author: LAFFITTE, District Judge.

text:
    Angel A. PEREZ TORRES, Plaintiff, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant.
    Civ. A. No. 83-2891 HL.
    United States District Court, D. Puerto Rico.
    Feb. 27, 1985.

      Juan A. Hernandez Rivera, Maria Santana de Cuevas, Bayamón, P.R., for plaintiff.
    Fidel A. Sevillano-Del Rio, Asst. U.S. Atty., Hato Rey, P.R., for defendant.
   OPINION AND ORDER

LAFFITTE, District Judge.

Present before this Court is Petitioner’s motion to alter or amend this Court’s Order dated October 25, 1984, and a motion requesting that attorneys fees requested be approved by this Court.

On October 3, 1984, counsel for plaintiff filed a motion requesting attorney’s fees for the services rendered in connection with a favorable determination of a claim in the Social Security Administration. Petitioner requested 25% of the past-due benefits as attorney’s fees. Said motion was granted by Judge Torruella on October 9, 1984. Thereafter, on October 24, 1984, defendant Secretary of Health and Human Services (the Secretary) filed its opposition to the motion requesting attorneys fees. In said motion, the Secretary challenged the validity of the retainer agreement entitled “Authorization and Contract” subscribed by plaintiff, Angel Pérez Torres, and his counsel.

The Authorization and Contract provides in its pertinent part as follows:

“For the services rendered in connection with the claim, claimant’s attorney is authorized to charge a fee of 25 percent of the past due benefits for months prior to the month in which the favorable determination was made on the claim, or a fee equivalent to the benefits of two consecutive months, whatever be greater, after obtaining the approval of the fee from the Social Security Administration.” (Emphasis ours.)

Defendant contends that the contract at issue here, which states that plaintiff’s counsel can charge a fee equivalent to the benefits of two consecutive months if this is greater than 25% of past due benefits, is contrary to the Code of Federal Regulations, which provides that an attorney cannot contract with his client for a fee over 25% of the past due benefits. 20 CFR Sec. 404.1730. Therefore, defendant requested this Court to delete from plaintiff’s counsel’s contract the words “or a fee equivalent to the benefits of two consecutive months, whatever be greater”, and that plaintiff’s counsel be instructed to inform his clients who have signed the contract, about this change in the “Authorization and Contract.”

Defendant’s request was granted and the order of October 19, 1984, was set aside by Judge Torruella on October 25, 1984. Subsequently, on November 5, 1984, plaintiff’s counsel brought a Motion to alter or amend the October 25th order. For the reasons that follow, plaintiff counsel’s request for attorneys fees will be GRANTED.

Plaintiff’s counsel based his request on the fact that defendant erroneously concluded that 42 U.S.C. § 406 and 20 CFR 404.1730 prohibit an attorney to contract with his client for a fee over 25% of the past due benefits.

Title 42 U.S.C. § 406 provides in its pertinent part as follows:

“(a) ... The Secretary may, by rule or regulation, prescribe the maximum fees which may be charged for services performed in connection with any claim before the Secretary under this subchapter, and any agreement in violation of such rules and regulations shall be void. Whenever the Secretary, in any claim before him for benefits under this sub-chapter, makes a determination favorable to the claimant, he shall, if the claimant was represented by an attorney in connection with such claim, fix (in accordance with the regulations prescribed pursuant to the preceding sentence) a reasonable fee to compensate such attorney for the services performed by him in connection with such claim. If as a result of such determination, such claimant is entitled to past-due benefits under this subchapter, the Secretary shall, notwithstanding section 405(i) of this title, certify for payment (out of such past-due benefits) to such attorney an amount equal to whichever of the following is the smaller: (A) 25 percentum of the total amount of such past-due benefits, (B) the amount of the attorney’s fee so fixed, or (C) the amount agreed upon between the claimant and such attorney as fee for such attorney’s services ....
(b)(1) Whenever a court renders a judgment favorable to a claimant under this subchapter who was represented before the court by an attorney, the court may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of the total of the past-due benefits to which the claimant is entitled by reason of such judgment, and the Secretary may, notwithstanding the provisions of section 405(i) of this title, certify the amount of such fee for payment to such attorney out of, and not in addition to, the amount of such past-due benefits. In case of any such judgment, no other fee may be payable or certified for payment for such representation except as provided in this paragraph.”

