author: VAN SICKLE, Senior District Judge.

text:
    Gerald D. BIBY, Plaintiff, v. Winston SATRAN, Warden, North Dakota State Penitentiary, Defendant.
    Civ. No. A1-85-276.
    United States District Court, D. North Dakota, Southwestern Division.
    Oct. 22, 1985.

      Gerald D. Biby, pro se.
   MEMORANDUM AND ORDER

VAN SICKLE, Senior District Judge.

Gerald D. Biby was convicted in state court of two counts of theft by deception. Biby petitions for a writ of habeas corpus pursuant to 28 U.S.C. § 2254 and moves to proceed in forma pauperis pursuant to 28 U.S.C. § 1915. Biby’s application is sufficient to permit him to file the petition for writ of habeas corpus in forma pauperis.

Biby was the managing partner in a real estate development partnership. Several months after the property had been foreclosed upon and sold at a sheriff’s sale, Biby sent letters to two of the partners asking for their share of the annual installment on the property. State v. Biby, 366 N.W.2d 460, 461-62 (N.D.1985). Unaware of the foreclosure and sheriff’s sale, the two partners sent Biby their payments. Id. at 462. Biby was charged with two counts of theft of property with respect to the receipt of these payments. Id. Biby’s defense was that, with the two partners’ consent, he used the money to pay partnership expenses. Id. Biby was convicted on both counts.

In his petition, Biby alleges five grounds for relief: 1) the criminal complaint and summons were issued without probable cause and the charges should’ve been dismissed; 2) the trial court erred in refusing to permit a witness called by the defense to testify; 3) the trial court violated the due process, equal protection, and assistance of counsel provisions of the Constitution by refusing to give two requested jury instructions on the nature of partnerships and liabilities of partners; 4) the trial court violated the due process, equal protection, and assistance of counsel provisions of the Constitution by refusing to give a jury instruction on actual or constructive notice of foreclosure; and 5) the trial court erred in refusing to permit the use of demonstrative evidence.

Rule 4 of the rules governing section 2254 cases states that a court may summarily dismiss a habeas corpus petition “[i]f it plainly appears from the face of the petition and any exhibits annexed to it that the petitioner is not entitled to relief in the district court.” Rule 4, 28 U.S.C. Foil. § 2254 (1976). An examination of the petition indicates that it presents two issues concerning petitioner’s entitlement to relief in this court: first, whether petitioner has exhausted available state remedies; and second, whether the petition raises claims cognizable in federal habeas corpus proceedings.

I. EXHAUSTION OF STATE REMEDIES

The first inquiry is whether petitioner has exhausted state remedies as to the claims raised. A section 2254 petitioner must exhaust available state remedies before he is entitled to relief in federal court. 28 U.S.C. § 2254(b) and (c); Duck-worth v. Serrano, 454 U.S. 1, 3, 102 S.Ct. 18, 19, 70 L.Ed.2d 1 (1981); White v. Wyrick, 651 F.2d 597, 598 (8th Cir.), cert. denied, 454 U.S. 1058, 102 S.Ct. 608, 70 L.Ed. 596 (1981). The exhaustion requirement is satisfied when a federal habeas petitioner either has fairly presented the substance of his federal claims to the state courts or has no other presently available state remedies to pursue. Graham v. Solem, 728 F.2d 1533, 1535 (8th Cir.), cert. denied, — U.S. —, 105 S.Ct. 148, 83 L.Ed.2d 86 (1984). The exhaustion requirement restrains the federal courts from upsetting a state court conviction without first giving the state courts the opportunity to correct a constitutional violation. Rose v. Lundy, 455 U.S. 509, 518, 102 S.Ct. 1198, 1203, 71 L.Ed.2d 379 (1982). The purpose of the exhaustion requirement is to “protect the state courts’ role in the enforcement of federal law and prevent the disruption of state judicial proceedings.” Id. In order to determine whether petitioner has exhausted state remedies the court must first ascertain whether petitioner presented on direct appeal to the North Dakota Supreme Court the substance of the claims he raises in this habeas corpus petition.

Petitioner previously filed a petition for writ of habeas corpus with this court. In the first petition, Biby raised the same claims as he now raises, as well as a Miranda claim. This court dismissed the first petition for failure to exhaust state remedies because Biby had not raised a Miranda claim on appeal before the North Dakota Supreme Court. Biby v. State of North Dakota, No. A1-85-160 (D.N.D. June 17, 1985) (order granting permission to proceed in forma pauperis and dismissing habeas corpus petition). With respect to the petition’s other claims, this court stated that petitioner raised the “identical issues already submitted to the North Dakota Supreme Court on direct appeal.” Id. Upon further research and more careful consideration of the issues presented to the state supreme court, however, the court concludes that petitioner did not present the constitutional issues to the state court.

On direct appeal to the North Dakota Supreme Court, petitioner raised the same claims he presents in this habeas petition but did not frame most of the claims as violations of his constitutional rights. See Brief for Appellant, State v. Biby, 366 N.W.2d 460 (N.D.1985). In his appeal to the state supreme court petitioner directly raised a constitutional claim only as to the issuance of the criminal complaint (the first claim in the present petition). As to the four other claims raised in this petition, however, Biby did not argue to the state court that these alleged errors amounted to constitutional violations.

The exhaustion requirement is not satisfied merely because all the facts necessary to support the federal claim were before the state courts. Anderson v. Harless, 459 U.S. 4, 6, 103 S.Ct. 276, 277, 74 L.Ed.2d 3 (1982); Snethen v. Nix, 736 F.2d 1241, 1244 (8th Cir.1984). The exhaustion requirement is satisfied only when the habeas petitioner “ ‘fairly presented’ to the state courts the ‘substance’ of his federal corpus claim,” Anderson, 459 U.S. at 6, 103 S.Ct. at 277, and provided the state courts with a “ ‘fair opportunity’ to apply controlling legal principles to the facts bearing upon his constitutional claim,” id.

The Eighth Circuit Court of Appeals has held that the “fair presentation” and “fair opportunity” tests are met if the petitioner cited the federal Constitution, a federal case, or referred to a specific constitutional right. Purnell v. Missouri Department of Corrections, 753 F.2d 703, 706 (8th Cir. 1985). The Eighth Circuit has also indicated that the tests may be met without specific constitutional references if the underlying facts necessarily implicate a specific right protected by the Constitution or the argument is well within the mainstream of constitutional litigation. Diamond v. Wyrick, 757 F.2d 192, 193 (8th Cir.1985).

A review of the brief submitted by petitioner to the North Dakota Supreme Court and the cases cited therein reveals that the petitioner did not cite to the federal Constitution, federal cases, or refer to specific constitutional rights with respect to the four claims concerning evidentiary rulings and jury instructions. See Brief for Appellant, State v. Biby, 366 N.W.2d 460 (N.D.1985). Also, the cases cited in petitioner’s brief did not address federal constitutional issues relating to petitioner’s claims. See id. and cases cited therein. Furthermore, the factual allegations presented to the state court were insufficient to put the court on notice of claimed constitutional violations. See Purnell, 753 F.2d at 708 (allegations that the trial court erroneously applied evidentiary principles to admit objectionable hearsay and reject expert testimony are not within the mainstream of constitutional litigation and did not call to mind specific constitutional rights); Davis v. Campbell, 608 F.2d 317, 319 (8th Cir.1979) (admissibility of evidence and improper jury instructions generally do not involve federal constitutional issues). Although petitioner’s brief to the North Dakota Supreme Court contained a few vague references to “fair trial” principles, see Brief for Appellant, supra, these references standing alone, without citation to a provision of the federal Constitution or to federal cases, were not a sufficient presentation of a federal constitutional issue. See Thomas v. Wyrick, 622 F.2d 411, 413 (8th Cir.1980), cert. denied, 459 U.S. 1175, 103 S.Ct. 824, 74 L.Ed.2d 1020 (1983) (reference to denial of a fair trial, without citation to any provision of the Federal Constitution or to any federal case, was not a sufficient presentation of the federal constitutional issue). Petitioner did not, therefore, fairly present to the state court the substance of four of the five habeas corpus claims.

Finally, a post-conviction remedy is available to petitioner whereby he can collaterally attack his conviction based upon alleged federal constitutional violations. • See N.D.Cent.Code § 29-32-01 (1974). Therefore, petitioner has not exhausted available state remedies with respect to four of the five claims raised in his habeas corpus petition.

If a petition contains both exhausted and unexhausted claims, the district court must dismiss the habeas corpus petition. Rose, 455 U.S. at 522, 102 S.Ct. at 1205; Snethen, 736 F.2d at 1244. Biby’s petition for a writ of habeas corpus is dismissed for failure to exhaust state remedies.

II. CLAIMS

A federal court has jurisdiction pursuant to section 2254 only as to complaints relating to federal constitutional rights. 28 U.S.C. § 2254(a) (1976); Graham v. Solem, 728 F.2d 1533, 1535 n. 3 (8th Cir.), cert. denied, — U.S. —, 105 S.Ct. 148, 83 L.Ed.2d 86 (1984) (only errors of constitutional significance are cognizable in a federal habeas proceeding to review a state conviction). The second inquiry, then, is whether the claims raised by petitioner present federal constitutional issues.

Petitioner’s first claim, that the criminal charges should have been dismissed because the complaint and summons were issued without probable cause, does not present a cognizable federal claim. It is a well-established rule that a conviction will not be vitiated because the defendant was unlawfully brought before the court. See United States v. Crews, 445 U.S. 463, 474, 100 S.Ct. 1244, 1251, 63 L.Ed.2d 537 (1980) (an illegal arrest, without more, is neither a bar to subsequent prosecution nor a defense to a valid conviction); Gerstein v. Pugh, 420 U.S. 103, 119, 95 S.Ct. 854, 865-66, 43 L.Ed.2d 54 (1975) (it is an established rule that illegal arrest does not void a subsequent conviction); Frisbie v. Collins, 342 U.S. 519, 522, 72 S.Ct. 509, 511-12, 96 L.Ed. 541 (1952) (“[t]here is nothing in the Constitution that requires a court to permit a guilty person rightfully convicted to escape justice because he was brought to trial against his will”). Petitioner’s first claim does not present a genuine constitutional issue and is without merit.

