obligations with respect to the exchanged parcels of land as between a court order invalidating the exchange, and Meridian’s potential (due process) claim that, title having passed, it cannot now be disturbed by a judgment in a case to which Meridian was not a party. Finally, as is shown by plaintiffs’ joinder of Meridian, they recognize that Meridian’s absence would prevent the Court from granting them complete relief and returning matters to the status quo ante. All of these considerations compel the conclusion that Meridian is a necessary party under Rule 19(a). See McKenna v. Udall, 418 F.2d 1171, 1174 (D.C.Cir.1969).

Similar reasoning compels the conclusion that Meridian is an indispensable party under Rule 19(b). As explained above, a full, fair, and adequate judgment that does not prejudice the plaintiffs, the government, or Meridian cannot be reached in Meridian’s absence. None of the parties has suggested, nor has the Court itself divined, a satisfactory means by which these problems could be resolved or even mitigated by a careful shaping of any judgment or relief. Finally, the District Court for the District of Montana constitutes an adequate alternative forum in which Meridian and the other defendants may be joined and the “Circle West” suits be heard.

For the reasons stated, the Court will grant the motions of the private defendants in Nos. 83-3320 and 83-3330 to dismiss these cases pursuant to Rule 19, Fed.R. Civ.P.

III

Accordingly, it is this 28th day of November, 1984

ORDERED that the motions of private defendants in Nos. 83-3320 and 83-3330 to dismiss be and they are hereby granted, and it is further

ORDERED that National Coal Association v. Clark, Civil Action No. 83-3320, and Northern Plains Resource Council v. Clark, Civil Action No. 83-3330 be and they are hereby dismissed, and it is further

ORDERED that oral argument will be heard on the pending motion to dismiss or for summary judgment in National Coal Association v. Clark, Civil Action No. 83-2985, on January 11, 1985, at 10:00 a.m.

      . Specifically, plaintiffs cite a provision of the Mineral Lands Leasing Act of 1920, 30 U.S.C. §§ 181, 202, which prohibits a company operating a common carrier railroad from holding or being given a federal coal lease, and the “commodities clause” of the Interstate Commerce Act, 49 U.S.C. § 10746, which prohibits railroads operating under the jurisdiction of the Interstate Commerce Commission from transporting goods that the railroad has produced or mined.

      . In No. 83-3320, these defendants have moved to dismiss for lack of jurisdiction and improper venue, or in the alternative for transfer to the federal district court for the district of Montana, or for summary judgment. In No. 83-3330, they have filed a similar motion as to jurisdiction and venue, but they have omitted the summary judgment motion.

      . It is also claimed that consolidation is inappropriate because of factual distinctions and differences in legal theories. For example, plaintiffs in No. 83-3330 have also asserted a claim under the National Environmental Policy Act (NEPA), 42 U.S.C. §§ 4321 et seq., asserting that the environmental impact statement prepared by the Bureau of Land Management was inadequate under NEPA.

      . The other pending motions in these cases include defendants’ motions to dismiss for failure to state a claim or for summary judgment in No. 83-2985, the government defendants’ motion to dismiss for lack of standing in No. 83-3320, and a cross-motion for summary judgment filed by plaintiffs in the same case.

      . It was the purpose of these contacts to persuade the officials to establish the policy that led to the challenged “Circle West” exchange, and to approve the exchange itself.

      . Compare Environmental Research, supra, with Rose v. Silver, supra; see also Naartex Consulting Corp. v. Watt, 722 F.2d 779, 786-87 (D.C.Cir. 1983).

      . Plaintiffs seek to distinguish Naartex and, alternatively, they invite the Court to undertake its own analysis of the relevant District of Columbia Court of Appeals cases. The attempted distinctions of these cases from Naartex are entirely convincing. As for the suggestion that this Court should undertake an independent analysis of District of Columbia law, it is obvious that this Court is bound by the recent, carefully reasoned opinion of its own Court of Appeals. Plaintiffs also argue that the vitality of Naartex and the government contacts exception is undermined by recent decisions of the Supreme Court in Keeton v. Hustler, — U.S. —, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984), and Calder v. Jones, — U.S. —, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984), which held, inter alia, that First Amendment concerns should not affect jurisdictional analysis. This argument also falls short of the mark, however, for it ignores the dual basis for the government contacts exception, which is rooted not only in the First Amendment, but also in the concern that the courts in the District of Columbia not be transformed imo national forums contrary to congressional intent.

