author: BATTISTI, Chief Judge.

text:
    Robert J. AFFELDT, et al., Plaintiffs, v. Magistrate James G. CARR, Defendant.
    No. C85-1319.
    United States District Court, N.D. Ohio, E.D.
    Nov. 5, 1985.

      Robert Affeldt, St. Petersburg, Fla., for plaintiffs.
    Robert S. Catz, Cleveland, Ohio, Terence J. Anderson, Coral Gables, Fla., Roger M. Synenberg, Asst. U.S. Atty., Cleveland, Ohio, for defendant.
   ORDER

BATTISTI, Chief Judge.

On October 2, 1985, this Court issued a brief order granting defendant’s motion for summary judgment and dismissing plaintiff’s complaint with prejudice. At that time, the Court stated that it would issue an opinion seasonably in order to state fully the grounds for its decision. In recognition of the important issues raised in this case and the Court’s obligation to the litigants, the following opinion sets out the basis for the order of October 2, 1985.

I.

On May 6,1985, plaintiff filed the instant complaint, alleging violation of First Amendment rights of free speech and association, Fifth Amendment equal protection rights and Sixth Amendment rights to counsel and an “unbiased tribunal.” Plaintiff, for himself and over 300 class members, alleges that Magistrate James G. Carr deprived them of their rights in the course of proceedings before him which occurred in September 1983. Plaintiffs pray for an injunction against the Magistrate prohibiting him from infringing upon plaintiffs’ constitutional rights; a declaratory judgment that the Magistrate’s actions were unconstitutional; and $6,000,000 in monetary damages plus reasonable attorney’s fees and costs.

On May 9, 1985, defendant moved to dismiss the case with prejudice pursuant to Federal Rule of Civil Procedure 12(b)(6). On May 28, 1985, plaintiff responded to defendant’s brief.

Plaintiff invokes this Court’s jurisdiction pursuant to 28 U.S.C. § 1331 (federal question jurisdiction); 28 U.S.C. § 1343(4) (original jurisdiction “to recover damages or ... other relief under an Act of Congress providing for the protection of civil rights”); and 28 U.S.C. §§ 2201, 2202 (jurisdiction of “any court of the United States” to make declaratory judgments). Jurisdiction is proper in this Court.

II.

Plaintiff is a former law professor who taught at various universities, including the University of Toledo, for eighteen years. He is a licensed attorney in the State of Ohio, who, in his own words, “practices Title VII law.” Defendant, formerly a law professor at the University of Toledo Law School, has been a fulltime Magistrate of the United States District Court for the Northern District of Ohio, Western Division sitting in Toledo since September 29, 1979.

Plaintiff alleges that the Magistrate engaged in a “pattern and practice of dismissing class actions without an evidentiary hearing when disputed facts exist, of depriving plaintiffs and class members of their choice of counsel, of penalizing them when they exercise their constitutional rights of free speech and association.” Complaint at 3. Specifically, plaintiff states that in September 1983, the Magistrate without providing plaintiff notice or an evidentiary hearing, disqualified the plaintiff as a class attorney in Sharp v. Owens Coming Fiberglass, C80-450. Plaintiff contends that the Magistrate’s decision was based on the testimony of two perjured witnesses and that the Magistrate refused to reconsider when he learned the testimony had been recanted.

Plaintiff contends that in the same case, the Magistrate ordered the class representatives to “seek other independent counsel who would not speak to or associate with former counsel,” namely, the plaintiff. Complaint at 4. Plaintiff interprets this action as a “gag order.” He contends that when the law firm of Joseph W. Westmeyer, Jr. & Co., L.P.A. was retained, the Magistrate not only disqualified that law firm from acting as class counsel but also disqualified the plaintiffs from acting as class representatives.

In the second count of his complaint, plaintiff contends “[t]he Magistrate has entered into a conspiracy with three large law firms in the City of Toledo to dismiss all class action lawsuits in which the plaintiff is counsel or ‘of counsel.’ ” Complaint at 5. Plaintiff contends these actions were dismissed without an evidentiary hearing with facts still in dispute and that the Magistrate adopted arguments and opinions wholesale from briefs of the parties opposed to plaintiff. In addition, plaintiff alleges that the Magistrate “has associated with members of the firms who have opposed the plaintiff in these class action suits and has permitted a member of one of these firms to represent his wife and still litigates before him.” Complaint at 6.

Counts III and IV of the Complaint repeat charges of interference with the right to counsel and due process. In Count V, “plaintiffs contend the magistrate, by writing opinions denying class certification before evidentiary hearings, has interfered with the plaintiff and class members’ constitutional right to an impartial tribunal.” Count VI alleges that the Magistrate knowingly deprived plaintiffs of constitutional rights and “carried out such policy with a malicious intent to cause a deprivation of fundamental constitutional rights.”

III.

Defendant moves to dismiss with prejudice on the grounds that plaintiff has failed to state a cause of action. Specifically, defendant contends that the doctrine of judicial immunity warrants dismissal of the instant action and that there are adequate remedies at law, namely, appellate proceedings, which would permit plaintiff to receive redress of any injuries he may have sustained.

The Supreme Court has consistently held since 1868 that judges are absolutely immune from civil suits for damages. See, e.g., Stump v. Sparkman, 435 U.S. 349, 98 S.Ct. 1099, 55 L.Ed.2d 331 (1978); Pierson v. Ray, 386 U.S. 547, 87 S.Ct. 1213, 18 L.Ed.2d 288 (1967); Bradley v. Fisher, 13 Wall. (80 U.S.) 335, 20 L.Ed. 646 (1871); Randall v. Brigham, 7 Wall. (74 U.S.) 523, 19 L.Ed. 285 (1868). The doctrine was established “to protect the finality of judgments from continual collateral attack in courts of competing jurisdiction [footnote omitted] and to protect judicial decision-making from intimidation and outside interference.” Pulliam v. Allen, 466 U.S. 522, 546-47, 104 S.Ct. 1970, 1983, 80 L.Ed.2d 565 (1984) (Powell, J. dissenting).. The immunity doctrine is based on the notion that the “burdens of litigation,” including the time, costs, and anxiety expended in defending oneself in a suit, would pose a threat to judicial independence and decisiveness. Id. at 548, 104 S.Ct. at 1984. However, while emphasizing that judicial immunity barred damage actions, see Pulliam, 466 U.S. at 536-39, 536 n. 15, 104 S.Ct. at 1978-79, 1978 n. 15, the majority of the Supreme Court held that judicial immunity does not bar prospective injunctive relief against a judicial officer. Pulliam specifically held that judicial immunity does not bar an award of attorney’s fees against a judicial officer. Id. at 543-44, 104 S.Ct. at 1981-82.

Since plaintiff asks for both monetary and injunctive relief, this Court will first examine the issue of damages.

A.

JURISDICTION

The standards for the applicability of judicial immunity have most recently been restated in Martinez v. Winner, 771 F.2d 424, 434-36 (10th Cir.1985), and King v. Love, 766 F.2d 962, 965-68 (6th Cir.1985). The essential prerequisites to immunity are that the judge not act in the clear absence of all jurisdiction and that he be performing a judicial act. Stump v. Sparkman, 435 U.S. 349, 359, 98 S.Ct. 1099, 1106, 55 L.Ed.2d 331; Pierson v. Ray, 386 U.S. 547, 553-54, 87 S.Ct. 1213, 1217, 18 L.Ed.2d 288. The judge must have both subject matter jurisdiction of the matter before him and personal jurisdiction over the defendant. Stump, 435 U.S. at 357-59, 98 S.Ct. at 1105-06; Bradley v. Fisher, 13 Wall. (80 U.S.) 335, 351-52, 20 L.Ed. 646; Cuiska v. City of Mansfield, 250 F.2d 700, 702 (6th Cir.1957); Kenny v. Fox, 232 F.2d 288 (6th Cir.), cert. denied sub nom., Kenny v. Killian, 352 U.S. 855, 77 S.Ct. 84, 1 L.Ed.2d 66 (1956).

Hence, this Court must examine each of the acts complained of and determine whether the defendant was acting within his jurisdiction. In undertaking this inquiry, it must be noted that the “scope of a judge’s jurisdiction must be construed broadly,” Stump, 435 U.S. at 356, and that even though federal courts are courts of limited jurisdiction, federal judicial officers are absolutely immune from damages even if they act in excess of their jurisdiction. King v. Love, 766 F.2d at 967.

Plaintiff alleges that defendant engaged in misconduct in the case of Sharp v. Owens Coming Fiberglass, C80-450, which was filed in the United States District Court for the Northern District of Ohio, Western Division. Plaintiff is listed as counsel for plaintiffs in Sharp. The case, which was designated a class action seeking to enforce a claim of racial discrimination in employment under 42 U.S.C. § 1981 and Title VII, was filed on July 21, 1980. The case was assigned to district Judge Nicholas Walinski. The docket sheet indicates numerous filings in this action between July 1980 and April 1982. On April 21, 1982, Judge Walinski denied the preliminary injunction sought by plaintiffs. Plaintiff appealed to the Sixth Circuit Court of Appeals on April 28, 1982. On October 6, 1982, plaintiff filed a motion for recusal of Judge Walinski. On November 23, 1982, plaintiff’s motion for recusal was denied. On December 1, 1982, plaintiff moved to transfer all discovery and non-dis-positive matters.