Petitioner’s second claim is that by not permitting a witness to testify the trial court deprived him of effective assistance of counsel and the right to confront witnesses. Generally, a claim that a trial court erred in excluding testimony offered is not cognizable in a federal habeas corpus proceeding. Davis v. Campbell, 608 F.2d 317, 319 (8th Cir.1979). The admissibility of evidence presents a justiciable federal issue “only where trial errors infringe upon a specific constitution protection or are so prejudicial as to amount to a denial of due process.” Id.

The right to counsel guaranteed by the sixth amendment involves two entitlements: first, the accused has a right to be represented by counsel in the criminal proceedings; and second, the accused has a right to the effective assistance of counsel. United States v. Cronic, 466 U.S. 648, 104 S.Ct. 2039, 2043, 2044, 80 L.Ed.2d 657 (1984). The habeas petition neither alleges nor do the facts indicate that Biby was denied legal representation at any stage of the criminal proceedings or that his counsel’s performance was deficient and prejudiced petitioner. Therefore, petitioner’s claim that he was deprived of effective assistance of counsel because a witness was not allowed to testify fails to state a cognizable federal claim.

In addition to the right to assistance of counsel, the sixth amendment also provides the accused with the right “to be confronted with the witnesses against him.” U.S.Const.Amend. VI. The purpose of the confrontation clause is to ensure that the accused has an adequate opportunity to cross-examine the witnesses against him. Douglas v. State of Alabama, 380 U.S. 415, 418, 85 S.Ct. 1074, 1076, 13 L.Ed.2d 934 (1965); Pointer v. State of Texas, 380 U.S. 400, 403, 85 S.Ct. 1065, 1067-68, 13 L.Ed.2d 923 (1965). Petitioner has not alleged facts that indicate he was denied the opportunity to cross-examine any of the prosecution witnesses. Thus, petitioner has not presented a claim cognizable under the confrontation clause.

Pro se pleadings are to be liberally construed, White v. Wyrick, 530 F.2d 818, 819 (8th Cir.1976), but even if the court construes the second claim as alleging a due process violation, it still fails to present a cognizable federal claim. In order to establish a denial of due process petitioner must show that the asserted error was so “gross” or “conspicuously prejudicial” that it “fatally infected the trial and failed to afford petitioner the fundamental fairness which is the essence of due process.” Maggitt v. Wyrick, 533 F.2d 383, 385 (8th Cir.), cert. denied, 429 U.S. 898, 97 S.Ct. 264, 50 L.Ed.2d 183 (1976). Whether or not the trial court was correct in refusing to admit the witness’ testimony, that refusal did not deprive petitioner of a fair trial. The testimony of the witness was offered to impeach one of the partners, who testified for the prosecution, and to clarify what entity or individual was in fact the partner. Petitioner had the opportunity to accomplish these objectives through cross-examination of the partner. Therefore, the court’s refusal to grant him another avenue for presenting this evidence was not so egregious or fundamentally unfair that it amounts to a denial of due process. Petitioner’s second claim, even if liberally construed, fails to present a justiciable federal issue.

The fifth claim is similar to the second claim asserted by petitioner: he alleges that the court’s refusal to admit demonstrative evidence in the form in which it was offered deprived him of the effective assistance of counsel. Because this allegation does not present facts which would constitute a valid assistance of counsel claim, see supra p. 1568, it is not cognizable in a federal habeas proceeding. Furthermore, even if construed liberally, the claim does not present a valid due process claim. If the court erred in admitting the exhibit in a piecemeal fashion, this error was not so egregious and fundamentally unfair that it rises to the level of a due process violation. Petitioner’s claim concerning the admissibility of demonstrative evidence is not justiciable in a federal habeas corpus proceeding.

In his third and fourth claims, petitioner alleges that the trial court erred in failing to give jury instructions on the nature of partnerships, liabilities of partners, and actual or constructive notice of foreclosure. Petitioner alleges that the trial court thereby violated the due process, equal protection, and assistance of counsel clauses of the Constitution. “A state trial court’s refusal to give an instruction does not alone raise a ground cognizable in a federal habeas corpus proceeding.” Tyler v. Wyrick, 635 F.2d 752, 753 (8th Cir.1980), cert. denied, 452 U.S. 942, 101 S.Ct. 3089, 69 L.Ed.2d 958 (1981); Davis v. Campbell, 608 F.2d 317, 319 (8th Cir.1979). The refusal to give instructions provides a basis for federal habeas corpus relief only when the refusal was so fundamentally unfair and infected the entire trial that the defendant was deprived of his right to a fair trial guaranteed by the due process clause. Tyler, 635 F.2d at 753.

Petitioner apparently requested the nature of partnership and liabilities of partners instructions in support of his defense that, with the partners’ consent, he used the money to pay partnership expenses incurred in marketing the property. This court agrees with the assessment of the state courts that the proposed instruction was inapplicable to the case. Whether the partners gave petitioner the money to pay for partnership expenses and whether he used the money for that purpose was relevant but whether the partners were legally liable for partnership expenses was not relevant to petitioner’s defense. The failure of the trial court to instruct the jury on the nature of partnerships and the liability of partners, therefore, was not so fundamentally unfair and egregious as to constitute a due process violation.

Similarly, the trial court’s failure to instruct the jury on actual or constructive notice of foreclosure does not violate the due process clause. Petitioner apparently offered the notice of foreclosure instruction to bolster a claim that the doctors were not defrauded because they should have known of the foreclosure. Under North Dakota law, however, a claim that the defrauded party should have known of or easily could have discovered the falsity of the representation is not a defense to a charge of theft by deception. State v. Hastings, 77 N.D. 146, 153, 41 N.W.2d 305, 309 (1950) (the fact that investigation and the exercise of ordinary prudence would have disclosed the falsity of the pretenses is not important; what is important is whether the false pretenses in fact deceived the person defrauded); State v. Stewart, 9 N.D. 409, 414-16, 83 N.W. 869, 870-71 (1900) (it is no defense to the crime that the victim was negligent or lacked prudence in failing to discover the falsehood). The notice of foreclosure instruction, then, did not relate to a valid defense and was correctly denied. The court concludes that the failure of the trial court to give the requested jury instructions did not violate the due process clause.

Petitioner has also alleged that the failure to give the requested jury instructions constitutes a violation of the equal protection and assistance of counsel clause of the Constitution. The equal protection clause guarantees that all persons who are similarly situated will be treated alike, absent a justification for treating them differently. Brown v. Jensen, 572 F.Supp. 193, 199 (D.Colo.1983). Petitioner’s claims do not present facts that would support an equal protection claim. Plaintiff has also failed to present an effective assistance of counsel claim, see supra, p. 1568. The court concludes that the claimed errors of the trial court relating to jury instructions do not have federal constitutional dimensions and are not cognizable in a federal habeas corpus proceeding.

In summary, the court concludes that Biby’s petition should be dismissed because the claims presented in the petition are without merit from the standpoint of stating federal constitutional grounds. The court also concludes that the petition should be dismissed for failure to exhaust state remedies.

Although the court could merely dismiss the petition for failure to exhaust state remedies, the court is also dismissing the petition on the alternative ground of failure to present valid federal constitutional claims. The court is dismissing the petition on both grounds because the purposes of the exhaustion requirement will not be furthered by referring to the state courts claims that are without merit. See Purnell v. Missouri Department of Corrections, 753 F.2d 703, 711 (8th Cir.1985) (Bright, J., concurring in part and dissenting in part); Veneri v. State of Missouri, 734 F.2d 391, 393 (8th Cir.1984).

IT IS ORDERED:

Petitioner’s motion to proceed in forma pauperis is granted. The clerk shall file the action without prepayment of fees and costs.

The above-entitled action is dismissed with prejudice.

      . The North Dakota Supreme Court’s record has not been submitted as a part of the record in this action but this court has examined the briefs submitted to the supreme court on direct appeal of petitioner's conviction.


source: Caselaw Access Project

author: SACHS, District Judge.

license: Public Domain

text:
    ASSOCIATION OF SEAT LIFT MANUFACTURERS, a Trade Association, Plaintiff, v. Margaret HECKLER, Secretary of the Department of Health & Human Services, et al., Defendants.
    No. 85-1043-CV-W-6.
    United States District Court, W.D. Missouri, W.D.
    Oct. 23, 1985.
    Frederick Walters, Linde, Thomson, Fair-child, Langworthy, Kohn & Van Dyke, P.C., Kansas City, Mo., for plaintiff.
    Paul Caciopa, Kansas City, Mo., Judith Strong, Ass’t. U.S. Atty., Kansas City, Mo., for defendants.
   MEMORANDUM AND ORDER

SACHS, District Judge.

Plaintiff, an association of seat lift manufacturers, suppliers of equipment prescribed by doctors for patients suffering from arthritis and other health conditions, seeks to challenge the method used for determining the reasonable cost of such equipment, for Medicare reimbursement purposes. Plaintiff contends that defendants have arbitrarily selected prices of $749.95 for Missouri and $763.00 for Iowa by using quotations appearing in Sears, Roebuck catalogues. This effects a cost reduction in Iowa that exceeds $500.00.

Part B Medicare coverage may be used to obtain reimbursement for the reasonable cost of seat lifts prescribed in certain circumstances. Plaintiff and its members are not direct claimants, however, except on certain “assigned claims.” The Secretary of Health and Human Services challenges plaintiffs standing to sue and disputes the court’s jurisdiction.

Plaintiff seeks a preliminary injunction and a hearing has been scheduled. The court has determined, however, that suit may not be maintained. Because this controversy is unlikely to be resolved by a single judge, a prompt and somewhat sketchy opinion is being filed.

The statutory scheme allows direct claimants to Medicare Part B coverage to appeal administratively from adverse actions, but they may not thereafter litigate to challenge the Secretary’s decisions, except when they present constitutional questions. Hatcher v. Heckler, 772 F.2d 427 (8th Cir. 1985). The Sixth Circuit has ruled, however, that a supplier that is not authorized to seek administrative remedies as a claimant may seek judicial relief. Michigan Academy of Family Physicians v. Blue Cross and Blue Shield of Michigan, 757 F.2d 91 (6th Cir.1985). Certiorari has been granted in that case. Heckler v. Michigan Academy, — U.S. —, 106 S.Ct. 58, 88 L.Ed.2d 47 (1985). No subject matter jurisdiction exists when there is a “claim arising under” the Medicare Act, except where there is a specific provision for judicial review. 42 U.S.C., § 405(h); Hatcher v. Heckler, supra.

