author: SWEET, District Judge.

text:
    STANLEY-FIZER ASSOCIATES, INC., Plaintiff, v. SPORT-BILLY PRODUCTIONS ROLF DEYHLE, Rolf Deyhle, Telemundi, A.G., and Wolfgang Stein, Defendants.
    No. 85 Civ. 2491 (RWS).
    United States District Court, S.D. New York.
    April 28, 1985.
    Aronsson Kerker & Ferst, New York City, for plaintiff; Nathan M. Ferst, New York City, of counsel.
    Wender Murase & White, New York City, for defendants; Eric L. Gilioli, New York City, of counsel.
   OPINION

SWEET, District Judge.

Stanley-Fizer Associates, Inc. (“Stanley”) has brought this motion pursuant to Fed.R.Civ.P. 65(a) to preliminarily enjoin defendants Sport-Billy Productions Rolf Deyhle, Rolf Deyhle, Telemundi, A.G., and Wolfgang Stein (collectively “Sport-Billy”) from 1) terminating the agency agreement between Stanley and Sport-Billy; 2) employing any individual and/or entity other than Stanley for the purposes of procuring license agreements for the marks referred to in the complaint; and 3) entering into direct licensing agreements without the participation of Stanley. An evidentiary hearing having been held, the motion for preliminary injunctive relief is denied, pending further proceedings to determine the rights of the parties.

Facts

Sport-Billy is the owner of proprietary rights and holds trademarks and copyrights on certain marks and designs. In order to make- commercial use of these marks and designs in North America, Sport-Billy entered into an agency agreement with Stanley on April 1, 1981 and a subsequent agreement on December 3, 1982. The second agreement, which expires on December 31, 1986, requires that in return for a percentage commission Stanley will assist Sport-Billy in entering licensing agreements for certain of Sport-Billy’s copyrights and trademarks. The relevant portions of the December, 1982 contract between Stanley and Sport-Billy are attached as Exhibit One.

Stanley, formed in 1980, acts as an agent for companies wishing to license their trade names and trade marks. It also provides merchandising, direct mail, and “premium promotions” services for its consumers. Stanley’s other clients have included the Board of Regents and the University of the State of New York; the Presidential Sports Award; Yoi Larsen, the jewelry designer; Claude Chassagne, the photographer; Lee Dunne, an author-playwright; the China Institute in America; the American Express Company; and Columbia Pictures.

Stanley alleges that Sport-Billy has breached the contract by 1) requiring that all funds earned under the license agreements with third parties be paid directly to Sport-Billy or, if received by Stanley, that they be paid to Sport-Billy without any deduction for commissions due to Stanley; 2) terminating the agreement in order to deprive Stanley of commissions it would earn on license agreements resulting from the 1986 World Cup Soccer Tournament in Mexico; and 3) utilizing “Sports Excellence Marketing” as an alternative licensing agent.

Paragraph 3 of the contract requires that all funds received by Stanley in its capacity as agent for Sport-Billy be held in trust and, less royalties kept by Stanley, be remitted to Sport-Billy within 30 days after the end of each calendar quarter. Paragraph 11 permits Sport-Billy to terminate the contract unilaterally in the event Stanley breaches its obligations under paragraph 3, and Sport-Billy contends that it properly terminated the contract pursuant to clause 11a, after giving Stanley the required 10 days notice of Stanley’s default.

Sport-Billy maintains, and Stanley’s testimony and the correspondence between Sport-Billy and Stanley introduced at the hearing establish, that in the last quarter of 1984 Stanley received $11,605.44 in total royalty payments, of which $8,123.80 was due to Sport-Billy by the close of January, 1985. Stanley testified that she attempted to execute this payment by instructing her bank, telephonically, to cable the $8,123.80 to Sport-Billy in Europe. The payment was not made, and on February 22, 1985 Sport-Billy by letter sought an explanation of the delay.

Joan Stanley, president of Stanley, testified that upon receipt of the February 22 letter she sought from her bank an explanation of the failure to transfer the funds, but was unable to find any evidence that the bank had received the initial order to transfer the funds. Although Stanley admitted that Sport-Billy had a right to the $8,123.80 in dispute, she stated that she made no efforts to transfer the funds once the failure of the initial transfer was discovered. On March 18, 1985, when payment had still not been made, Sport-Billy sent Stanley formal notice that the payment was lacking and demanded payment by March 31, 1985. The March 18 letter also sought collection of an interest-free loan in the amount of $21,034.26 that Sport-Billy had given Stanley, and which was payable “from royalties received by Stanley-Fizer prior to the end of December, 1985.” Stanley disputed that she owed any part of the $21,024.26, claiming that these funds were not due until December 31, 1985.

Stanley responded to the March 18 letter by telexing Sport-Billy that “Your demand for repayment is incorrect and we owe you no monies.” Sport-Billy responded, in a telex of April 1, giving Stanley until April 10, 1985 to cure its nonpayment. In the absence of the necessary payment, Sport-Billy asserts it has terminated the agreement as permitted by paragraph 11 of the contract.

Stanley has claimed that Sports Excellence Marketing has interfered with its licensing program and destroyed its ability to function as an agent, exclusive or otherwise. This interference is the justification claimed by Stanley for its failure to pay the license fees concededly owing. No agreements were identified as having been frustrated by this interference. Further, Stanley apparently seeks by this action to claim substantial rights and commissions which may result if a proposed transaction goes forward involving Mexican World Cup coins.

Law

The standard for obtaining a preliminary injunction is well settled in this Circuit. A plaintiff must establish 1) possible irreparable injury and 2) either a) a likelihood of success on the merits or b) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in the plaintiffs favor. Le Sportsac Inc. v. K Mart Corp., 754 F.2d 71 (2d Cir.1985); Arthur Guinness & Sons, PLC v. Sterling Publishing Co., 732 F.2d 1095 (2d Cir.1984).

Stanley alleges that it will suffer irreparable harm because termination of the contract will destroy Stanley’s business. Stanley testified that the contract at issue provides 70-80% of Stanley’s existing business and that termination of the contract would damage Stanley’s reputation so that Stanley would be unable to acquire additional customers. A loss of business that is commercially life-threatening can constitute irreparable harm and can warrant a grant of a preliminary injunction. Kayser-Roth Corp. v. Fruit of the Loom, (slip op. 82 Civ. 8128) (S.D.N.Y. February 3, 1983); R & G Affiliates, Inc. v. Knoll International, (slip op. 83 Civ. 4194) (S.D.N.Y. July 12, 1984) (Weinfeld, J.); Newport Tire & Rubber Co., Inc. v. The Tire & Battery Corp., 504 F.Supp. 143 (E.D.N.Y.1980) (reviewing Second Circuit authorities). I credit Stanley’s testimony that termination of the contract at issue will destroy the company, and so I find irreparable injury.

However, I do not find either a likelihood of success on the merits or a sufficiently serious question going to the merits to make them a fair ground for litigation. The evidence presented at the preliminary injunction hearing appeared to establish a termination of the contract by Sport-Billy as permitted by paragraph 11. Stanley conceded that payments due Sport-Billy were not made, that Stanley was given notice of the nonpayment and an opportunity to cure the breach, and that only in the absence of Stanley’s curing its failure to pay did Sport-Billy terminate the contract. These are sufficient grounds for termination.

Stanley has put forth as justifications for her nonpayment certain alleged improper activity by Sport-Billy. None of the allegations is related, however, to Stanley’s default in remitting the funds. Moreover, sufficient evidence to substantiate the allegations of improper activity by Sport-Billy was not introduced at the hearing. Stanley’s complaint that Sport-Billy was requiring licensees to pay royalties directly to Sport-Billy, rather than to Stanley, does not amount to an allegation of a breach. Paragraph 3(a)(iv) of the contract specifies that Sport-Billy may rely upon Stanley to “receive on behalf of the Company royalty payments ... when requested to do so by the company.” Stanley was not given a contractual right to serve as a collection agent, and Sport-Billy is within its right when it seeks direct payment by licensees.

Sport-Billy also is given the right, in paragraph 1(d), to enter license agreements without the assistance of Stanley, as long as Stanley had not initially solicited the licensees and Stanley was given notice and its normal compensation. Allegations that all direct contacts are impermissible are therefore groundless. There was also no evidence introduced to substantiate the allegation that Sport-Billy had entered contracts in violation of 1(d). Sport-Billy has asserted that Sports Excellence Marketing is simply an extension of Sport-Billy itself, and, consequently, it also is free to reach licensing agreements as provided by paragraph 1(d). This naked assertion is uncontradicted by any evidence presented by Stanley. The delineation between Sport-Billy, Wolfgang Stein, apparently its principal actor, and Sports Excellence Marketing has not been established by the evidence thus far presented by either party. Moreover, no evidence was presented to substantiate the allegation that Sports Excellence had entered into any licensing agreements with respect to marks to which Stanley had exclusive licensing rights.

Finally, although there is ambiguity with respect to whether or not the contract included the marks of the 1986 World Cup, the evidence presented thus far indicates that the rights to license these marks was not conferred in the contract. Both the November 29, 1982 letter from Sport-Billy to Stanley, even if not received before the contract was signed, and the May, 1984 letter from Stanley to Sport-Billy proposing amendments to the contract so that these signs would be included, indicate an understanding by both parties that these marks were not covered by the contract. Sport-Billy’s activities with respect to these marks are therefore not violations.