On December 2, 1982, Judge Walinski granted plaintiff’s motion to transfer all discovery and non-dispositive matters to the Magistrate. The Magistrate assigned to the judges of the Western Division is James G. Carr, the defendant in the instant case.

It was, then, by plaintiff’s own motion that he consented to defendant’s supervision and jurisdiction over his case. There appears to be nothing unusual in the way this matter was assigned to the Magistrate. Hence, plaintiff had consented to the Magistrate’s jurisdiction. Furthermore, plaintiff admits in his Response to Defendant’s Motion to Dismiss (“Response”) that “it is acknowledged that the Magistrate has subject matter jurisdiction over the Title VII lawsuit____” Response at 11. Plaintiff goes on to state, however, that the Magistrate lacked subject matter jurisdiction to issue the “disqualification and gag orders.” Id.

Under 28 U.S.C. § 636(b)(1)(A), “a judge may designate a magistrate to hear and determine any pretrial matter pending before the court, except a motion ... to dismiss or to permit maintenance of a class action____” Subparagraph (B) goes on to state that “a judge may also designate a magistrate to conduct hearings, including evidentiary hearings, and to submit to a judge of the court proposed findings of fact and recommendations for the disposition, by a judge of the court, of any motion excepted in subparagraph (A).”

The issuance of orders disqualifying counsel and the issuance of gag orders are indeed pretrial matters which do not fall within the exception of 28 U.S.C. § 636(b)(1)(A). The Magistrate, therefore, had subject matter jurisdiction to issue such orders.

B.

JUDICIAL ACTS

Plaintiff, however, argues that “[s]ince the disqualification and gag orders were not preceded by an evidentiary hearing ... these acts by the Magistrate were non-judicial in nature____” Response at 8. The standard for determining whether an act is “judicial” was set out in Stump v. Sparkman, 435 U.S. 349, 362, 98 S.Ct. 1099, 1107, 55 L.Ed.2d 331, as “one relatpng] to the nature of the act itself, i.e., whether it is a function normally performed by a judge, and to the expectations of the parties, i.e., whether they dealt with the judge in his judicial capacity.” Using these two factors, it is clear that the magistrate’s acts were indeed “judicial” in nature since the issuance of gag orders and rulings on counsel’s continued representation of a client are both prerogatives of a judge.

The thrust of plaintiff’s contention, however, is that since the defendant did not conduct an evidentiary hearing pri- or to making his decisions, these decisions were based on prejudice. In the first instance, a judicial officer is not required to hold a hearing prior to issuing a gag order. Gag orders fall within the Court’s prerogative to maintain appropriate decorum in the administration of justice and protect the rights of the litigants from prejudice. See Sheppard v. Maxwell, 384 U.S. 333, 86 S.Ct. 1507, 16 L.Ed.2d 600 (1966); In re Oliver, 452 F.2d 111 (7th Cir.1971). Furthermore, gag orders do not violate a party’s free speech rights. United States v. Tijerina, 412 F.2d 661 (10th Cir.), cert. denied, 396 U.S. 990, 90 S.Ct. 478, 24 L.Ed.2d 452 (1969). There must simply be evidence or findings that the judicial officer finds imminent prejudice to the administration of justice. In re Oliver, supra. As most recently noted in Martinez v. Winner, a judge is ultimately responsible for controlling the atmosphere at proceedings and is immune for acts taken in furtherance of that duty. Martinez, 771 F.2d at 434-35.

Similarly, the power and duty to disqualify counsel are exercised by a judge as a condition of the federal court’s power to regulate the professional conduct of attorneys admitted to its bar. Ceramco Inc. v. Lee Pharmaceuticals, 510 F.2d 268, 270-71 (2d Cir.1975); In re Gopman, 531 F.2d 262, 266 (5th Cir.), reh’g denied, 542 F.2d 575 (1976). The trial court’s obligation is to prevent any potential conflict of interest. Tucker v. Shaw, 378 F.2d 304 (2d Cir.1967).

Plaintiff also states that the defendant performed various “ministerial or administrative duties” to which he is not entitled to judicial immunity. Response at 8. This Court does not regard any of the actions listed by plaintiff on page 9 of his Response as “ministerial.” The signing of protective orders, granting or refusing permission to take depositions, and awarding or denying interest on attorney’s fees awards all go directly to the conduct of discovery, pretrials and the administration of a judgment. These actions could scarcely be called anything less than “judicial,” for they lie at the heart of a trial court’s duties. See Martinez, 771 F.2d at 434.

Citing the case of Lopez v. Vanderwater, 620 F.2d 1229 (7th Cir.1980), plaintiff analogizes defendant’s conduct to the exercise of “prosecutorial powers.” Response at 6-7. The test enunciated in Sevier v. Turner, 742 F.2d 262, 272 (6th Cir.1984), is “whether initiating accusatory processes such as criminal prosecutions or civil contempt proceedings is a function normally performed by a judicial officer.” (Citing Stump, 435 U.S. at 362, 98 S.Ct. at 1107.) Plaintiff complains that in his orders of July 17 and July 18, 1984, “the Magistrate called upon the defendant’s law firm to conduct an investigation into the legal and personal activities of attorney Affeldt____” Response at 7. An examination of the orders, attached as exhibits to plaintiff's Response, does not show the Magistrate ordering any investigation. Rather, what appears is the Magistrate grappling with defendant’s motion to disqualify Affeldt. The Magistrate states that “it appears that certain readily ascertainable facts are in dispute, and that those facts may have some pertinence to the resolution in question.” July 19, 1984 Order at 1. The Magistrate asks defendant to supplement the record in support of this motion. Id. at 2. Such requests to supplement the record are made to assist the Court in rendering an informed decision; such requests are not in the nature of orders for independent investigations.

This Court will not at this time initiate a de novo review to determine whether the Magistrate's requests were appropriate or overbroad in the sense that the materials requested were more than necessary for rendering his decision. As stated by the Sixth Circuit in Sevier v. Turner, 742 F.2d 262, 271 (6th Cir.1984), “a judicial officer does not act in the clear absence of all jurisdiction if he merely acts in excess of his authority.” There is no indication in this case that the defendant acted in a manner outside either his authority or jurisdiction. Ultimately, the conduct complained of here can be distinguished from those cases where judges order “independent investigations of crimes occurring outside their courtrooms.” See Martinez, 771 F.2d at 435. Thus, the Magistrate did perform judicial acts which were within his jurisdiction; consequently, he is entitled to absolute judicial immunity as to the alleged damages for his acts.

Plaintiff contends that the Magistrate’s acts are part of a “conspiracy” (Count II of Complaint), and are motivated by “malicious intent” (Count VI of Complaint). He states that they were “simply a continuation of the vendetta which the Magistrate had previously waged against attorney Affeldt [plaintiff] at the University of Toledo Law School.” Response at 8. This Court will not consider such allegations. It is well-established that a judge is entitled to immunity even if he acted with partiality, maliciously or corruptly. Bradley v. Fisher, 13 Wall. (80 U.S.) 335, 348, 20 L.Ed. 646 (1871). Even if a judge has prejudged a matter before him, judicial immunity applies. Martinez, 771 F.2d at 435. Given plaintiff’s allegations, it is surprising that he would not only consent to the defendant’s supervision and jurisdiction over pre-trial matters but would move for the Magistrate’s participation in the first instance. The Court does not wish to permit actions against judges and magistrates to become a post-judgment mechanism for losing parties to seek review of final orders. Allegations of bias, which can appropriately be addressed in a recusal motion, would proliferate if such charges could serve as the basis for a successful suit. Such a system would disrupt the very finality of judgments which the doctrine of judicial immunity was originally intended to secure.

IV.

INJUNCTIVE & DECLARATORY RELIEF

Plaintiff’s complaint also seeks declaratory and injunctive relief against defendant. As stated earlier, “judicial immunity is not a bar to prospective relief against a judicial officer acting in her judicial capacity.” Pulliam v. Allen, 466 U.S. 522, 541-42, 104 S.Ct. 1970, 1981. To obtain equitable relief, plaintiff must show that he has an inadequate remedy at law and a serious risk of irreparable harm. Id. at 541, 104 S.Ct. at 1981. Plaintiff has failed to make such a showing. Indeed, all the acts of which plaintiff complains could have been appealed either directly or by extraordinary writ. The statute granting jurisdiction to magistrates provides appeal not only to the district judge but to the Court of Appeals. The statute explicitly states that there shall be no limitation on a party’s right to appeal a magistrate’s decision to the United States Supreme Court. See 28 U.S.C. §§ 636(c)(4) and (c)(5). Plaintiff could have exercised his rights of appeal in the context of Sharp v. Owens-Corning. Further, as defendant has correctly noted at page 19 of his brief in support of the motion to dismiss, plaintiff could also have sought recusal or disqualification of the Magistrate under 28 U.S.C. §§ 144 and 455 as an alternative or in conjunction with direct appeal and extraordinary writs under the All Writs Act. 28 U.S.C. § 1651.