A close reading of Section 404.1730 and 42 U.S.C. § 406 reveals that the Act and regulations prohibit the Secretary from paying fees directly to an attorney in excess of 25% of the past-due benefits. The Act also limits the amount that an attorney can charge or collect to no more than the fee prescribed or authorized by the Secretary [see 42 U.S.C. Section 406(a) ]. Therefore, there is a difference between payment of fees by the Secretary out of past-due benefits, and authorization to charge fees by the Secretary. 20 CFR 404.1725(b)(2). However, it must be noted that the Act neither impedes the Secretary from authorizing, nor prohibits an attorney from contracting fees in excess of 25% of the past-due benefits. Furthermore, under 20 CFR 404.1725(b)(2) fees may be authorized even if no benefits are payable.

Therefore, according to the regulations, if the fee authorized by the Secretary is less than the 25% withheld, the amount is paid directly to the attorney and the balance released to the plaintiff. If the amount authorized exceeds the 25% withheld, then the total of the 25% is paid directly to the attorney, but the collection of the balance of the approved fees is a matter of settlement between the attorney and the claimant represented, and does not involve the Social Security Administration. See plaintiff counsel’s Exhibit A, “Authorization to Charge and Receive a Fee.”

In some cases where no past-due benefits are available, the attorney is required to request authorization from Secretary or Federal Court to charge and receive the fees that it deems reasonable under the particular circumstances of each case. Therefore, in those cases the attorney can only charge the fees authorized by the Administration or Federal Court and must collect the whole amount directly from the claimant. 20 CFR 404.1725(b)(2). The clause at issue in this case is directed for this type of situation when there are no past-due benefits. Furthermore, the clause of the Authorization and Contract herein cannot be considered illegal, as alleged by defendant, since it provides that the fee to be charged is subject to the approval of the Social Security Administration. Therefore, if the fee authorized is less than the amount requested, the attorney will not be able to collect a higher fee from the claimant. Furthermore, this issue is academic in this case, because the fee requested is 25% of plaintiffs past-due benefits.

WHEREFORE, the order dated October 25, 1984, is hereby VACATED, and the motion requesting attorneys fees filed by plaintiffs counsel is GRANTED as requested.

IT IS SO ORDERED.

      . See, 20 CFR 404.1730 for the corresponding regulation.

      . Section 1725(b)(2) provides that:
      "(2) Although we consider the amount of benefits, if any, that are payable, we do not base the amount of fee we authorize on the amount of the benefit alone, but on the consideration of all the factors listed in this section. The benefits payable in any claim are determined by specific provisions of law and are unrelated to the efforts of the representative. We may authorize a fee even if no benefits are payable." (Emphasis ours.)


source: Caselaw Access Project

author: WILLIAM T. HART, District Judge.

license: Public Domain

text:
    Brett C. KIMBERLIN, Plaintiff, v. UNITED STATES DEPT. OF JUSTICE, et al., Defendant.
    No. 84 C 2873.
    United States District Court, N.D. Illinois, E.D.
    Feb. 27, 1985.

      Donald V. Morano, Chicago, Ill., for plaintiff.
    Elizabeth Landes, Asst. U.S. Atty., Kevin J. Egan, Winston & Strawn, Chicago, Ill., for defendant.
   MEMORANDUM OPINION AND ORDER

WILLIAM T. HART, District Judge.