Stanley’s evidence at this early stage does not indicate either a likelihood of success or the existence of substantial grounds for litigation and a balance of hardship in Stanley’s favor. Moreover, the evidence does not excuse the breach by Stanley. The termination by Sport-Billy based on the evidence presented thus far appears justified.

Conclusion

The evidence adduced at the hearing for a preliminary injunction does not warrant the grant of the relief sought. However, additional discovery may alter these initial findings, and the denial of the injunction at this time does not prejudice Stanley’s ultimate success on the issues in dispute.

The motion for a preliminary injunction is denied.

IT IS SO ORDERED.

       Ed. note: exhibit was not designated for publication.


source: Caselaw Access Project

author: OWENS, Chief Judge:

license: Public Domain

text:
    Ruth Y. KELLY, et al., Plaintiffs, v. MACON-BIBB COUNTY BOARD OF ELECTIONS, et al., Defendants.
    Civ. A. No. 83-27-3-MAC.
    United States District Court, M.D. Georgia, Macon Division.
    April 29, 1985.

      S. Phillip Brown, Macon, Ga., for plaintiffs.
    Wallace Miller, Jr., Ed Sell, Jr., Macon, Ga., for defendants.
   OWENS, Chief Judge:

The public water supply of Bibb County, Georgia has been fluoridated pursuant to a duly enacted law of the State of Georgia. See O.C.G.A. § 12-5-175 (1982). That same law provides that any municipality or county by local referendum may remove itself from the requirement of fluoridation. Id. § 12-5-175(a). In order to call such a referendum, the statute requires a

petition of 10 percent of the registered voters in such political subdivision who voted in the last general election.

Id.

Plaintiffs purport to represent a class of Bibb County residents who desire to call such a referendum. The undisputed facts reveal that in March of 1982, plaintiffs presented to defendants a petition bearing the signatures of 6,164 individuals. The parties further agree that “the last general election” which preceded presentation of the petition was the November, 1980, Presidential election, in which 49,047 registered voters of Bibb County voted.

Upon review of the petition, defendants excluded certain signatures for reasons not presently in dispute. Additionally, defendants excluded 793 individuals who were not registered to vote in Bibb County in the 1980 general election, and 325 individuals who in fact did not vote in the 1980 general election. These exclusions were based on defendants’ construction of § 12-5-175(a) to the effect that the petition must be signed by individuals who were registered to vote and who in fact voted in Bibb County in the 1980 general election. Based upon these exclusions, plaintiffs’ petition fell short of the required 4,904 signatures, and their request for a referendum was denied.

Plaintiffs contest defendants’ construction of 12-5-175(a). Plaintiffs argue that there is no compelling justification for counting only those persons who actually voted in Bibb County in 1980. Plaintiffs assert that this construction “disenfranchises” those persons registered to vote in Bibb County at the time they signed the petition in March, 1982, but who, for various reasons such as age or prior residence, were not registered to vote in Bibb County in 1980. Plaintiffs assert that such a construction and disenfranchisement is unconstitutional; alternatively, plaintiffs assert a pendent state law claim in which they request this court to interpret § 12-5-175(a) to hold that the petition need be signed only by persons registered to vote in Bibb County at the time of signing, and that their number must equal 10% of the persons who actually voted in Bibb County in the 1980 general election. Defendants, while disputing this interpretation, concede that if it were adopted a referendum must be held based upon the 1982 petition. Defendants have moved for summary judgment against the plaintiffs.

ISSUES PRESENTED

The parties agree that no disputed issues of material fact preclude consideration of defendants’ motion for summary judgment. At issue are questions of law concerning the constitutionality of defendants’ construction of the relevant statute. Plaintiffs challenge this construction on both First and Fourteenth Amendment grounds. Additionally, plaintiffs seek to invoke pendent jurisdiction over their state law claim of statutory construction.

CONCLUSIONS OF LAW

Plaintiffs’ Constitutional Claims

While plaintiffs’ complaint alleges impairment of numerous constitutional rights, all claims are premised upon an alleged violation of the equal protection clause of the Fourteenth Amendment. The contested statute, under defendants’ construction, recognizes a specific class of persons eligible to petition the county for a local referendum, and excludes all persons not within that class. The statute treats the two classes differently on account of three possible factors: duration of county residence, age, and whether an individual actually exercised his right to vote in the last general election. Plaintiffs argue that those excluded by the classification are deprived of a fundamental constitutional right — the right to vote — and that such discrimination violates the equal protection clause .absent proof of a compelling state interest. See, e.g., Dunn v. Blumstein, 405 U.S. 330, 342, 360, 92 S.Ct. 995, 1003, 1012, 31 L.Ed.2d 274 (1972) (Tennessee one year durational residency requirement for voting in state election violates the equal protection clause under strict equal protection standard of review).

Plaintiffs, however, have not been prohibited from exercising a fundamental constitutional right. This is not a “right to vote” case; referendums, unlike general elections for a representative form of government, are not constitutionally compelled. The fluoridation program was implemented by an Act of the Georgia General Assembly. The state, consistent with the Constitution, could have directed that exclusions from the Act’s coverage be available only by legislative action. By allowing an “opt out” procedure by way of local referendums, the state did not create a fundamental right protected by the federal Constitution. In establishing eligibility requirements for those voters authorized to call a local referendum by way of petition, the state may not discriminate on the basis of “suspect” classifications such as race. However, the classifications established by defendants’ construction of § 12-5-175(a) do not involve such suspect classifications. There being no fundamental constitutional right to call a local referendum, defendants are not required to establish a compelling state interest in support of their construction of the challenged statute.

The court now turns to the question of whether defendants’ classification is reasonably related to a permissible state interest. Defendants allege that the statute seeks to insure that the administrative burden and expense of a local referendum will not be invoked absent the legitimate concern of a substantial number of concerned citizens active in the local political process. By requiring a petition signed by 10% of the registered voters who actually voted in the last election, defendants argue that evidence of legitimate public concern is more convincingly demonstrated. The court finds this to be a permissible state purpose. It is important to note that if a referendum is properly called, there is no extraordinary restriction on those eligible to vote in the referendum itself; registration at the time of the referendum is all that would be required. Further, plaintiffs were only 400 signatures short of the required number. They could have attempted to obtain additional signatures of individuals qualified under defendants’ construction. Instead, they chose to litigate the issue and abandoned their solicitations. Under all of these circumstances, plaintiffs’ constitutional rights have not been abridged by defendants’ construction of § 12-5-175(a).

Plaintiffs’ Pendent State Law Claim

Plaintiffs request this federal district court to resolve their dispute with defendants by employing state law rules of statutory construction, apart from any federal question jurisdiction. This court declines to do so. The exercise of pendent jurisdiction is always discretionary. United Mine Workers v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966). In this case, two important factors govern this court’s exercise of discretion. First, the federal constitutional claim, which supports pendent jurisdiction over the state law claim, by this order has been resolved adverse to plaintiffs prior to trial. Under these circumstances, the pendent claim should be dismissed as well. Id. at 726, 86 S.Ct. at 1139. Second, and most importantly, federal courts should abstain from resolving unsettled questions of state law which involve the state’s own political process. See Burford v. Sun Oil Co., 319 U.S. 315, 332-33, 63 S.Ct. 1098, 1106-07, 87 L.Ed. 1424 (1943). The interests of comity between the state and federal systems demand that plaintiffs’ claim be resolved in a Georgia court. Accordingly, plaintiffs’ pendent state law claim is dismissed.

CONCLUSION

Defendants’ motion for summary judgment on plaintiffs’ Counts I and III is hereby GRANTED. Fed.R.Civ.P. 56. Count II of plaintiffs’ complaint is hereby DISMISSED for lack of appropriate federal jurisdiction. There being no issues remaining for trial, let final judgment be entered in favor of defendants.

      . The right to vote in a general election, i.e., the right to participate in representative government, is a fundamental constitutional right that may not be abridged absent a compelling state interest. Kramer v. Union Free School District, 395 U.S. 621, 626, 89 S.Ct. 1886, 1889, 23 L.Ed.2d 583 (1969); Reynolds v. Sims, 377 U.S. 533, 562, 84 S.Ct. 1362, 1381, 12 L.Ed.2d 506 (1964). A referendum, however, is a form of direct democracy. Our constitution insures a representative form of government, not a direct democracy. See L. Tribe, American Constitutional Law, § 13-17 at 773 (1978) ("There is, after all, no absolute constitutional requirement that a change be instituted by a political unit whenever a majority of the people in the unit favor it____”). Where a state provides for an expression of direct democracy, such as by initiative or referendum, it does so as a matter of legislative grace; the right to participate in such a process is not fundamental to our Constitution.


author: BARRINGTON D. PARKER, District Judge.

text:
    Joseph S. SOTTILE, Jr., Plaintiff, v. UNITED STATES of America, et al., Defendants.
    Civ. A. No. 84-2926.
    United States District Court, District of Columbia.
    April 29, 1985.
    Richard D. Paugh, Rockville, Md., for plaintiff.
    Scott T. Kragie, Asst. U.S. Atty., Dept. of Justice, Jerome P. Jones, F.A.A., Washington, D.C., for defendants.
   MEMORANDUM AND ORDER DISMISSING COMPLAINT

BARRINGTON D. PARKER, District Judge.

