text:
    Howard B. PETERSON, III, Plaintiff, v. AIR LINE PILOTS ASSOCIATION, Defendant.
    No. C-80-341.
    United States District Court, M.D. North Carolina, Winston-Salem Division.
    Nov. 18, 1985.

      Hamilton Horton, Winston-Salem, N.C., and Robert F. Gore, Springfield, Va., for plaintiff.
    Gary Green and James W. Johnson, Washington, D.C., and Dan S. Walden, Winston-Salem, N.C., for defendant.
   MEMORANDUM OPINION AND ORDER

EUGENE A. GORDON, Senior District Judge.

This case comes before the court on defendant’s motion for summary judgment. Briefly, plaintiff is an airline pilot who, from May 1977 until January 1979, served as a “replacement pilot” for Wien Air Alaska. During this period defendant Air Line Pilots Association (ALPA) and Wien were engaged in a bitter strike that was finally resolved after intervention by the President of the United States. As part of the agreement that ended the strike, the striking pilots replaced those nonunion pilots who had flown during the strike. The nonunion pilots were furloughed pending their recall as vacancies arose, and ALPA agreed not to take any retaliatory action against them. In May 1979, Peterson contracted to fly for Piedmont Aviation, Inc. and began flying as a first officer on June 16, 1979. No written contract was executed, but Peterson’s rights and responsibilities were set out in the Piedmont-ALPA collective bargaining agreement (CBA), to which he was subject. Under the terms of the CBA Peterson was to fly as a probationary employee for the first twelve months of his employment, during which time he was to be liable to dismissal at the discretion of Piedmont.

Peterson flew without incident until July 19, 1979, when, at the inquiry of a Piedmont pilot with whom he was flying, he confirmed that he had flown for Wien during the strike. During the next two weeks Peterson was subjected to sporadic harassment — he was insulted and refused permission to pilot the aircraft in flight. In the first days of August, Peterson called Piedmont’s headquarters in Winston-Salem and spoke with Captain Saunders, the Senior Vice-President for Operations, about the problem. Saunders invited Peterson to come to Winston-Salem and Peterson accepted. On or about August 3,1979, Peterson met first with Saunders and next with Captain Sharp, the Director of Flight Operation and Acting Staff Vice-President for Flight Operations. Exactly what transpired during these meetings is disputed, but the result was that Peterson was removed from active flight status, and for the next three months received his salary from Piedmont while he searched for a new job. He began flying for Coleman Air Transport Company on October 1, 1979.

Peterson contends that Piedmont fired him under pressure from ALPA, which had allegedly staged a surreptitious slowdown of flight operations. Furthermore, Peterson alleges that this slowdown was part of a much larger conspiracy by ALPA to punish all those pilots who flew for Wien during the strike. Peterson originally sued Piedmont and certain individual pilots, as well as ALPA. Against Piedmont he alleged claims for breach of contract, breach of duty of good faith and fair dealing, and violation of the Railway Labor Act, 45 U.S.C. § 151 et seq. (RLA). Against ALPA and the individual pilots he alleged claims for conspiracy, blacklisting, and intentional interference with a contractual relationship, and against ALPA he alleged a claim for breach of its duty of fair representation (DFR).

This court has previously ruled that the RLA preempts the state claims, thus mandating dismissal of the individual pilots and all claims for punitive damages against ALPA. Peterson v. Air Line Pilots Association, No. C-80-341-WS (M.D.N.C. Jan. 27, 1983) (memorandum opinion). At that same time ALPA’s motion to remove the case from the jury calendar was denied, and plaintiff’s motion to amend his Complaint to include Piedmont in his DFR claim was granted.

Shortly thereafter, by Order entered August 11, 1983, defendant’s motion to strike plaintiff’s Second Amended Complaint was granted, and plaintiff filed a Third Amended Complaint on August 19, 1983. Subsequently, defendants ALPA and Piedmont moved for summary judgment on the remaining claims based on DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983), which had been decided during the pendency of this case. In DelCostello the Supreme Court held that the six-month statute of limitations in Section 10(b) of the National Labor Relations Act, 29 U.S.C. § 160, applies to actions brought by an employee jointly for breach of contract against the employer and for breach of the duty of fair representation against the union. Determining that DelCostello applied retroactively to the subject case, this court concluded that Peterson’s action was time-barred and should be dismissed with prejudice. Peterson v. Air Line Pilots Association, No. C-80-341-WS (M.D.N.C. Jan. 19, 1984) (order granting summary judgment).

While Peterson’s appeal was pending, he and Piedmont negotiated a settlement and Peterson dismissed his claim against Piedmont in exchange for a sum of money. Subsequently the Fourth Circuit Court of Appeals determined that, by not pleading the statute of limitations until three years after Peterson’s initial complaint, ALPA had waived its right to rely on that defense. Thus, the Court of Appeals reversed this court’s dismissal of Peterson’s action. In the same opinion the Court of Appeals affirmed the dismissal of Peterson’s state-law claims and his claims for punitive damages. Peterson v. Air Line Pilots Association, 759 F.2d 1161 (4th Cir.), cert. denied,-U.S.-, 106 S.Ct. 312, 88 L.Ed.2d 289 (1985).

On remand defendant ALPA has once again moved for summary judgment. ALPA argues, first, that Peterson forfeited his claim by refusing reinstatement at Wien; second, that Peterson should not be allowed to claim as damages lost future earnings; third, that Peterson’s settlement with Piedmont bars recovery against ALPA; fourth, that since damages are not recoverable and the remaining claims for relief are equitable in nature, jury trial is inappropriate; and fifth, that Peterson’s claim for attorney’s fees should be dismissed. After considering the briefs and affidavits submitted by the parties and all matters of record, the court concludes that summary judgment should be denied on each ground raised by defendant.

1. Refusal to Return to Wien

It is undisputed that Peterson was offered a permanent position as a pilot with Wien Air Alaska, beginning March 1981, and that he declined. ALPA contends that any claim for damages by Peterson is truncated at that point.

Peterson had worked for Wien as a B-737 co-pilot for almost two years during the ALPA strike and, according to the ALPA-Wien collective bargaining agreement, was entitled to be recalled by Wien as soon as a vacancy arose, in accordance with his accumulated seniority. After he left Piedmont under the circumstances disputed in this case, Peterson worked briefly for Coleman Air Transport Company in Illinois, and then moved to Las Vegas to fly for E.G. & G., Inc. In March 1981, when he was recalled by Wien, Peterson was earning $36,000 per year at E.G. & G.; at Wien he would have earned approximately $33,000 initially, but would shortly have received a raise to approximately $40,000. Peterson refused the Wien recall, however, because he claims that he was assaulted and beaten during the strike, that he had suffered harassment while at Piedmont, and that he knew of other incidents of harassment and vandalism against pilots who had flown during the strike and since been recalled to Wien. Although ALPA contends that it would be unreasonable to presume that the animosities of the strike would continue even after the strike had ended, it seems eminently reasonable that an employee who had suffered such indignities, especially one who had confronted this powerful union by filing suit, would continue to suffer abuse from ALPA members.

An employee is under a duty to make a reasonable effort to secure interim employment to mitigate the damages resulting from his wrongful discharge. Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 197-200, 61 S.Ct. 845, 853-55, 85 L.Ed. 1271 (1941); United Industrial Workers of the Seafarers International Union v. Board of Trustees of Galveston Wharves, 400 F.2d 320 (5th Cir.1968) (RLA); See, e.g., Ford Motor Co. v. EEOC, 458 U.S. 219, 102 S.Ct. 3057, 73 L.Ed.2d 721 (1982) (Title VII); Rasimas v. Michigan Department of Mental Health, 714 F.2d 614 (6th Cir.1983) (Title VII); EEOC v. Sandia Corp., 639 F.2d 600 (10th Cir.1980) (ADEA). He is not required, however, to accept a position that is not consonant with his particular skills, background, and expertise, or which involves conditions that are substantially more onerous than his previous position. NLRB v. Laredo Packing Co., 730 F.2d 405 (5th Cir.1984); NLRB v. Madison Couriers, Inc., 472 F.2d 1307, 1320-21 (D.C.Cir.1972).

ALPA argues that an employer charged with unlawful discrimination often can suspend the accrual of backpay liability by unconditionally offering the claimant the job he sought, citing Ford Motor Co., 458 U.S. at 232, 102 S.Ct. at 3066. While this is an accurate statement of the law, ALPA’s reliance upon it is misplaced. Wien Airlines, which offered Peterson the job, was not the offending party here. Instead, Peterson’s claim is that Piedmont wrongfully fired him at the insistence of ALPA. The position Peterson claims to have been wrongfully deprived of was the one he enjoyed at Piedmont before it was discovered that he had flown for Wien during the strike: Peterson had been a probationary flight officer who was allowed to undertake his duties without interference and harassment. ALPA’s reliance on Ford Motor Co. would be more sound if Piedmont had offered Peterson his former position.

Nevertheless, if Peterson could have mitigated his damages by accepting the recall from Wien, he was under a duty to do so. Phelps Dodge, supra. It is not contemplated by the mitigation requirement of the RLA, however, that a wrongfully discharged employee be forced to accept a position where he feels that his career and personal safety are threatened. Laredo Packing Co., supra. If, as Peterson claims, he declined Wien’s offer for fear of retribution from former strikers, then he was not required, as a matter of law, to accept the position. The reasonableness of Peterson’s decision is a question of fact, and summary judgment should be denied.

2. Future Earnings

“Frontpay,” or recovery for future earnings, can be an appropriate remedy where reinstatement is unavailable or inappropriate. Thompson v. Brotherhood of Sleeping Car Porters, 367 F.2d 489 (4th Cir.1966), cert. denied, 386 U.S. 960, 87 S.Ct. 1019, 18 L.Ed.2d 110 (1967); See O’Donnell v. Georgia Osteopathic Hospital, Inc., 748 F.2d 1543 (11th Cir.1984) (frontpay appropriate when reinstatement reasonably refused). It is the obligation of the court, if Peterson was wrongly damaged, to fashion whatever remedy would best make him whole. Thompson, 367 F.2d at 493. The propriety of reinstatement at Piedmont cannot be determined at this juncture, but it could be an impracticable remedy because of the passage of time, see DeArroyo v. Sindicato De Trabajadores Packinghouse, AFL-CIO, 425 F.2d 281 (1st Cir.), cert. denied, 400 U.S. 877, 91 S.Ct. 121, 27 L.Ed.2d 115 (1970) (no reinstatement because six years had passed), or because of animosity by Piedmont pilots. See Spagnuolo v. Whirlpool Corp., 641 F.2d 1109 (4th Cir.), cert. denied, 454 U.S. 860, 102 S.Ct. 316, 70 L.Ed.2d 158 (1981) (reinstatement inappropriate where hostility prevents necessary cooperation); accord, EEOC v. Prudential Federal Savings & Loan Association, 763 F.2d 1166 (10th Cir.1985); Cancellier v. Federated Department Stores, 672 F.2d 1312, 1319 (9th Cir.), cert. denied, 459 U.S. 859, 103 S.Ct. 131, 74 L.Ed.2d 113 (1982). Therefore, the appropriateness of frontpay cannot be determined as a matter of law.