Although Michigan Academy, if it stands, would seemingly favor jurisdiction, an alternate theory for summarily rejecting judicial relief is that the ultimate suppliers have no standing to sue, not being within the “zone of interest” contemplated by Congress in enacting the legislation. New Jersey Speech-Language-Hearing Association v. Prudential Insurance Company, 724 F.2d 383 (3rd Cir.1983). An Eighth Circuit decision seems to anticipate such a ruling where ordinary commercial concerns are in question. Granville House v. Dept. of Health & Human Services, 715 F.2d 1292, 1299 (8th Cir.1983). In Granville House, Judge Heaney wrote:

HHS correctly notes that other courts have stated that the very similar Medicare statute was enacted to benefit patients, not to benefit or subsidize providers. See, e.g., Dialysis Centers, Ltd. v. Schweiker, 657 F.2d 135, 138 (7th Cir. 1981). See also Pennsylvania Pharmaceutical Ass’n v. Department of Public Welfare, 542 F.Supp. 1349, 1355-1356 (W.D.Pa.1982) (Medicaid Act not intended to benefit pharmacists who sought to challenge rate of reimbursement for prescriptions).

' Although there may be good public policy reasons to allow litigation testing claims of serious bureaucratic blunders (see dissent of Judge Weis in New Jersey Speech-Language-Hearing Assoc., supra), I do question the rationale of Michigan Academy. It is difficult to see how Congress, having closed the judicial doors to nonconstitutional questions presented by Medicare Part B claimants, can be said to have left the door ajar for litigation by the suppliers of such claimants.

Discretion causes me to avoid direct challenge to an appellate panel (in Michigan Academy) and I therefore rule that plaintiff lacks standing, as the majority decided in the New Jersey case.

Although the defendants cited New Jersey in their brief, plaintiff fails to distinguish ihat decision or to urge the court that it was wrongly decided. Plaintiff does cite an earlier district court decision holding that a supplier of medical equipment that may be needed by Medicare patients is within the “zone of interest” so as to sustain standing to sue over the allowable rate for its product, because “unless hospitals and the suppliers of medical products are assured of a reasonable rate in compensation for their products and services, those products and services will not be forthcoming. In the end, the primary beneficiary— the patient — will suffer.” Pacemaker Monitor Corp. v. United States Government, 440 F.Supp. 473, 484 (S.D.Fla.1977). While this rationale is not without appeal, it was rejected by the Third Circuit in the New Jersey case, 724 F.2d at 387, and by a district court in a 1982 decision. Pennsylvania Pharmaceutical Ass’n v. Department of Public Welfare, 542 F.Supp. 1349, 1355-6 (W.D.Pa.1982) (“If a provider finds participation in the program unprofitable he should withdraw from the program. Minnesota Ass’n of Health Care Facilities, Inc. v. Minnesota Dept, of Public Welfare, 602 F.2d 150 (8th Cir.1979) ... Congress did not vest the pharmaceutical plaintiffs with an interest to challenge a state’s payment schedules ... ”). The Pennsylvania case was, in turn, cited with apparent approval in Granville House, supra. The weight of authority, therefore, is currently contrary to the Pacemaker decision, which is plaintiff’s strongest case on the question of standing.

Plaintiff further contends that Granville House is somewhat favorable to its claim to standing because it asserts its interest in this case is “not simply financial.” It seems uncontestable, however, that plaintiff is seeking a higher price for its members’ merchandise than would be paid using the Sears catalogue price, and the members, unlike the plaintiff in Granville House, are engaged in ordinary business pursuits.

Because plaintiff lacks standing to sue in this case, judgment should be entered in favor of defendants. SO ORDERED.

      . In its brief filed October 22, 1985, plaintiff generally asserts due process and equal protection violations. It does not, however, supply authorities in support of a constitutional challenge in the section of its brief justifying its statement of a claim upon which relief can be granted. The controversy appears to concern whether defendants "complied with all applicable statutes, regulations, and guidelines in determining the ‘reasonable charge' for seatlift charges ...” Plaintiff’s brief, page 38.


author: WILLIAM C. LEE, District Judge.

text:
    Phillip L. GIBSON, Plaintiff, v. John R. BLOCK, Secretary of the United States Department of Agriculture, Defendant.
    Civ. No. F 83-363.
    United States District Court, N.D. Indiana, Fort Wayne Division.
    Oct. 23, 1985.

      Wade R. Bosley, Bosley & Schatz, Marion, Ind., for plaintiff.
    Christina McKee, Asst. U.S. Atty., Fort Wayne, Ind., for defendant.
   ORDER

WILLIAM C. LEE, District Judge.

This matter is before the court on defendant’s (“Secretary”) motion to dismiss. Plaintiff (“Gibson”) has filed both a response and a supplemental brief. For the following reasons, the motion to dismiss will be granted.

This action arises out of Gibson’s participation in the federal government’s “Payment In Kind,” or PIK, program. Under this program, qualified farmers can receive payment in the form of grain stored by the government in return for not growing crops. Gibson applied to the program, was awarded a contract to receive a certain amount of grain, only to have that amount reduced upon administrative review of a former tenant’s appeal of the award. Gibson now sues the Secretary, claiming that the decision not to award him 100% of PIK grain and PIK cash payments was arbitrary and capricious. He seeks a court order that a transcript of the administrative proceedings be provided, a de novo hearing on the facts surrounding the award for his farm, and certain findings that he is entitled to 100% of the PIK grain and cash payments.

The Secretary has moved to dismiss the action, arguing that the administrative findings of the PIK program’s administrative machinery are not subject to review and that this court has no jurisdiction over this cause because it falls within the exclusive jurisdiction of the Court of Claims. The jurisdictional argument amounts to a motion to dismiss for lack of subject matter jurisdiction, for which the court can consider matters outside the pleadings. See Biotics Research Corp. v. Heckler, 710 F.2d 1375, 1379 (9th Cir.1983). The court focuses its attention on the jurisdictional issue.

Based upon the complaint and certain documents filed with the briefs on this motion, the relevant facts are as follows. Gibson owned a farm in Grant County, Indiana known to the Department of Agriculture as farm F-603. The farm had a 160-acre corn base. During 1980-1982, Gibson had rented the farm to Kim Man-well. In 1983, Manwell and Gibson were unable to work out an agreement for renting out the farm for the 1983 crop year. According to Gibson, Manwell told him in January, 1983 that he would not be able to rent the farm and was going to file for bankruptcy, which Manwell did on March 14, 1983. Realizing that Manwell would not rent the farm, Gibson signed up for the PIK program in February, 1983.

On March 17, 1983, Manwell signed a form entitled “Intent to Participate and Application for Payment,” in which he claimed a “0” percent share of the payment, and in which Gibson requested a “100” percent share of the PIK payment. On March 18/1983, the Grant County Committee of the Department of Agriculture’s Agricultural Stabilization and Conservation Service (ASCS) approved a contract whereby Gibson would be entitled to receive a PIK payment for all 160 acres, which under the PIK payment formula, would amount to 14,630 bushels of corn.

In June, 1983, Manwell appealed to the Grant County ASCS Committee concerning the award of 100% of the PIK payments to' Gibson. The County Committee ruled in Gibson’s favor, and Manwell appealed to the Indiana State ASCS Committee, which ruled that Manwell had been unfairly displaced as a tenant on Gibson’s farm and therefore removed farm F-603 from any participation in the PIK program for 1983. Gibson appealed this ruling to the Deputy Administrator for State and County Operations (DASCO), a division of the Department of Agriculture, and the hearing was conducted by telephone conference. DAS-CO upheld the decision against Gibson, but awarded Gibson partial relief. The relief took the form of a payment in bushels of corn equal in value to the 1982 cash rental per acre times the number of acres set aside in 1983 for PIK, plus an amount for costs incurred in using the acres under approved conservation use. This totalled 11,235 bushels of corn, or 3,395 bushels less than Gibson would have received in 1983 had the adverse ruling not occurred. DASCO also ruled that Gibson would not be considered the operator of the farm for 1983.

Gibson filed this suit to challenge the Secretary’s determination that he was only entitled to 11,235 bushels and that he was not the operator of the farm in 1983. Gibson argues that the Secretary’s decision was arbitrary and capricious because Man-well’s appeal came much too late under the applicable regulations. In his complaint, Gibson originally requested the following relief: (1) that the Secretary be ordered to provide Gibson with a transcript of all the oral testimony at the various administrative hearings; (2) that he be granted a de novo hearing on the facts; and (3) that the court find that Gibson is entitled to the full 100% of the 1983 PIK payments and that he was the 1983 operator of the farm. In his supplemental brief, Gibson acknowledged the receipt of 11,235 bushels of corn, and thus stated that his request for relief amounts to the following:

1. That the court find that:
a. The plaintiff is entitled to the remaining 3,395 PIK bushels;
b. The plaintiff is entitled to the $3,048.00 PIK cash payment;
c. The plaintiff is a 1983 operator;
d. A declaratory judgment be issued stating that the plaintiff does not owe the liquidated damages of $8,368.36 as set forth in Exhibit E of the Transcript;
e. The Secretary’s decision of October 5, 1983, be reversed.
2. In the alternative, that he be granted a deNovo [sic] hearing to present all the facts to this Court, at which time a transcript of the testimony can be taken.

Plaintiff’s Supplemental Brief, p. 5. The Secretary’s motion to dismiss is premised on the belief that this request for relief is a request for monetary damages in excess of $10,000.00, which would place the ease within the exclusive jurisdiction of the Court of Claims.