Finally, plaintiff has not demonstrated any threat of irreparable harm or injury. This Court believes greater harm would be caused to the administration of justice and the ability of the Magistrate to perform his duties were it to issue the broad injunctive and declaratory relief sought by plaintiff. Accordingly, plaintiff’s prayer for injunctive and declaratory relief is denied.

Y.

In conclusion, defendant’s motion to dismiss for failure to state a claim under Fed.R.Civ.Pro. 12(b)(6) is granted; plaintiff’s complaint against defendant is barred by the doctrine of judicial immunity and is dismissed with prejudice.

IT IS SO ORDERED.

      . This case was originally assigned to Judge John Potter in the Western Division of the Northern District of Ohio. On May 1, 1985, however, Judge Potter and Judge Walinski transferred this case to the Eastern Division for reassignment on the grounds that their "close working relationship [with] Magistrate Carr would make it inappropriate for any of the judges of the Western Division to hear this action." On May 6, 1985, Chief Judge Frank J. Battisti was assigned the case.

      . Plaintiff contends that he has demonstrated irreparable harm by alleging "invasion of First Amendment rights.” Response at 16. This Court has already found, however, that the "gag orders” and disqualification rulings do not in themselves constitute infringements of the First Amendment.

      . There is an indication on the record that plaintiff did file an appeal to the Sixth Circuit. Plaintiff appears, however, to have moved for voluntary dismissal of that appeal, which was granted by the Sixth Circuit on May 30, 1985.


source: Caselaw Access Project

license: Public Domain

text:
    PRINTING INDUSTRIES ASSOCIATION OF NORTHERN OHIO, INC., et al., Plaintiffs, v. GRAPHIC ARTS INTERNATIONAL UNION, LOCAL NO. 546, et al., Defendants.
    Nos. C83-127 to C83-129.
    United States District Court, N.D. Ohio, E.D.
    Nov. 5, 1985.

      Michael T. McMenamin, Nancy Noall, Cleveland, Ohio, Carl A. Zellers, Westlake, Ohio, Martin T. Wymer, Irwin Haiman, Cleveland, Ohio, for plaintiffs.
    Stanley D. Gottsegen, Cleveland, Ohio, for defendants.
   MEMORANDUM OPINION AND ORDER

BATTISTI, Chief Judge.

As agreed by the parties at an in-chambers conference on June 11, 1985, this matter is before the Court for final disposition based upon the present record. For the reasons outlined below, the Court grants judgment in favor of defendants.

I.

PROCEDURAL HISTORY

On January 7, 1983, plaintiffs Printing Industries Association of Northern Ohio, Inc. (“PIANO”) filed complaints in the above-captioned actions against four unions representing printing industry employees in the Greater Cleveland area. Plaintiffs are a multi-employer bargaining association and the individual member employers who comprise that association. Plaintiffs sought declaratory judgment and reformation of contract. Specifically, plaintiffs sought reformation of a cost-of-living allowance (“COLA”) provision that appeared in two separate collective bargaining agreements entered into between PIANO and defendant Unions. Although the collective bargaining agreements were negotiated by PIANO, each of the individual employers were signatories to the agreements. The gravamen of plaintiffs’ Complaint is that the COLA provision in the collective bargaining agreements should be reformed such that the wage adjustment would be based on the national consumer price index (“CPI”) rather than on the Cleveland consumer price index, the latter being the one provided for in the agreements.

Before the Court could rule on defendants’ March 22; 1983 preliminary injunction motion, the parties entered into a consent agreement. Pursuant to that consent agreement, which was approved and ordered by the Court on April 25, 1983, the four cases were consolidated. In addition, the Court ordered on April 25, 1983 that each plaintiff-employer pay its employees COLA wage adjustments based upon changes in the National CPI-W during the term of the contracts in dispute. The employers were also ordered to place in an escrow account funds sufficient to cover the difference between wage adjustments based upon the National CPI-W and the Cleveland CPI-W; plaintiffs were to continue depositing this disputed amount in escrow until the Court entered a final order in the consolidated cases. Order, PIANO v. International Printing and Graphic Communications Union, Local No. 56, 578 F.Supp. 555 (N.D.Ohio, 1983).

Following this Court’s ruling of July 13, 1983 that reformation of collective bargaining agreements was not within the jurisdiction of the arbitrator under the arbitration clauses of the collective bargaining agreements, the parties filed cross-motions for summary judgment. On January 27, 1984, the Court denied the cross-motions for summary judgment. Memorandum Opinion and Order, PIANO v. International Printing and Graphic Communications Union, Local No. 56, 584 F.Supp. 990 (N.D.Ohio, 1984).

Between January 1984 and April 1985, the parties undertook negotiations for new collective bargaining agreements which would go into effect upon the expiration of the agreements in dispute in the instant cases. In the course of those negotiations, the parties to C83-130, PIANO and Local No. 53, settled their dispute and stipulated to a dismissal. Negotiations did not prove fruitful in resolving the disputed issues in C83-127, -128 and -129. Although a new agreement covering Local No. 546 (Bookbinders) was negotiated for the period October 1, 1983 to September 30, 1985, it contains a COLA provision different from the ones at issue in this case. The Court has not yet received the stipulated dismissal in C83-127, although such a dismissal was alluded to in the Notice of Withdrawal of Counsel on page 2, filed May 17, 1985.

On June 18, 1985, plaintiff Bedford Lithograph Company, with the consent of both the bookbinders and lithographers units of Local 546, moved this Court for a voluntary dismissal with prejudice pursuant to Federal Rule of Civil Procedure 41(a)(2). On June 19, 1985, plaintiffs PIANO and the remaining employers filed a brief in opposition to Bedford’s motion for dismissal. On September 4,1985, plaintiffs PIANO and the remaining employers withdrew their opposition to the dismissal though expressly reserving their rights under the National Labor Relations Act. On October 29, 1985, the Court ordered the voluntary dismissal of Bedford Lithograph nunc pro tunc. On September 19, 1985, plaintiff Lith-o-Kraft Plate Company stipulated and the Court ordered its voluntary dismissal with prejudice. On September 24, 1985, plaintiff Emerson Press, Inc. was also voluntarily dismissed with prejudice pursuant to a stipulation. The dismissals covered all claims made pursuant to the collective bargaining agreements at issue in C83-127, -128 and -129.

II.

Jurisdiction of this action is based on § 301 of the Labor Management Relations Act, 29 U.S.C. § 185, and the Federal Declaratory Judgment Act, 28 U.S.C. §§ 2201 et seq. Plaintiff has its principal place of business in Westlake, Ohio; defendant has its principal place of business in Cleveland, Ohio. Defendant is the exclusive bargaining representative for those employees who work in union pressrooms “and who are engaged in the operation of gravure, offset and letter-press printing presses and their associated devices, offset platemaking, darkroom work, stripping, opaquing, layout and platemaking.” Amended Complaint at 4.

PIANO has represented various printing companies in Cleveland over the past 30 years. Id. at 5. On October 1, 1981, PIANO entered into a collective bargaining agreement with the Union. The contract expired on September 30, 1984. Although the contract provided for a grievance and arbitration procedure in Part IV, the arbitrator’s powers were limited such that he “[would] not have the authority to render a decision which will add to, subtract from, or modify the specific provisions of this contract.”

Part XXVIII of the contract provided for semi-annual wage adjustments based upon corresponding changes in the Consumer Price Index Revised for Urban Wage Earners and Clerical Workers, 1967-100, new series for Cleveland, Ohio. Amended Complaint at 6. Similar wage adjustment provisions to compensate workers for inflation were included in contracts between the parties since 1972 and have been based upon the Cleveland CPI-W.

Plaintiffs contend that computation by the Bureau of Labor Statistics of its indices results in a “distortion” since “the Cleveland CPI-W is based upon a smaller sample, and hence is more prone to statistical distortion.” Amended Complaint at 11. While conceding that the indices are based on price changes of the same 400 representative items within the seven major components of the CPI-W, plaintiffs state that “the distinction between the Cleveland CPI-W and the National CPI-W lies in the number of times a particular item is sold or traded, which is obviously less frequently for the Cleveland CPI-W than the National CPI-W.” Id. Plaintiffs are most concerned by the fact that since June 1982 the Cleveland CPI-W has exceeded the National CPI-W. For example, the Cleveland CPI-W exceeded the National CPI-W by 17.9 points in August 1982 and 20.5 points in October 1982. Id. at 12. Plaintiffs note that between October 1981 and April 1982 the mean variance was 1.7 points above the National CPI-W and 3.7 points above for January 1978 and April 1982. Id. at 11. Plaintiffs attribute this “substantial and unprecedented deviation" to Cleveland’s depressed housing market and smaller sampling. Plaintiffs also extend the depressed economic conditions theory to explain distortions in the other components upon which the CPI-W are calculated. Id. at 12. Plaintiffs assert that a disproportionate weight is placed upon the housing component of the index and the false assumption that home ownership costs in the Greater Cleveland area have increased dramatically compared to home ownership costs nationally.