ALPA argues that Peterson’s claims for future earnings must fail because they are highly speculative. This same argument was rejected by the court in Thompson because, although future loss cannot be established precisely, an injured party is “not barred from a reasonable recovery merely because he is unable to prove his damages with absolute certainty.” 367 F.2d at 493. ALPA contends that Thompson has effectively been overruled on this issue by Newport News Shipbuilding & Dry Dock Co. v. NLRB, 631 F.2d 263 (4th Cir.1980), in which the court held that a union was not liable for failure to fairly represent an employee because the employer had the right to fire him. The discharged employee could not recover back-pay from the union, the court held, because the employee had no right to receive the pay even if competently represented by the union. ALPA contends that, since Peterson was a probationary employee when he left Piedmont, Piedmont could rightfully terminate him and Newport News controls. The case is easily distinguished, however. In Newport News there was no claim that the employer and the union were acting in concert as there is here. In addition, Peterson has alleged that this discharge by Piedmont was an unfair labor practice, while in Newport News the firing was not. Therefore, Newport News is inapposite. If Peterson’s allegations are true, and they must be assumed so at this juncture, ALPA cannot coerce Piedmont into firing Peterson and then avoid liability for his lost earnings.

ALPA contends, and rightly so, that any liability must be apportioned between the employer and the union “according to the damage caused by the fault of each.” Vaca v. Sipes, 386 U.S. 171, 197, 87 S.Ct. 903, 920, 17 L.Ed.2d 842 (1967). If Peterson’s contentions are true, there is every likelihood that a jury may find the union partly, if not fully, responsible for the wrong and proportionately liable. See Czosek v. O’Mara, 397 U.S. 25, 28-29, 90 S.Ct. 770, 772-73, 25 L.Ed.2d 21 (1970) (even if employer not party to litigation, damages recoverable from union for harm stemming from its conduct). Summary judgment should be denied.

3. Settlement with Piedmont

ALPA claims that Peterson’s settlement with Piedmont during the pendency of the recent appellate proceedings bars his recovery from ALPA. It is true that damages for the breach of duty of fair representation are meant to compensate and no more. Peterson, 759 F.2d at 1167 (punitive damages inappropriate). ALPA’s position presumes, perhaps wrongfully, that Peterson was made whole by his settlement with Piedmont. To avoid double recovery the settlement must be offset against the total amount of damages, but first those damages, if any, must be determined.

4- Trial by Jury

ALPA contends that, since damages are not recoverable by Peterson, his only claims are equitable in nature and, therefore, trial by jury is inappropriate. The preceding discussion deflates the major premise of that syllogism, and the argument falls.

ALPA also claims that, in light of Del-Costello, the court must reconsider its earlier determination that Peterson is entitled to a jury. Nothing about DelCostello indicates that Peterson, in his claims for damages, is not entitled to a jury, and summary judgment should be denied on this issue.

5. Attorney’s Fees

According to the “American Rule,” the parties generally bear their own attorney’s fees in the absence of statutory or contractual authorization. However, a federal court in the exercise of its equitable powers may award attorney’s fees when the interests of justice require. Hall v. Cole, 412 U.S. 1, 93 S.Ct. 1943, 36 L.Ed.2d 702 (1973). Precedent dictates that this authority be exercised only under limited and exceptional circumstances, commonly known as the “bad faith” and the “common benefit” exceptions to the American Rule. Id. at 5, 93 S.Ct. at 1946.

The first generally recognized exception allows an award of attorney’s fees when the opposing party has acted in bad faith. Hall, supra; Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 88 S.Ct. 964, 19 L.Ed.2d 1263 (1968); Vaughan v. Atkin son, 369 U.S. 527, 82 S.Ct. 997, 8 L.Ed.2d 88 (1962). In Hall, the Supreme Court stated that “it is unquestioned that a federal court may award counsel fees to a successful party when his opponent has acted ‘in bad faith, vexatiously, wantonly, or for oppressive reasons.’ ” 412 U.S. at 5, 93 S.Ct. at 1946 (quoting 6 J. Moore, Federal Practice ¶54.77[2], at 1709 (2d ed. 1972)). A split of authority exists concerning exactly to what conduct the bad faith exception applies. It appears universally accepted that bad faith in the conduct of the litigation itself may warrant imposition of fees, as may the bad faith maintenance of a meritless claim or defense. Shimman v. International Union of Operating Engineers, Local 18, 744 F.2d 1226, 1230 (6th Cir.1984). On the other hand, some courts will award attorney’s fees for bad faith in that conduct which gave rise to the litigation itself, Dogherra v. Safeway Stores, Inc., 679 F.2d 1293 (9th Cir.), cert. denied, 459 U.S. 990, 103 S.Ct. 346, 74 L.Ed.2d 386 (1982); Richardson v. Communications Workers, AFL-CIO, 530 F.2d 126 (8th Cir.1976); accord Sierra Club v. United States Army Corps of Engineers, 590 F.Supp. 1509 (S.D.N.Y.1984), while others will not. Shimman, supra (disapproving dicta in Huecker v. Milburn, 538 F.2d 1241 (6th Cir.1976)).

The pivotal case on this question is Hall v. Cole. Hall involved a suit by a union member who was expelled from the union for being critical of its practices. The district court held that the union had violated § 102 of the Labor-Management Reporting and Disclosure Act of 1959, 29 U.S.C. § 412, ordered reinstatement, and awarded attorney’s fees. The court of appeals affirmed and the Supreme Court granted certiorari on the issue of attorney’s fees only. Responding to the union’s argument that fees were improper because the district court had expressly found that the union believed in good faith that it could expel its member, the Court stated that “[i]t is clear, however, that ‘bad faith’ may be found, not only in the actions that led to the lawsuit, but also in the conduct of the litigation.” 412 U.S. at 15, 93 S.Ct. at 1951 (emphasis added). It is this language that the courts have relied on to award fees for bad faith in the conduct that formed the basis of the lawsuit, and Peterson urges that ALPA’s treatment of him was so obnoxious that fees are warranted under this rationale. ALPA, not surprisingly, argues for adoption of the more restrictive view of Shimman and the denial of fees.

This presents a question of first impression in this Circuit. After due consideration, this court is persuaded that the bad faith exception to the American Rule does not apply to the conduct that led to the litigation. This holding is based on a number of considerations. First, Peterson bases his claim for fees on the above-quoted language from Hall. But the Hall Court was not presented with the question whether the bad faith exception applies to the conduct leading to the claim. Rather, the Court was considering application of the second, “common fund” exception to the American Rule (discussed infra). The pertinent language in Hall, therefore, is dictum. Shimman, 744 F.2d at 1232-33.

More persuasive is that the Hall Court quoted Moore’s Federal Practice for the proposition that fee shifting is appropriate when the “opponent has acted ‘in bad faith, vexatiously, wantonly, or for oppressive reasons.’ ” Hall, 412 U.S. at 5, 93 S.Ct. at 1946. Moore’s Federal Practice, however, precedes the quoted passage with the statement “where an unfounded action or defense is brought or maintained ...” 6 J. Moore, Federal Practice ¶ 54.77[2], at 1709 (2d ed. 1972) (emphasis added). When Hall is read closely and the pertinent language considered in context, it becomes apparent that the Court did not intend to extend application of the bad faith exception to the conduct upon which the claims were based. See Shimman, 744 F.2d at 1233.

A second flaw with applying the bad faith exception in these circumstances is that it defeats the rationale of the general rule that parties bear their own fees. Because the Shimman analysis of this point is thorough and persuasive, it is necessary here only to adopt its reasoning and conclusion. See Shimman, 744 F.2d at 1231-32.

The third reason the bad faith exception is not appropriately applied in the subject case is that its basic rationale is punitive. Hall, 412 U.S. at 5, 93 S.Ct. at 1946. In International Brotherhood of Electrical Workers v. Foust, 442 U.S. 42, 99 S.Ct. 2121, 60 L.Ed.2d 698 (1979), the Supreme Court held that punitive damages “may not be assessed against a union that breaches its duty of fair representation by failing properly to pursue a grievance.” Id. at 52, 99 S.Ct. at 2128. In Peterson, the Fourth Circuit Court of Appeals held that Foust created a per se rule that a union’s breach of its duty of fair representation can never render it liable for punitive damages. 759 F.2d at 1167. To apply the bad faith exception and award attorney’s fees for the union’s alleged bad faith treatment of Peterson would completely circumvent Foust and Peterson. Thus, it is concluded that the bad faith exception to the American Rule is not applicable to the DFR claim in the subject case.

The second recognized exception to the American Rule is the “common benefit” exception. Under this exception, the award of attorney’s fees is within the discretion of the court when the “plaintiff’s successful litigation confers ‘a substantial benefit on the members of an ascertainable class, and where the court’s jurisdiction over the subject matter of the suit makes possible an award that will operate to spread the costs proportionately among them.’ ” Hall, 412 U.S. at 5, 93 S.Ct. at 1946 (quoting Mills v. Electric Auto-Lite Co., 396 U.S. 375, 393-94, 90 S.Ct. 616, 626-27, 24 L.Ed.2d 593 (1970)). Fee shifting is justified in that instance not because of the defendant’s bad faith, but rather because it would unjustly reward the other members of the class to benefit from a plaintiff’s efforts without sharing his costs. Hall, 412 U.S. at 6, 93 S.Ct. at 1946.