This matter is before the Court on defendants’ motion to dismiss. Plaintiff Sot-tile filed this action against the United States government and several defendants in their individual capacities claiming malicious prosecution, negligence, defamation, and tortious interference with a contract. The action against the government was brought pursuant to the Federal Tort Claims Act (“FTCA”), 28 U.S.C. § 2671 et seq.; jurisdiction over the government arises out of the Act. 28 U.S.C. § 1346(b). Jurisdiction over the remaining individual defendant, Leo O’Berry, is apparently based on this Court’s diversity jurisdiction. The defendants have moved to dismiss this matter on several grounds: the exclusion of the named torts from the FTCA, lack of subject matter jurisdiction over the claim against the individual defendant O’Berry, and his absolute immunity from liability for the common law torts. For the reasons set forth below, defendants’ motion to dismiss is granted.

FACTS

Sottile is a flight instructor, certified by the Federal Aviation Administration (“FAA”). He operated a business, which included providing flight instruction, in Michigan. In the Fall of 1980, the Detroit, Michigan FAA office received a complaint against the plaintiff filed by a student, John Cook. The complaint alleged that Cook did not receive flight instruction from the plaintiff, a certified instructor, but had received lessons from a non-certified instructor contrary to his expectations and to the price paid for the lessons. Further, he alleged that false entries (a rubber stamp with plaintiff’s name) were made on his student pilot log book. The entries indicated that Sottile had accompanied Cook on several flights; Cook contended that another pilot had instead flown with him.

On the basis of this charge, the FAA commenced an investigation of plaintiff and his business. Defendant O’Berry, the chief inspector of the FAA’s Michigan office, was involved in the investigation. Shortly thereafter, Cook withdrew his allegations against the plaintiff for reasons which he never fully explained. Nevertheless, the FAA continued its investigation into the incident. An Enforcement Investigation Report (“EIR”) was prepared regarding the investigation which contained evidence, information obtained during the investigation, and a recommendation that plaintiff’s Certified Flight Instructor (“Cpi”) certificate be revoked. The EIR was forwarded to the Regional Flight Standards Division in Chicago, Illinois. The Division concurred with the revocation recommendation. The recommendation was forwarded to the Regional Counsel who issued an Order of Revocation of Plaintiff’s CFI Certificate on October 23, 1981. Sot-tile then pursued his statutory right to appeal the Order of Revocation to the National Transportation Safety Board (“NTSB”). 49 U.S.C. § 1429; 49 C.F.R. Part 821. A hearing was held before an Administrative Law Judge (“AU”) in Washington, D.C. on April 6, 1982. In an opinion issued on June 23, 1982, the AU reversed the Order of Revocation largely on the basis that Cook, without fraud or coercion, had recanted his original charge. The AU found that there was a clear preponderance of evidence that Sottile had not violated any FAA regulations and that the FAA had failed to sustain its burden of proof in this respect. That decision was subsequently adopted by the NTSB. On September 19, 1984, plaintiff filed this action alleging claims under the FTCA and common law torts.

ANALYSIS

A. Claims Against the Government Under the FTCA

The government contends that this action should be dismissed pursuant to Fed.R.Civ.P. 12(b)(6) because the common-law torts charged against the government are excluded under the FTCA. The FTCA exclude from its coverage

Any claim arising out of assault, battery, false imprisonment, false arrest, malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights: Provided, That, with regard to acts or omissions of investigative or law enforcement officers of the United States Government, the provisions of this chapter and section 1346(b) of this title [28 USCS § 1346(b) ] shall apply to any claim arising, on or after the date of the enactment of this proviso, out of assault, battery, false imprisonment, false arrest, abuse of process, or malicious prosecution. For the purpose of this subsection, “investigative or law enforcement officer” means any officer of the United States who is empowered by law to execute searches, to seize evidence, or to make arrests for violations of Federal law.

28 U.S.C. § 2680(h). The United States still retains its sovereign immunity with respect to defamation and tortious interference with a contract. Therefore, plaintiff is barred from recovery for those claims. Cf. Art Metal-U.S.A., Inc. v. United States, 753 F.2d 1151, 1154-56 (D.C.Cir.1985) (barring claims under § 2680(h) for interference with prospective advantage and injurious falsehood — derivations of interference with contract rights and defamation). See also Wilcox v. United States, 509 F.Supp. 381, 387 (D.D.C.1981) (federal government immune from actions for defamation).

Malicious prosecution is also an excluded tort under the FTCA. However, § 2680(h) contains a proviso which allows a claimant to seek recovery for malicious prosecution if the act is committed by “investigative or law enforcement officers of the United States” “who [are] empowered by law to execute searches, to seize evidence, or to make arrests for violations of Federal law.” In order for plaintiff to state a claim under this section, the FAA investigative officers in this case must be vested with the powers listed above. However, the law of this Circuit is such that the plaintiff “must clear the ‘discretionary function’ hurdle and satisfy the ‘investigative or law enforcement officer’ limitation to sustain the malicious prosecution component of his FTCA claim.” Gray v. Bell, 712 F.2d 490, 508 (D.C.Cir.1983) (emphasis in original), cert. denied, — U.S. -, 104 S.Ct. 1593, 80 L.Ed.2d 125 (1984). Since the Court finds that the government has not waived its sovereign immunity with respect to the prosecution in this action under the discretionary function exemption in 28 U.S.C. § 2680(a), the application of the investigative officer language need not be reached.

The malicious prosecution claim must thus be analyzed under the discretionary function exemption of the FTCA. 28 U.S.C. § 2680(a). In addition, plaintiff’s negligence claim for investigation and prosecution of the charges against him must be analyzed under that exemption. Section 2680(a) provides that FTCA does not apply to

Any claim based upon an act or omission of an employee of the Government, exercising due care, in the execution of a statute or regulation, whether or not such statute or regulation be valid, or based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused.

The purpose of the discretionary function exception was recently noted by the Supreme Court.

[The discretionary function exception] was intended to encompass the discretionary acts of the Government acting in its role as a regulator of the conduct of private individuals. Time and again the legislative history refers to the acts of regulatory agencies as examples of those covered by the exception, and it is significant that the early tort claims bills considered by Congress specifically exempted two major regulatory agencies by name. * * * This emphasis upon protection for regulatory activities suggests an underlying basis for the inclusion of an exception for discretionary functions in the Act: Congress wished to prevent judicial ‘second-guessing’ of legislative and administrative decisions grounded in social, economic, and political policy through the medium of an action in tort.

United States v. S.A. Empresa de Viacao Aerea Rio Grandense (Varig Airlines), — U.S. -, -, 104 S.Ct. 2755, 2765, 81 L.Ed.2d 660 (1984).

The initial decision to investigate the complaint filed by Cook as well as the decision to continue the investigation after Cook had withdrawn his charges against Sottile are entirely within the discretionary function exception. 49 U.S.C. § 1482(a) authorizes the Secretary of Transportation or the Civil Aeronautics Board to receive complaints and to investigate them. See also 14 C.F.R. §§ 13.3; 13.5. A great deal of latitude remains with the Secretary or the Board as to whether to investigate or to continue the investigation. Cf. Transamerica Airlines, Inc. v. Civil Aeronautics Board, 661 F.2d 244, 250-51 (D.C.Cir.1981). Thus, the decision to continue investigating plaintiff with respect to alleged violations of FAA regulations after Cook had withdrawn his allegations was well within the province of discretion under the Federal Aviation Act. Cf. Varig Airlines, 104 S.Ct. at 2766-69 (“FAA’s alleged negligence in failing to check certain specific items in the course of certificating a particular aircraft falls squarely within the discretionary function exception of § 2680(a)”).

There is no question that the initial charges by Cook formed a reasonable basis to investigate the plaintiff; the decision to issue an Order of Revocation (and thus “initiate” a prosecution) was a discretionary decision to be made by FAA officials during and after the course of investigation. The FAA inspectors are given a necessarily broad amount of flexibility and discretion in planning an investigation and preparing a report. See Compliance and Enforcement Program, Dept. of Transportation — Federal Aviation Administration, FAA Order No. 2150.3 at ¶¶ 401; 906 (reprinted, October 1983).

The claims of malicious prosecution and negligence in connection with the issuance of an Order of Revocation which the plaintiff was forced to appeal to the NTSB also fall within the discretionary function exception. In Gray, 712 F.2d 490, the plaintiff filed charges of malicious prosecution and gross negligence in connection with a preindictment investigation and presentation to the Grand Jury. The Court held that

It is plain that Gray’s FTCA claim was properly dismissed insofar as it incorporates the malicious prosecution claim and thus challenges the actual decision to institute prosecution against him. Prosecutorial decisions as to whether, when and against whom to initiate prosecution are quintessential examples of governmental discretion in enforcing the criminal law, and, accordingly, courts have uniformly found them to be immune under the discretionary function exception.

Id. at 513. In that case, the court also found that the alleged conduct by prosecutors which related to the decision to prosecute was “too intertwined with purely discretionary decisions of the prosecutors to be sufficiently separated from the initial decision to prosecute.” Id. at 515-16. See also Bernitsky v. United States, 620 F.2d 948, 955 (3rd Cir.1980), cert. denied, 449 U.S. 870, 101 S.Ct. 208, 66 L.Ed.2d 90 (1980); (investigative and enforcement decisions in a case involving the Mining Enforcement and Safety Administration are within discretionary function exception).