The starting point for the court’s jurisdictional analysis is the principle of sovereign immunity. It is well accepted that the United States cannot be sued without its consent. United States v. Testan, 424 U.S. 392, 399, 96 S.Ct. 948, 953, 47 L.Ed.2d 114 (1976). Regardless of whether the United States is named as a defendant or not, a suit is considered to be against the sovereign if “the judgment would expend itself on the public treasury or domain, or interfere with the public administration.” Land v. Dollar, 330 U.S. 731, 738, 67 S.Ct. 1009, 1012, 91 L.Ed. 1209 (1947). See Dugan v. Rank, 372 U.S. 609, 620, 83 S.Ct. 999, 1006, 10 L.Ed.2d 15 (1963). At least part of the relief sought here would operate against the United States, as Gibson seeks payment of cash and a declaration that he does not owe certain damages. That would have a direct effect on the treasury. In addition, Gibson seeks to obtain grain from the PIK program, which would have a direct effect on the public domain. Clearly, this is a suit against the United States, although it only names the Secretary.

The United States has waived its sovereign immunity in certain limited respects. The Secretary argues that the waiver set forth in the Tucker Act governing claims for monetary damages of more than $10,-000.00 is applicable here. Under the Tucker Act, subject matter jurisdiction is vested exclusively in the Court of Claims if the suit is against the United States, seeks monetary relief in excess of $10,000.00, and is founded upon the Constitution, federal statute, executive regulation, or a government contract. 28 U.S.C. §§ 1346(a)(2) and 1491. See Portsmouth Redevelopment & Housing Authority v. Pierce, 706 F.2d 471, 473 (4th Cir.), cert. denied, 464 U.S. 960, 104 S.Ct. 392, 78 L.Ed.2d 336 (1983). Here, the suit is against the United States, and is founded both upon an executive regulation (to the extent that the time period for Man-well’s appeal is governed by PIK program regulations) and upon a government contract (as Gibson is claiming his entitlement to the remainder of the PIK payments by virtue of the March 18, 1983 contract agreement with the Grant County ASCS Committee). The real issue here is whether Gibson seeks “monetary relief” in excess of $10,000.00.

It is clear that the mere form of the complaint will not control the determination of the type of relief sought; the exclusive jurisdiction of the Court of Claims cannot be avoided by simply framing the complaint to appear to seek only injunctive, mandatory, or declaratory relief. State of New Mexico v. Regan, 745 F.2d 1318, 1322 (10th Cir.1984), cert. denied, — U.S. —, 105 S.Ct. 2138, 85 L.Ed.2d 496 (1985); B.K. Instrument, Inc. v. United States, 715 F.2d 713, 727 (2d Cir.1983); Portsmouth Redevelopment & Housing Authority, 706 F.2d at 474; Amalgamated Sugar Co. v. Bergland, 664 F.2d 818, 823 (10th Cir.1981). Several different formulae exist to test the essence of the plaintiff’s claim. The Seventh Circuit has held that a claim which seeks “essentially the same relief as would be afforded on a contract claim” cannot avoid the exclusive jurisdiction of the Court of Claims merely because it is framed as a request for equitable relief. Chicago Consortium, Inc. v. Brennan, 599 F.2d 138,141 (7th Cir.1979). Other tests are: if the “real effort of the complaining party is to obtain money from the federal government,” the Court of Claims has exclusive jurisdiction, Bakersfield City School Dist. of Kern County v. Boyer, 610 F.2d 621, 628 (9th Cir.1979); if the “prime objective” or “essential purpose” is to obtain money from the federal government, Court of Claims jurisdiction is exclusive. State of New Mexico, 745 F.2d at 1322; Alamo Navajo School Bd., Inc. v. Andrus, 664 F.2d 229, 233 (10th Cir.1981), cert. denied, 456 U.S. 963, 102 S.Ct. 2041, 72 L.Ed.2d 487 (1982). To avoid the exclusive jurisdiction of the Claims Court, the equitable relief sought must have “significant prospective effect or considerable value apart from merely determining monetary liability of the government.” State of Minnesota by Noot v. Heckler, 718 F.2d 852, 858 (8th Cir.1983).

A plaintiff need not be seeking cash to fall within this exclusive jurisdiction, provided the essence of the claim is measurable in monetary terms. Thus, in another PIK case brought in the District of Colorado, the farmer-plaintiff filed suit to challenge a decision by ASCS to reduce the amount of wheat he was to receive through the program. The plaintiff sought to obtain the grain lost through the ASCS decision. The court there had little difficulty finding that the suit was one for monetary damages, subject to the Claims Court’s exclusive jurisdiction. Raines v. Block, 599 F.Supp. 196, 198 (D.Colo.1984). In effect, the Raines court viewed the grain as money, so that a suit to obtain the grain was a suit to obtain monetary damages.

This conclusion is supported by the realities present in the PIK program. Farmers do not grow their large crops (in Gibson’s case, 160 acres of corn) for personal consumption; rather, they grow them for sale and conversion into cash, thereby justifying the name “cash crop.” A PIK payment of grain serves the same purpose — it gives grain to the farmer as an incentive not to grow a crop, and can be converted into cash through sale to a grain dealer. Just as a farmer views his crop as convertible into cash, so should the PIK payment be viewed in monetary terms, as it will do little more than provide the recipient with cash once it is sold. This court therefore reads Raines as sanctioning a conversion of PIK grain payments into monetary terms for purposes of determining the district court’s jurisdiction under the Tucker Act. Thus, Gibson’s request for delivery of the 3,395 bushels of corn under the March 18, 1983 contract, which the Secretary states were valued at $3.38 a bushel at the time this dispute arose, as well as the request for a $3,048.00 PIK cash payment, places this case as a request for monetary relief in excess of $10,000.00.

The only real question is whether Gibson’s other requests for relief can be considered monetary or as falling within the Claims Court’s jurisdiction. The request that the Secretary’s decision be reversed and a de novo trial be held are at best “procedural” issues to be resolved in an adjudication on the merits of this cause. A reversal of the Secretary’s decision would be necessary for an award of the monetary relief sought here; in fact, an award of the crops and cash would in effect be a reversal of the decision. That is clearly within the Court of Claims’ jurisdiction, and would flow directly from the adjudication of the monetary claim. Likewise, the trial de novo could be an important part of the adjudication of the claim. Claims for relief which are merely incidential or subordinate to the basic suit for money do not remove the action from the Claims Court’s exclusive jurisdiction. See State of New Mexico v. Regan, 745 F.2d at 1322.

Three requests for relief in the complaint need further comment. Gibson first asks that the Secretary be required to furnish transcripts of the testimony at the various-administrative hearings. In Bakersfield City School Disk of Kern County, the plaintiff sought the disbursement of certain funds held by the government, as well as an injunction against the use of the transcript of administrative proceedings because of the alleged inaccuracies in the transcript. The presence of this issue concerning the transcript did not alter the court’s conclusion that the Tucker Act applied to the claim. 610 F.2d at 628. The state of the record below, which is one of the issues . raised by Gibson’s argument concerning the arbitrary and capricious nature of the Secretary’s decision, is to a large extent similar to the “procedural” issues discussed above. The examination of the merits of this case in the Claims Court, in the context of determining whether the decision was arbitrary so as to justify an award of the crops and cash sought, would necessarily bring this issue before the court. Gibson loses nothing by seeking this relief in the Claims Court.

The second request concerns a finding that Gibson was the operator of farm F-603 in 1983, while the third request seeks a finding that Gibson does not owe certain liquidated damages. Both of these requests are in the nature of a declaratory judgment request — in fact, Gibson calls the request concerning the liquidated damages as seeking a declaratory judgment. The Court of Claims can issue declaratory relief that is “tied to and subordinate to a monetary award.” Portsmouth Redevelopment & Housing Authority, 706 F.2d at 473, quoting S.J. Groves & Sons Co. v. United States, 495 F.Supp. 201, 209 (D.Colo.1980). In addition, a 1972 amendment to 28 U.S.C. § 1491 gave the Claims Court the limited equitable power to remand appropriate matters to any administrative or executive body or official with discretion “as it may deem proper and just.” Thus, it would be possible for the Claims Court to declare that Gibson is not liable for the liquidated damages, and to remand the matter to the Secretary with instructions to change the records to show that Gibson was the 1983 operator of the farm. In short, both of these requests áre within the power of the Claims Court to grant, so that the entire case lies within that court’s jurisdiction.

The court finds that this action is one primarily for monetary damages against the United States in excess of $10,000.00, and is therefore within the exclusive jurisdiction of the Court of Claims. The cause must be dismissed here, as this court is without subject matter jurisdiction over the claim. The Secretary’s motion to dismiss will therefore be granted.

The court also finds that it would be in the interest of justice to transfer this cause to the Court of Claims pursuant to 28 U.S.C. § 1631. A transfer will therefore be ordered.

For the reasons stated above, the defendant’s motion to dismiss for lack of subject matter jurisdiction is hereby GRANTED. This cause is hereby TRANSFERRED to the Court of Claims.


author: LUONGO, Chief Judge.

text:
    Joseph G. SENDI v. NCR COMTEN, INC.
    Civ. A. No. 84-2114.
    United States District Court, E.D. Pennsylvania.
    Oct. 25, 1985.

      David R. Black, Media, Pa., for plaintiff. Philip H. Lebowitz, Pepper, Hamilton & Scheetz, Philadelphia, Pa., for defendant.
   OPINION

LUONGO, Chief Judge.

Plaintiff Joseph Sendi brought this action claiming that his employer deprived him of earned commissions in violation of the Pennsylvania Wage Payment and Collection Law (WPCL), 43 P.S. § 260.1 et seq. Presently before me is defendant’s motion for summary judgment. Because the record reveals no genuine- issues of material fact, I will grant defendant’s motion.

The basic facts are not in dispute. Defendant NCR Comten is in the business of selling and leasing computer equipment. Plaintiff was hired by defendant’s predecessor company in 1967, and in 1981 held the position of Regional Sales Director for defendant’s eastern region. Plaintiff's compensation included commissions for sales and leases within the eastern region.

On November 2, 1981, Sendi submitted a letter of resignation, requesting a termination date of December 31. He proposed to remain at Comten for part of November and use his accumulated vacation days to cover the rest of the period. Defendant rejected Sendi’s proposal and terminated his employment as of November 6. Defendant gave him two weeks’ severance pay and a lump sum payment for 200 hours of accumulated vacation, but paid him no commissions for contracts which closed after November 6.