In Hall the Supreme Court upheld the award of attorney’s fees to a union member who successfully sued and was reinstated into the union that had expelled him in violation of his First Amendment rights. The Court concluded that “there can be no doubt that, by vindicating his own right of free speech ..., respondent necessarily rendered a substantial service to his union as an institution and to all of its members.” Id. at 8, 93 S.Ct. at 1948. Although, again, there is contradictory precedent on the application of this exception, our own Circuit has considered it in a case squarely in point. In Harrison v. United Transportation Union, 530 F.2d 558 (4th Cir.1975), cert. denied, 425 U.S. 958, 96 S.Ct. 1739, 48 L.Ed.2d 203 (1976), the court held that a union member whose union improperly failed to pursue his grievance was entitled to recover attorney’s fees under the common benefit rationale; by vindicating his right, the plaintiff had vindicated a right shared by all the union membership: the right to fair representation. Id. at 564. See also Rolax v. Atlantic Coast Line Railroad Co., 186 F.2d 473, 481 (4th Cir.1951) (application of common benefit exception). Contra Shimman, 744 F.2d at 1235 (redress for personal injury does not benefit other union members; therefore, common benefit exception inapplicable).

While it is concluded that the bad faith exception of the American Rule cannot warrant an award of fees in the subject case, Harrison is persuasive that the common benefit exception pertains. The court cannot conclude that Peterson will not be able to prove facts sufficient to bring himself within a recognized exception to the rule that the parties bear their own costs, and, therefore, summary judgment should be denied.

For the foregoing reasons, it is ORDERED that defendant’s motion for summary judgment is DENIED.


source: Caselaw Access Project

author: BUA, District Judge.

license: Public Domain

text:
    UNITED STATES of America ex rel. Ruthe CARBONA, Petitioner, v. Jane E. HUCH, Warden, Dwight Correctional Center, Paul J. Klincar, Chairman, Illinois Prisoner Review Board, Respondents.
    No. 85 C 1750.
    United States District Court, N.D. Illinois, E.D.
    Nov. 19, 1985.
    Ruthe M. Carbona, pro se.
    Neil F. Hartigan, Atty. Gen., State of 111. by Jack Donatelli, Asst. Atty. Gen., Chicago, 111., for respondents.
   ORDER

BUA, District Judge.

Before the Court is the respondents’ motion to deny the writ of habeas corpus filed by the state prisoner petitioner. For the reasons stated herein, the respondents’ motion is granted and the writ is denied.

I. FACTS

Petitioner Ruthe Carbona is an inmate at Dwight Correctional Center in Dwight, Illinois, serving a 20 to 60-year sentence for murder. On June 14, 1985, Carbona’s motion to reinstate her pro se petition for habeas corpus was granted. The petition alleged that the Illinois Prisoner Review Board had violated Carbona’s constitutional rights when on July 31, 1985, it denied her third request for parole for the stated reason that the extreme violence of her crime required longer incarceration to prevent a reoccurrence of such behavior. Petitioner claims that the Prisoner Review Board considered impermissible factors when it considered the fact that the victim, her husband, was a Lieutenant in the Cook County Sheriff’s Office.

The respondents to the petition are the Warden of Dwight Correctional Center and the Illinois Prisoner Review Board. They filed a motion to deny the writ in which they argued that the Board adequately stated its reasons for denial of parole and did not rely on the fact that the victim was a police officer.

The petitioner did not file a response to the respondents’ motion. However, she did file a motion for discovery, in which she set forth the basis for her belief that improper factors were considered in the denials of her requests for parole. The Court will consider petitioner’s motion for discovery as a response to respondents’ motion to deny and decide the motion accordingly.

II. DISCUSSION

In Greenholtz v. Nebraska Penal and Correctional Complex, 442 U.S. 1, 99 S.Ct. 2100, 60 L.Ed.2d 668 (1979), the Supreme Court recognized that there is no constitutional right to parole. 442 U.S. at 7. However, the Court noted that “by establishing a parole system, a state may create an expectation for inmates of release on parole which is entitled to some due process, protection.” 442 U.S. at 12, 99 S.Ct. at 2106. The Seventh Circuit Court of Appeals has recognized that such a due process right exists in Illinois and that “parole must be granted if none of the specified reasons for denial are found to exist.” United States ex rel. Scott v. Illinois Parole and Pardon Board, 669 F.2d 1185, 1189 (7th Cir.), cert. denied sub nom., McCombs v. Scott, 459 U.S. 1048, 103 S.Ct. 468, 74 L.Ed.2d 617 (1982).

The Seventh Circuit in Scott set forth the following test for determining whether a statement of reasons for denial of a parole is sufficient to satisfy the requirements of the Due Process Clause of the Fourteenth Amendment:

To satisfy minimum due process requirements a statement of reasons should be sufficient to enable a reviewing body to determine whether parole has been denied for an impermissible reason or for no reason at all. For this essential purpose, detailed findings of fact are not required, provided the Board’s decision is based upon consideration of all relevant factors and it furnishes to the inmate both the grounds for the decision ... and the essential facts upon which the Board’s inferences are based.

Id. at 1190. Due process requires only that the inmate be told why his request for parole has been denied. Id. at 1191. It does not require a summary of the evidence relied upon. Id. If the parole board cites to facts upon which its reasons for denial of parole can be justified, due process is met. Heirens v. Mizell, 729 F.2d 449, 467 (7th Cir.1984).

In the present case, the relevant portion of the Prisoner Review Board’s decision reads:

Taking all factors into consideration, however, and noting in particular a crime of extreme violence resulting in the death of an innocent victim, the Board decides that parole to the free community is not warranted at this time.

In addition, the Board noted “the violent murder of her husband who she was convicted of shooting in the back during a domestic quarrel.” Finally, the Board acknowledged statements and letters received on Ms. Carbona’s behalf.

The reasons stated here for denial of parole are similar to those in Heirens v. Mizell, 729 F.2d 449 (7th Cir.1984). In Heirens, the Prisoner Review Board stated:

The panel who last interviewed you was likewise not convinced, although you may have demonstrated the ability to perform adequately in a structured society, that you would be able to function without recourse to violence in the free society.

The Board in Heirens noted the prisoner’s prior criminal record and the “particularly heinous details” of the crime for which the prisoner was imprisoned.

In denying the prisoner’s petition for a writ of habeas corpus, the Seventh Circuit Court of Appeals held that the Board “considered all the relevant factors, provided Heirens with its reasons for denial and also gave him the ‘essential facts’ underlying its reasons.” Heirens, 729 F.2d at 469. In support of its holding, the Seventh Circuit found that the Board provided the prisoner with two reasons for its decision to deny parole: (1) that the risk of nonconforming conduct was too great, i.e., doubts regarding his rehabilitation; and (2) that release would not serve the best interests of society nor serve as a deterrent to noncompliance with the established laws of society. Id. at 468-69. With regard to the first reason, the Seventh Circuit noted three facts cited to support the Board’s decision. Two of these facts involved the circumstances surrounding the crime for which the prisoner was imprisoned. With regard to the second reason, the Heirens court noted the number of crimes and the details of them as the facts cited by the Board.

In the present case, as in Heirens, it is clear that concern regarding the prisoner’s entry into and functioning in free society is the Board’s main reason for denying parole. This concern in Heirens encompassed both doubts regarding the prisoner’s rehabilitation in light of the circumstances surrounding his crime, and the best interest of society, i.e., to remain safe from the same type of behavior exhibited by a serious and violent crime. While it did not explicitly mention doubts regarding Ms. Carbona’s rehabilitation, the Board clearly mentioned the best interests of society as a reason for denying parole when it said that “parole to the free community is unwarranted at this time.”

In addition, the Board cited, as facts in support of its reasons, the violent nature of the crime, i.e., murder, the fact that the victim was innocent and the prisoner’s husband, and the fact that the victim was shot in the back. Under Heirens and Scott, the Board has stated its reasons for denying parole and supplied underlying facts sufficient to meet due process requirements. Finally, the Court finds no mention in the Board’s decision of the allegedly impermissible reference to the victim being a member of the Cook County Sheriff’s Office, and therefore will delve no further into that decision.

III. CONCLUSION

For the reasons stated above, respondents’ motion to deny the petition for a writ of habeas corpus is granted. Accordingly, the writ is denied.

IT IS SO ORDERED.


author: McLAUGHLIN, District Judge.

text:
    Kwame AGYENKWA, Plaintiff, v. AMERICAN MOTORS CORP. and Speed Auto Sales, Inc., Defendants.
    No. 85 CV 1146.
    United States District Court, E.D. New York.
    Nov. 20, 1985.

      Gerald Ross, New York City, Adduci, Dinan & Mastriani, for plaintiff; Louis S. Mastriani, Bennett A. Caplan, Washington, D.C., of counsel.
    Herzfeld & Rubin, New York City, for AMC; Edward L. Birnbaum, Jeffrey L. Chase, of counsel.
    Paul Eric Rudde, New York City, for Speed Auto Sales, Inc.
   MEMORANDUM AND ORDER

McLAUGHLIN, District Judge.

This is a diversity action in which plaintiff seeks to recover for personal injuries sustained in a single vehicle accident. Defendant American Motors Corp. (“AMC”) is the manufacturer of the vehicle — an AMC Jeep CJ7 — that plaintiff was driving at the time of the crash. Defendant Speed Auto Sales, Inc. (“Speed”) is the distributor from whom plaintiff purchased the vehicle. Both defendants have moved to dismiss the complaint on the ground of forum non conveniens. For the reasons stated below, the motion is granted.

Facts

On December 4, 1981, the plaintiff purchased a 1982 AMC Jeep CJ7 from defendant Speed and arranged for Speed to ship the vehicle to plaintiffs residence in Accra, Ghana. Plaintiff alleges that the vehicle arrived toward the end of March, 1982, and that he delivered it to the local AMC dealer for a “routine service check-up” (Complaint ¶ 8). Plaintiff picked up the vehicle on April 2, 1982.

The accident occurred the next day as plaintiff was driving near North Accra, Ghana. Plaintiff swerved to avoid some potholes in the road and heard an “unusual noise” under the vehicle (Complaint ¶ 10). He alleges that the vehicle began turning “in a zig zag manner” and that he could not control it. When the vehicle finally flipped over into a ditch, plaintiff was thrown through the windshield and sustained serious injuries. In a complaint sounding in negligence, breach of warranty and perhaps strict liability, he seeks to recover for his personal injuries and medical expenses, and for business losses that he alleges are a result of the accident.

Defendant AMC is a Maryland corporation with its principal place of business in Southfield, Michigan. It alleges that the vehicle in question was manufactured in Toledo, Ohio. Defendant Speed is a New York corporation with its principal place of business in Brooklyn, New York. Plaintiff, a resident of Ghana, premises jurisdiction in this Court on diversity of citizenship, 28 U.S.C. § 1332. Defendants do not contest jurisdiction, but argue that this Court should dismiss the complaint on the ground that Ghana provides a more convenient forum for this litigation.