B. Common Law Tort Claims Against the Defendant O’Berry

The government argues that this Court does not have subject matter jurisdiction over the claims against O’Berry because both he and the plaintiff are residents of the State of Michigan. Although the plaintiff argues that there is diversity of citizenship, this Court need not make a final determination with respect to diversity because the claims against the individual are subject to pendent jurisdiction. Lykins v. Pointer, 725 F.2d 645, 648-49 (11th Cir.1984).

Recovery for the common law tort claims against the individual defendant is barred by absolute immunity. Barr v. Mateo, 360 U.S. 564, 79 S.Ct. 1335, 3 L.Ed.2d 1434 (1959); McKinney v. Whitfield, 736 F.2d 766, 768-69 (D.C.Cir.1984); Gray, 712 F.2d at 505. However, in order to claim this immunity, the actions by federal officials must have been “ ‘taken ... within the outer perimeter of [their] line of duty.’ ” McKinney, 736 F.2d at 769 (quoting Barr, 360 U.S. at 575, 79 S.Ct. at 1341).

The discussion above indicates that the defendants’ actions, including the investigation of Cook’s complaint against the plaintiff and the continued investigation after the withdrawal of the complaint, were within the scope of O’Berry’s official duties. Cf. McKinney, 736 F.2d at 770 (absolute immunity for liability from common law torts would be available for certain conduct in administering an FAA program, but not where excessive means are used). This is not a case where excessive means, such as physical force, was used in the course of conduct clearly related to official duties. Here, the defendants, although ultimately deemed to have been mistaken, pursued actions distinctly authorized by statute and regulations, especially in light of the amount of discretion inherent in the FAA investigative activities. See supra at 1042-1044. Moreover, this Circuit in Gray, supra, has indicated that where the discretionary function test under the FTCA has been satisfied, it is extremely likely that the test for absolute immunity is also satisfied. 712 F.2d at 505-06. Therefore, defendant O’Berry is entitled to claim absolute immunity from liability for the common law tort claims brought against him.

In accord with the above, it is this 29th day of April, 1985,

ORDERED

That defendants’ motion to dismiss is granted and this action is dismissed with prejudice.

      . On February 8, 1985, the Court issued an Order which dismissed the action against two of the individual defendants, Joseph Mastro and Carl Schellenberg, for failure to prosecute.

      . See discussion at 1044-1045 infra.

      . The statutory authority for such action is found in 49 U.S.C. § 1429; 14 C.F.R. § 13.19(b). Such an action must first be proceeded by notice. 14 C.F.R. § 13.19(c). The plaintiff makes no allegation that notice given to him was insufficient.

      . Since the Court finds that the complaint should be dismissed against the government under Fed.R.Civ.P. 12(b)(6), there is no need for the Court to reach defendants’ claim that venue under the FTCA does not lie in this district. A dismissal for improper venue could not be made with prejudice. Stebbins v. Nationwide Mutual Ins. Co., 757 F.2d 364, 370 (D.C.Cir.1985).

      . On a preliminary inquiry, the Court finds nothing in the Federal Aviation Act, 49 U.S.C. § 1301 et seq., which would support an assertion that FAA investigators have the authority to execute searches, seize evidence, or make arrests for federal law violations. Cf. 49 U.S.C. § 1482(b) (formal investigation by FAA Administrator or Board); 49 U.S.C. § 1484 (Civil Aeronautics Board vested with subpoena power). See EEOC v. First Nat'l Bank of Jackson, 614 F.2d 1004, 1007-08 (5th Cir.1980), cert. denied, 450 U.S. 917, 101 S.Ct. 1361, 67 L.Ed.2d 347 (1981) (EEOC does not fall within definition of investigative or law enforcement officers); United States v. Rubin, 573 F.Supp. 1123, 1124-25 (D.Colo.1983) (Justice Department and United States Attorneys are not within definition of investigative or law enforcement officers).

      . Making false entries into a student pilot logbook is a violation of Federal Aviation Regulation 61.59(a)(2). See Helms v. Sottile, Docket No. SE-5388, Memorandum at 1 (Initial Decision of ALJ for the NTSB) (June 23, 1982) (attached as an exhibit to plaintiffs opposition to motion to dismiss).

      . Plaintiff simply asserts in its opposition to the motion to dismiss that he is a citizen of Ohio. Opp. at IV. In the caption of the complaint, plaintiff states that he is a citizen of Michigan. The Court has grave doubts as to diversity of citizenship, especially since the plaintiff has not amended his complaint to reflect his "true" citizenship. Plaintiffs counsel is entirely remiss in his duty to the Court and the other parties in this litigation and appears to be playing fast and loose with the Federal Rules of Civil Procedure and otherwise acting in an irresponsible manner. However, given this Court's pendent jurisdiction over the claims asserted against O'Berry, this dilemma need not be resolved.


author: HUYETT, District Judge.

text:
    UNITED STATES of America v. Muhammad ASKARI.
    Crim. A. No. 85-44.
    United States District Court, E.D. Pennsylvania.
    April 30, 1985.
    Ronald A. Sarachan, Asst. U.S. Atty., Philadelphia, Pa., for U.S.
    Maureen K. Rowley, Asst. Defender, Philadelphia, Pa., for Askari.
   MEMORANDUM AND ORDER

HUYETT, District Judge.

Presently before me is defendant Askari’s motion for reduction of bail and the government’s motion to revoke bail and to order pretrial detention of defendant Askari under the Bail Reform Act of 1984, Pub.L. No. 98-473, title II, 98 Stat. 1837 (1984). I have considered the written submissions of the parties and the testimony, proffers, and arguments of counsel at the hearing held on April 19, 1985. I will grant the government’s motion and order bail revoked and defendant Askari detained pending trial on May 28, 1985.

In granting the government’s motion, I make the following findings of fact pursuant to 18 U.S.C. § 3142(i)(1).

FINDINGS OF FACT

1. On February 14, 1985, defendant Muhammad Askari a/k/a John Marshall Henry was indicted and charged with possession of a firearm by a convicted felon, in violation of Title 18, United States Code, Appendix I, Section 1202(a)(1).

2. On February 28, 1985, at defendant’s initial appearance, the government moved for pretrial detention of defendant pursuant to Title 18, United States Code, Section 3142(f)(1)(D) on the grounds that defendant Askari is charged with a felony committed after he had been convicted of two prior crimes of violence: bank robbery and robbery. The government argued that there was no condition of release or combination of conditions which would reasonably assure the safety of any other person and the community.

3. At a detention hearing held on March 4, 1985, United States Magistrate Scuderi held that before he could order pretrial detention of a defendant he had to find that there was no condition or combination of conditions that would reasonably assure both the appearance of the person as required and the safety of any other person and the community. Judge Scuderi then held that the government had failed to show that defendant Askari posed a serious risk of flight and therefore denied the government’s motion for detention. The court set bail at $75,000/10% cash.

4. On March 7, 1985, defendant filed a motion for reduction of bail. On March 12, 1985, the government filed a notice of appeal of the order denying its motion for detention.

5. I held a de novo hearing on April 19, 1985 at which both the government and defendant presented evidence through written documents, oral testimony and proffer.

6. Special Agent Forest G. Webb of the Federal. Bureau of Investigation (FBI), Philadelphia, PA testified as a witness for the government at the April 19, 1985 hearing. Agent Webb testified from his knowledge of the FBI records pertaining to defendant Askari and from his involvement in the investigation leading up to the present indictment of defendant Askari. Based on his forthright nature and his years of experiences with the FBI, I find him to be a credible witness.

7. Defendant Askari has a lengthy criminal record which includes crimes of violence.

8. On May 13, 1974, defendant Askari committed an armed robbery at the Beneficial Mutual Savings Bank, 5535 Chester Avenue, Philadelphia, Pennsylvania. Government Exhibits 1 and 2 (“G_”).

9. During the bank robbery, defendant Askari repeatedly threatened the lives of the people inside the bank. In addition to verbal threats, defendant’s actions included holding a handgun on a bank guard, taking the guard’s gun from its holster, giving the guard’s gun to his accomplice, Rachael Williama Gilbert, and directing her to use it to cover the people in the bank while he confronted a teller and took $2,380.00.

10. Defendant Askari entered a guilty plea to two counts of bank robbery, in violation of Title 18, United States Code, Section 2113(a), including taking $2,380.00 from the Beneficial Mutual Savings Bank “by force and violence, and by intimidation.” Gl.

11. On July 18, 1974, defendant Askari was sentenced to five years imprisonment. Defendant was released from prison on March 1, 1979.

12. On February 13, 1980, defendant Askari was charged with an armed robbery at the Thrifty Food Store, Chester Avenue, Philadelphia, Pennsylvania.

13. During the robbery, defendant entered the grocery store with a shotgun and a bag, pointed the shotgun at the store owner, and ordered him to fill the bag with money. After the bag was filled, defendant took the bag, grabbed a woman and using her as a shield, backed out of the store.

14. On April 25, 1980, defendant Askari pleaded guilty and was convicted in the Common Pleas Court of Philadelphia, February Term 1980, Nos. 1581, 1585, of robbery and unlawfully carrying a firearm without a license, in violation of 18 Pa.C.S.A. §§ 3701, 6106. On July 9, 1980, defendant was sentenced to not less than five nor more than ten years imprisonment for the robbery conviction and five years probation on the firearms offense. G3.