      . Because of this determination, the Court need not and does not reach the question whether Burlington Northern, Inc. and Burlington Northern Railroad Company, which have financial interests in Meridian (and indirect financial interests in the outcome of these cases), are also necessary and indispensable parties.

      . That Rule requires the joinder of a party if "(1) in his absence complete relief cannot be accorded among those already parties, or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest".

      . That Rule requires a court that has identified a necessary party which is not amenable to process to "determine whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed ... The factors to be considered by the Court include: first, to what extent a judgment rendered in the person’s absence might be prejudicial to him or those already parties; second, the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; third, whether a judgment rendered in the person’s absence will be adequate; fourth, whether the plaintiff will have an adequate remedy if the action is dismissed for non-joinder”.

      . In addition to its jurisdictional adequacy (see n. 12, 13, and 14), the Montana court is clearly an adequate forum for an adjudication on the merits. That court is, of course, endowed with decision-making authority equal to that enjoyed by this Court and by all other federal courts. Moreover, the Montana court’s proximity to the land which is the subject of the "Circle West” suits, and its concomitantly greater familiarity with the substantive issues that will have to be reached if plaintiffs’ threshold statutory challenges fail would, if anything, render it more competent than this Court to decide these cases. Finally, since many of the individuals whose actions are challenged in these cases — e.g., the Bureau of Land Management officials and Meridian representatives — reside in Montana, as do the members of plaintiff organizations in No. 83-3330 and some of the members of plaintiff organizations in No. 83-3320, the Montana court would be a convenient forum for the parties in these cases.

      . Meridian, a Montana corporation which owns land in Montana, both is found and does business in Montana, and is therefore subject to jurisdiction under Fed.R.Civ.P. 4(d)(3) and 4 Mont.Code Ann.Civ.Proc. Rule 4B, which provides, inter alia, that ”[a]ll persons found within the state of Montana are subject to the jurisdiction of the courts of this state”. Id.

      . The federal defendant can be joined pursuant to 28 U.S.C. § 1391(e), which provides, inter alia, that suits against officers of the United States acting in their official capacities may be brought “in any judicial district in which (1) a defendant in the action resides, or (2) the cause of action arose, or (3) any real property involved in the action is situated”. Id. These cases appear to satisfy all three of the cited grounds. Private defendant Meridian resides in Montana (see n. 12, supra). The involvement of the local office of the Interior Department's Bureau of Land Management in the development and approval of the land exchange certainly permits Montana to be characterized as the district in which the claims arose. Finally, the land involved in the exchange is located in Montana.
      As for the private defendants, Burlington Northern Railroad Company is qualified to do business in Montana (Defendants’ Memorandum in Support of Motion to Dismiss in No. 83-3320 at 14-15 n. 5), and it is therefore found in Montana and amenable to process under the Montana "long-arm” statute, Mont.Code Ann. Civ.Proc. Rule 4B(1). Burlington Northern, Inc. may also be amenable to suit in Montana; in any event, it has indicated that it would consent to the jurisdiction of the Montana federal district court (Defendants' Memorandum, supra; Affidavit of Scott Anderson). Moreover, even if Burlington Northern were not amenable to suit, its indirect economic interest in the challenged land exchange, coupled with the absence of an available alternative forum in the wake of this Court’s decision in these cases, would likely lead the Montana federal court to conclude that Burlington Northern is not an indispensable party in whose absence the suits could not proceed.

      . Venue would be proper in the District Court in Montana under 28 U.S.C. §§ 1391(b), (c), and (e). As noted in note 13, supra, venue as to the United States is proper under 28 U.S.C. § 1391(e) and will be proper with respect to the entire lawsuit if it is also proper with respect to the other defendants. Lamont v. Haig, 590 F.2d 1124, 1129, 1130 n. 36 (D.C.Cir.1978). Under 28 U.S.C. § 1391(b), venue is proper in the district in which the claim arose, and as noted in note 13, supra, Montana can reasonably be characterized as the district in which these claims arose. Moreover, if a subsequent lawsuit is brought against all of the present defendants except for Burlington Northern, Inc., venue would be proper under 28 U.S.C. §§ 1391(b) and (c), which provide that venue in cases not founded solely on diversity is proper in the district where all defendants reside and that a corporation’s residence for venue purposes is “any district in which it is incorporated or licensed to do business or is doing business” (28 U.S.C. § 1391(c)); and it might even be proper as to Burlington Northern under the “doing business” provision of § 1391(c).