As a Comten employee, Sendi earned commissions under the NCR Comten Sales Representative Incentive Compensation Plan Agreement and the Regional Directors Compensation Plan Agreement (the Plans). The Plans provide that employees earn commissions on most sales and leases when Comten accepts the orders. For hardware lease or purchase contracts generating $10,000 or more of revenue, however, employees “qualify for 50% of the commission at the time the contract is accepted by NCR Comten and the Customer. The remaining 50% is payable when the equipment has been accepted by the customer and is Certified Ready for Use (CRFU) by NCR Comten.” Sales Representative Incentive Compensation Plan Agreement at 11VI. The Plans further provide that commissions “are not earned until paid” and that employees “forfeit all rights to commissions which have not been paid at termination of employment.” Id. at 111! VI, VII.

Plaintiff’s complaint rests on two grounds. First, he claims that, regardless of the Plans’ terms, he is entitled to commissions for all contracts generated by his efforts. Second, he claims Comten terminated him on November 6 rather than December 31 in order to deprive him of earned commissions.

Defendant has moved for summary judgment on the ground that plaintiff was paid all commissions which he had earned prior to his termination. Defendant also contends that plaintiff was an employee at will with no right to set his own termination date.

I. Plaintiffs Claim for Deprivation of Earned Commissions

The WPCL provides:

Whenever an employer separates an employe from the payroll, or whenever an employe quits or resigns his employment, the wages or compensation earned shall become due and payable not later than the next regular payday of his employer on which such wages would otherwise be due and payable.

43 P.S. § 260.5(a).

Plaintiff argues that he is entitled to commissions for sales made between November 6 and December 31, 1981. He alleges that he was the only eastern region Sales Director in 1981, and that he is ultimately responsible for all sales concluded during that year. He also claims he was wrongfully deprived of commissions on certain hardware contracts worth more than $10,000. In accordance with the Plans, Sendi was paid only a 50% commission on such contracts which Comten accepted before his November 6 termination date, but under which the equipment was not installed and certified ready for use until after November 6. Plaintiff seeks to recover the remaining 50%. He argues that since the WPCL requires the payment of all “wages or compensation earned” he is entitled to commissions for all contracts attributable to his labor, and that the Plans’ requirements cannot be applied to deprive him of such commissions. It is plaintiff’s contention that summary judgment is inappropriate because his claims cannot be resolved without a detailed examination of his sales efforts and a determination of what contracts are traceable to those efforts.

Plaintiff misconceives the nature of the WPCL. The statute itself does not create a right to compensation. Rather, it gives “additional protections to employes by providing statutory remedies for the employer’s breach of its contractual obligation to pay wages.” Ward v. Whalen, 18 Pa.D. & C.3d 710, 714 (C.P. Allegheny County 1981). See also Mirkin v. Cintas Corp., 538 F.Supp. 145, 148 n. 2 (E.D.Pa. 1982). The contract between the parties governs whether specific wages or commissions are “earned.” See Heimenz v. Pennsylvania Power & Light Co., 75 Pa.D. & C.2d 405, 406 (C.P. Lycoming County 1976) (whether severance pay is wages according to the WPCL depends upon the terms of the contract between the parties). See also Wilson v. Homestead Valve Manufacturing Co., 217 F.2d 792, 797 (3d Cir.1954) (under Pennsylvania law, “the compensation to which ... [an employee is] entitled depends upon the language of the employment contract”), cert. denied, 349 U.S. 916, 75 S.Ct. 606, 99 L.Ed. 1250 (1955); Marcin v. Darling Valve & Manufacturing Co., 259 F.Supp. 720, 723 (W.D.Pa.1966) (parties may by contract limit the “payment of commissions on orders placed before termination of employment”); Levan v. Royal Paper Product's, 199 Pa.Super.Ct. 505, 185 A.2d 801 (1962). It is necessary, therefore to determine whether under the Plans plaintiff earned the commissions he seeks to recover.

I note that the Plans use varying and somewhat inconsistent terms to describe employees’ entitlement to commissions. The Plans set forth when employees “qualify” for certain commissions and when other commissions are “payable,” and in the same section state that commissions “are not earned until paid.” The section following provides that employees forfeit all commissions not paid at time of termination. If the latter two provisions control, Sendi has earned no commissions not already paid and thus can recover nothing under the WPCL. In considering defendant’s motion for summary judgment, however, I will construe the Plans most favorably to the plaintiff. I will thus assume that Sendi “earned” commissions when he “qualified” for them or when they became “payable.” This reading is consistent with Comten’s actual practice and with Sendi’s understanding of the Plans. See Plaintiff’s Deposition at 74 (Dec. 14, 1984).

Even assuming plaintiff earned commissions when they became payable, I can perceive no question of fact precluding the entry of summary judgment. Plaintiff clearly has no right under the Plans to receive commissions on sales made after his termination. In addition, the Plans preclude a finding that he is entitled to more than a 50% commission on large hardware contracts when the equipment was not installed during his term of employment. The commissions plaintiff seeks were not payable under the Plans and were thus not earned for the purpose of the WPCL.

Plaintiff agreed to the Plans and his commission rights are governed by their terms, including the terms defining the conditions under which commissions are payable. I cannot accept his argument that the Plans’ provisions contravene public policy. Since the WPCL does not purport to outline what compensation is due in any particular case, a contractual restriction on when commissions are earned does not frustrate the statute’s purpose. Defendant is entitled to summary judgment on plaintiff's claim that he was deprived of earned commissions.

II. Plaintiffs Claim for Wrongful Discharge

Under Pennsylvania law, an employee is presumed to “serve[ ] at the pleasure of an employer and the relationship may be terminated by either party and at any time.” Adams v. Budd Co., 583 F.Supp. 711, 713 (E.D.Pa.1984). This presumption may be overcome by a showing that termination violated a clearly established public policy. Novosel v. Nationwide Insurance Co., 721 F.2d 894, 898 (3d Cir.1983). Moreover, an employer’s custom or practice can create additional contractual rights. Id. at 902-OS.

Plaintiff advances two separate contentions. First, he asserts that his November 6 termination violated the public policy underlying the WPCL in that Comten terminated him on November 6 for the purpose of depriving him of earned commissions. Plaintiff next asserts that Comten’s personnel policy manual entitled him to at least two weeks’ notice before being removed from the payroll.

Plaintiff’s public policy argument is without merit. As I have already discussed, the WPCL is designed to ensure that employees receive the compensation provided for in their contracts. It does not create a new right to compensation, nor does it guarantee an employee a specific term of employment. In the case of a terminated employee, the WPCL applies only to wages earned prior to termination. It “has no application to wages agreed to be paid in the future for services to be rendered in the future.” Weingrad v. Fischer & Porter Co., 47 Pa.D. & C.2d 244, 250 (C.P. Bucks County 1968).

Sendi was paid all commissions which, according to the Plans, he had earned as of November 6. He thus received everything he was entitled to under the WPCL. Sendi nevertheless complains that Comten, in order to reduce his commissions, accepted his resignation earlier than the date he had requested, December 31. By claiming that defendant’s choice of a termination date violated public policy, plaintiff in effect interprets the WPCL to grant an employee the right to earn compensation until whatever date the employee wishes to specify as his date of termination. Such an interpretation finds no support in the language or purpose of the statute.

I must also reject plaintiff’s claim that he was entitled to remain at Comten and earn commissions for at least two additional weeks. That claim is based primarily on Comten’s personnel policy manual, which states: “Employees are required to give at least two weeks written notice of termination.” In support, plaintiff has submitted evidence to show that Comten has customarily kept resigning employees on the payroll for at least two weeks.

The Third Circuit has held that summary judgment on a claim such as this is appropriate if, after the plaintiff has had an opportunity to conduct discovery, the record shows no genuine issue of material fact. Wolk v. Saks Fifth Ave., Inc., 728 F.2d 221, 224 (3d Cir.1984). After reviewing the evidence submitted, I conclude as a matter of law that the personnel policy manual does not create an enforceable contract right. The notice requirement is imposed only on employees, and is clearly a matter of convenience. The manual states that the notice is required in order to guarantee a terminating employee “timely receipt of his/her final paycheck.” The only consequence of an employee’s failure to give notice is that the final paycheck would be mailed instead of being handed to the employee on the last day of employment. Such administrative provisions in a personnel policy manual do not rise to an agreement by which the employer must abide. See, e.g., id. at 224-25; Sharon Steel Corp. v. VJR Co., 604 F.Supp. 420, motion for reconsideration denied, 603 F.Supp. 1199 (W.D.Pa.1985); Boresen v. Rohm & Haas, Inc., 526 F.Supp. 1230, 1235-56 (E.D. Pa.1981), aff'd mem., 729 F.2d 1445 (3d Cir.1984); Beidler v. W.R. Grace, Inc., 461 F.Supp. 1013, 1016 (E.D.Pa.1978), aff'd mem., 609 F.2d 500 (3d Cir.1979); Richardson v. Charles Cole Memorial Hospital, 320 Pa.Super.Ct. 106, 466 A.2d 1084 (1983).

My conclusion with regard to the notice provision is reinforced by plaintiff’s deposition testimony. Sendi, far from relying on the provision in question, was not even certain that Comten had a personnel manual and could not recall reading one. Plaintiff’s Deposition at 52 (Dec. 14, 1984). Further, he conceded that he had no agreement with Comten as to the length of his employment or the conditions upon which he could be fired. Plaintiff’s Deposition at 63-69 (Jan. 4, 1985).

The evidence concerning Comten’s practices does not mandate a different result. Plaintiff has submitted deposition excerpts, affidavits and company records to show that a number of employees remained at Comten for at least two weeks after giving notice of resignation. Such evidence is insufficient to establish that a two weeks’ notice requirement had become part of the contract between Comten and its employees. Sendi himself testified that Comten followed no set practice with regard to employees who resigned. Plaintiff’s Deposition at 57-58 (Dec. 14, 1984). Robert Hartig, Sendi’s successor, testified that whether a resigning employee would continue to receive commissions or would be terminated immediately was determined on a case by case basis. Deposition of Robert Hartig at 59-62 (May 2, 1985). Other Corn-ten officials testified that the company’s practice was to require immediate termination of employees with access to confidential information. Deposition of Dietrich Mittelstadt at 35-36 (April 25, 1985); Deposition of Edward J. Clark at 30-31 (April 25, 1985). Comten cannot be barred from exercising its judgment in individual cases merely because it has permitted certain employees to remain after submitting their resignation.