Plaintiffs argue that the contract should be reformed since a “mutual mistake of the parties” occurred. Plaintiffs contend that the parties “believed that the Cleveland CPI-W was specifically reflective of the increases or decreases in the cost of living in the Greater Cleveland area due to inflation.” Id. at 14. This unprecedented distortion in October 1982, however, would result in a 56-cent-per-hour increase for employees covered by the collective bargaining agreement, or 36 cents more per hour than they would be entitled to under the National CPI-W. The plaintiffs contend that if the employees receive this “windfall,” id. at 15, the individual member employers will sustain “severe financial hardship,” including the inability to be competitive with shops not required to pay Cleveland COLA’s, the impairment of operations, and substantial layoffs. Id. at 16. In Count II of their Complaint, plaintiffs allege that payment of COLA’s at the Cleveland CPI-W would frustrate the purpose of the collective bargaining agreement. Id. at 19-20. The Complaint states that “neither party assumed the risk that the Cleveland CPI-W would not, at some point, accurately reflect changes in the cost of living in the Greater Cleveland area due to inflation____” Id. at 21.

A brief explanation of the consumer price indices at issue is worthwhile at this point. The U.S. Bureau of Labor Standards (“BLS”), a division of the U.S. Department of Labor, compiles and calculates an “All Cities” Consumer Price Index known as the National CPI-W. The index is designed to measure changes in prices of goods and services purchased by urban wage earners and clerical workers throughout the United States. Using a base reference index of 100.0 for 1967, the index is calculated from studies of the price changes of 400 items. These 400 items are grouped into seven major categories: food and beverages; housing; clothing or apparel; transportation; medical costs; entertainment; and other. Prices are surveyed in the urban portions of 39 major metropolitan areas and 17 smaller cities at approximately 18,000 retail and service establishments.

The BLS also compiles, calculates and publishes indices for 28 individual urban areas, including Cleveland, Ohio. The Cleveland index is based upon the price changes in the same 400 items comprising the national index. Since the Cleveland CPI-W is based upon a smaller number of sales of each item, it is more likely to be statistically distorted. The Cleveland CPI-W is published bi-monthly.

III.

MUTUAL MISTAKE

The Court’s primary objective in this matter is to reach conclusions of fact. Given the duration of these lawsuits and the treatment of the legal principles, at issue in this Court’s summary judgment opinion of January 27,1984, all that remains is for the Court to make those conclusions of fact about the parties’ intentions that it refused to make in January 1984.

To recapitulate, in order to obtain reformation of the contract, plaintiff must show by clear and convincing evidence that a mutual mistake was made by the parties, specifically that “both PIANO and the Unions definitely intended that the major purpose of including a COLA provision in their contracts was to keep employees’ wages even with inflation and that the parties formed the assumption that the Cleveland CPI-W would parallel and com-patently reflect the changes in the cost-of-living in the Cleveland area.” Summary Judgment Opinion and Order, Jan. 27,1984, at 10. Concomitantly, PIANO must show that it was not deemed to have assumed the risk for variances in the Cleveland CPI-W in order to obtain reformation. Id. If only one party was mistaken or if the parties’ intentions were conflicting, then the Court may not order reformation. Id. at 11. As the Court noted, quoting Professor Corbin, in determining the intent of the parties as it relates to mistake, “[t]he Court’s judgment on each of them [the factors used in coming to an agreement] is a judgment on a matter of fact, not a judgment as to law.” Id. at 12. Hence, this Court must determine as a conclusion of fact that the Unions’ main intention was to gain for their membership a COLA provision that protected them from inflation and that they believed that the Cleveland CPI-W would accurately and best measure the rate of inflation in the Cleveland area.

At the time of the summary judgment opinion, the Court noted that the deposition testimony failed to prove conclusively that the Unions cared about the accuracy of the Cleveland CPI-W. “Obtaining the benefit [the COLA provision which other unions had] took precedence over the form the benefit took.” Id. at 16. The Court also noted, however, that it was not “indisputably clear” that PIANO and the Unions’ intentions diverged. The Court will review that testimony in order to reach a conclusion. Mr. George Bockman, president of Local 546, testified that he was the chief negotiator and spokesman for the Union in arriving at the collective bargaining agreement that became effective May 1, 1982. Deposition of George Bockman on Feb. 23, 1983 (filed March 18, 1983) [hereinafter “Bockman”], at 4-5. Bockman was involved in negotiations which resulted in the contract for May 1973 to April 30, 1976 in which the cost-of-living clause appeared for the first time. He stated that the union had proposed the COLA. Bockman at 13. When asked about the purpose of that provision, he responded over his counsel’s objection:

The main thrust of it was the membership and us felt that we were falling behind in cost-of-living because we had no adjustments in the cost of living going up... Right [the main purpose was essentially to keep the members’ real wages from being eaten away by inflation].

Id. When asked why the Cleveland CPI-W was used instead of the National CPI-W, he stated:

The only way I can answer that, being so long ago, is we were all new to the cost of living, both sides, and so when we finally agreed that they were going to put a cost of living in, I’m just guessing because I’m not sure, and I don’t know who asked or why it was asked for, if it was asked even, that which index are we going to use, and our International Vice President was in at that time, and he did most of the talking, because he knew more about cost of living than we did and his expertise was far superior to ours.
All I can remember, very vaguely, is Neil Johnson, Carl’s [Carl Zellers, president of PIANO] predecessor, and he said they wanted the Cleveland index, and that was it. Just the company wanted the Cleveland index. So there was no argument on that, as I recall anyway. We wanted the cost of living no matter what, and that was it, as I can remember. That’s the best I can remember.

Bockman at 13-14.

He responded that it was his “estimated guess,” although unsubstantiated, that the parties thought the Cleveland index would more accurately reflect the cost-of-living in Cleveland than the National CPI-W. Id. at 14. He continued that PIANO presented the language of the cost-of-living clause, that “it was presented to us by them,” id. at 15, and that he didn’t understand the language of the provision, “even to this day.” Id. Still, neither side questioned the reliability or accuracy of the Cleveland CPI-W prior to October 1982. Id.

Robert Hudek, secretary-treasurer of Local 546, was the chief union spokesman on behalf of the bindery employees that resulted in the agreement dated October 1, 1985. Deposition of Robert Hudek, dated February 23, 1983 (filed March 18, 1983) [hereinafter “Hudek”], at .4-5. When asked what the “union’s purpose in asking to retain in [sic] the existing contract the cost-of-living adjustment provisions,” Hudek answered “to keep the people’s wages where they were with inflation ... so they didn’t lose any money.” Hudek at 17-18. Hudek confirmed that neither side proposed to replace the Cleveland CPI-W with the National CPI-W and that in October 1982, two meetings were held to discuss the Cleveland CPI-W. Id. at 19.

This Court concludes that, in the strictest sense, a mutual mistake occurred. The language concerning the Cleveland CPI-W was proposed by PIANO and agreed to by the Unions. The Unions’ intent, understandably, was to protect their members against loss in their real wages due to inflation. When PIANO refused the COLA provisions offered by the Unions, the Unions accepted PIANO’s CPI-W. Similarly, both parties accepted the use of the Cleveland CPI-W, as proposed by PIANO, on the assumption that it would most accurately measure the inflation rate in the Cleveland area. In the absence of testimony from the Union’s “international vice-president” referred to in Mr. Bookman’s deposition at 14, it is clear that the Union negotiating team had not conducted any intensive economic or statistical study into the relationship between the National and Cleveland CPI-W. Indeed, it appears that neither party had in 1973 or at any time prior to October 1982 considered divergence between these indices. While a Court always hesitates to draw conclusions about intent based on faulty or incomplete memories of events occurring years in the past, it is probable that the Union relied on the Cleveland CPI-W.

Having found a mutual mistake, the Court must decide whether the mistake here compels reformation of the contract. As discussed in the Summary Judgment Opinion at 12-15, the Court has struggled between those cases in which mutual mistake as to a variable rate forces reformation, the so-called ALCOA line of eases (referring to Alcoa v. Essex Group, Inc., 499 F.Supp. 53 (W.D.Pa.1980)), and those cases in which courts have found that the parties necessarily assumed the risk of fluctuations in a variable rate. See, e.g., Wabash, Inc. v. Avnet, Inc., 516 F.Supp. 995 (N.D.Ill.1981).

At this time, the Court holds that the variance between the Cleveland CPI-W and the National CPI-W was a risk assumed by the parties. In the instant case, the fluctuation is unfavorable to plaintiff-employers, but it could have redounded as well to the detriment of the Unions. This Court will not order the reformation of a contract simply because subsequent information has revealed that an index upon which both parties relied and which had been accurate over a period of years suddenly changed. The finality of contract and the certainty of the parties would be subject to the variability of fluctuations and “whose ox was gored.” See Wabash, Inc. v. Avnet, Inc., 516 F.Supp. 995, 996 n. 6 (N.D.Ill.1981). One can only speculate whether PIANO and the employers would call for reformation as a contract principle in the instant case if the divergence had resulted in the Cleveland CPI-W being lower than the National CPI-W.