Discussion

The doctrine of forum non conveniens allows a court to “resist imposition upon its jurisdiction” even when jurisdiction and venue are technically proper. Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507, 67 S.Ct. 839, 842, 91 L.Ed. 1055 (1947). The primary consideration is whether the convenience of the parties and the ends of justice would be served by dismissing the case. Roster v. Lumbermens Mut. Cos. Co., 330 U.S. 518, 527, 67 S.Ct. 828, 833, 91 L.Ed. 1067 (1947). Although the motion is addressed to the discretion of the district court, Piper Aircraft v. Reyno, 454 U.S. 235, 257, 102 S.Ct. 252, 266, 70 L.Ed.2d 419 (1981); Overseas Nat’l Airways, Inc. v. Cargolux Airlines Int’l, 712 F.2d 11, 14 (2d Cir.1983), the Supreme Court has described the appropriate inquiry.

First, “the court must determine whether there exists an alternative forum.” Piper Aircraft Co. v. Reyno, supra, 454 U.S. at 254 n. 22, 102 S.Ct. at 265 n. 22. If this requirement is met, the public and private interests at stake are balanced, as outlined in Gulf Oil Corp. v. Gilbert, supra. Gilbert also instructs that “unless the balance is strongly in favor of the defendant, the plaintiffs choice of forum should rarely be disturbed.” Id. 330 U.S. at 508, 67 S.Ct. at 843. The Court has subsequently made clear, however, that the choice of a foreign plaintiff is entitled to less deference. See Piper Aircraft v. Reyno, supra, 454 U.S. at 255-56, 102 S.Ct. at 265-66 (“When the home forum has been chosen, it is reasonable to assume that the choice is convenient. When the plaintiff is foreign, however, this assumption is much less reasonable.”). Thus, although there is still a presumption in favor of the plain tiff’s selection of this forum, the defendant’s burden of showing inconvenience sufficient to justify dismissal is less stringent than it would be if the plaintiff were a citizen. With that in mind, I shall address each part of the test in turn.

A. Availability of an Alternative Forum

Defendants argue that the courts of Ghana provide a suitable alternative forum for this case. The plaintiff, however, points to several factors, both legal and practical, that he says militate against litigating in Ghana.

Plaintiff’s first concern is that he may not possess jurisdiction over the defendants in Ghana. In addition, plaintiff fears that Ghana’s three-year statute of limitations for personal injury actions will bar his suit. In response, both defendants have agreed to waive any jurisdictional and statute of limitations defenses should this case be litigated in Ghana.

The plaintiff contends, however, that this does not solve the problem, arguing that the Ghanaian Court might refuse to exercise jurisdiction over the case despite the concessions of the defendants. The parties’ experts differ on this point. Thus, in order to protect against the possibility that the court in Ghana may refuse to hear this case, the dismissal will be conditioned on both the defendants’ waiver of the two objections and the acceptance of jurisdiction by the court in Ghana.

The plaintiff argues that even if these legal obstacles are hurdled, there are several practical problems that make Ghana an inadequate alternative forum. First, he contends that pre-trial discovery procedures are superior in this forum. Second, he believes that Ghanaian law does not provide a right to trial by jury in cases such as this. Finally, plaintiff argues that there is no contingent fee system in Ghana, and that he is without the financial means to hire an attorney on any other basis. He adds that Ghanaian law requires the losing party to pay the winning party’s legal fees, a risk he cannot afford to take.

Again the parties’ experts on the laws of Ghana disagree on these matters. Defendants have, however, agreed to waive any rights they may have to attorney fees if they prevail. As to plaintiff’s alleged inability to obtain counsel in Ghana, the absence of a contingent fee system “is a factor which favors ... retention of jurisdiction, though it is not determinative ____” Hodson v. A.H. Robins Co. Inc., 528 F.Supp. 809, 818 (E.D.Va.1981), aff'd, 715 F.2d 142 (4th Cir.1983).

Here it is in dispute whether contingent fee arrangements are permitted in Ghana, although defendants’ expert — who states that such arrangements are legal today— appears to be more familiar with the issue. Compare Atadika Supp. Aff. ¶1¶ 6-8 with Mastriani Aff. ¶ 4. In any case, there is every indication that the plaintiff has the financial means to proceed in Ghana. He has not submitted any financial statements, but in his papers in opposition to the motion to dismiss, he has provided an accountant’s report covering one of his businesses. See Exh. C to Plaintiff’s Opposition to Defendant’s Motion to Dismiss. This report is submitted as evidence of business losses suffered by plaintiff as a result of the accident. It also reveals, however, that plaintiff is a man of some means. Aside from his interests in at least two profitable businesses, plaintiff was able to afford nine trips to London for medical treatment, and he rented a vehicle costing almost $6,000 per year. In addition, plaintiff has offered to finance the transportation to New York of witnesses and evidence, both documentary and physical, if this Court denies the motion to dismiss. Plaintiff thus hardly appears unable to finance litigation in Ghana.

Plaintiff also states that discovery procedures in Ghana are limited. Defendants, however, have provided copies of Ghana’s discovery rules, and they appear to be reasonably similar to our own. See Atadika Supp. Aff. Exh. 3. Moreover, “some inconvenience or the unavailability of beneficial litigation procedures similar to those available in the federal district courts does not render an alternative forum inadequate.” Shields v. Mi Ryung Constr. Co., 508 F.Supp. 891, 895 (S.D.N.Y.1981); see Calavo Growers of California v. Generali Belgium, 632 F.2d 963, 968 n. 6 (2d Cir.1980), cert. denied, 449 U.S. 1084, 101 S.Ct. 871, 66 L.Ed.2d 809 (1981). For the same reason, the unavailability of a jury trial in Ghana — another point on which the parties disagree — does not require that this Court retain jurisdiction, especially in the absence of any explanation by the plaintiff as to why this would be prejudicial. Finally, in order to ensure that the plaintiff will be able to collect his damages should he prevail in Ghana, I will condition dismissal on the defendants’ agreement to pay any judgment rendered against them in Ghana.

Having concluded that the courts of Ghana provide an adequate alternative forum for this litigation, I turn to the Gulf Oil v. Gilbert balancing test.

B. The Balancing of the Public and Private Interests at Stake

The Supreme Court in Gulf Oil v. Gilbert laid out the factors that a court must consider in balancing the public and private interests at stake in a forum non conveniens determination. That test was summarized as follows in Piper Aircraft v. Reyno:

The factors pertaining to the private interests of the litigants included the “relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive.” Gilbert, [330 U.S. at 508[, 67 S.Ct. at 843] ]. The public factors bearing on the question included the administrative difficulties flowing from court congestion; the “local interest in having localized controversies decided at home”; the interest in having the trial of a diversity case in a forum that is at home with the law that must govern the action; the avoidance of unnecessary problems in conflict of laws, or in the application of foreign law; and the unfairness of burdening citizens in an unrelated forum with jury duty. Id. at 509. [67 S.Ct. at 843]
454 U.S. at 241 n. 6, 102 S.Ct. at 258 n. 6.

1. The Private Interests

The plaintiff’s theories of recovery in this case are negligence, breach of warranty, and seemingly, although it is not completely clear from the complaint, strict liability. Plaintiff argues that the defective nature of the vehicle is the key issue and that information pertaining to the design and manufacture of the AMC Jeep CJ7 is located in the United States (although not in New York). Defendant argues that this is a negligence case and that evidence about the accident is located in Ghana.

While reasonable minds may differ as to the proper characterization of this action, I conclude that access to evidence will be facilitated, and the convenience of witnesses and parties furthered, if this case is tried in Ghana.

This suit is in fact very similar to Piper Aircraft v. Reyno, 454 U.S. 235, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981). There the representative of several Scottish citizens killed in a plane crash in Scotland instituted a wrongful death action in the United States against a Pennsylvania plane manufacturer and an Ohio propeller manufacturer. In affirming the dismissal of the suit in favor of a Scottish forum, the Court agreed with the plaintiff that records concerning the design, manufacture and testing of the plane were located in the United States. See id. at 242, 257, 102 S.Ct. at 258, 266. Dismissal was not unreasonable, however, in light of the fact that witnesses who could testify about the maintenance of the plane, the training of the pilot, and the investigation of the accident were all located in Scotland. See id. at 242, 257-59, 102 S.Ct. at 258, 266-67. In addition, information and witnesses on the issue of damages were to be found in Scotland, and trial “would be aided by familarity with Scottish topography and by easy access to the wreckage.” Id. at 242, 102 S.Ct. at 258.

Many of the same considerations obtain in this case. The AMC dealer who was the last to check the vehicle is in Ghana, as are the police personnel who investigated the accident and inspected the wreckage. In addition, the defendants allege that plaintiff was contributorily negligent. A view of the accident scene — the road and potholes — will be helpful in determining that issue. Finally, at least some of plaintiff’s doctors and medical records are in Ghana; the rest may be in London, but they are surely not in New York. Plaintiff’s business records are also in Ghana; these documents will be needed to ascertain damages.

The plaintiff is correct, as was the plaintiff in Piper Aircraft v. Reyno, that corporate records relevant to the alleged design defect are in the United States. I will therefore take the suggestion of the Supreme Court in Reyno, and “dismiss subject to the condition that defendant corporations agree to provide the records relevant to the plaintiff’s claims.” 454 U.S. at 257 n. 25, 102 S.Ct. at 267 n. 25. As long as plaintiff’s access to the design and testing records is assured, the private interests of the parties should be well served by trial in Ghana, as all other evidence relating to the accident and the damages is located there.

2. The Public Interests

Analysis of the public interests prong of the Gilbert test also leads to the conclusion that this case would be better tried in Ghana. The local interest in deciding this case is almost nonexistent. The plaintiff is not a resident of New York, the vehicle was not manufactured here, and the accident did not take place here. The only contact with this forum is that the vehicle happened to pass through a New York distributor on its way from Ohio to Ghana. Any defect in design or manufacture arose before the vehicle got to New York, and any injury to the plaintiff took place after the vehicle left New York. There is no reason why this Court or a local jury should be burdened with a litigation having such a tangential relation to this forum. See Danser v. Firestone Tire & Rubber Co., 86 F.R.D. 120, 123 (S.D.N.Y.1980).

An analysis of the law that would apply also points to Ghana as the appropriate forum. Under New York’s choice of law rules — which Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941) mandates be applied in this diversity case — it appears that the law of Ghana will govern all aspects of this controversy.