Sendi voluntarily submitted his resignation on November 2, after accepting a position with another company engaged in the same business as Comten. As his resignation letter shows, he was fully aware of the sales activity that would occur in December and he hoped to benefit from that activity even though he was leaving the company. Nothing in the WPCL or Comten’s policies and practices compelled Comten to accept Sendi’s proposal or to pay him commissions he had not earned under his contract. Defendant’s motion for summary judgment will be granted as to plaintiff’s claims for wrongful discharge and deprivation of earned commissions.


author: LEAHY, District Judge.

text:
    SPRAGUE ELECTRIC CO. v. CORNELL-DUBILIER ELECTRIC CORPORATION.
    Civ. A. No. 364.
    District Court, D. Delaware.
    Aug. 7, 1945.
    Rehearing Denied Sept. 13, 1945.

      See, also, 4 F.R.D. 113.
    The present suit is bottomed on several causes of action. An action is alleged under §§ 1 and 2 of the Sherman Act and §§ 4 and 16 of the Clayton Act; another action is alleged under the Declaratory Judgment Act. The controversy centers about a suit for unfair competition brought by Cornell-Dubilier against Sprague in the Massachusetts state court. Each of the parties here moves against the other for summary judgment. The facts are taken from the complaint, the affidavits and depositions.
    Sprague, a competitor of Cornell-Dubi-lier, was sued in Massachusetts in May, 1941. The following year Cornell-Dubilier sued three of its other competitors. All the parties manufacture electrical condensers. They are the largest in the industry and their combined production represents more than half of the condensers sold in the United States. The device is an indispensable element of radios, telephones, airplanes, trucks, submarines, tanks, direction finders, etc. Practically all condensers manufactured by the parties are sold to the government. Production demands have sharply increased. Personnel has doubled, but there still remains a labor shortage. Executive and key operating personnel are required to give their undivided attention to production schedules.
    Plaintiff charges that the suits brought by defendant seek to enjoin plaintiff and other competitors of defendant from carrying on their manufacturing operations and to recover heavy damages. These actions, especially the one against plaintiff, require the attention of executives and key production men at a time when their attention is required by war work, with a resultant interference with both production and research, all of which damages the reputation and competitive position of plaintiff. The suit against plaintiff (which is typical of the suits against defendant’s other competitors) is based upon alleged breaches of contract by former employees of defendant, who are now in plaintiff’s employment and who are alleged to have disclosed numerous trade secrets of defendant to the new employer who has made use of such trade secrets, in violation of an employer-employee contract. Plaintiff hired Brafman after he left defendant’s employ. This is the basis of the Massachusetts suit by defendant against plaintiff.
    Plaintiff charges that the employer-employee contracts used by defendant are in restraint of trade and therefore illegal; and the attempt to enforce them is a violation of the antitrust laws.
    The relief sought here on account of the alleged groundless action brought in Massachusetts is for a money judgment for treble damages and an injunction restraining the action in the state court, or, for declaratory judgment relief that defendant has no cause of action against plaintiff in Massachusetts and for an injunction against further prosecution of the Massachusetts action.
    Arthur G. Connolly, of Wilmington, Del., for plaintiff.
    Caleb R. Layton, III (of Hastings, Stockly & Layton), of Wilmington, Del., and Thomas F. Daly and Helen H. Robinson (of Lord, Day & Lord), both of New York City, for defendant.

       15 U.S.C.A. §§ 1 and 2.

       15 U.S.C.A. §§ 15 and 26.

       28 U.S.C.A. § 400.

       Whereas, Harold E. Brafman, residing at 89 Mercer Avenue, North Plainfield, State of New Jersey, is employed by Cornell-Dubilier Electric Corporation, a Delaware corporation, hereinafter termed the Corporation and in the course of his employment has and will become familiar with various processes, products and apparatus used by or manufactured by or under development by the Corporation, and it is probable that he will make inventions and improvements in such lines in which inventions and improvements the Corporation desires all right, title and interest:
      Therefore, in consideration of $1.00, the receipt of which is hereby acknowledged, and in consideration of the knowledge of the art which he will acquire by reason of his employment by the said Corporation and of other good and valuable considerations moving from the Corporation to him:
      1. He agrees to assign and does hereby assign to said Corporation, its successors or assigns, all right, title and interest in and to any and all inventions, improvements or discoveries he may have made or suggested since he entered the employ of the Corporation whether or not made during the ordinary course of his employment.
      He agrees that the inventions, improvements or discoveries referred to in the above paragraph include all inventions, improvements or discoveries which the Corporation shall deem to be useful or to become useful to the business of the Corporation and whether such invention, improvement or discovery was made as a result of direct assignment to make such invention or otherwise.
      He further agrees that when requested by the Corporation and at its expense either during his employment or at any time thereafter to execute United States and foreign applications for any and all such inventions, improvements and/or discoveries which were made within the period of time above stated, these inventions to be and remain the property of the Corporation or its assignees, whether patented or not and that he will without further compensation other than such, if any, as the Corporation may see fit to make voluntarily and in its own arbitrary discretion, execute individual assignments thereof to the Corporation and also execute any further papers it may deem necessary to effectuate the purposes of this agreement and will cooperate with the Corporation to secure to it patent protection on all such inventions, improvements and discoveries, such cooperation to include the prompt disclosure of all the facts, the production of all papers relating to such inventions and improvements and the performance of all acts necessary to complete such inventions, improvements and discoveries and the willingness to testify in interference or other proceedings to the facts of and surrounding the making of such inventions, improvements and discoveries.
      2. He further agrees that he will not at any time during said employment disclose to anyone any information that he may acquire during said employment relating to any of the processes, formulae, plans, circuits, devices or methods, developed, acquired, manufactured or practiced at any time by said Corporation In its business, and he will not use any of said processes, formulae, plans, circuits, devices or methods or his knowledge of the same except in tbe course of bis employment by the Corporation.
      3. He hereby covenants and agrees that he has not executed and will not execute any agreement in conflict herewith.
      In Witness Whereof he has hereunto set his hand and seal this day of November 3,1939.
      Harold E. Brafman.

   LEAHY, District Judge.

It is best to give each party’s version of the story:

1. Defendant’s. Before January, 1941, Brafman was employed by defendant as a foreman in its mica transmitting condenser department, where he learned many of the defendant’s formulae, secret processes and methods of manufacture of these condensers. At a time when plaintiff was not manufacturing these devices, he told defendant’s officers that plaintiff had offered him, at a considerable increase in salary, employment if he would take charge of the new condenser department which plaintiff intended to set up. Defendant then raised Brafman’s salary twice; but on January 27, 1941 he entered the employ of the plaintiff. Defendant, having reason to believe that Brafman had made disclosure to plaintiff of defendant’s trade secrets, on May 29, 1941 commenced its action in the Superior Court of Berkshire County, Massachusetts, against both plaintiff and Brafman for damages and for an injunction restraining plaintiff from using any of the trade secrets. Defendant claims that it was compelled to take this action not alone against plaintiff in Massachusetts, but also against three other manufacturers of condensers who had hired persons who were formerly employees of defendant. According to defendant, in each of these situations the circumstances indicated that its former employees, so hired, were chosen for their knowledge of defendant’s trade secrets. The other suits are: Defendant v. Micamold Radio Corporation and six individuals in the Supreme Court of the state of New York, County of Kings; Defendant v. Solar Manufacturing Corporation and one Greenberg in the New Jersey Court of Chancery; and Defendant v. Aerobox Corporation and one Gardner in the Superior Court of Bristol County, Massachusetts.

2. Plaintiff’s. Four years have elapsed since the institution of the Massachusetts suit. 70 days have been devoted to the examination of defendant’s witnesses before a Special Master. Defendant’s prima facie case has not been completed. Plaintiff claims that several years may well elapse before any decision is finally rendered in the Massachusetts action. Plaintiff claims that defendant has indulged throughout in dilatory practices. This manner of prosecuting the suit against plaintiff, plaintiff charges, plus the highly speculative grounds supporting that suit, and the fact that three other similar suits against other large competitors have been filed, supports the conclusion that defendant’s real purpose in instituting the Massachusetts action was not to protect its trade secrets but rather to intimidate its former employees and competitors in order to restrain trade and attempt to create a monopoly in the industry.

Declaratory Judgment Relief

It is the present view that the Declaratory Judgment Act furnishes an additional remedy which may not be withheld because of the pendency of another suit. Dominion Elec. Mfg. Co. v. Weigand Co., 6 Cir., 126 F.2d 172; Employers’ Liability Assur. Corp. v. Ryan, 6 Cir., 109 F.2d 690; and Rule 57 of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c. Although the parties may be before the Massachusetts cou'rt on certain issues, jurisdiction has likewise attached here because there can be no denial but that the parties are in an actual controversy and there are issues present here which are not present in the Massachusetts suit. The single question under this branch of the case, however, is what form that relief should take.

For 15 years or more each of defendant’s employees has been compelled to sign the uniform type of agreement, a copy of which may be found in footnote 4, supra. It would appear that approximately 8000 employees are bound by this agreement. The first section of the agreement fixes the relationship between employer vis-a-vis employee with respect to all inventions and discoveries made by the employee. The second section deals with any processes, formulae, plans, methods, etc., with which the employee becomes familiar during his tenure of employment. The suit against plaintiff and the other of defendant’s competitors is based upon the second section of the agreement.

On many occasions, officers of defendant have advised its employees that the effect of the agreement is that if they should leave defendant’s employ they are prohibited from using any information they may have acquired about “any of the processes, formu-lae, plans, circuits, devices or methods developed, acquired, manufactured or practiced at any time” by defendant. The agreement contains many of the vices condemned by courts in similar situations. First, the prohibitions continue for the lives of the employees. Then, there is no limitation on the kind of knowledge acquired while in defendant’s employ. There is no distinction between information that was old and well known, whether it was described in patents owned by others than defendant, or whether it pertains to material appearing in technical publications. The testimony of one of defendant’s officers indicates that it makes no difference whether the employee was thoroughly familiar with the information before he went to work for defendant.