Brett Kimberlin is presently confined in the Metropolitan Correctional Center (“MCC”) in Chicago based on his conviction in 1981 in an Indiana federal court for several violations of federal laws, including causing personal injury by means of an explosive device to Carl and Sandra DeLong. In 1983 Sandra DeLong, on behalf of herself and Carl (then deceased), won a civil judgment against Kimberlin in an Indiana state court in the amount of 1.61 million dollars based on the same facts which led to Kimberlin’s criminal conviction. On November 21, 1983, Thomas Gahl, a U.S. probation officer for the federal district court of the southern district of Indiana and the officer assigned to the Kimberlin case, sent a letter to the warden of the MCC to inform that institution of the civil judgment entered against Kimberlin. Patrick Leddy, then Kimberlin’s case manager at the MCC, read that letter and informed Gahl and Kennard Foster, one of the prosecutors in Kimberlin’s criminal case, that Kimberlin had been sending funds from his prison commissary account to a female outside the prison. Gahl then allegedly relayed that information to Sandra DeLong and/or Paula Kight, DeLong’s attorney. In March of 1984 Sandra DeLong, through her attorney Paula Kight, obtained a writ of attachment against all monies in Kimberlin’s prison commissary account in an attempt to satisfy the civil judgment. DeLong’s affidavit supporting the motion for the writ stated that she had received information that Kimberlin was transferring $125 per month from his commissary account to an unidentified female civilian.

Kimberlin then filed a one-count complaint in this court, claiming that disclosing the information that he was sending money from his commissary account to someone outside the prison violated the Privacy Act, 5 U.S.C. § 552a. Defendants Kight and DeLong answered the complaint, and then all the defendants moved to dismiss the complaint or in the alternative for summary judgment, basically claiming that the Privacy Act had not been violated and that the Privacy Act did not authorize suits against individuals. Kimberlin then sought leave to amend his complaint and this court entered and continued that motion so that defendants could file briefs on whether the amended complaint, if accepted, would cure the defects of the original complaint. All defendants have now filed motions to dismiss or in the alternative for summary judgment against the proposed amended complaint.

Because the amended complaint includes all of the charges made in the original complaint (except for certain claims Kimberlin concedes are defective) this opinion will discuss only the proposed amended complaint. If it can withstand the motions against it, then it will stand as the complaint in this action. If not, then it will not be accepted, Hakeen v. Hoffman House, Inc., 724 F.2d 1238, 1244 (7th Cir.1984), and the original complaint must be dismissed as well since it has no more merit than the amended complaint.

The amended complaint retains the alleged violations of the Privacy Act as count 1, naming only the Bureau of Prisons and the Parole Commission as defendants (though of course the complaint alleges that these two entities acted through the other individual defendants). A new second count alleges that Gahl, by disclosing the information to Kight and DeLong, violated Kimberlin’s constitutional rights to privacy and due process and is liable as an agent of U.S. District Court under Bivens v. Six Unknown Named Agents, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971). A new third count alleges that Gahl, Leddy, Kight and DeLong conspired to violate Kimberlin’s rights to privacy and due process. No legal basis is identified in the third count but Kimberlin’s supporting brief makes clear that a Bivens action is intended. Kimberlin has dropped his original request for injunctive relief, but asks for compensatory (i.e., pain, suffering, mental anguish and litigation expenses) and punitive damages, costs and attorney’s fees.

I. Count 1: The Privacy Act Claim

The Privacy Act forbids any agency (defined in § 552(e) as essentially any part of the executive branch) to disclose information it has concerning an individual without that person’s prior written consent, unless the information falls within one of the 12 exceptions appearing in § 552a(b). Each agency is required, with exceptions not relevant here, to keep an accurate accounting of the “date, nature, and purpose of each disclosure of a record to any person or to another agency made under subsection (b) ... and the name and address of the person or agency to whom the disclosure is made” (§ 552a(c)). Section 552a(g) authorizes civil suits against agencies which fail to “comply with any ... provision of [the Privacy Act], or any rule promulgated thereunder, in such a way as to have an adverse effect on an individual.” If the failure to comply is found to be intentional or willful a plaintiff can recover actual damages (but not less than $1000) and costs and attorney fees (§ 552a(g)(4)).