15. On May 13, 1981, defendant’s sentence was reduced to time served to 23 months on the robbery conviction and three years probation on the firearms conviction to run consecutively. Defendant’s motion to reduce sentence was based on defendant having no prior convictions which was not true. G3.

16. On September 18, 1982, a complaint was filed charging defendant Askari a/k/a John Henry with theft by deception in violation of 18 Pa.C.S.A. § 3922. On January 26, 1984, defendant pleaded guilty in the Philadelphia Court of Common Pleas and was sentenced to time in (five months) to twelve months imprisonment. G7.

17. Defendant Askari was paroled on May 8, 1984 after paying $200 restitution. G7.

18. On October 23, 1983, defendant was stopped on Chester Avenue by Philadelphia Police Officer Joseph Tabasco who was investigating an armed robbery at a nearby bar. Defendant was allegedly found to have in his possession a Beretta 6.35 caliber pistol, Model 950B, bearing serial number G39315 with one live .25 caliber round in the chamber and five live .25 caliber rounds in the clip. Defendant was arrested and charged with possession of a firearm by a person convicted of a crime of violence, carrying a firearm without a license, and carrying a firearm on public streets, in violation of 18 Pa.C.S.A. §§ 6105, 6106 and 6108.

19. On October 23, 1983, defendant was on probation from his 1980 conviction for unlawfully carrying a firearm without a license, and he was on release pending trial for his charge of theft by deception.

20. The state prosecution of defendant Askari based on the October 23, 1983 incident was delayed by the failure of defendant to retain counsel, failure of counsel to be prepared and then by defendant’s failure to appear. On May 10, 1984, the state charges were withdrawn. G4. Agent Webb testified that the state charges were withdrawn in favor of federal prosecution.

21. Defendant Askari was told, at the time the state charges were withdrawn, that he still faced federal charges. Defendant remained in the community and made no attempt to flee. After the present federal indictment came down, defendant Askari turned himself in.

22. Agent Webb was assigned the case to investigate sometime during the summer of 1984. He submitted a report in January 1985, and defendant Askari was indicted in February 1985.

DISCUSSION

Before I make conclusions of law, defendant Askari has raised several legal arguments which I must first address.

In opposing the government’s motion for pretrial detention under the Bail Reform Act of 1984, defendant contends that application of the Act to him violates the constitutional prohibition against ex post facto laws. The conduct for which defendant Askari is under indictment was committed on October 2, 1983; the Bail Reform Act was signed into law on October 12, 1984.

The prohibition against ex post facto laws applies to any laws which impose “a punishment for an act which was not punishable at the time it was committed; or imposes additional punishment to that prescribed.” Weaver v. Graham, 450 U.S. 24, 28, 101 S.Ct. 960, 964, 67 L.Ed.2d 17 (1981) or which alter substantial rights. Beazell v. Ohio, 269 U.S. 167, 46 S.Ct. 68, 70 L.Ed. 216 (1925). There is no ex post facto violation “if the change is merely procedural, and does ‘not increase the punishment nor change the ingredients of the offense or the ultimate facts necessary to establish guilt’.” Weaver, 450 U.S. at 29, n. 12, 101 S.Ct. at 964, n. 12, quoting Hopt v. Utah, 110 U.S. 574, 4 S.Ct. 202, 28 L.Ed. 262 (1884). Therefore the key consideration is whether pretrial detention pursuant to the Bail Reform of 1984 is punitive in nature or merely procedural.

In United States v. Miller, 753 F.2d 19 (3d Cir.1985), the Third circuit held that the availability of bail pending appeal is a procedural issue rather than a type of punishment to which ex post facto applies. Similarly, I conclude that pretrial detention or bail pending trial is also a procedural issue rather than a type of punishment to which the ex post facto doctrine applies. As the court in United States v. Payden, 598 F.Supp. 1388, 1392 (S.D.N.Y.1984) noted, in passing the Bail Reform Act of 1984, Congress intended not “to promote the traditional aims of punishment such as retribution or deterrence, but rather ... to curtail reasonably predictable conduct, not to punish for prior acts.” quoting S.Comm. on the Judiciary, Comprehensive Crime Control Act of 1983, S.Rep. No. 225, 98th Cong., 1st sess. 8 (1983). Congress sought to minimize the risk of flight and the danger to society posed by the release of criminal defendants. Therefore, pretrial detention is an incident of a governmental purpose other than punishment and as such is a constitutionally permissible, regulatory provision.

Defendant also argues that Judge Scuderi correctly denied the government’s motion for pretrial detention on the grounds that the government had failed to establish both risk of flight by the defendant and danger to the community which could not be prevented by any condition or combination of conditions. The government moved for pretrial detention pursuant to section 3142(f)(1)(D) of the Act. Section 3142(f) states in pertinent part that the judicial officer must determine whether “any condition or combination of conditions set forth in subsection (c) will reasonably assure the appearance of the person as required and the safety of any other person and the community ...” (emphasis added). Defendant Askari contends that this section must be read in the conjunctive and that the judicial officer must therefore find that there are no conditions or combination of conditions which will assure both the appearance of the person and the safety of the community. The government, on the other hand, argues that a disjunctive reading is more consistent with the legislative intent underlying the Bail Reform Act.

There has been no ruling of which I am aware in this circuit directly on point, but in United States v. Delker, 757 F.2d 1390 (3d Cir.1985), the Third Circuit implicitly accepted the government’s disjunctive reading when it affirmed my holding that defendant Delker should be detained pretrial because the government had shown by clear and convincing evidence that no condition or combination of conditions would assure the safety of any other persons or the community. In Delker, I rejected the government’s contention that there was a risk that defendant Delker might flee or fail to appear. United States v. Delker, Crim. No. 84-441, slip op. at 17 (E.D.Pa. December 10, 1984).

In United States v. Kouyoumdjian, 601 F.Supp. 1506 (C.D.Cal.1985), the court held that the government, in order to prevail on a motion for pretrial detention under the Act need not establish both risk of flight and danger to the community. As the court noted, “[t]o construe the statute ... by requiring findings on both appearance and safety before detention could be ordered, would defeat the overriding purpose of the Bail Reform legislation.” Kouyoumdjian, 601 F.Supp. at 1510. Prior to the 1984 Act, a court could only consider the risk of flight by the defendant. In passing the Act, Congress intended to permit courts to consider the additional factor of the danger to the community. Congress did not intend to increase the government’s burden of proof, but rather intended to allow judges more flexibility in making detention decisions. See Report of the Committee on the Judiciary, United States Senate on S. 215, Rept No. 96-147 (May 25, 1983) at 32. Therefore, logic necessitates a disjunctive reading. This conclusion is reinforced by the fact that sections 3142(b) and (c) are written in the disjunctive, e.g., “the judicial officer shall order the pretrial release ... unless the judicial officer determines that such release will not reasonably assure the appearance of the person as required or will endanger the safety of any other person or the community.” § 3142(b). See also United States v. Bey, Crim. No. 84-205, slip op. (N.D.Ohio 1985).

Finally, defendant contends that even if the statute is to be read in the disjunctive, the government has failed to meet its burden of proving by clear and convincing evidence that there is no condition or combination of conditions which will assure the safety of any other person or of the community; this burden of proof is set forth in section 3142(f). Under the new Act, before ordering pretrial detention, I must consider a number of factors, including: the nature of the offense charged and its circumstances, 18 U.S.C. § 3142(g)(1); the weight of the evidence against the defendant, § 3142(g)(2); the history and characteristics of the defendant, § 3142(g)(3); and the nature and seriousness of the threat to the community posed by the pretrial release of the defendant, § 3142(g)(4).

The government has filed its motion for pretrial detention pursuant to § 3142(f)(1)(D) which applies when a defendant is charged with a felony after having been convicted of two or more prior offenses described in paragraphs A through C. In this case, defendant Askari has twice before been convicted of armed robbery which constitutes a crime of violence as defined in 18 U.S.C. § 3156(a)(4)(A) and as described in § 3142(f)(1)(A). Defendant is now charged with another felony, namely, possession of a firearm by a convicted felon. I need not at this time consider the merits of the government’s case against defendant, but I conclude that there is considerable evidence of the crime charged.

I have considered the evidence offered by the government and defendant Askari as to his personal characteristics, community ties, employment, record of appearance at other judicial proceedings, and financial resources. The defendant appears to be a long term resident of the Philadelphia area, his family resides in Philadelphia, and he has an offer of employment here. I note, however, that defendant has a lengthy criminal record which includes several convictions for violent crimes, and that a pattern has developed in defendant’s behavior.

Considering the factors mandated under Section 3142(g), on balance I find that the factors weigh in favor of detaining Askari pending trial. I recognize that defendant has family and community ties and therefore I do not find that there is a strong likelihood that he would flee before the trial. I do, however, find him to be a danger to the community. At the time of the act alleged in the present indictment, defendant was out on probation for his 1980 conviction for carrying a firearm without a license and was on release pending trial for theft by deception.

Defendant contends that the sixteen-month delay between the date of the act with which defendant Askari is charged and the date the federal indictment was handed down defeats the government’s contention that no condition or combination of conditions will assure the safety of the community. However, I do not believe that the government has dawdled in preparing this case for trial. Until May 10, 1984, the state prosecution continued. Shortly after the withdrawal of the state charges, the FBI commenced its investigation which continued until a report was filed in January 1985. An indictment was issued the next month. Therefore, I must reject defendant’s position.