Accordingly, this Court refuses to grant reformation of the relevant COLA provisions in the collective bargaining agreements based on mutual mistake; plaintiffs’ request for reformation is denied.

IV.

FRUSTRATION OF PURPOSE

To this point, the Court has assumed arguendo that the divergences between the Cleveland CPI-W and the National CPI-W alleged by plaintiff are indeed true. To the extent that plaintiffs seek reformation of the collective bargaining agreements based on frustration of purpose, however, plaintiffs must establish that- (1) the divergence did in fact occur and “the non-occurrence of the frustrating event [was] a basic assumption on which the contract was made;” (2) the purpose frustrated was a “principal purpose” of that contract; and (3) the frustration must be “substantial.” See Restatement (Second) of Contracts § 265 (as cited in Summary Judgment Opinion at 17, 19).

Noting that the inquiry as to elements 1 and 2 of the above test have largely been addressed in the preceding section on mutual mistake, the Court will examine whether the divergence alleged did in fact occur and whether it is substantial.

Plaintiffs have resubmitted for the purposes of final adjudication the expert report of Dr. John F. Burke, Jr. which was originally considered in the motion for summary judgment. Dr. Burke, an associate professor of economics at Cleveland State University, states in his Report that in the short-run the National and Cleveland CPI-W indices can diverge and that “the two indexes can take obviously different routes in getting to similar ends.” Report at 1-2. Dr. Burke concludes, “however, that any, even “seemingly minor” or “abnormal” deviations of the relevant metropolitan CPI index from the national all-city average will have a significant impact on wage adjustments.” Id. at 2. Finally, Dr. Burke contends that “changes in wages compound over time,” such that minor adjustments would be incorporated into subsequent wage increases. Id. at 3. The ultimate result, concludes the professor, is that as these printing firms are forced to increase their labor costs, they will become less competitive within their industry. Id. at 4.

Dr. Burke identifies the divergence between the indices not only to the smaller sampling field of the Cleveland CPI-W but to one specific component, housing. The housing component consists of three sub-components: fuel, household furnishings, and shelter. The shelter subcomponent is further divided into rent, other rent, and home ownership. Burke Affidavit at 7. According to Dr. Burke, between April and August 1982, the average price of a house increased in the Cleveland area while the average price of a house declined nationally during the same period; thus, the home ownership subcomponent of the Cleveland CPI-W index rose while the same component in the National CPI-W declined. Burke Affidavit at 7. He states, however, that the actual price of a home in Cleveland did not increase, but that “a sampling error resulting from insufficient home sales in the Greater Cleveland area” occurred. Id. at 8. “When there are not sufficient home sales to justify computing an index for the home ownership item of the shelter sub-component, the sample is expanded to other regions and the traditional geographic boundaries of the Cleveland CPI-W are disregarded in order to obtain the requisite number of home sales thereby producing a complete sample.” Id. at 8. As a result, argues Dr. Burke, BLS considered sales prices higher than the normal sample, which produces a higher homeownership subcomponent, which in turn increases the entire CPI-W. Plaintiffs indicate that in January 1983, BLS issued a news release which recognized and warned of the sampling errors in local CPI indices and urged use of the national CPI. Id. at 10.

Defendant has offered the testimony of Professor Andrew Gross. The Court, however, is unable to assess the credibility of the proferred testimony, since defendant has not presented the professional credentials of the professor. The report of Professor Gross was filed with the Court on May 17, 1985 and was, therefore, not originally considered in the Summary Judgment Opinion. The Court will consider Professor Gross’ testimony not for the truth of the matter asserted (since its credibility cannot be determined) but for the importance of the issues asserted as they bear on the question of the divergence in the indices in this matter.

Professor Gross recognizes the larger sampling variability of the Cleveland CPI-W but states that “[t]he CPI-W for Cleveland is still the best measure of the Cleveland area situation.” Gross Report at 11. Furthermore, Gross states that the BLS’s practice of expanding the sampling area to surrounding regions when the original sample is too small is “valid.” He states that these “ ‘imputed’ or ‘collapsed’ models are used widely — ” Id. at 11. He contends that whatever distortions are caused by examining a large area do not invalidate the Cleveland CPI-W, since “the surrounding area tends to move in a similar fashion to the Cleveland metropolitan area.” Id. at 11. Professor Gross also contends that the sources presented by Dr. Burke are “anecdotal” and are “statistically insufficient” to lead to the conclusion that the CPI-W housing component was distorted. Id. at 12.

Above all, Gross concludes that “there is no consistent or persistent ‘distortion’ between the Cleveland CPI-W and the National CPI-W. Id. at 13. He notes that the Cleveland CPI-W has been above and rising more rapidly than the National CPI-W for years, id. at 8, but that examinations of the divergence both on a month-to-month and year-to-year basis reveal “no meaningful distortion or discrepancy” between the indices. Id. at 14. Gross found that the 1984 CPI-W was only 1.9% above the 1983 CPI-W whereas the 1984 National CPI-W was 3.4% over the 1983 index. Id. at 10, 13. Hence, he concludes that “the Cleveland index is only very slightly above the U.S.A. figure and furthermore, the annual percent increase for Cleveland was significantly less (1.9% v. 3.4% increase). Id. at 10 (emphasis in original).

The Court is not equipped to determine whose statistical or economic analysis is correct and will therefore not do so. To quote the aphorism and invert it somewhat, “There are truths, half-truths and then statistics.” It is clear, however, that to be substantial, the change in profit or loss must be great. The detriment to the complaining party must not simply be one of hardship but near commercial impracticability. Summary Judgment at 20. The Court reiterates that while there is an 18% increase in the Cleveland CPI-W when compared to the National CPI-W for April 1982 through October 1982, and that the Cleveland CPI-W has been approximately 20 points above the National CPI-W for that period, the actual effect on wages is not as substantial as plaintiff contends. As noted in the Summary Judgment Opinion at 22, the wage adjustments using the Cleveland CPI-W rather than the National CPI-W are from 36 to 75 cents per hour (depending on the contract involved). “These differences, expressed as a percentage of the base wage rate, vary from 2.6% to 5.9%.” Summary Judgment at 22. The Court does not regard such increases to be sufficient to meet the showing of substantial frustration. The threat of the employers of PIANO becoming non-competitive within their industry is speculative, and the Court declines to reform these contracts based on such speculation. Furthermore, to the degree that the contracts at issue in this litigation have expired, the parties may enter subsequent collective bargaining negotiations wiser and may be more willing to obtain contract provisions which not only protect the wage-earners’ interests but those of the PIANO employers and the printing industry. It appears certain that the parties are at least how aware of the validity of the Cleveland CPI-W and, based on the BLS’s January 1983 warning, will draw future contracts appropriately. This Court does not believe, however, that the hardship exacted on plaintiffs by virtue of the fluctuations in a government index are substantial enough to warrant post-hoc reformulation of contracts.

V.

For the reasons stated above, the Court denies plaintiffs’ prayer for reformation of contract based on mutual mistake. As to Count II of the Amended Complaint, the Court denies plaintiffs’ prayer for reformation of contract based on frustration of purpose. Hence, the COLA provisions in Part XXVIII of the Collective Bargaining Agreement dated October 1, 1981 will remain intact in their reference to the Cleveland CPI-W. To effect this finding, the funds placed in escrow accounts pursuant to the Order of April 25, 1983 representing the difference between wage adjustments paid using the National CPI-W and the Cleveland CPI-W will be released and distributed to defendants pursuant to the terms of the original collective bargaining agreements.

Judgment shall be entered for defendant.

IT IS SO ORDERED.

      . The collective bargaining agreements at issue in this litigation cover the following periods:
      (1) C83-127: Local No. 56 — Oct. 1, 1981 to Sept. 30, 1984;
      (2) C83-128: Local No. 546 (Lithographers)— May 1, 1982 to April 30, 1985;
      (3) C83-129: Local No. 546 (Bookbinders)— Oct. 1, 1981 to Sept. 30, 1983;
      (4) C83-130: Local No. 53 — January 1, 1981 to December 31, 1983.

      . On May 17, 1985, Walter, Haverfield, Buescher & Chockley ("WHB & C”) notified this Court of its withdrawal as counsel of record for each of the plaintiffs in the above-captioned actions. WHB & C stated that a conflict of interest had arisen such that the interests of the plaintiffs, which had been identical at the commencement of the lawsuit, were diverging. Specifically, plaintiffs noted that the smaller printing companies with up to 10 employees had different collective bargaining goals than the "large” shops with 30 or more employees. Notice of Withdrawal of Counsel and Motion for Continuance, filed May 17, 1984, at 4, 6. On May 17, 1985, the Court noted WHB & C's withdrawal and ordered each of the plaintiffs to retain separate counsel while retaining WHB & C as trial counsel. Trial was continued until May 28, 1985 at 10:00 a.m. At the Conference held in Chambers on June 11, 1985, the parties agreed to forego a trial-in-court and instead submit the case to the Court for decision on the record already compiled.