In tort cases, New York courts generally apply the law of the place of the accident, unless application of some other law will better further state interests without impairing the smooth functioning of the interstate system. Shafarman v. Ryder Truck Rental, Inc., 100 F.R.D. 454, 458 (S.D.N.Y.1984). For example, New York courts have found departure from the law of the place of the accident to be warranted when a foreign state’s law might bar or limit the recovery of a New York resident. See, e.g., Tooker v. Lopez, 24 N.Y.2d 569, 301 N.Y.S.2d 519, 249 N.E.2d 394 (1969); Babcock v. Jackson, 12 N.Y.2d 473, 240 N.Y.S.2d 743, 191 N.E.2d 279 (1963). In this case, the plaintiff is not a New York resident, the accident did not take place here, and the vehicle was not manufactured here. New York thus has no interest that would be furthered by the displacement of the law of Ghana.

Plaintiff next argues that even if Ghanaian law were to apply to the tort issues in the case, New York law should govern the contract/warranty issues. It appears, however, that a New York court might not apply two different bodies of law to this case, but rather would apply the law of Ghana to both the tort and warranty causes of action. Cf. Martin v. Julius Dierck Equip. Co., 52 A.D.2d 463, 384 N.Y.S.2d 479 (2d Dep’t 1976) (for purposes of borrowing statute, Virginia was place of accrual of both negligence and warranty causes of action arising from defect in forklift manufactured in New York and causing injury in Virginia), aff'd on other grounds, 43 N.Y.2d 583, 403 N.Y.S.2d 185, 374 N.E.2d 97 (1978); see also Wheeler v. Standard Tool & Mfg. Co., 359 F.Supp. 298, 301 (S.D.N.Y.1973) (under New York law, strict liability eases are governed by the law of the place of the injury), aff'd 497 F.2d 897 (2d Cir.1974). Thus, the fact that the law of Ghana will likely govern the resolution of this case suggests the wisdom of dismissal in favor of a court familiar with that law. See Piper Aircraft v. Reyno, supra, 454 U.S. at 260 n. 29, 102 S.Ct. at 268 n. 29; Calavo Growers of California v. Generali Belgium, supra, 632 F.2d at 967, cert. denied, 449 U.S. 1084, 101 S.Ct. 871, 66 L.Ed.2d 809 (1981); Schertenleib v. Traum, 589 F.2d 1156, 1165 (2d Cir.1978).

Conclusion

Accordingly, defendant’s motion to dismiss the complaint is granted, subject to the following conditions:

1. that defendants consent to suit and acceptance of process in any suit plaintiff files in Ghana on the claims that are the subject of the instant suit;
2. that the appropriate forum in Ghana accepts jurisdiction to hear the case;
3. that defendants agree to waive any statute of limitations defense;
4. that defendants agree to make available, at their own expense, any documents, records or witnesses within their control that are needed for the fair adjudication of the plaintiff’s claims in Ghana;
5. that defendants agree to pay any judgments which may be rendered against them in Ghana in any suit on the plaintiff’s claims, and that they agree to waive any claim for attorney fees;
6. that the defendants advise the Court and the plaintiff of their consent to these conditions within thirty days of the date of this Order, and that they inform the Court within sixty days of the date of this Order of their efforts to determine whether Ghana will accept jurisdiction.

The plaintiff’s motion to recover its costs in defending this motion is denied.

SO ORDERED

      . Defendant AMC originally asserted jurisdictional objections, but withdrew them by letter dated August 13, 1985.

      . 28 U.S.C. § 1391(a) provides that in a diversity case, venue is proper in the district where all plaintiffs or all defendants reside or in the district in which the claim arose. Neither defendant has objected to venue in this Court.

      . Because of the enactment in 1948 of 28 U.S.C. § 1404(a), which allows a federal district court to transfer a case to a more convenient federal forum, the forum non conveniens dismissal is of only limited vitality today. Menendez Rodriguez v. Pan Am Life Ins. Co., 311 F.2d 429, 432 (5th Cir.1962), vacated on other grounds, 376 U.S. 779, 84 S.Ct. 1130, 12 L.Ed.2d 82 (1964); Wright, Miller & Cooper, Federal Practice and Procedure § 3828, at 176. The doctrine is usually invoked only when, as is the case here, the forum alleged to be more convenient is in a foreign country. See Schertenleib v. Traum, 589 F.2d 1156, 1161 (2d Cir.1978).

      . The Supreme Court has left open the question whether a federal court sitting in diversity must apply state forum non conveniens rules. See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 249 n. 13, 102 S.Ct. 252, 262 n. 13, 70 L.Ed.2d 419 (1981); Koster v. Lumbermens Mut. Cas. Co., 330 U.S. 518, 529, 67 S.Ct. 828, 834, 91 L.Ed. 1067 (1947); Gulf Oil Co. v. Gilbert, 330 U.S. 501, 509, 67 S.Ct. 839, 843, 91 L.Ed. 1055 (1947). The Second Circuit, too, in Schertenleib v. Traum, 589 F.2d 1156, 1162 n. 13 (2d Cir.1978), found that the similarity between federal and New York law on the issue obviated the need to decide that "intriguing question.”
      The New York Court of Appeals, however, in Islamic Republic of Iran v. Pahlavi, 62 N.Y.2d 474, 478 N.Y.S.2d 597, 467 N.E.2d 245 (1984), cert. denied, — U.S.--, 105 S.Ct. 783, 83 L.Ed.2d 778 (1985), has held that the availability of an alternative forum is no longer a prerequisite to dismissal. Thus it appears that federal law and state law have diverged on this point and that it may soon become necessary to resolve the question left open by those earlier courts. I need not decide that issue now, however, in light of my finding that an alternative forum for this ligitation exists in Ghana.

      . The plaintiffs attorney has submitted an affidavit (Mastriani Aff.) which covers various aspects of Ghanaian law. The basis of the affiant’s knowledge is telephone consultation with a member of the bar of Ghana. Defendant has submitted an affidavit (Atadika Aff.) and a supplemental affidavit (Atadika Supp. Aff.) by a Ghanaian attorney, who has appended copies of cases and court rules. When confronted with a dispute between experts, “the court may dismiss if it ‘justifiably believes’ that there is an adequate alternative forum, as long as the dismissal is made conditional on defendants’ consenting to suit elsewhere and on the transferee court's accepting jurisdiction. Calavo Growers of California v. Generali Belgium, [632 F.2d 963, 968 n. 6 (2d Cir.1980) ], cert. denied, 449 U.S. 1084, 101 S.Ct. 871, 66 L.Ed.2d 809 (1981); Schertenleib v.

        Traum, supra, 589 F.2d at 1163.” Shields v. Mi Ryung Constr. Co., 508 F.Supp. 891, 895 (S.D.N.Y.1981).

      . Defendant Speed has not specifically made this offer, but it has indicated its intent, see Rudder Aff. ¶ 2, to "join and adopt the content” of defendant AMC’s motion papers, which do specifically state that AMC will waive any claim to fees. The order of dismissal will be conditioned on both parties agreeing to such a waiver.

      . I note that while these records most assuredly are not located in Ghana, neither are they located in New York. Presumably they are to be found in Ohio, where the vehicle was manufactured, or in Michigan, where AMC maintains its corporate headquarters.

      . Defendant relies on Chance v. DuPont De Nemours Co., 371 F.Supp. 439 (E.D.N.Y.1974), to establish New York’s "continuing interest in torts occurring outside of the state.” (Plaintiff’s Opposition to Defendant’s Motion to Dismiss at 29). That case is inapposite, however, as it supports the application of New York law when tortious physical acts in New York have consequences outside the state or when tortious decisions to act or refrain from acting are formulated in New York. See id. at 445. Here there is no allegation that any conduct or managerial decision affecting the manufacture of the AMC Jeep CJ7 took place in this state. New York thus has little, if any, interest in deciding this case.


author: MOTZ, District Judge.

text:
    Robert J. TURNER v. SMALIS, INC.
    Civ. No. JFM-83-1956.
    United States District Court, D. Maryland.
    Nov. 21, 1985.

      Robert J. Weltchek, Baltimore, Md., for plaintiff.
    Benjamin R. Goertemiller, James F. Mewbom, Semmes, Bowen & Semmes, Baltimore, Md., for defendant Smalis.
    Phillips L. Goldsborough, III, Smith, Somerville & Case, Baltimore, Md., for defendant Monte Byers.
   MEMORANDUM

MOTZ, District Judge.

On October 4, 1985 United States Magistrate Frederic Smalkin issued a Report and Recommendation recommending that an order be entered granting the motion for summary judgment of defendant, Smalis, Inc., on the ground that plaintiffs’ claims are barred by limitations. Plaintiffs filed timely objections to the Report and Recommendation to which defendant has responded. Upon a de novo review of the issues presented, the Court adopts Magistrate Smalkin’s Report and Recommendation as its own.

The Section 5-204 Issue

The first and, as described by the Magistrate, “most intriguing” issue is whether or not defendant is barred from raising the statute of limitations under Section 5-204 of the Courts and Judicial Proceedings Article of the Maryland Code. The Magistrate carefully analyzed the pertinent statutory provisions, and no useful purpose would be served by simply repeating his reasoning. Suffice it to say that the Court is fully in accord with it.

There is a difficulty in the construction which the Magistrate (and this Court by adoption) has placed upon the statutory language. To read the phrase “doing business” in Section 5-204(1) as encompassing substantial in-state activity effectively negates the distinction made in the related sections of the Corporation and Association Article (Sections 7-202 and 7-203) between “doing any inter-state or foreign business” and “doing any intra-state business.” This is particularly troublesome since Section 5-204 by its express terms applies both to corporations required to “qualify,” i.e. those doing intra-state business, and those merely required to “register,” i.e. those doing only inter-state business. However, this Court is not writing upon a clean slate. More than twenty years ago the Maryland Court of Appeals construed the forerunners of the statutory provisions now in issue as requiring a within — Maryland “doing business” test and made no distinction in that regard between qualification and registration. G.E.M. Inc. v. Plough, Inc., 228 Md. 484, 486, 180 A.2d 478, 480 (1962). The Maryland Courts have said nothing during the intervening years indicating any retreat from that position and the Maryland General Assembly has reenacted the statutes without substantive modification. Against this background foreign corporations and their legal advisors have been entitled to rely upon Maryland law as it has been enunciated by Maryland authorities, and this Court should not embark upon a new interpretation which would strip a foreign corporation of the essential right to raise a limitations defense.