Under the Act, the government must demonstrate to my satisfaction by clear and convincing evidence that, if released pending trial defendant Askari would pose a threat to members of his community. I conclude that the government has met that burden with respect to defendant Askari. I therefore make the following conclusions of law.

CONCLUSIONS OF LAW

1. The Bail Reform Act of 1984, 18 U.S.C. § 3142(e) expressly provides that the court shall order the detention of a defendant prior to trial if, after a hearing, the court finds “that no condition or combination of conditions will reasonably assure ... the safety of any other person and the community ... ”.

2. Under the Bail Reform Act, there must be a sufficient evidentiary basis for the court’s determination that pretrial detention is necessary. In making my determination I am required to consider: (1) the nature and circumstances of the offense, including whether the offense is a crime of violence; (2) the weight of the evidence against the defendant; (3) the history and characteristics of the defendant including his character, physical and mental condition, family ties, employment, financial resources, length of residence in the community, community ties, past conduct, history relating to drug or alcohol abuse, criminal history, appearance record, and whether at the time of the offense he was on probation, parole, or other type of release pending trial, sentencing or appeal; and (4) the nature and seriousness of any alleged danger to any person or the community that was posed by the defendant’s release. 18 U.S.C. § 3142(g).

3. I find that there exists probable cause to believe that defendant Askari committed a felony after having been convicted twice of committing a “crime of violence” within the meaning of 18 U.S.C. § 3156(a)(4), and therefore, the government is properly proceeding under § 3142(f)(1)(D).

4. The indictment charges defendant Askari with possession of a firearm by a convicted felon in violation of Title 18, United States Code, Appendix, Section 1202(a)(1). I find that the weight of the evidence against Askari is great. I also find the facts to be clear and convincing that no condition or combination of conditions of release will reasonably assure the safety of any other person and the community. 18 U.S.C. § 3142(e) and (f).


author: SAND, District Judge.

text:
    John Whitney STILLMAN d/b/a Stillman International, Plaintiff, v. NICKEL ODEON, S.A., Jose Esteban Alenda, Jose Luis Garci also known as Jose Luis Garcia Munoz, Enrique Herreros, Simon/Reeves/Landsburg Productions Inc., Richard A. Waldberg and Shapira Films, Ltd., Defendants.
    No. 83 Civ 7786 (LBS).
    United States District Court, S.D. New York.
    April 30, 1985.

      Rachlin & White, New York City, for plaintiff; Howard W. Rachlin, Thomas D. White, New York City, of counsel.
    Solin & Breindel, P.C., New York City, for defendants; Alan Seife, Claude M. Tusk, New York City, of counsel.
   OPINION

SAND, District Judge.

Plaintiff, a New York foreign language film licensing and sales agent, has instituted this action based on an alleged oral agreement entered into by plaintiff and defendant Nickel Odeon, a Spanish film company owned by defendants Alenda and Garci, making plaintiff the exclusive licensing agent for a Spanish film entitled “Volver a Empezar.” Defendants have moved for summary judgment with respect to plaintiff’s contract claims. Defendants contend that Spanish law governs the resolution of plaintiff’s contractual claims and that such claims must be dismissed pursuant to Spanish legal standards. As an initial matter, this Court must first determine what law is to be applied in resolving the parties’ contractual dispute. For the reasons discussed below, we conclude that the law of New York should be applied. Accordingly, defendants’ motion for summary judgment is denied.

Introduction

The first issue which this Court must resolve is what law to apply in the instant action. At the October 25, 1984 oral argument of this motion, the parties agreed that this choice of law issue would be separated from all other issues in the case and submitted to the Court for resolution. The parties have stipulated, by the submission of certain documents, affidavits, and testimonial evidence, to the facts upon which this Court is to base its decision. The parties’ stipulation as to these facts has been made solely for purposes of resolving this choice of law question. The Court has also examined the affidavits of plaintiff’s and defendants’ Spanish law experts in making this determination. See F.R.Civ.P. 44.1.

Facts

Plaintiff is engaged in the business of licensing foreign language films for distribution on an international basis. On May 5, 1982, plaintiff and Irene Stillman, his wife, met with defendants Garci and Alenda at the offices of defendant Nickel Odeon in Madrid, Spain, to discuss the defendants’ film “Volver a Empezar” (“To Begin Again” or “Begin the Beguine”) (hereinafter “the Film”). Garci (the Film’s director) and Alenda (the Film’s producer) are the sole shareholders and officers of Nickel Odeon. These parties met again the following day at the offices of Nickel Odeon. At this meeting, plaintiff entered into an oral agreement with Nickel Odeon to distribute the Film on a worldwide basis, except for Spain. Rachlin Affidavit U 5; Dep. Stillman 75-79. According to plaintiff’s deposition testimony, Nickel Odeon agreed to pay plaintiff a commission equal to 20% of the gross revenues (less special expenses) generated by plaintiff from his licensing of the Film for distribution. Neither party suggested that this agreement be reduced to writing at that time. Dep. Stillman 79-80. The parties did agree that the duration of their agreement would be determined at the upcoming Cannes Film Festival in France. Plaintiff thereafter commenced his promotional efforts in anticipation of the film festival.

On May 19,1982, plaintiff and Irene Still-man met with Alenda in Cannes, France. At that meeting, the parties agreed orally that the term of their agreement would run from May 6, 1982 to January 15, 1983, with a provision for automatic six-month renewal periods unless Nickel Odeon notified plaintiff of its intention to cancel the agreement 45 days prior to its termination. This agreement was not reduced to writing.

During the following year, plaintiff engaged in extensive efforts to license the Film for distribution all over the world. Plaintiff wrote to various film production companies and other interested parties as part of his promotional and licensing efforts. See, e.g., PX 47 (letter from Australian production company); 84 (telegram from Czechoslovakian film commission); 102 (letter from Netherlands broadcasting company); 103 (letter from Norwegian broadcasting company); 104 (letter from Belgian film company); 105 (letter to West German film company); 109-13 (letters to Swedish film company); 114 (letter to Switzerland film company); 115 (letter to French film company); 116 (letter to British film institute); 129 (letter to Japanese film company). Plaintiff attended various film festivals as well. See, e.g., PX 20 (Montreal); 104, 106 (Berlin); 107-10 (Goteborg); 133 (Milan). Plaintiff's promotional efforts were reported in at least two issues of Variety Magazine, a major entertainment industry publication. Rachlin Aff. Ex.G. (reporting that film was “repped for world sales by Stillman International of New York”). Plaintiff also communicated to Nickel Odeon his efforts to promote and license the Film on a worldwide basis. Rachlin Aff. ¶ 5; PX 25, 123.

Plaintiffs efforts bore fruit in the form of an agreement with Richard A. Waldberg to distribute the Film in Australia, Rachlin Aff.Ex.H, and an agreement with Shapira Films, Ltd. to distribute the Film in Israel. Id. Ex.J. The former agreement was entered into on May 23, 1982, in Cannes, France; the latter agreement was entered into on December 31, 1982, in New York City. Both agreements indicated that payments by the respective licensees were to be made to plaintiffs New York office or New York bank account (or, in Shapira’s case, to Nickel Odeon, if plaintiff so specified). Copies of these agreements were forwarded to Nickel Odeon. Rachlin Aff. Ex.J.

Sometime during late July or early August of 1982, plaintiff drafted a representation agreement which embodied the terms of the oral agreement described above. Seife Aff.Ex.G; Dep. Stillman 88-90. Plaintiff presented this agreement to Garci at the Montreal Film Festival in August 1982. Rachlin Aff. ¶ 5. This agreement was not signed by either party to the alleged oral agreement. On August 30, 1982, Nickel Odeon entered into a written agreement with Twentieth Century Fox International Corp., granting Fox exclusive rights to distribute the Film in various Latin American countries. PX 5. In December 1982, plaintiff wrote to Alenda, describing his efforts to promote and license the Film worldwide and asking him to sign the representation agreement which he had presented to Garci in Montreal. PX 25. The agreement was not signed by either party.

On February 16,1983, plaintiff and Nickel Odeon entered into a written agreement which “confirmed] in writing that Whit Stillman ... has acted with the authorization of Nickelodeon S.A. in the negotiation of the sale of our film “Volver a Empezar” (Begin the Beguine), to the countries of Australia and Israel” and stated that Nickel Odeon “com[m]its itself to fulfill the clauses of the contracts” with Australia and Israel. Rachlin Aff.Ex.L. This agreement contained sales commission terms similar to those orally agreed upon previously by the parties. It also specified particular payment terms with respect to the Australian and Israeli sales contracts and stated that failure to comply with these terms would result in Nickel Odeon’s cancellation of the contracts. Id.

On March 1, 1983, Nickel Odeon can-celled its written agreement with plaintiff, claiming that Waldberg and Shapira had failed to comply with its payment terms. In response, plaintiff asserted that Wald-berg and Shapira had complied with the contract terms and stated that he would pursue legal action to enforce its May 6, 1982 oral agreement if defendants did not honor the Australian and Israeli film distribution agreements. PX 24.