As defendant’s principal place of business is located in New Jersey and the contracts were entered into therein, under Stentor Electric Mfg. Co. v. Klaxon, 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477, we refer to the Delaware conflict of law rule and, in doing so, we find Maberry & Pollard v. Shisler, 1833, 1 Harr., Del., 349; MacKenzie Oil Co. v. Omar Oil & Gas Co., 34 Del. 435, 154 A. 883; and Phoenix Oil Co. v. MacKenzie Oil Co., 34 Del. 460, 154 A. 894; these cases show that Delaware courts in following the general conflict of law rule look to the place of contracting to determine the validity of the contract. Thus, Delaware would hold that under a situation such as is present here the law of New Jersey should determine the validity of the contract in question.

Before applying the New Jersey law to the employment contract, consideration must be given to the scope and construction of that contract. It is quite clear that the contract goes beyond the protection of trade secrets and embraces anything that the employee saw or learned during his employment. This is not only the plain meaning of the language used, but what is probably more important, the parties’ actions, as appear from the depositions, are in accordance with this construction of the agreement. The agreement, given this construction, puts a restraint upon the employees’ right to labor or exercise their skill greater than is necessary for the fair protection of the defendant and, therefore, such agreement is unenforceable by injunction under New Jersey law. This is the theory of Sternberg v. O’Brien, 48 N.J.Eq. 370, 22 A. 348, 349, which is the leading New Jersey authority. In that case the Vice Chancellor said: “The law is settled that a contract in .restraint of labor, which seeks to prevent •one of the contracting parties from exercising his skill or labor generally, without limitation as to place or time, or which attempts to put a restraint upon his right to labor or to exercise his skill greater than is necessary for the fair protection of the other party to the contract, is void.” The agreement sub judice violates both of the .conditions set forth by the Vice Chancellor.

■ The more recent case of Tribune Association v. Simonds, N.J.Ch., 104 A. 386 is not only inapplicable but is also not inconsistent with Sternberg v. O’Brien, supra. In the Tribune case defendant entered into an exclusive contract to serve as an editorial writer and agreed not to write for any publication in competition with plaintiff during the term. Before the expiration of the contract he left the plaintiff’s employ and began to write for a competitor. It appeared that plaintiff had spent over $35,000.00 in exploiting the defendant and that he occupied a unique position among writers upon World War I. The court allowed the injunction because the hardship upon plaintiff if left to its remedy at law was great. In fact, the hardship on plaintiff was so great that the court might have been justified in granting the injunction even though the services of the defendant were not unique.

In this type of case an interesting question arises: Where the restraint imposed is unreasonable, should a court of equity enforce the agreement to the extent that it is reasonable ? Although an increasing number of jurisdictions take the view that they will enforce that part of the agreement which is reasonable, New Jersey seems to have answered the query in the negative. See Sternberg v. O’Brien, supra, and Driver v. Smith, 89 N.J.Eq. 339, 104 A. 717. Although the New Jersey cases say that an agreement imposing unreasonable restraint is void, it is nevertheless clear from other language in the same opinions that the court merely means that such agreements are unenforceable in equity. The cases do not hold that such agreements are so tainted with illegality as to preclude an action at law for damages; in fact, it is assumed in cases where injunctions have been denied that an action at law may be maintained. The declaratory judgment relief to be granted in this case must be limited to the prevention of suits for injunction of an equitable nature. There is no authority in this court to enjoin an action at law for damages. Hence, defendant will be enjoined from seeking equitable relief in the Massachusetts court and any other court based upon the employment contract.

Violation of the Antitrust Laws

Plaintiff’s action for treble damages is based on the charge that defendant instituted the Massachusetts suit for the purpose “of thwarting and circumventing the anti-trust laws”. There is no question but that the Massachusetts action could be enjoined because the complaint here pleads a cause of action under the antitrust laws and exclusive jurisdiction under these statutes is given to the United States District Courts. Such was the situation in Katz Drug Co. v. Sheaffer Pen Co., D.C., 6 F. Supp. 212, 214, where the district court enjoined an action in the state court in Iowa. There the court said:

“Under the law, the plaintiff cannot interpose its defense in the Iowa suit. The statute specifically limits injunctive relief to courts of the United States in all cases of anti-trust law violations. General Investment Co. v. Lake Shore & M. S. R., 260 U.S. 261, loc. cit. 287, 43 S.Ct. 106, 67 L.Ed. 244. The plaintiff in this case could not obtain the relief to which it claims it is entitled in the Iowa proceeding.

“Moreover, according to the bill, the prosecution of the Iowa case, although innocent within itself, would aid the defendant in carrying out its plan to maintain prices in violation of the anti-tru'st laws.”

' But, there is no evidence here that defendant has intended to maintain any illegal monopoly. So, too, there is an absence of facts pointing to an intent to restrain or an actual restraint on any part of goods in interstate commerce. The only allegations which are directed at violation of the antitrust laws aver that by reason of the institution of the Massachusetts suit it has been necessary for plaintiff’s key personnel to be in attendance at the hearings before the Master appointed to determine the issues, with the result that its production operations have decreased and its ability to compete with defendant in the manufacture and sale of condensers has been impeded. The mere declaration that defendant has also sued three other manufacturers of electric condensers which must have likewise lessened their production is not sufficient to show a restraint on commerce as that term is used in the antitrust laws. But, assuming it to be the fact that there has been a decrease in production, acts done to prevent production do not necessarily mean an interference with interstate commerce. Apex Hosiery Co. v. Leader, 310 U.S. 469, 60 S.Ct. 982, 84 L.Ed. 1311, 128 A.L.R. 1044. Even a tortious prevention of manufacture is merely an indirect or remote restraint under the rule of Standard Oil Co. of New Jersey v. United States, 221 U.S. 1, 31 S.Ct. 502, 55 L.Ed. 619, 34 L.R.A.,N.S., 834, Ann.Cas. 1912D, 734, and United States v. American Tobacco Co., 221 U.S. 106, 31 S.Ct. 632, 55 L.Ed. 663; Loewe v. Lawlor, 208 U.S. 274, 28 S.Ct. 301, 52 L.Ed. 488, 13 Ann.Cas. 815. Hunt v. Crumboch, 3 Cir., 143 F.2d 902, 904, affirmed 65 S.Ct. 1545, states: “With the right of the plaintiffs to recover in some other action upon some other theory we have no concern. All that is before us is whether they have brought themselves within the purview of the Sherman Act.” Here, the record is bare of any evidence that there was an intent to monopolize the supply of electric condensers, control of their price or to discriminate between potential customers. There was, for all practical purposes, only one customer and that was the government of the United States of America and as for prices, they were, in the main, determined by ceilings fixed by OPA.

Moreover, the mere institution of suit against a competitor does not bring one within the prohibitions of the antitrust laws. International Visible Systems Corp. v. Remington-Rand Inc., 6 Cir., 65 F.2d 540; Glenn Coal Co. v. Dickinson Fuel Co., 4 Cir., 72 F.2d 885. If defendant here was of belief that his trade secrets were in jeopardy he did nothing more, in instituting suit in Massachusetts, than select a lawful method of protecting his claimed property. While it has been determined that defendant should be enjoined from attempting to enforce the negative provisions of the employee contracts in equity, the mere maintenance of suits at law for breach of contract can hardly be said to be sufficient to support and maintain a claim for treble damages for violation of the antitrust laws.

Allegations of Irreparable Injury

Plaintiff argues further that since the Massachusetts suit will cause irreparable injury to plaintiff, this cou'rt should enjoin the state suit under its general equitable powers. The irreparable injury is claimed to arise because plaintiff’s production and research are impaired, as a result of the necessity of attendance in court of witnesses and the production of important documents. The suit, so plaintiff claims, has damaged its relationship with the government and its other customers. These injuries are said to be of a serious nature, not only from the standpoint of plaintiff’s reputation in bu'siness, but also because the delay will interfere with the production of essential materials for the United States government in the prosecution of the war. Plaintiff relies on numerous cases where a federal court, under its general equitable powers, has enjoined parties from proceeding in actions in the state courts. But, in all of these cases there was some act which had independent legal significance apart from hardship incident to any suit in a state court. Plaintiff’s arguments here would apply to any suit against a company engaged exclusively in important war work, and if plaintiff were right, no action could be maintained against any such company. In Driver v. Smith, 89 N.J.Eq. 339, 104 A. 717, 720, which arose in connection with the first World War, the cou'rt held that in an action strictly between individuals, the court will not refuse to hear a party’s cause merely because the effect of granting him relief may be embarrassing to the party against whom the relief is granted and who is engaged in the performance of war work. During the course of the opinion the court said: “So long as the courts are open the rights of parties must be determined by the existing law. It would be an intolerable situation if each court before whom the rights of individuals were litigated were permitted to determine * * * whether the granting or withholding relief would aid or injure the government in its war activities, and it would be still more intolerable were the courts permitted to base their opinion upon written statements of officers of the army, no matter how high their rank. The general government does not have to depend upon the favor of courts. Its power is limited only by such constitutional inter-dictions as remain in force during war. If the effect of a decree of the court, rendered under existing law, be to embarrass the government, the fault lies either with the Constitution or the legislative branch of the government for failure to confer sufficient power upon its executive or upon the executive for failure to have exercised power conferred. So far as the present case is concerned there is no lack of power to remedy any harm which may be occasioned to the government by the enforcement of a decree of this court if it should be granted. Under existing law it has full and complete authority to take over and operate through its own agents any essential war industry. The time has not yet arrived where courts will permit the appropriation of the property of one by another upon the plea that the other needs the property for war purposes.”

Today, in this war the government has means to protect its vital interests under the existing law, and that protection does not depend upon the uncertain alertness of any party litigant purporting to act in its interest. What plaintiff really says under this head of the case is that the suit in Massachusetts is annoying and to plaintiff a live nuisance. But these are always the dangers which flow from litigation. It is a threat which threatens each one of us. There is no merit in the contention made by the plaintiff in its appeal to have the cou'rt exercise its general equity powers in favor of' plaintiff by enjoining the Massachusetts suit.

Orders on the motions for summary judgment filed by each of the parties may be submitted.

On Petition for Reargument.