Plaintiffs have filed with their opposition to the Magistrate’s Report and Recommendation a request that this question be certified for resolution by the Maryland Court of Appeals pursuant to Section 12-601 of the Courts and Judicial Proceedings Article of the Maryland Code. The Court declines to do so. First, albeit it in dictum, the Maryland Court of Appeals has already directly spoken to the issue. See G.E.M., Inc. v. Plough, Inc., supra. Second, the request for certification has been raised exceedingly late in these proceedings after the Magistrate has spent substantial time and attention in reviewing the matter. Third, this is a case originally brought by plaintiffs in this Court, not one removed to it by defendant. Therefore, it is not an instance where plaintiffs have been deprived of the opportunity to have the Maryland courts reconsider their position because of litigation maneuvering by the defendant.

The Discovery Rule

The second ground for objection to the Magistrate’s Report and Recommendation asserted by plaintiffs is that the “discovery rule” prevents their claims from being time-barred. They have added nothing to the arguments which they made before the Magistrate in this respect. The Magistrate properly rejected their contention. Plaintiffs knew on the day that Robert Turner was injured both the fact of his injury and the machine which had caused that injury. There was nothing “hidden” about the alleged defects in the machine and there are no facts to support the “conspiracy of silence” which plaintiffs claim prevented them from learning of defendant’s role in manufacturing the machine. On these facts and under the settled Maryland authorities cited by the Magistrate, plaintiffs’ reliance upon the discovery rule is unavailing.

For these reasons the Court adopts the Magistrate’s Report and Recommendation and will enter an order granting the motion of Smalis, Inc. for summary judgment.

REPORT AND RECOMMENDATION

October 4, 1985

FREDERIC N. SMALKIN, United States Magistrate:

I.

Background

On February 25, 1980, the plaintiff Robert J. Turner lost an arm while attempting to make adjustments to a conveyor device that had been sold in 1978 by the defendant herein, Smalis, Inc. (a Pennsylvania corporation), to plaintiff’s employer, the C.J. Langenfelder Co. The device consisted of a conveyor mechanism with a magnetic pulley at the top, used for separating ferrous from non-ferrous scrap in a yard operated by Langenfelder. The plaintiff’s arm somehow was drawn into the “nip point” of the magnetic pulley while he was attempting (with a metal-headed hammer) to knock debris from the moving belt. Plaintiff received his first award of benefits from the Workmen’s Compensation Commission on April 10, 1980. This diversity suit was filed June 9, 1983. It seeks recovery against Smalis as seller and assembler of the conveyor on warranty, negligence, and strict liability theories. Another defendant, one Byers, and a third party defendant have since been dismissed, leaving Smalis, Inc., as the only remaining defendant.

In an earlier Report and Recommendation, I made recommendations as to, inter alia, the motion of defendant Smalis for summary judgment. That motion sought summary judgment in Smalis’ favor on the ground of limitations as to the warranty counts, as well as (on grounds of contributory negligence and/or assumption of the risk) on plaintiff’s negligence, strict liability, and consortium counts. In an order adopting my Report and Recommendation, Judge Hargrove granted the defendant Smalis’ motion for summary judgment on the ground of limitations as to the warranty counts, but denied it otherwise. The case is now before the Court on a renewed motion for summary judgment by defendant Smalis, as to the entire complaint, on the ground of limitations. The motion was argued on September 27, 1985. Supplemental briefs were thereafter filed on certain points of law.

II.

Workmen’s Compensation Act and Limitations

In my earlier Report and Recommendation, I construed a theretofore unconstrued provision of Maryland workers’ compensation law, MD.ANN.CODE art. 101, § 58 (1985 Repl. Vol.), and I concluded that that statute did not postpone the accrual of plaintiff’s warranty cause of action until two months following his first award of compensation. Rather, I found that the plaintiff’s warranty cause of action accrued at the time of delivery of the allegedly defective equipment, on September 1, 1978, and that plaintiff’s warranty action was therefore barred by MD.COM.LAW CODE ANN. [U.C.C.] § 2-725 (1975). In effect, I held that MD.ANN.CODE art. 101, § 58 applied to tort claims prosecuted by a workers’ compensation recipient against a third party, but not to warranty claims, which arise ex contractu rather than ex delicto. Report and Recommendation at 6-7. Of course, in that Report and Recommendation, I had no occasion to construe MD.ANN.CODE art. 101, § 58 as it applied to plaintiff’s non-warranty claims, because there was then no motion pending to dismiss them on limitations grounds.

Smalis has now moved for summary judgment on all of plaintiff’s remaining claims, on limitations grounds. Since my Report and Recommendation of February 13, 1985, the Court of Appeals of Maryland has authoritatively construed MD.ANN. CODE art. 101, § 58. In Smith v. Bethlehem Steel Corp., 303 Md. 213, 228-30, 492 A.2d 1286, 1293-94 (filed June 3, 1985), the Court held that § 58 does not postpone the accrual of an injured employee’s cause of action against a third party until two months after his first award of compensation, but, rather, merely interrupts the running of limitations for a period of two months after his first award of compensation. In the instant case, the plaintiff’s injury occurred on February 25,1980. Suit was filed on June 9, 1983. Plaintiff received his first award of workers’ compensation on April 10, 1980. Thus, under Smith, the excludable period under MD. ANN.CODE art. 101, § 58 was the two months after April 10, 1980, viz., from April 10, 1980 through June 10, 1980. This excludable period, when added to the three year general limitations period in Maryland, MD.CTS. & JUD.PROC.CODE ANN. § 5-101 (1984 Repl.Vol.), gave plaintiff a total period of three years and two months within which to file his claim. The instant claim was not filed until more than three years and three months after the plaintiff’s injury. Therefore, on the face of the matter, the plaintiff’s entire complaint is time-barred under Maryland’s statute of limitations, as affected by MD.ANN.CODE art. 101, § 58, and as interpreted by the Court of Appeals in Smith.

III.

A. Availability of Limitations to Foreign Corporations

In order to save his causes of action against Smalis, the plaintiff has raised several arguments. The first, and most intriguing, is that the defendant Smalis, a foreign (i.e., non-Maryland) corporation, headquartered in New Stanton, Pennsylvania, is barred from raising the statute of limitations in defense of this suit by the operation of MD.CTS. & JUD.PROC.CODE ANN. § 5-204. That statute provides that a foreign corporation, required by law to qualify or register to do business in Maryland, cannot raise limitations in any action at law arising out of a liability incurred while the corporation was “doing business without having qualified or registered,” or instituted while the corporation “is doing intrastate or interstate or foreign business” in Maryland without having qualified or registered. It is undisputed in this case that Smalis, Inc., has never registered or qualified in Maryland under the applicable statutes, MD.CORPS. & ASS’NS.CODE ANN. §§ 7-202 and 7-203 (1985 Repl.Vol.).

B. The Statutory Qualification/Registration Requirement in Maryland

The two provisions of MD.CORPS. & ASS’NS.CODE ANN. governing registration and qualification of foreign corporations, viz., §§ 7-202 and 7-203, differentiate between foreign corporations doing interstate and foreign business in Maryland on the one hand, and those doing intrastate (Maryland) business on the other. A foreign corporation may satisfy all requirements to do intrastate, interstate and foreign business by qualifying under MD.CORPS. & ASS’NS.CODE ANN. § 7-203, which is a rather complex procedure. If it wishes to do only interstate and/or foreign business, it need not qualify under § 7-203, but need merely register, a much less complicated procedure under MD.CORPS. & ASS’NS.CODE ANN. § 7-202, but one which requires, inter alia, the appointment of a registered agent in Maryland for service of process. As mentioned, Smalis has neither qualified nor registered in Maryland.

C. Qualification and the Commerce Clause

Therefore, on the face of the Maryland corporation statutes and the limitations statute, Smalis is barred from raising the limitations defense. However, in this area, things are not quite as simple as they seem. It is an unconstitutional burden on interstate commerce for a state to require foreign corporations to qualify to do interstate business in that state before according to that corporation the same rights, remedies, and judicial fora as are available to domestic corporations. Allenberg Cotton Co. v. Pittman, 419 U.S. 20, 95 S.Ct. 260, 42 L.Ed.2d 195 (1974). Allenberg recognized that there is no legitimate state interest overriding the Commerce Clause that allows a state to discriminate, at least with regard to matters arising out of interstate commerce, between in-state and foreign corporations when it comes to making its courts available, especially to settle disputes that arise out of interstate commerce. Although the Allenberg Court held that, in some situations, a foreign corporation may be so heavily involved with a particular state, in terms of doing business within that state, as to require qualification as a condition upon its right to utilize that state’s judicial mechanisms, see, e.g., Eli Lilly & Co. v. Sav-On-Drugs, Inc., 366 U.S. 276, 81 S.Ct. 1316, 6 L,Ed.2d 285 (1961), the Court very clearly stated in Allenberg that the corporation’s presence in the host state must be much stronger than that arising from mere interstate sales activity before qualification can be constitutionally required. In sum, it must be doing “localized” business within the host state beyond merely selling its products there. 419 U.S. at 33, 95 S.Ct. at 267. The Allenberg Court distinguished Eli Lilly by pointing out that, in Eli Lilly, the foreign corporation had in the host state a large permanent sales force and a sales office, indicia of doing business there on a fixed and permanent basis sufficient to allow the host state constitutionally to subject it to licensure. 419 U.S. at 32.

D. Qualification and Registration under Maryland Statutes as Interpreted by Maryland Courts

At this juncture, it is necessary to examine the Maryland statutes requiring qualification and registration. On the face of the statutes, a corporation doing only interstate business in Maryland need not qualify, but need only register, which is a less burdensome procedure. The Maryland courts, though, have consistently construed the registration requirement in a fashion that avoids Commerce Clause problems, i.e., as not applying to foreign corporations that are not “doing business” in Maryland. In G.E.M., Inc. v. Plough, Inc., 228 Md. 484, 486-89, 180 A.2d 478, 480-81 (1962), the Court of Appeals of Maryland adopted a within-Maryland “doing business” test in construing the forerunners of §§ MD.CORPS. & ASS’NS.CODE ANN. §§ 7-202 and 7-203. The Court made no distinction, in adopting that test, between qualification and registration, 228 Md. at 486, 180 A.2d at 480, and it noted that adoption of this test avoided Commerce Clause problems in the case of corporations doing only interstate business in Maryland, 228 Md. at 489, 180 A.2d at 481. The “doing business” test requires far more than occasional interstate sales activity conducted in Maryland. There is no fixed formula for determining whether a corporation is doing business in Maryland. Rather, doing business requires a permanent corporate presence in Maryland, traditionally manifested by such instate activities as: maintaining a Maryland sales force, having Maryland personnel, having a Maryland distribution network, payment of Maryland taxes, ownership of Maryland real estate, and/or other typical indicia of doing intrastate business in Maryland. S.A.S. Personnel Consultants, Inc. v. Pat-Pan, Inc., 286 Md. 335, 339, 407 A.2d 1139, 1142 (1979). The plaintiff here has the burden of proving that the foreign corporation is doing business in Maryland in the sense adverted to. Id.