On May 23,1983, during the Cannes Film Festival in France, Nickel Odeon entered into an agreement with Waldberg granting him the right to distribute the Film in Australia. Rachlin Aff.Ex.U. This agreement was virtually identical to the film distribution agreement previously entered into by plaintiff and Waldberg, except that plaintiff was not a party to the Nickel Odeon/Waldberg agreement.

Discussion

The first issue raised by defendants’ motion for summary judgment is which substantive law is to be applied in determining the legal validity of plaintiff’s claims. A federal court sitting in a diversity case must apply the choice of law rules of the state in which the case is brought, in this case New York. See Klaxon Co. v. Stentor Electric Manufacturing Co. of North America, 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). New York courts apply the “paramount interest” test in determining the law to be applied in contract disputes. See Intercontinental Planning, Ltd. v. Daystrom, Inc., 24 N.Y.2d 372, 300 N.Y.S.2d 817, 248 N.E.2d 576 (1969). In Daystrom, the New York Court of Appeals applied New York’s statute of frauds provision governing brokers and finders, rather than New Jersey law (which lacked similar provisions), to bar recovery of a finder’s fee by a New York corporation from a New Jersey corporation. The court began by noting that New York no longer follows traditional choice of law rules which provided that matters bearing upon contract execution, interpretation and validity would be determined according to the law of the forum where the contract was made (i.e., the forum in which the last act necessary to make it binding takes place) and that matters relating to performance were regulated by the forum in which the contract was to be performed. According to the court, “the law of the jurisdiction having the greatest interest in the litigation will be applied and ... the facts or contacts which obtain significance in defining state interests are those which relate to the purpose of the particular law in conflict.” 300 N.Y.S.2d at 825, 248 N.E.2d at 582 (citing Miller v. Miller, 22 N.Y.2d 12, 15-16, 290 N.Y.S.2d 734, 737, 237 N.E.2d 877, 879 (1968)). The court found that the dispute had sufficient contacts with New York to give that state a substantial interest in applying its law. The court noted that plaintiff was a New York corporation whose business was based in New York, the alleged agreement arose out of a New York newspaper advertisement and was consummated at á meeting in a New York restaurant, and that the services performed by plaintiff were substantially rendered in New York. The court concluded that applying New York law would further the policy underlying its statute of frauds to “protect principals in business transactions from unfounded claims and thereby encourage use of New York as a national and international business center,” whereas New Jersey had “no interest in having its lack of protection for its residents used to establish their liability in a suit brought by residents of other jurisdictions when the laws of the forum State offer a completed defense to the action.” 300 N.Y.S.2d at 827-28, 248 N.E.2d at 583-84.

Applying these choice of law principles to the instant case, we conclude that the law of New York should be applied in resolving this contract dispute. Both Spain and New York have substantial contacts with the instant dispute. The preliminary negotiations and initial agreement between the parties occurred in Spain; the defendants Nickel Odeon and its two principals, Alenda and Garci, are citizens of Spain; and the subject matter of the alleged contract is a Spanish-made film. Cf. Transatlantic Cement v. Lambert Freres Et Cie, 462 F.Supp. 363, 365 (S.D.N.Y.1978) (applying French law in contract dispute where defendants were French citizens, preliminary negotiations occurred in France, and alleged agreement occurred in France). A number of other significant factors, however, counterbalance or otherwise undermine the strength or substantiality of those contacts. Plaintiff is a resident of New York whose place of business is also located in that state. Final agreement on the duration of the alleged contract occurred in France, rather than Spain, as contemplated by the parties when the original “agreement” was entered into. Dep. Stillman 76-77. Cf. Teledyne Industries, Inc. v. Eon Corp., 373 F.Supp. 191, 200 (S.D.N.Y.1974) (applying California law where contract negotiated entirely in California, was signed there, and involved California plaintiff and New York defendant with division in California). A substantial part of the contract’s performance was to originate from plaintiff’s place of business in New York. In the year following the alleged oral agreement in May 1982, plaintiff engaged in worldwide promotion and distribution efforts which emanated from his New York office. One of the two licensing agreements consummated by plaintiff was entered into in New York; payment under each of these agreements was to be made to plaintiff’s office or bank account in New York. Although plaintiff’s performance of his contract duties also involved extensive travel all over the world, the agreement specifically excluded Spain from the scope of plaintiffs exclusive worldwide representation authority. Thus, while Spain has substantial contacts with respect to the execution of the alleged agreement, New York also has significant contacts with the contract as a whole. Cf. Transatlantic Cement, supra, 462 F.Supp. at 365 (applying French law where only event occurring in New York was meeting between parties which led to cessation of contractual relationship).

The relative interests of each forum in having its law apply to resolve this dispute favor the application of New York law. Although Spain has both a statute of frauds-type provision and a registration requirement for film distributors, Spain’s lack of interest arises primarily from the inapplicability of these provisions to the instant dispute.

As for the statute of frauds provision, a forum’s interest in having such a statute apply is two-fold: first, to protect its courts from perjury and use as instruments of extortion, and second, to protect the enacting forum’s defendants from lawsuits for alleged promises informally made. Daystrom, 300 N.Y.S.2d at 828, 248 N.E.2d at 583. Here, the first interest is inapplicable since this lawsuit is being brought in New York federal court and thus does not threaten the integrity of Spanish courts. See Kristinus v. H. Stern & Com. E Ind. S.A., 463 F.Supp. 1263, 1265 (S.D.N.Y.1979). The second interest, to the extent it is implicated by plaintiff’s claim of an alleged oral contract for worldwide (except Spain) film representation rights, will be preserved by applying New York law as fully as it would be by applying Spanish law. Under the Spanish Commercial Code, whose provisions apply to the instant case,

Commercial contracts shall be valid, binding and enforceable regardless of the form or language in which they are entered into, their type or the amount involved, provided that their existence is proven by one of the means established under Civil law. However, the testimony of witnesses of itself shall not be sufficient to prove the existence of a contract involving more than 1,500 pesetas, unless it is in conjunction with some other proof.

Comm.Code Art. 51. In the instant case, plaintiff does not rely merely on witnesses’ testimony to establish the existence of the alleged contract with Nickel Odeon. Instead, plaintiff has produced substantial documentary evidence of worldwide film promotion and sales efforts consistent with the terms of the alleged agreement, as well as a written confirmation, signed by both parties, which ratifies the existence of at least some form of agency relationship between plaintiff and defendants in terms substantially similar to those testified to by plaintiff and embodied in an unsigned representation agreement purporting to “formalize[] the verbal agreement” between the parties. Thus, the issue under New York or Spanish law is essentially the same: whether the testimonial and documentary evidence described above is sufficient as a factual matter to establish the existence of an agreement between the parties as plaintiff alleges. Although we do not decide at this stage of the litigation whether such an agreement in fact existed, we nevertheless are persuaded that the evidence submitted by the parties with respect to the choice of law question is sufficient to undermine any interest which Spain might otherwise have in having its Commercial Code provisions apply in resolving this dispute.

Spam’s second asserted interest in having its laws apply relates to its regulatory provisions regarding filmmaking activities. Specifically, Section 32 of the Ordinance of 7 April 1978 provides that

There shall be a public registry, called Registry of Film Companies and kept in the General Film Management Office, in which movie companies which produce, distribute or exhibit films, labs, film shooting studios, dubbing studios, export companies and auxiliary companies for films must be entered.
A company not entered in the Registry may not hold any type of license or authorization, and will not be entitled to credits or subsidies in matters pertaining to the competence of the General Film Management Office.

According to Jose Antonio Suarez de la Dehesa, defendants’ Spanish law expert, plaintiff’s undisputed failure to comply with this provision renders him incompetent, or without capacity, to enter into an agreement to distribute a Spanish film, and any such contract entered into by plaintiff is without legal effect. See Seife Aff. Ex.G.

We may assume that Spain has an interest in the application of its laws “which regulate[] certain filmmaking activities.” See Ordinance of 7 April 1978 (Ministry of Culture) Section 16 (annexed as Ex. 1 to Rachlin Aff.Ex.A). We have difficulty, however, with the contention that this interest will be legitimately advanced in the instant case. First, this provision does not necessarily displace or augment the general provisions of Spain’s Commercial Code governing commercial contracts. As noted previously, commercial contracts are governed by the Civil Code except for matters expressly set forth in the Commercial Code or in special statutes. The Civil Code provisions require three elements in order to establish a valid contract: consent of the contracting parties (which may not be given by unemancipated minors, or by insane, demented, deaf-mute persons or persons unable to write), a specific subject matter, and consideration. Civil Code §§ 1621, 1623. Plaintiff’s alleged oral agreement with Nickel Odeon has undoubtedly satisfied each of these elements. While the Commercial Code makes allowance for “special statutes” which may supersede or augment its general provisions, it does not evince any similar intent with respect to a Ministerial Order, which under Spanish law is merely a regulatory-type interpretation of a Royal Decree and thus is neither a statute nor an interpretation of a statute. Rachlin Aff.Ex.A. at 5-6. It is thus doubtful that this ordinance can be reasonably and properly construed as a limitation on plaintiff’s contractual authority. See Rachlin Aff.Ex.A.