Defendant suggests that the court’s opinion has failed to consider several points of critical importance, i. e., because it does not consider the validity of the New York contract between Brafman and defendant, and because in interpreting the application of the New Jersey law to the New Jersey contract, the opinion fails to correctly appraise an implied contract not to disclose trade secrets. Defendant claims that in any event later New Jersey cases are in variance with the court’s interpretation of Sternberg v. O’Brien, 48 N.J.Eq. 370, 22 A. 348; and, moreover, the later cases enforce the implied contract not to disclose trade secrets, even though the main agreement is too broad. In support of this view reliance is on Credit Rating Service, Inc., v. Charlesworth, 126 N.J.Eq. 360, 8 A.2d 847; Taylor Iron & Steel Co. v. Nichols, 73 N.J.Eq. 684, 69 A. 186, 24 L.R.A.,N.S., 933, 133 Am.St. Rep. 753; and Trenton Potteries Co. v. Olyphant, 58 N.J.Eq. 507, 43 A. 723, 46 L.R.A. 255, 78 Am.St.Rep. 612.

I think the opinion necessarily holds, and I now specifically hold, that the New York contract between Brafman and defendant merged into the later New Jersey contract, and that all implied covenants or contracts were also merged into the later written New Jersey contract. Where parties specifically contract with respect to a subject on which the law implies a contract, the terms and provisions of the written specific contract control so long as no other rule of law is violated. This principle is supported by Taylor Iron & Steel Co. v. Nichols, 73 N.J.Eq. 684, 69 A. 186, 24 L.R.A.,N.S., 933, 133 Am.St.Rep. 753, upon which defendant itself places much reliance. I do not think that later New Jersey cases weaken the rule of Sternberg v. O’Brien, 48 N.J.Eq. 370, 22 A. 348. The principle for which Sternberg v. O’Brien is cited is — as defendant claims and as this court recognized in its opinion — dictum in that opinion, but that dictum has been followed in later New Jersey decisions and Sternberg v. O’Brien is still considered the leading case. It is true, of course, that where the subject matter of the contract is readily divisible, courts will specifically enforce that part which is not in restraint of trade. But the contract in suit is not readily divisible and hence no part of it may be enforced in equity. ¡

The case of Taylor Iron & Steel Co. v. Nichols, 73 N.J.Eq. 684, 69 A. 186, 24 L.R.A.,N.S., 933, 133 Am.St.RepI 753, may at first blush impel a conclusion at war with the one reached here. In that case the agreement of employment forbade defendant from disclosing any knowledge which he might have relating to making steel which had been used in the plaintiff’s plant whether it was a matter of common knowledge or not. The Court held that the necessary result of the enforcement of the contract would be that the defendant must either work for the plaintiff or remain idle, and further held that the^contract was an unreasonable restraint and refused to enforce it. The Court also held that there was an implied contract arising from the confidential relationship of the parties that defendant would not disclose plaintiff’s trade secrets, and it remanded the case so that the Vice Chancellor might determine what the plaintiff’s trade secrets were in order that the defendant might be enjoined from disclosing them. I think defendant here misinterprets the opinion because the only trade secrets subject to the implied agreement were secrets not covered by the specific contract. In the case at bar, on the other hand, I have interpreted the agreement to be all-inclusive and that it applies to all knowledge acquired from working with defendant and all trade secrets. I am accordingly of the opinion that the written New Jersey agreement is not divisible and that no part of its negative covenants can be enforced in equity.

Defendant complains further of the opinion because it is not clear whether it is intended to apply to similar employment contracts (involving defendant and other persons wholly unrelated to the suit at bar) which were entered into in states other than New Jersey and which admittedly were not merged into any New Jersey contract. If the.opinion may be interpreted this way, it is, of course, too broad, and I now specifically hold that defendant is simply enjoined from attempting to enforce in equity the written New Jersey contract between it and Brafman. It was not intended in the opinion to pass upon the validity of other employment contracts governed by the laws of states other than New Jersey, or of any other contract between defendant and persons not parties here.

Defendant further argues that since the court found that there was no violation of the anti-trust laws it lacks jurisdiction because there was no affirmative finding that jurisdictional amount of $3,000 was involved. The complaint alleged the amount in controversy exceeded the jurisdictional amount. This was not disputed by defendant. And what is more important, the depositions and the nature of the action plus the allegations of the complaint are sufficient to show that the suit, involves much more than the jurisdictional amount. Defendant further charges that the opinion is erroneous since once the court found no violation of the anti-trust laws it is without power to enjoin the proceeding in the Massachusetts Court or in any other court by virtue of Sec. 265 of the Judicial Code, 28 U.S.C.A. § 379. This argument is obviously without merit for there is no intention of enjoining the Massachusetts Court or any other court; the injunction will simply operate on the defendant.

I have carefully considered the other arguments made by the defendant in its Petition for Reargument, but have rejected them as being without merit. The Petition for Reargumcnt is accordingly denied.

       What parties do under an agreement is an important aid in arriving at the paramount question of intent. See Attorney General v. Drummond, 1 Drury and Warren 353, 368, where Lord Chancellor Sugden said: “Tell me what you have done under such a deed and I will tell you what the deed means.”

       The discussion of the unenforceability in equity of an agreement imposing too broad a restraint is actually dictum, in Sternberg v. O’Brien because Vice Chancellor Van Fleet construed the agreement as not imposing the broad restraint claimed by plaintiff, but the excellent analysis of the Vice Chancellor has been repeatedly followed in New Jersey and may be accepted as settled New Jersey law. See, for example, Driver v. Smith, 89 N.J.Eq. 339, 104 A. 717.

         See for example tlie Delaware view as represented by Capital Bakers v. Leahy, 26 Del.Ch. 407, 178 A. 648.


author: GIBSON, District Judge.

text:
    BOWLES, Price Administrator, v. STRANO et al.
    Civil Action No. 4826.
    District Court, W. D. Pennsylvania.
    Sept. 4, 1945.
    John A. Metz, Jr., William S. Doty, Robert B. Greer, and Henry Mustin, Attys., Office of Price Administration, all of Pittsburgh, Pa., for plaintiff.

      Myron E. Rowley, of Aliquippa, Pa., for defendants.
   GIBSON, District Judge.

The coiirt, after hearing and consideration, makes the following Findings of Fact and Conclusions of Law:

Findings of Fact

1. On February 24, 1945, Stephen M. Tkatch and Anna V. Tkatch entered into an agreement with Domenick Strano and Agata Strano for the sale of a certain property in Harmony Township, Beaver County, Pennsylvania. The total purchase price was $22,500, and the first payment was to be made on or before June 1, 1945. By an agreement made part of the agreement of sale the vendors, Stephen M. and Anna V. Tkatch, were given the option of remaining in the house for one month, and no longer, after June 1, 1945, on condition that they pay a rental of $110 and deliver an agreement wherein they agreed that they were not lessees in the ordinary sense of the word and waived all provisions of the O. P.A. Rent Control Regulations and submitted themselves to the local rules for eviction of tenants.

2. Owing to delays of the vendors the sale was not consummated until July 3, 1945, when the vendees tendered the balance of the purchase money, $17,500 which was accepted by the vendors. At that time, and pursuant to such payment, an agreement was entered into by which it was provided that the vendors were unable to vacate the premises immediately, but contracted to deliver possession by August 1, 1945, and waived all O.P.A. provisions and consented to the local remedies for eviction of tenants.

3. The vendors, although notified, failed to deliver possession of the premises in question on August 1, 1945, as they had agreed, and thereupon the vendees instituted an amicable action of ejectment in the Court of Common Pleas of Beaver County, Pennsylvania, for the purpose of ejecting them.

4. On August 23, 1945, Chester Bowles, Price Administrator, through the Area Rent Director of the Pittsburgh Defense-Rental Area, filed a demand for a temporary restraining order, to be followed by preliminary and final injunction, enjoining Domenick Strano and Agata Strano from proceeding with their ejectment action and for a mandatory injunction requiring them to move the Court of Common Pleas of Beaver County to strike from its records, at their costs, the alleged unlawful judgment at No. 147 September Term, 1945, D.S.B.

5. No interest of the United States is adversely affected by the eviction order.

6. Upon the date fixed for hearing upon the prayer for temporary restraining order the parties agreed to a final hearing of the matter.

Conclusions of Law

I. Judgment should be entered for defendants.

II. While the agreement between the vendors and vendees was described in part as a lease, its actual character was qualified by the exhibit attached thereto and made part thereof, and was an agreement between the vendors and vendees which was not under the jurisdiction and control of the Price Administration office or of the Area Rent Director for the Pittsburgh Defense-Rental Area.

III. The vendors having accepted the final payment for the premises in question, and at the same time having formally agreed to deliver possession on August 1, 1945, are estopped from seeking the powers of the O.P.A. and the Area Rent Director to enable them to violate their contract and maintain their possession of the premises conveyed in violation of their contract.

' IV. The equitable jurisdiction of this court should not be exhorted or sought on behalf of persons when the ultimate effect of the exercise of it would be to enable such persons to violate their contract and thereby cause damage to other persons who had entered into and relied upon their said contract.

V. The plaintiff is not entitled to claim the exercise of the equitable powers of the court under the case as presented.

VI. The plaintiff's case is without equity, and the prayer for injunction is denied.

Discussion

As the court views the facts as admitted at the hearing, it is asked to exercise its equitable jurisdiction to the ultimate benefit of vendors who are trying to ignore their agreement. This agreement was based upon a payment to those persons of $17,500. True, the action is brought by the local counsel for the Price Administrator. Their action is based upon their technical interpretation of an agreement which is not in accordance with the court’s interpretation of it. Even if the court is mistaken and counsel are right as to the interpretation, the effect of an injunction would be to aid a violator of an agreement and to further injure the other party to it. In the exercise of a sound discretion such a result should not be sought by O.P.A. representatives, and certainly was not contemplated by the power to make regulations conferred upon them by law.

The counsel for the Price Administrator, when queried by the court, admitted in effect that the position of the O.P.A. was technical, and that the chief offense of the defendants was the failure to bow to the jurisdiction of the Rent Director by undertaking to avoid consequent delay by their own interpretation of the agreement between vendors and vendees.

The injunction demanded will be denied.