The second affidavit of Mr. Smalis accompanying Paper No. 82 herein shows that Smalis, Inc. has: never maintained any place of business or office in Maryland; never had a telephone or telephone listing in Maryland; never owned property in Maryland; never had any bank account in Maryland; never paid taxes in Maryland; never had corporate meetings in Maryland; never maintained employees, distributors, or agents in Maryland; never maintained inventory in Maryland; never maintained any research and development facilities in Maryland; never conducted any advertising in Maryland, except to mail brochures to Maryland customers; but it has occasionally sold and delivered products to Maryland customers who placed orders with Smalis in Pennsylvania. Mr. Smalis’ first affidavit accompanying the same filing shows that Smalis’ sales in Maryland have typically accounted for around 3% of recent years’ total sales. The affidavit of Despina Apostolakis, accompanying plaintiff’s supplemental memorandum in opposition to defendant’s motion, shows only that Smalis had a continuing sales relationship with several Maryland customers, including the plaintiff’s employer, C.J. Langenfelder. Additionally, deliveries to Maryland customers were occasionally made in Smalis’ own trucks. This is no more, essentially, than Mr. Smalis has himself stated in his affidavit; it shows nothing more than interstate sales to Maryland customers. Under the Maryland case law interpreting the statutes in question, it is perfectly evident that Smalis, Inc., may not be considered to have been doing business in Maryland without the requisite registration. See also Aeropesca, Ltd. v. Butler Aviation, 44 Md.App. 610, 616-19, 411 A.2d 1055, 1059-61 (1980).

E. The Commerce Clause and MD.CTS. & JUD.PROC.CODE ANN. § 5-204

The statute at issue in Allenberg was a door-closing statute that purported to deny an unqualified foreign corporation the right to use the forum state’s courts to press a claim for affirmative relief. A like door-closing bar in Maryland has been held constitutionally inapplicable to an unregistered foreign corporation, desiring to assert a counterclaim in a Maryland court, when the corporation cannot be said to be doing business in Maryland. Finch v. Hughes Tool Co., 57 Md.App. 190, 245-46, 469 A.2d 867, 894-95, cert. denied, 300 Md. 88, 475 A.2d 1200 (1984), cert. denied, 105 S.Ct. 1190, 84 L.Ed.2d 336 (1985). No Maryland case has addressed the interplay between § 5-204, which bars only the defense of limitations, and the Commerce Clause. The purpose of § 5-204 is apparent. If a foreign corporation does not appoint an agent for service of process in Maryland (which is part of the registration scheme of § 7-202), then it is more difficult to locate and serve the corporation with a lawsuit filed in the Maryland courts. Therefore, the legislative judgment expressed in § 5-204 is that the unregistered foreign corporation, not having made it easy for a plaintiff to serve it with process, should be completely barred from raising limitations.

The barring of a litigant from raising a specific defense is, obviously, a less drastic burden on interstate commerce than closing the courthouse doors completely in its face. If the limitations statute required, through its incorporation of the provisions of the Corporations and Associations Code, that a foreign corporation be qualified or licensed in Maryland to be able to raise limitations, even if it were doing only interstate business here, the statute would impose an impermissible burden on interstate commerce, repugnant per se to the Commerce Clause. Coons v. American Honda Motor Co., 94 N.J. 307, 463 A.2d 921, 926-27 (1983), cert. denied, — U.S.-, 105 S.Ct. 808, 83 L.Ed.2d 800 (1985). Whether the Coons rationale would apply to the less burdensome process of registration is an open question. However, even if Coons draws the validity of mere registration into constitutional question, this Court need not declare § 5-204 unconstitutional unless it would apply under Maryland decisional law to companies doing only interstate business in Maryland. The court in Coons held that the New Jersey statute in question applied to foreign corporations “regardless of the nature of their business (interstate or intrastate)____” 463 A.2d at 926.

Although the precise question has not arisen in reported Maryland cases, this Court is of the opinion that the Maryland courts would construe “doing business” in the same way for purposes of analysis under § 5-204 (which incorporates MD.CORPS. & ASS’NS.CODE §§ 7-202 and 7-203 by necessary reference) as they have under the broader door-closing statute, MD.CORPS. & ASS’NS.CODE § 7-301, which also necessarily incorporates §§ 7-202 and 7-203. That is, a foreign corporation is simply not required to register in Maryland, either to litigate its own claims or defend itself on limitations grounds, unless it is doing intrastate business in Maryland. See G.E.M. v. Plough, Inc., 228 Md. at 486-89, 180 A.2d at 480-81. See also Aeropesca, Ltd. v. Butler Aviation, 44 Md.App. at 618-19, 411 A.2d at 1060-61. Under the present facts, because Smalis cannot be said to be doing business intrastate in Maryland, the registration requirement of § 7-202 would not be applicable to it, thus rendering § 5-204 inapplicable in turn. Essentially because of the caution with which the Maryland courts have approached the registration requirement of § 7-202, then, the constitutional question need not be answered under the facts of this case.

IY. The “Discovery Rule" Applied

Having concluded that Smalis is not barred from raising the limitations defense, the next step is to determine whether there is a bar raised to that defense by the so-called “discovery rule.” See Poffenberger v. Risser, 290 Md. 631, 431 A.2d 677 (1981). The essence of the Poffenberger discovery rule is that a plaintiff’s cause of action arises when there is actual knowledge sufficient to put a putative plaintiff on inquiry. 290 Md. at 637, 431 A.2d 677. The only actual knowledge required, though, is knowledge of the circumstances of the plaintiff’s injury, not knowledge of the further subsidiary facts supporting liability that would have been discoverable by an inquiry thoroughly conducted by the plaintiff at the time. See O’Hara v. Kovens, 60 Md.App. 619, 631-32, 484 A.2d 275, 282-83, (1984), cert. granted, 303 Md. 20, 491 A.2d 586 (1985). As the Court of Special Appeals stated in Lutheran Hospital v. Levy, 60 Md.App. 227, 237, 482 A.2d 23, 27 (1984), cert. denied, 302 Md. 288, 487 A.2d 292 (1985): “The beginning of limitations is not postponed until the end of an additional period deemed reasonable for making the investigation.”

It is evident in this case that the plaintiff knew, on the very date he was injured, that he had been injured by a conveyor device in a scrapyard operated by his employer, C.J. Langenfelder. He knew precisely the nature of the injurious instrumentality, as he was attempting to repair it at the time. It is not germane that he did not know, on that date, who its manufacturer or seller was. O’Hara, 60 Md.App. at 632, 484 A.2d at 282. As already stated, he knew the identity of the mechanical device that caused his injury, as well as the entire, unfortunate extent of that injury. A reasonable inquiry started then and there could have developed within the period of limitations the facts pointing to the identity of the device’s seller-manufacturer, and when, where, and from whom it was purchased by Langenfelder. The facts that no such inquiry was in fact instituted eo instante or that the information was not discovered until after suit was brought do not, as the above-quoted excerpt from Lutheran Hospital demonstrates, further postpone the beginning of limitations. This case is unlike that of Rockstroh v. A.H. Robbins Co., Inc., 602 F.Supp. 1259, 1264 (D.Md.1985), in which the product’s design defect was so subtle as to require substantial medical expertise to discover that it caused the plaintiff’s injury. In this case, from the very date of the accident, it was apparent that the entire mechanism in question was not provided with screens, guard rails, and/or warning signs. All of these physical defects, which form the very basis of plaintiff’s negligence and strict liability claims against Smalis, were inherent, obvious physical characteristics of the machine in question, observable from the date it was delivered, through the date of injury, and thereafter. Thus, the product defects here relied upon to show liability were not subtle, hidden, or otherwise so difficult to discover that an attenuated discovery rule, beyond the dictates of O’Hara and Lutheran Hospital, ought to be applied.

The plaintiff’s claim of some sort of conspiracy of silence preventing him from discovering Smalis’ role is simply not supported by any facts sufficient to overcome straightforward application of the Poffenberger rule, as discussed in the preceding paragraph. The plaintiff’s lack of actual knowldge of the precise facts upon which to formulate his theories of liability, including the identity of the manufacturer, is not a bar to application of the Poffenberger rule, so long as the circumstances of the injury, including the patent defects in the machine, were perfectly obvious. The remaining facts can be discovered by reasonable inquiry. The limitations period is not further tolled for procuring the opinion of an expert that the patent defects in the machine constitute, in fact, a basis upon which a negligence or strict liability counts can be bottomed. As the decisions in Lutheran Hospital and O’Hara make clear, what the plaintiff actually does or does not discover on inquiry is quite immaterial. Here, there is no sustainable claim made of fraud on the part of defendant Smalis or any one else that ameliorates the normal operation of the rules in question. Cf. MD.CTS. & JUD.PROC.CODE ANN. § 5-203.

For the reasons stated, I respectfully recomend to the Court that, upon the expiry of time for taking exception to this Report and Recommendation provided in FED.R.CIV.P. 72(b), an order be entered granting the defendant Smalis’ motion for summary judgment and entering judgment in its favor, on the ground that all of the plaintiff’s claims are barred by limitations.

FEDERAL RULE OF CIVIL PROCEDURE 72.

MAGISTRATES; PRETRIAL MATTERS

(a) NONDISPOSITIVE MATTERS. A magistrate to whom a pretrial matter not dispositive of a claim or defense of a party is referred to hear and determine shall promptly conduct such proceedings as are required and when appropriate enter into the record a written order setting forth the disposition of the matter. The district judge to whom the case is assigned shall consider objections made by the parties, provided they are served and filed within 10 days after the entry of the order, and shall modify or set aside any portion of the magistrate’s order found to be clearly erroneous or contrary to law.

(b) DISPOSITIVE MOTIONS AND PRISONER PETITIONS. A magistrate assigned without consent of the parties to hear a pretrial matter dispositive of a claim or defense of a party or a prisoner petition challenging the conditions of confinement shall promptly conduct such proceedings as are required. A record shall be made of all evidentiary proceedings before the magistrate, and a record may be made of such other proceedings as the magistrate deems necessary. The magistrate shall enter into the record a recommendation for disposition of the matter, including proposed findings of fact when appropriate. The clerk shall forthwith mail copies to all parties.