      . The Court could, of course, hold that plaintiff had failed to meet its standard of showing mutual mistake by “clear and convincing evidence.” To do so, however, would not only make it virtually impossible for a party to prevail where intent was an issue but would distort what are probable and logical assumptions on the part of both parties in the instant case.


author: SAFFELS, District Judge.

text:
    The ABSENTEE SHAWNEE TRIBE OF INDIANS OF OKLAHOMA, Daniel Little Axe, Governor, Plaintiff, v. The STATE OF KANSAS, Defendant.
    Civ. A. No. 84-2435-S.
    United States District Court, D. Kansas.
    Nov. 12, 1985.
    Charles D. Sauer, Overland Park, Kan., Keith Wilson, Jr., Independence, Mo., F. Browning Pipestem, Norman, Okl., Alvin D. Shapiro, Patrick Woodley, Kansas City, Mo., for plaintiff.
    John W. Campbell, Asst. Atty. Gen., Topeka, Kan., for defendant.
   MEMORANDUM AND ORDER

SAFFELS, District Judge.

This matter is before the court on defendant’s motion for partial summary judgment. Oral argument was held on July 19, 1985. This dispute centers around a land patent dated April 19, 1865, which plaintiff claims is void on its face.

The uncontroverted facts for the purposes of this motion are as follows. The land in question comprises 11.97 acres located in Johnson County, Kansas, and is known as the Shawnee Mission State Park. This land was originally contained within three sections of land patented to the Reverend Thomas Johnson and his heirs. Defendant traces its title to this land to a land patent dated April 18, 1865.

Due to the nature of this case, some historical background is helpful. Reverend Thomas Johnson served as a Methodist missionary to the Shawnee Indians in Kansas for twenty-six years. In 1830, Reverend Johnson opened a Methodist mission and school in what today is known as Wyandotte County, Kansas. In 1838, Reverend Thomas received a letter from C.A. Harris, Commissioner for Indian Affairs, which stated the United States Government agreed to cooperate with the Missionary Society of the Methodist Episcopal Church in the construction and operation of an Indian manual labor school. In 1839, Reverend Johnson was appointed superintendent of the Indian Mission District which encompassed the Shawnee Indians in Kansas. Also in 1839, the Shawnee Methodist Mission and Indian Manual Labor School were opened for classes. The school was located in what is today known as Johnson County, Kansas.

In 1844, the Methodist Episcopal Church separated over the issue of slavery. The Shawnee Methodist Mission and Indian Manual Labor School fell within the boundary of the Methodist Episcopal Church South. Reverend Johnson was superintendent of the Indian Manual Labor School.

On March 5, 1853, the United States Congress authorized the President to enter into negotiations with the Indian tribes west of Missouri and Iowa to secure settlement and to extinguish Indian title to the land. In the spring of 1854, a Shawnee tribal delegation began negotiations with the Commissioner of Indian Affairs. The parties agreed upon a treaty with amendments on May 10, 1854. This treaty was ratified by the Senate on August 2, 1854, was approved by the Shawnee Indians in full council on September 28, 1854, and proclaimed by the President on November 2, 1854. Pertinent provisions of this treaty provide as follows:

Article 1. The Shawnee tribe of Indians hereby cede and convey to the United States, all the tract of country lying west of the State of Missouri, which was designated and set apart for the Shawnees in fulfillment of, and pursuant to, the second and third articles of a convention made between William Clark, Superintendent of Indian Affairs, and the chiefs and headmen of the Shawnee nation of Indians, at St. Louis, on the seventh day of November, one thousand eight hundred and twenty-five, which said tract was conveyed to said tribe, (subject to the right secured by the second article of the treaty made at Wapaghkoneta, on the eighth day of August, one thousand eight hundred and thirty-one,) by John Tyler, President of the United States, by deed bearing date the eleventh day of May, one thousand eight hundred and forty-four—
Article 2. The two hundred thousand acres of land reserved by the Shawnees, shall be selected between the Missouri State line, and a line parallel thereto, and west of the same, thirty miles distant; which parallel line shall be drawn from the Kansas River, to the southern boundary line of the country herein ceded; ... Of the lands lying east of the parallel line aforesaid, there shall first be set apart to the Missionary Society of the Methodist Episcopal Church South, to include the improvements of the Indian Manual Labor School, three sections of land; ... All the land selected, as herein provided, west of said parallel line, and that set apart to the respective societies for schools, and to the churches before named, shall be considered as part of the two hundred thousand acres reserved by the Shawnees.
******
... After all the Shawnees, and other persons herein provided for, shall have received their shares of the two hundred thousand acres of land reserved, it is anticipated that there will still be a residue; ... It is agreed that all the tracts of land, in this article assigned, or provided to be assigned or selected, shall be assigned and selected according to the legal subdivisions of United States lands, and according to the laws of the United States respecting the entry of public lands, so far as said laws are applicable; and no portion of this instrument shall be so construed as to nullify or impair this stipulation. And the said Indians hereby cede, relinquish, and convey to the United States, all tracts or parcels of land which may be sold, or are required to be sold in pursuance of any article of this instrument.
* * * * * *
Article 6. The grants of land above made to missionary societies and churches, shall be subject to these conditions: The grant to the Missionary Society of the Methodist Episcopal Church South, at the Indian Manual Labor School, shall be confirmed to said Society, or to such person or persons as may be designated by it, by patent, from the President of the United States, upon the allowance to the Shawnees, by said society, of ten thousand dollars, to be applied to the education of their youth; which it has agreed to make. The grants for the schools established by the Baptists and Friends, shall be held by their respective Boards of Missions, so long as those schools shall be kept by them, — when no longer used for such purpose by said Boards, the lands, with the improvements, shall, under the direction of the President, be sold at public sale, to the highest bidder, upon such terms as he may prescribe, the proceeds to be applied by the Shawnees to such general beneficial and charitable purposes as they may wish: Provided, That the improvements shall be valued, and the valuation deducted from the proceeds of sale, and returned to said Boards respectively.

10 Stat. 1053.

In 1855, the Commissioner of Indian Affairs, on behalf of the Shawnee Indians, leached an agreement with the Missionary Society of the Methodist Episcopal Church South. The Society agreed to board and educate up to eighty (80) Shawnee children at the Fort Leavenworth Manual Labor School which would be known as the Shawnee Manual Labor School. The Commissioner agreed to pay a per annum in quarterly payments of Five Thousand Dollars ($5,000) in money and to credit the Society with One Thousand Dollars ($1,000) per annum up to Ten Thousand Dollars ($10,-000), which the Missionary Society had agreed to pay for the land pursuant to the 1854 treaty. If the school were closed pri- or to the full ten-year period, the unliquidated balance of the $10,000 was to be adjusted between the parties upon principles of right and equity. The effective date of this agreement was October 1, 1854.

In 1856, an agreement was reached by the Missionary Society of the Methodist Episcopal Church South and Reverend Johnson whereby the Society gave Reverend Johnson one of the three sections of land the Society had received pursuant to the 1854 treaty. A second section of land was given to Reverend Johnson in return for which he was to assume the Society’s $10,000 obligation to the government. The Society reserved the remaining section of land containing the school buildings. In 1857, the Secretary of the Interior approved the designation of land by the Missionary Society and Reverend Johnson, which included all of the Southwest Quarter of Section Three, Township Twelve, Range 25 East of the 6th Principal Meridian, which is the subject matter of this litigation. Also in 1857, those lands not selected by individual members of the Shawnee Nation or withheld on behalf of the Absentee Tribe of the Shawnee Indians were thrown open for purchase and redemption. In 1861, the Missionary Society conveyed its remaining interest in the southwest quarter of section three to Reverend Johnson, thus bringing the total quarter section under his equitable title.

In 1862, Reverend Johnson was informed that the government was annuling its contract with the Missionary Society. The school had been functioning from October 1, 1854, to September 30, 1862. The government had paid the Society Thirty-Two Thousand Five Hundred Dollars ($32,-500), leaving a balance of Seven Thousand Five Hundred Dollars ($7,500). The Society, however, still owed Two Thousand Dollars ($2,000) on the $10,000 for the reservation of the land. Deducting this from the balance due would leave Five Thousand Five Hundred Dollars ($5,500) to be paid by the government.

Reverend Thomas Johnson was murdered on January 2, 1865. On April 3, 1865, the Secretary of the Interior approved the payment of $5,500 to the Administrator of Reverend Johnson’s estate. On April 6, 1865, a land patent was issued for three sections of land due Johnson under the 1854 treaty. On April 18,1865, the President approved and signed a land patent which provided, in pertinent part:

... whereby it appears that the “Rev’d. Thomas Johnson, now deceased, was designated by said society as the person to whom the Patent for said three sections of land should issue under the provisions of the 6th Article of said treaty.” And the Secretary of the Interior under date April 7th, 1865, has decided that the Patent should be issued to the said Thomas Johnson, the selection constituting the said three sections having been made in subdivisional tracts ...