      . Because the Court has concluded that these cases must be dismissed for lack of jurisdiction over an indispensable party, it does not reach the issues of venue, standing, and appropriateness for consolidation.


author: IRVING, District Judge.

text:
    John ARNDT; Joan Arndt; et al., Plaintiffs, v. PRUDENTIAL BACHE SECURITIES, INC.; et al., Defendants.
    Civ. No. 84-1235-JLI(CM).
    United States District Court, S.D. California.
    Nov. 28, 1984.

      Patrick Duffy and Gregory Germann, Long Beach, Cal., for plaintiffs.
    Samuel Keesal and Robert Feighner, Long Beach, Cal., for defendants Prudential Bache, Farrish and Katsen.
    Robert McGregor and James Stiven, San Diego, Cal., for defendants Merrill Lynch and Hinke.
    Michael Kirby and Gregory Post, San Diego, Cal., for defendants Drexel, Burn-ham, Lambert and Marquit.
    Philip Westbrook, for defendants Chubb and Massa.
   AMENDED MEMORANDUM DECISION AND ORDER

IRVING, District Judge.

Defendants Prudential Bache; Farrish; Katsen; Merrill Lynch; Hinke; Drexel Burnham Lambert; and Marquit’s Rule 12(b)(6) and Rule 9 motions came on for hearing on November 19, 1984. Having considered the pleadings, all papers filed in support of and in opposition to the motions, and the oral argument of counsel, the court issues the following memorandum.

BACKGROUND

Plaintiffs allege that defendants conspired with various companies with which J. David Dominelli had a relationship (“J. David Entities”), and each other, to carry out a scheme in which J. David securities were financed and issued in violation of the California Corporations Code and the Securities Exchange Act of 1934. In a fourteen-claim complaint, plaintiffs, investors in the J. David Entities, allege that the defendants caused false information regarding J. David Entities’ losses to be communicated by wire and in written form. Plaintiffs allege that they relied on defendants’ representations in making and continuing their investments in J. David Entities. Plaintiffs also allege that the conspiracy profited from the concealment of the J. David Entities’ losses by collecting fees, commissions and/or illegal kickbacks. Little more than these general allegations are specified in each individual claim of the complaint.

J. David Dominelli and the J. David Entities are not named in the suit as they are in Chapter Seven bankruptcy proceedings.

DISCUSSION

I. Defendants’12(b)(6) Motion

All defendants, except Chubb and Massa, move to dismiss Claims 1 through 9, 13 and 14 for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). Each claim is considered separately:

A. Claims 1 through 3: RICO

Plaintiffs allege violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C.A. § 1962 (West Supp.1970-1983). Plaintiffs do not specify which subsection of 18 U.S.C.A. § 1962 has been violated.

Defendants seek dismissal of the RICO claims on four grounds. Defendants prevail on the two of their arguments, therefore the others will not be addressed.

Defendants claim that plaintiffs have failed to sufficiently allege a RICO “enterprise.” The statute provides:

“[E]nterprise” includes any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity.

18 U.S.C.A. § 1961(4) (West Supp.1970-83). Nowhere in their complaint do plaintiffs allege, specifically or implicitly, an enterprise or who comprises the enterprise.