A party objecting to the recommended disposition of the matter shall promptly arrange for the transcription of the record, or portions of it as all parties may agree upon or the magistrate deems sufficient, unless the district judge otherwise directs. Within 10 days after being served with a copy of the recommended disposition, a party may serve and file specific, written objections to the proposed findings and recommendations. A party may respond to another party’s objections within 10 days after being served with a copy thereof. The district judge to whom the case is assigned shall make a de novo determination upon the record, or after additional evidence, of any portion of the magistrate’s disposition to which specific written objection has been made in accordance with this rule. The district judge may accept, reject, or modify the recommended decision, receive further evidence, or recommit the matter to the magistrate with instructions.

      . The Smith court did not address the tort-warranty distinction upon which my analysis rested. It is noted, however, that the Smith plaintiffs action was a tort action, 303 Md. at 219 n. 1, 492 A.2d at 1288 n. 1, and that the holding in Smith does not change the result of my earlier Report and Recommendation in any event.

      . It is undisputed that the present case involves goods that travelled in interstate commerce from Pennsylvania to Maryland.

      . Finch did not discuss the difference in the Maryland statutes between registration and qualification, probably because of the Maryland courts’ interpretations of both statutes as requiring that the foreign corporation be doing intrastate business, see G.E.M., Inc. v. Plough, Inc., 228 Md. at 486, 180 A.2d at 480, but it did bottom its holding on the Allenberg case.

      . Or in diversity cases filed in this District Court, as § 5-204 has been held to be part of the substantive law of Maryland. Rockstroh v. A.H. Robbins Co., Inc., 602 F.Supp. 1259, 1263-64 (D.Md.1985).

      . If the company is doing interstate business in the forum state, the statute obviously may constitutionally be applied to it. McKinley v. Combustion Engineering, Inc., (746 F.2d 1486 (9th Cir.1984)), reversing in part 575 F.Supp. 942 (D.Idaho 1983).

      . Whether Smalis sold the conveyor device as a group of unassembled parts or as an assembled device is simply a disputed issue of fact, not a physical fact which has somehow been fraudulently concealed.


author: ROBERT H. HALL, District Judge.

text:
    The STATE OF GEORGIA ex rel. Lewis R. SLATON and James L. Webb, Plaintiff, v. FLECK & ASSOCIATES, INC., Charles R. Fleck, Ronald C. Hayes, Eddie S. Sigsbey and Michael Clutter, Defendants.
    Civ. A. No. C85-2374A.
    United States District Court, N.D. Georgia, Atlanta Division.
    Nov. 21, 1985.

      Charles S. Hunter, Atlanta, Ga., for plaintiff.
    Brian Spears, Atlanta, Ga., for defendants.
   ORDER

ROBERT H. HALL, District Judge.

Plaintiff, the State of Georgia, brings this action seeking to abate a public nuisance under Georgia’s Nuisance Statute, Ga.Off’l Code Ann. § 41-1-1 et seq. Specifically, the State seeks an Order enjoining the activity taking place at Club Atlanta, located at 76 4th Street, Atlanta, Georgia, and authorizing the State to close and padlock Club Atlanta for one year. According to the State, Club Atlanta is “used predominately as a meeting place for males and ... continuing and frequent incidents of lewdness, oral and anal sodomy, and sexual contact between various male patrons occurs on a repeated basis in the premises.” The activity at Club Atlanta, asserts the State, violates the criminal laws, tends greatly to corrupt the manners and morals of the public, and is manifestly injurious to the public health by increasing the risk of spreading contagious and infectious diseases, in particular Acquired Immune Deficiency Syndrome (“AIDS”).

This action was initiated in the Superior Court of Fulton County, Georgia, on February 7, 1985. It was subsequently removed to this court on the basis of diversity of citizenship on April 3, 1985. The issue presently before the court is whether this action is a removable “civil action” for purposes of the applicable federal removal statute, 28 U.S.C. § 1441.

Under the general removal statute, “any civil action brought in a State court ... may be removed by the defendant or the defendants, to the [appropriate] district court____” 28 U.S.C. § 1441(a) (Emphasis added). By contradistinction, an action which is criminal or quasi-criminal cannot be removed from state court. See, e.g., Mulligan v. Western Union Telegraph Co., 20 F.Supp. 953, 959 (D.N.J.1937).

The burden is on the party seeking to remove a state action to federal court to establish his/her/its right to do so. Irving Trust Co. v. Century Export & Import, 464 F.Supp. 1232, 1236 (S.D.N.Y.1979); Tasner v. U.S. Industries, Inc., 379 F.Supp. 803, 809 (N.D.I11.1974). See, generally, C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3721, at 209-10.

A case should be remanded if there is doubt as to the right of removal. Croy v. Buckeye International, Inc., 483 F.Supp. 402, 405 (D.Md.1979); Smith v. St. Luke’s Hospital, 480 F.Supp. 58, 60-61 (D.S.D.1979); Irving Trust Co. v. Century Export & Import, supra, 464 F.Supp. at 1236; Wilhelm v. United States Department of Air Force, 418 F.Supp. 162, 165 (S.D.Tex.1976); Tasner, supra, 379 F.Supp. at 809; Greater New York Mutual Insurance Co. v. Anchor Construction Co., 326 F.Supp. 245, 248 (E.D.Pa.1971).

Federal and not state law controls whether a state proceeding is “civil” in nature for purposes of removal. See Commissioners of Road Improvement District v. St. Louis & Southwestern Railway Co., 257 U.S. 547, 557-58, 42 S.Ct. 250, 254, 66 L.Ed. 364 (1922); Cowart Iron Works, Inc. v. Phillips Construction Co., 507 F.Supp. 740, 744 (S.D.Ga.1981). See also Grubbs v. General Electric Corp., 405 U.S. 699, 705, 92 S.Ct. 1344, 1349, 31 L.Ed.2d 612 (1972); Paxton v. Weaver, 553 F.2d 936, 940 (5th Cir.1977). See, generally, 1A J. Moore & B. Ringle, Moore’s Federal Practice ¶ 0.157(4.-2), at 67 (“Whether a state proceeding is a civil action, for removal purposes, and has been properly removed involves the construction of the removal statute and hence presents a federal matter, and state decisions are not controlling.”).

The nature of the right asserted, rather than the form of the proceeding, determines whether an action is of a civil or criminal nature. See Quinn v. A Book

Named “Sixty Erotic Drawings From Juliette”, 316 F.Supp. 289, 292 (D.Mass.1970). See, generally, 1A J. Moore & B. Ringle, Moore’s Federal Practice II 0.157(4.-2), at 67-68. A suit brought by a state to vindicate its public policy and to recover a penalty for the benefit of the state has been held not to be civil in nature for the purposes of removal. See State ex rel. Warren v. F. W. Woolworth Co., 30 F.Supp. 410, 411 (W.D. Mo.1939) (“a suit by the state ... to recover a penalty for some wrongful act from an individual, to recover that penalty for the state or for disposition by the state to some governmental agency of the state, must be a suit which is not civil in its nature. A suit civil in its nature is an action for private injury looking to a recovery for private benefit.”). Similarly, a suit by a state to vindicate its criminal laws by enjoining violations thereof, and suits of a related nature, have been held not be civil in nature for removal purposes. See Quinn, supra, 316 F.Supp. at 289. See, generally, 1A J. Moore & B. Ringle, Moore’s Federal Practice 1J 0.157(4.-2), at 69.

Applying these principles to the instant action, the court concludes that this action resembles a criminal proceeding more than it resembles a civil proceeding and is thus nonremovable. It is an action to vindicate public policies of Georgia— namely, public policies against sodomy, lewdness, and threats to the public health — which could have been brought only by the State; it is not an action to redress a private injury. This action, admittedly prohibitory in nature, is also somewhat penal in nature; the State is in effect seeking to penalize defendants (with a monetary fine as well as forfeiture of Club Atlanta) for permitting violations of the criminal laws and for permitting activity which constitutes a risk to the public health. Further, the prohibitory nature of the action aids in the enforcement of Georgia’s criminal laws. Finally, in the event a monetary penalty is assessed, the money will become public funds. Considering all these factors together, and resolving all doubts in favor of remand, the court must conclude that this action is quasi-criminal, and thus non-civil.

The court recognizes the authorities cited by defendants weighing in favor of removal, see, e.g. 58 Am.Jur.2d Nuisances, §§ 142, 145; 66 C.J.S. Nuisances § 109, but is not persuaded to rule otherwise.

The court REMANDS this action to the Superior Court of Fulton County. In the words of 28 U.S.C. § 1447(c), this case “was removed improvidently and without jurisdiction.”

      . See Ga.Offl Code Ann. §§ 41-1-1, 41-1-2, 41-1-3, 41-2-1, 41-2-2, 41-3-1, 41-3-2, and 41-3-7.

      . The court raised this issue in its order of September 11, 1985. Defendants and plaintiff have had the opportunity to brief the issue so it is now ready for disposition.

      . The right to remove a case from a state to a federal court is purely statutory. See generally, C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3721, at 185.

      . This rule comes from the Supreme Court’s statement that ‘"[d]ue regard for the rightful independence of state governments ... requires that [federal courts] scrupulously confine their own jurisdiction to the precise limits which the [removal] statute has defined.’ ” Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941).
      One judge has explained the practical point of this rule as follows:
      If removal jurisdiction is doubtful, a remand spares both the courts and the parties the burden of a litigation that may turn out to have been an exercise in futility, when years later, an appellate court determines that subject matter jurisdiction was lacking ab initio ____ Further, remanding the doubtful ... case serves the interest of the state in having its own court interpret and apply state law.

        Irving Trust Co. v. Century Export & Import, 464 F.Supp. 1232, 1236 n. 8 (S.D.N.Y.1979). See also Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 355, 96 S.Ct. 584, 595, 46 L.Ed.2d 542 (1976) (Rehnquist, J., in dissent recognized that there is “minimal possible harm [from erroneous remand] to the party attempting removal— who will still receive a trial on the merits before a state court which cannot be presumed to be unwilling or unable to afford substantial justice.”).

      . Thus, Georgia law does not bind this court, contrary to what defendants maintain.

      . The court does not intend to suggest that all actions to abate a public nuisance are necessarily non-civil in nature. Every case must be analyzed on its own facts.

      . See Ga.Off'l Code Ann. §§ 16-6-2(a) and 16-6-15.

      . Defendants argue that this action cannot be deemed penal or criminal because they have not engaged and do not engage in criminal activity. The court concedes that this action is not like a criminal prosecution; this is not determinative of the issue, however. The question before the court is whether this action is "civil." A quasi-criminal action, albeit not strictly criminal, is noncivil and nonremovable.