Second, even assuming that this ordinance can be construed in the manner defendants suggest, i.e., as a further limitation on contractual authority with respect to filmmaking activities, it is doubtful that this ordinance was designed to apply to contracts which specifically exclude Spain from the scope of authorized performance. While defendants’ Spanish law expert opined that failure to comply with the ordinance affects a party’s contractual capacity and that film distributors from all over the world are permitted to register with Spain’s General Film Management Office, these conclusions are not inconsistent with an interpretation of the ordinance which would deprive non-registered persons from Spain or elsewhere of legal authority to agree to perform film distribution work in Spain. We have considerable difficulty, however, with an interpretation which would give this non-statutory ordinance worldwide applicability, particularly in a case where the parties specifically excluded Spain from the scope of their agreement. While Spain, like any state, has a legitimate interest in ensuring conformity with its regulations governing the transaction of business within its borders, this interest surely wanes in situations where the scope of contractual duties is specifically designed to exclude that forum from the parties’ agreement.

Finally, the interpretation suggested by defendants, if accepted, would presumably undermine the enforceability of the parties’ February 1983 agreement as well. In that agreement, defendants confirmed that plaintiff had been “performing under the authorization of Nickelodeon” in negotiating the sale of its film in Australia and Israel. The ordinance in question, however, provides that non-registered companies “may not hold any type of license or authorization” with respect to various film-making matters. Curiously, neither the defendants nor their Spanish law expert have suggested that this ordinance applies in the manner suggested above, suggesting not only that the ordinance’s limits on contractual authority are applicable, if at all, to filmmaking activity in Spain only, but also that the parties themselves did not contemplate that Spanish law in general or this ordinance in particular would apply to their various alleged legal relationships. Cf. Teledyne Industries, supra, 373 F.Supp. at 200 (fact that particular state’s law was within contemplation of parties is important consideration in determining which law to apply). Instead, the parties’ exclusion of Spain from their alleged oral agreement and their subsequent confirmation of plaintiff’s legal authority to negotiate the sale of defendants’ film in at least two other countries are both important reasons for declining to apply the aforementioned ordinance in the manner defendants suggest. Accordingly, there is little in the way of foreign state interests to be advanced by applying Spanish law in resolving the instant case.

In contrast to Spain’s limited interest in having its laws applied in this case, New York has a legitimate and substantial interest in the application of its laws. New York has an interest in insuring that persons who enter into agreements with its citizens which involve the performance of contract obligations within the state abide by their obligations. It also has an interest in permitting resolution of a dispute such as this on the merits, especially where the applicability of a foreign state’s laws was not reasonably contemplated by the parties and would permit the foreign defendants to avoid asserted contractual obligations which might otherwise be established and enforceable under New York law. Cf. Kristinus, supra, 463 F.Supp. at 1268. In Kristinus, a Pennsylvania resident sued a Brazilian jeweler for breach of an alleged promise to refund, at the jeweler’s New York franchise office, the price of jewels which plaintiff had purchased from the jeweler in Brazil. The court held that New York law (which the court assumed would allow plaintiff to enforce the promise), rather than Brazilian law (which required written evidence of such an agreement), would be applied under New York choice of law rules. According to the court, the fact that the contract was to be performed in New York rendered New York’s interests paramount to Brazil’s interest in protecting its citizens from unfounded contractual claims and thus would lead a New York court “to decline to apply foreign law where, as here, that law would foreclose enforcement of a contract valid under New York law.” Id. at 1265. In the instant case, New York also has an interest in protecting the rights of its own citizens whose performance of contractual duties is to occur substantially within its borders. While the defendants in the instant case did not thrust themselves into the New York marketplace as did the Brazilian jeweler in Kristinus, the parties with active contractual duties of performance in both cases were to perform these duties primarily in New York. And unlike Kristinus, the parties in this case specifically excluded the foreign forum from the realm of plaintiff’s contractual rights and defendants’ contractual duties. This is not a case of a party seeking to avoid the effect of its own forum’s law and benefit from a foreign jurisdiction’s lack of similar legal protection under circumstances which do not advance the interests of either forum. See Daystrom, supra. Rather, plaintiff seeks the protection of his own state’s law where the application of this law is consistent with the parties’ reasonable expectations, will advance his state’s legal interests, and will not undermine the legitimate interests underlying the foreign state’s laws.

Based on the above considerations, we conclude that a New York court would apply New York law in resolving the instant contract dispute. Accordingly, Nickel Odeon’s motion for summary judgment with respect to plaintiff’s claims of breach of the alleged oral agreement (claims 1 and 2) is denied. Insofar as the motion of defendants Nickel Odeon, Garci and Alenda for summary judgment with respect to the February 1983 agreement between the parties (claims 4 and 5) is predicated on the application and interpretation of Spanish law, the motion is denied. Insofar as defendants Nickel Odeon, Garci, Alenda, and S/R/L’s motion for summary judgment with respect to some of plaintiff’s claims of tortious interference with his contracts (claims 6-8 and 13-19) is based on the assumed invalidity of these contracts under Spanish law, see Defendant’s Memorandum of Law, at 7, 14-15, the motion is denied.

Finally, defendant S/R/L’s motion for summary judgment with respect to plaintiff’s tortious interference claim is denied. Defendant claims that the only evidence which plaintiff has produced in support of this claim is hearsay and that such evidence is insufficient to defeat a motion for summary judgment. The evidence produced by plaintiff in support of his claim is summarized in the affidavit of Howard W. Rachlin, Esq., plaintiff's counsel, and includes various exhibits, responses to interrogatories, and deposition testimony of plaintiff, plaintiff’s former counsel, and S/R/L’s president. Without opining as to the persuasiveness of each of these sources of evidence, perusal of these materials nevertheless reveals that plaintiff does not rely simply on hearsay affidavits in opposing defendant’s summary judgment motion. Cf. Schwimmer v. Sony Corp. of America, 637 F.2d 41, 45 n. 9 (2d Cir.1980). The factual issues raised by plaintiff’s submissions cannot properly be resolved at this stage of the litigation. Defendant’s motion for summary judgment on this basis is therefore denied.

The parties are directed to appear before this Court for a pre-trial conference on Wednesday, May 29, 1985 at 9:30 A.M.

SO ORDERED.

      . Jurisdiction is based on diversity of citizenship under 28 U.S.C. § 1332.

      . In addition to plaintiffs contractual claims, plaintiff has asserted a claim against Nickel Odeon for the reasonable value of services performed by plaintiff in connection with his efforts to license the film for distribution (claim 3) and a claim against defendants Nickel Odeon, Alenda, Simon/Reeves/Landsburg Productions, Inc. (hereinafter "S/R/L”) and Herreros for libel and conspiracy to libel (claims 20-25). Defendants have not moved for summary judgment with respect to these claims.

      . The stipulated facts include the following:
      1) Pages 73-94 of the transcript of the deposition of plaintiff John Whitney Stillman;
      2) Paragraphs 4 and 5 of the affidavit of Howard W. Rachlin, Esq., sworn to October 19, 1984, in opposition to defendants’ summary judgment motion;
      3) That portion of paragraph 9 of the Rachlin Affidavit that reads: "The contract specifically provided that plaintiff would be the exclusive licensing agent of the Film everywhere in the world except Spain. Thus, the contract was to be performed totally outside of Spain and primarily from plaintiffs offices in New York. In addition, defendant NICKEL ODEON breached its contract of May, 1982 with plaintiff by authorizing persons and/or entities (e.g., TWENTIETH CENTURY-FOX ENTERTAINMENT INC. ("FOX”), HERREROS and SIMON) other than plaintiff to license the Film in North America, Latin America, Israel and, in short, everywhere in the world except Spain.” (emphasis in original);

        4) Exhibits G, H, J, K, L, M, N, O, P, S, T, U, FF, GG and JJ to the Rachlin Affidavit;
      5) Exhibits B and C to the affidavit of Alan Seife, Esq., sworn to September 26, 1984, in support of defendants’ motion; and
      6) The documents marked in the proposed joint pretrial order as Plaintiff's Exhibits 5, 13, 18, 20, 25-27, 33, 46, 47, 57, 58, 64-66, 79, 80, 84, 86, 100-16, 123, 124, 127-45, 147, 148, 151 and 153-56.

        See Letter of Claude M. Tusk, Esq., November 1, 1984, to this Court; see also Transcript of Proceedings dated October 25, 1984.
      The parties have also agreed that this Court "may draw any inferences which it deems appropriate, make any findings of fact, and resolve any disputes arising from the underlying documents submitted herewith, with the same force and effect as if the Court had heard the testimony of the witnesses in a trial conducted to the Court.” See Transcript of Proceedings dated October 25, 1984, at 2.
      For purposes of this motion, we assume that New York law would permit enforcement of the contract alleged by plaintiff notwithstanding the parties' failure to reduce their agreement to a signed writing. See discussion at pages 1056-1057 infra.

      . This statement of facts does not purport to be a complete description of all the events underlying the instant case, but includes only those facts which we consider necessary to resolve the choice of law question.

      . The Spanish Civil Code requires that contracts under which the services of either party exceeds 1,500 pesetas (approximately $9) must be in writing. Civil Code Art. 1280. The Commercial Code’s own specific provisions, however, take precedence in cases involving commercial contracts. Comm.Code Art. 50 ("Commercial contracts ... shall follow, in all matters not expressly set forth in this code or in special statutes, the general rules of the [Civil Code]”). Both parties agree that the instant contract is a commercial contract. See Rachlin Aff.Ex.A, at 10-11 (opinion of plaintiffs Spanish law expert); Seife Aff.Ex.E, at 2-3 (opinion of defendants’ Spanish law expert).