Defendants also argue that plaintiffs have failed to allege a “racketeering enterprise injury,” i.e. an injury beyond that occasioned by the predicate offenses or incurred “by reason of” a violation of RICO. RICO’s civil remedy provision permits recovery by “any person injured in his business or property by reason of a violation of section 1962.’’ 18 U.S.C. § 1964(c) (emphasis added). On its face, the statute does not require that a racketeering enterprise injury be pleaded. However, many courts have construed this statutory language to impose such a requirement in order to keep within the spirit of the RICO statute and the legislature’s intent. Integrated Systems Management v. Dynamic Control Corporation, No. 84-0547-JLI (S.D.Cal. Sept. 5, 1984) (order dismissing RICO claim); Sedima v. Imrex Co., Inc., 741 F.2d 482 at 497 (2d Cir.1984); Moss v. Morgan Stanley, Inc., 653 F.Supp. 1347, 1361 (S.D.N.Y.), aff’d, 719 F.2d 5 (1983); Harper v. New Japan Securities International, Inc., 545 F.Supp. 1002, 1007 (C.D. Cal.1982).

In this instance, plaintiffs’ complaint fails to identify an enterprise and any injury beyond that incurred “by reason of” a violation of RICO. In fact, they fail to state which part of Section 1962 has been violated. Under these circumstances, plaintiffs have failed to state a RICO claim upon which relief can be granted.

B. Claims 4 through 6 — Fraud

Plaintiffs allege that defendants committed fraud by representing to plaintiffs and/or their representatives that J. David’s trading history was a successful one and that such statements were fraudulent. Defendants argue that the circumstances constituting this fraud are not pleaded with sufficient particularity. Fed. R.Civ.P. 9(b). Defendants are correct. The complaint is not sufficiently particular in identifying the fraudulent acts or the actors. In its present form, the complaint alleges that all defendants made statements to all plaintiffs. Not only is that highly improbable, but counsel has admitted in oral argument that that is not the case. In order to plead fraud with sufficient particularity in this instance, plaintiffs must identify who said what to whom, and when such statements were made. See Bruns v. Ledbetter, 583 F.Supp. 1050 (C.D.Cal.1984); Hokama v. E.F. Hutton & Co., Inc., 566 F.Supp. 636 (C.D.Cal.1983).

C. Claims 7 through 9 — Negligent Misrepresentation

For the reasons stated in Part B of this memorandum, the court finds that plaintiffs allegations of negligent misrepresentation are not pleaded with sufficient particularity.

D. Claim Thirteen — Breach of Fiduciary Duty

Plaintiffs’ complaint alleges that all defendants conspired to breach J. David Entities’ fiduciary duty to them. Defendants argue that the circumstances constituting this breach of fiduciary duty are not pleaded with sufficient particularity. Fed. R.Civ.P. 9(b). Defendants are correct. In its present form, the complaint does not identify the basis for a fiduciary relationship between each defendant and each plaintiff. Also, the complaint does not allege how the duty was breached. Thus, plaintiffs’ claims for breach of fiduciary duty have not been sufficiently pleaded.

E. Claim Fourteen — Securities Fraud under 10(b)(5)

Plaintiffs’ complaint alleges that defendants made representations to plaintiffs and/or their representatives in violation of the- Securities Exchange Act of 1934, § 10(b), 15 U.S.C.A. § 78a et seq. (West Supp.1983) and Rule 17 C.F.R. 240 10(b)-5. Defendants argue that the securities fraud alleged in Claim Fourteen is also insufficiently pleaded. The court agrees. Plaintiffs fail to identify the securities involved, and the persons purchasing and selling the securities. Thus, they have failed to state with sufficient particularity a violation of 10(b) “in connection with the purchase or sale” of securities.

II. Defendant Prudential Bache’s Request for Stay

Defendant Prudential Bache requests a stay of these proceedings because plaintiffs have failed to join indispensable parties presently involved in the related bankruptcy proceeding. Fed.R.Civ.P. 12(b)(7) and 19. In light of the present dismissal of the claims involving defendants Prudential Bache, Farrish and Katsen, the motion for stay of these proceedings is denied.

III. Defendant Merrill Lynch and Hinke’s Motion to Dismiss Based on the Applicable Statute of Limitations

To the extent that they occurred prior to May 1981, Merrill, Lynch and Hinke argue that claims based on their actions before that date are barred by the California statute of limitations. In light of the present dismissal of the claims involving Merrill, Lynch and Hinke, this motion is denied.

(1) that Claims 1 through 3 be dismissed without leave to amend;

Accordingly, the court orders the following:

(2) that Claims 4 through 9 be dismissed with leave to amend; and

(3) that Claims 13 and 14 be dismissed with leave to amend.