(Exhibit A attached to defendant’s motion for partial summary judgment.) The land patent was filed on May 26, 1865.

Defendant seeks partial summary judgment on the issue of the validity of the April 18, 1865, land patent. Plaintiff alleges that the land patent is null and void on its face because it purports to convey property to Thomas Johnson and his heirs when Thomas Johnson was already deceased.

To rule favorably on a motion for summary judgment, the court must first determine that the matters considered in connection with the motion disclose “that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Rule 56(c), Federal Rules of Civil Procedure. The principal inquiry is therefore whether a genuine issue of material fact exists. Dalke v. The Upjohn Co., 555 F.2d 245 (9th Cir.1977); Hanke v. Global Van Lines, Inc., 533 F.2d 396 (8th Cir.1976). A motion under Rule 56 will be denied unless the movant demonstrates beyond doubt that he is entitled to a favorable ruling. Madison v. Deseret Livestock Co., 574 F.2d 1027 (10th Cir.1978); Mustang Fuel Corp. v. Youngstown Sheet & Tube Co., 516 F.2d 33 (10th Cir.1975). Pleadings and documentary evidence are to be construed liberally in favor of a party opposing a Rule 56 motion. Harman v. Diversified Medical Investments Corp., 488 F.2d 111 (10th Cir.1973), cert. denied 425 U.S. 951, 96 S.Ct. 1727, 48 L.Ed.2d 195 (1976). However, once a summary judgment motion has been properly supported, the opposing party may not rest on the allegations of the complaint, but must respond with specific facts showing the existence of a genuine factual issue to be tried. Coleman v. Darden, 595 F.2d 533, 536 (10th Cir.), cert. denied 444 U.S. 927, 100 S.Ct. 267, 62 L.Ed.2d 184 (1979). A party with evidence tending to create a factual issue must present that evidence to the trial judge or summary judgment is proper. Otteson v. United States, 622 F.2d 516, 520 (10th Cir.1980).

Defendant argues that the patent was issued in conformity with the 1854 treaty and further that the patent was issued in conformity with the law respecting entry on public land in effect at the time the patent was issued. From 1836 to 1976, a 'statute was in effect which provided:

Where patents for public lands have been or may be issued in pursuance of any law of the United States to a person who has died before the date of such patent, the title to land designated therein shall inure to and become vested in the heirs, devisees and assignees of such deceased patentee as if the patent had issued to the deceased person during life.

(See 1964 Ed., 43 U.S.C. 1152, repealed by P.L. 94-579.) Plaintiff asserts that this statute is inapplicable because the land in issue is Indian land rather than public land.

It is clear that at common law a land patent to a party already deceased is void. Davenport v. Lamb, 13 Wall. 418, 80 U.S. 418, 20 L.Ed. 655 (1871). Defendant asserts that pursuant to the provisions of 43 U.S.C. 1152, Reverend Johnson’s heirs could take title to this land. The Circuit Court for the Western District of Washington, in Meeker v. Kaelin, 173 F. 216 (W.D.Wash.1909), found that lands contained within an Indian reservation were not public lands and therefore the statutory provision vesting title in the heirs of a deceased patentee was inapplicable. The court, however, did not elaborate on this finding.

Section 1152, Title 43, United States Code, was later discussed in Larkin v. Paugh, 276 U.S. 431, 48 S.Ct. 366, 72 L.Ed. 640 (1928). In that case, Lewis Greyhair, a Winnebago Indian, received a trust patent in 1902. In 1916, he made application for issuance of a fee simple patent. Greyhair died on April 30, 1916, and the patent was issued on May 19, 1916, over two weeks after his death. The court found that the patent was valid under the provisions of 43 U.S.C. 1152. The court found the statute to be valid for Indian selections made under Indian treaty as well as for patents for Indian allotments made under an Act of Congress. The court noted that the term “public lands” is seldom considered to include lands selected for or allotted to Indians but is sometimes used to include such lands where the United States has retained the title. The court found the statute to be highly remedial and concluded that patents to Indians were encompassed within its scope.

In Crews v. Burcham, 1 Black 352, 66 U.S. 352, 17 L.Ed. 91 (1861), the Pottawatomie Indians ceded their lands, subject to certain reservations for which patents were to be issued. Francis Besion, a member of the tribe, was a reservee of one-half section of land under an 1832 treaty. Besion died in 1843. A land patent was issued in 1845. The court found the act of Congress, on May 20, 1836, (5 U.S.St. 31) the predecessor of 43 U.S.C. 1152, to be applicable and upheld a prior conveyance of the land by Besion. Likewise, in United States v. Chase, 245 U.S. 89, 38 S.Ct. 24, 62 L.Ed. 169 (1917), the United States Supreme Court upheld a patent selecting an allotment for Reuben Wolf, an Omaha Indian, who died before the issuance of the patent in his name.

In the instant case, plaintiff asserts that the statute is inapplicable because this case involves Indian land, rather than public land. “Indian lands were judicially defined to include only those lands in which the Indians held some form of property interest: trust lands, individual allotments, and, to a more limited degree, opened lands that had not yet been claimed by non-Indians.” Solem v. Bartlett, 465 U.S. 463, 468, 104 S.Ct. 1161, 1165, 79 L.Ed.2d 443 (1984). Indian country may also include lands held in fee by non-Indians within reservation boundaries. Id.

In the 1854 treaty in this case, the Shawnee Indians ceded to the United States 1.6 million acres of land. The United States in return ceded to the Shawnee Indians two hundred thousand (200,000) acres of land located in what today is known as Kansas. The land in question herein is contained within these 200,000 acres.

The treaty provided for individual Shawnee Indians to claim a specific amount of land based on the family household. Second, specific amounts of land contiguous in nature could be selected by certain bands of the Shawnee tribe. Grants of land were also made to missionary societies and to a federal agency. Any surplus land not selected by individual Indians or by a particular band could be sold by the federal government. In certain circumstances, some missionary lands could become surplus lands to be sold by the federal government.

Article 2 of the treaty specifies that land set apart for schools and churches is to be considered as part of the 200,000 acres reserved by the Shawnees. However, Article 2 further states: “And the said Indians hereby cede, relinquish, and convey to the United States, all tracts or parcels of land which may be sold, or are required to be sold in pursuance of any article of this instrument.”

Article 6 of the treaty discusses the grants of land to the missionary societies and churches. The grant to the Baptists and the Friends was to be held by their respective Boards of Missions as long as they maintained schools, and when no longer used for such purposes, the land, with improvements, would be sold at public sale. The grant to the Missionary Society of the Methodist Episcopal Church South was to be confirmed to the Society “or to such person or persons as may be designated by it, by patent, from the President of the United States, upon the allowance to the Shawnees, by said society, of ten thousand dollars ...”

By the terms of Article 6, the land to the missionary societies was land which eventually would be sold and was therefore ceded back to the United States by the Indians under the terms of the treaty. The title to this land remained in the United States until it was to be sold; in the case of the missionary society, upon the payment of $10,000. Since the United States retained title to this land, it may be considered as public land for the purposes of 43 U.S.C. 1152. See Larkin v. Paugh, supra. The court makes this finding even when considering the general rule that “doubtful expressions are to be resolved in favor of the weak and defenseless people who are the wards of the nation . . .” Rosebud Sioux Tribe v. Kneip, 430 U.S. 584, 586, 97 S.Ct. 1361, 1363, 51 L.Ed.2d 660 (1977), quoting McClanahan v. Arizona State Tax Comm’n., 411 U.S. 164, 174, 93 S.Ct. 1257, 1263, 36 L.Ed.2d 129 (1973). The status of the land in question is made clear by the treaty.

Further, “public lands” is a term usually used to designate such lands as are subject to sale or other disposal under general laws. Kindred v. Union Pacific R.R. Co., 225 U.S. 582, 32 S.Ct. 780, 56 L.Ed. 1216 (1912). This term, however, may be used in a larger sense to include lands within Indian reservations. Id. Considering the remedial purposes of 43 U.S.C. 1152 and the nature of the land in question, the land patent can be found to fall within the statute’s scope and is therefore deemed valid.

IT IS BY THE COURT THEREFORE ORDERED that defendant’s motion for partial summary judgment is hereby granted.


text:
    Terry J. ATKINSON, et al., Plaintiffs, v. UNION PACIFIC RAILROAD COMPANY, and Missouri Pacific Railroad Company, Defendants.
    Civ. A. No. 85-2224-S.
    United States District Court, D. Kansas.
    Nov. 12, 1985.

      J.D. Lysaught, Mark D. Hinderks, Charles O. Thomas, Weeks, Thomas & Lysaught, Kansas City, Kan., for plaintiffs.
    Brian J. Finucane, Leonard Singer, Watson, Ess, Marshall & Enggas, Kansas City, Mo., Joel L. Norton, Douglas C. McKenna, Olathe, Kan., for defendants.
   MEMORANDUM AND ORDER

SAFFELS, District Judge.

This matter is before the court on defendants’ motion for summary judgment on the basis that the court lacks subject matter jurisdiction over the claims alleged in the complaint. Defendants contend that the claims alleged in the complaint must be resolved through arbitration procedures established by the Interstate Commerce Commission [hereinafter ICC] pursuant to 49 U.S.C. § 11347. In opposition, plaintiffs cite Norfolk & Western Railroad Co. v. Nemitz, 404 U.S. 37, 92 S.Ct. 185, 30 L.Ed.2d 198 (1971), contending that the United States Supreme Court has conferred jurisdiction on the district court to hear such claims.

The uncontroverted facts are as follows.

1. On September 15, 1980, pursuant to 49 U.S.C. §§ 11343 and 11344, the Union Pacific Corporation [hereinafter UPC] and Missouri Pacific Corporation [hereinafter MPC] jointly filed an application with the ICC seeking authorization for UPC to acquire control over MPC and Western Railroad Company [hereinafter WP].

2. On October 20, 1982, the ICC approved the joint application and UPC’s acquisition was completed December 22, 1982.

3. Section 11347, Title 49, United States Code (1982), provides:

When a rail carrier is involved in a transaction for which approval is sought under sections 11344 and 1Í345 or section 11346 of this title, the Interstate Commerce Commission shall require the carrier to provide a fair arrangement at least as protective of the interest of employees who are affected by the transaction as the terms imposed under this section before February 5, 1976, and the terms established under section 565 of title 45. Notwithstanding this subtitle, the arrangement may be made by the rail carrier and the authorized representative of its employees. The arrangement and the order approving the transaction must require that the employees of the affected rail carrier will not be in a worse position related to their employment as a result of the transaction during the 4 years following the effective date of the final action of the Commission ...

4. Pursuant to 49 U.S.C. § 11347, the ICC imposed certain labor protective conditions known as the New York Dock conditions.

5. Each plaintiff, except Cline R. Crownover, alleges that he was furloughed by UP from a carman position prior to the consolidation of UP and MP. Cline Crown-over contends he was furloughed after consolidation, due to the consolidation. Plaintiffs each allege that, had it not been for the acquisition, he would have been recalled and returned to work as a carman. Plaintiffs allege as a result each is entitled to benefits in the form of monies which he would have earned during that time as provided for in the New York Dock conditions.

6. The procedures under Article I, Section 4, of the New York Dock conditions provides that each railroad contemplating a transaction which may cause displacement or dismissal of employees give proper written notice of the transaction to its employees.

7. At the request of any interested party, negotiations are to be held for the purpose of reaching an agreement with respect to application of the New York Dock conditions. If the parties are unable to agree, either party may submit the issues to arbitration. A neutral referee shall render a decision after holding a hearing. The referee’s decision shall be final, binding and conclusive.

8. Further, Article I, Section 11, of the New York Dock conditions provides that if any of the parties have disputes regarding the “interpretation, application or enforcement” of the labor protective conditions other than in Article I, Sections 4 and 12, such shall be referred to an arbitration committee. A decision of the arbitration committee shall be final, binding and conclusive.

To rule favorably on a motion for summary judgment, the court must first determine that the matters considered in connection with the motion disclose “that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Rule 56(c), Federal Rules of Civil Procedure. The principal inquiry is therefore whether a genuine issue of material fact exists. Dalke v. The Upjohn Co., 555 F.2d 245 (9th Cir.1977); Hanke v. Global Van Lines, Inc., 533 F.2d 396 (8th Cir.1976). A motion under Rule 56 will be denied unless the movant demonstrates beyond doubt that he is entitled to a favorable ruling. Madison v. Deseret Livestock Co., 574 F.2d 1027 (10th Cir.1978); Mustang Fuel Corp. v. Youngstown Sheet & Tube Co., 516 F.2d 33 (10th Cir.1975). Pleadings and documentary evidence are to be construed liberally in favor of a party opposing a Rule 56 motion. Harman v. Diversified Medical Investments Corp., 488 F.2d 111 (10th Cir.1973), cert. denied 425 U.S. 951, 96 S.Ct. 1727, 48 L.Ed.2d 195 (1976). However, once a summary judgment motion has been properly supported, the opposing party may not rest on the allegations of the complaint, but must respond with specific facts showing the existence of a genuine factual issue to be tried. Coleman v. Darden, 595 F.2d 533, 536 (10th Cir.), cert. denied 444 U.S. 927, 100 S.Ct. 267, 62 L.Ed.2d 184 (1979). A party with evidence tending to create a factual issue must present that evidence to the trial judge or summary judgment is proper. Otteson v. United States, 622 F.2d 516, 520 (10th Cir.1980).

The issue presently before the court is whether a dispute regarding the eligibility of benefits for furloughed employees must be submitted to arbitration. Plaintiffs rely almost exclusively on the United States Supreme Court’s decision in Norfolk & Western Railroad Co. v. Nemitz, supra, for their position that the court does have jurisdiction to hear their causes of action. The court is of the opinion, however, that the decision in Nemitz and its underlying facts can be distinguished from the issue at hand. In Nemitz, the carrier and union entered into an agreement in 1968 which pre-dated the ICC merger order. The merger order incorporated that 1968 agreement as part of its terms. Later the parties entered into an agreement which restricted the rights of the 1968 agreement. Clearly, the Nemitz case did not involve interpretation of the New York Dock conditions as it does in the instant case. See Sorensen v. Chicago & North Western Transportation Co., 476 F.Supp. 1125, 1131-32 (D.Neb.1979).

In Nemitz, the court was not so much resolving a dispute with regard to the interpretation, application or enforcement of the New York Dock conditions; rather, the court sought to determine whether a post-consolidation agreement abrogated the employees’ rights and the standard of compensation as imposed by the ICC. In the instant case, plaintiffs seek the determination whether they are eligible for the ICC imposed benefits and whether they were discharged employees due to the acquisition. The court finds decisions such as S.A. Moran v. Union Pacific R.R., No. 85-0432 (D.Neb., unpublished, 7/03/85), and Bond v. Union Pacific Railroad Co., 601 F.Supp. 329 (D.Neb.1984), more applicable to the case at hand. In Moran, the plaintiffs alleged that defendants failed to comply with Article I, Section 4, of the New York Dock conditions by failing to give notice and have negotiations. While those facts are not directly analogous to the facts at issue here, the court’s interpretation of Article I, Sections 4 and 11, of the New York Dock conditions are persuasive. The court quotes the statutory language of Article I, Sections 4 and 11, and interprets the language of Section 11 to mandate arbitration for all disputes under the New York Dock conditions not exempted by that action. Slip Op. at 3-4. The court recognized that while Section 4 is excepted from the mandatory arbitration of Section 11, it provides its own procedures for arbitration of disputes. Id. at 4. The court found that “[r]ead as a whole, the New York Dock conditions contemplate arbitration of employment related disputes.” Id.

In addition to this decision, recent court decisions interpreting the New York Dock conditions hold that arbitration of a dispute is mandatory. Bond v. Union Pacific Railroad Co., supra, 601 F.Supp. at 331, citing Walsh v. United States, 723 F.2d 570 (7th Cir.1983). In Bond, the plaintiff alleged that his position was eliminated as a result of a merger of two railroads. The court held that because the New York Dock conditions mandate arbitration of plaintiff’s employment dispute and plaintiff had not pursued arbitration, the court had no subject matter jurisdiction over plaintiff’s cause of action.

In McKeon v. Toledo, Peoria & Western Railroad Co., 595 F.Supp. 766, 770 (C.D.Ill.1984), the court interpreted earlier Seventh Circuit Court of Appeals’ decisions addressing the New York Dock conditions to read that initial factual disputes regarding alleged violations must be submitted to arbitration. Only after arbitration is the ICC required to determine whether protective conditions have been violated, and only if there is an appeal from that ICC decision should an appellate court have jurisdiction to review. Id. at 769-70 (emphasis added). See also Swartz v. Norfolk & Western Railway Co., 589 F.Supp. 743, 746 (E.D.Mo.1984) [merger agreement, as approved by the ICC, mandates arbitration between the parties before seeking redress in federal court].

Further support for the proposition that arbitration is mandated by the New York Dock condition is found in decisions which have held that the language “may be referred by either party to an arbitration committee” as stated in Article I, Section 11 of the New York Dock conditions. Swartz, supra, at 744-45. See, e.g., Southern Railway Company-Control-Central of Georgia Railway Co., 317 I.C.C. 557, 566 (1962). Accord. New York Dock Railway v. U.S., 609 F.2d 83, 87-89 (2nd Cir.1979).

Defendants also contend that, regardless, the carrier’s position relative to the plaintiffs’ claims have been effectively denied by Arbitrator Fredenberger as a result of an arbitration hearing held on July 17, 1985. The court finds that it need not address itself to the merits of this contention. The court finds that plaintiffs’ claims for benefits must be resolved in arbitration under the ICC order.

Based on the application of the case law cited above to the facts and issues pled, the court finds that defendants’ motion to dismiss for lack of subject matter jurisdiction should be granted.

IT IS BY THE COURT THEREFORE ORDERED that defendants’ motion for summary judgment due to lack of the court’s subject matter jurisdiction is hereby granted.