As an initial matter, defendants assert that the Parole Commission, which is named only in count 1, is not a proper defendant to this action because the claim against it is based on the acts of defendant Gahl, and Gahl, being an employee of the federal district court (see 18 U.S.C. § 3654), is not subject to the Privacy Act. Kimberlin tries to argue that Gahl is an employee of the Parole Commission (an executive agency) by pointing to 18 U.S.C. § 3655, which requires probation officers to “perform such duties with respect to persons on parole as the United States Parole Commission shall request”. Even assuming that performing duties at the request of the Parole Commission makes a probation officer an employee of the Justice Department, however, Gahl was neither acting pursuant to Parole Commission order nor acting with respect to a person on parole, so he must have been an employee of the court at the time he acted. Therefore, the Parole Commission is dismissed from this action.

The remaining defendant Bureau of Prisons (“BOP”) asserts that the only two systems of records that contain information regarding a prisoner’s commissary account have been exempted from the civil remedies section (§ 552a(g)). That exemption, which appears at 28 C.F.R. § 16.97, was made pursuant to 5 U.S.C. § 552a(j)(2), which allows an agency head to promulgate rules exempting systems of records from certain provisions of the Privacy Act if (1) the principal function of the agency relates to “enforcement of criminal laws, including ... the activities of correctional, probation, pardon, or parole authorities,” and (2) the records consist of “reports identifiable to an individual compiled at any stage of the process of enforcement of the criminal laws from arrest or indictment through release from supervision.” Id.

If the rule exempting these two systems of records were proper under § 552a(j)(2), then Kimberlin’s Privacy Act claim would have to be dismissed. However, that section requires that the exempting rule give reasons for the exemption. The only reason given at 28 C.F.R. § 16.97 for exempting these two systems of records from the civil remedy section is that the records are exempt from § 552a(d). Section 552a(d), however, relates only to access to records by the individual whom the records are about, and says nothing concerning disclosure of records to third parties. Therefore, while an adequate justification has perhaps been given for preventing access to these systems of records by the subject of the records (though the justification is difficult to understand when a prisoner’s own commissary account is involved), no justification has been given for exempting these systems of records from the conditions of disclosure to third parties imposed by § 552a(b). Since no adequate reason has been given, these two systems of records have not been properly exempted from the kind of civil action Kimberlin’s complaint presents. This case therefore differs from Shapiro v. Drug Enforcement Administration, 721 F.2d 215, 217 (7th Cir.1983), judgment vacated on other grounds sub nom. United States Department of Justice v. Provenzano, — U.S. -, 105 S.Ct. 413, 83 L.Ed.2d 242 (1984), where the reason given for denying an individual access to his Drug Enforcement Administration files—that “access to such records would alert a subject to the existence of an investigation and thereby impede law enforcement efforts”—was found to be “sufficiently specific” to satisfy the reason-giving requirement of § 552a(j)(2).

The BOP also argues that Leddy’s disclosure to Gahl was proper under the “routine use” exception of § 552a(b)(3). “Routine use” is defined in § 552a(a)(7) as “the use of such record for a purpose which is compatible with the purpose for which it was collected.” As required by § 552a(e)(4)(D), the BOP has published the routine uses of the records in the two systems involved in this case. One of the systems of records the government contends contains the disclosed information (the Inmate Central Records System) has as one of its routine uses “to provide information relating to federal offenders to federal ... probation officials.” Privacy Act Issuances, 1981 Comp., Vol. II at 241. This routine use would appear to justify the disclosure to Gahl, who was Kimberlin’s probation officer at the time. However, in the regular briefing on this motion Kimberlin claimed that the Inmates Central Records System did not contain the information concerning Kimberlin’s disposition of his commissary funds, and the supplemental briefs the parties were invited to file to clarify that question indicate that Kimberlin is correct, so that routine use is not available to the BOP.

Routine uses of both systems of records include (1) “to provide information source to officers and employees of the Department of Justice who have a need for the information in the performance of their duties”, and (2) “to provide information source to state and federal law enforcement officials for investigations, possible criminal prosecutions, civil court actions, or regulatory proceedings”. Privacy Act Issuances, supra at 240-41. The first routine use does not apply here since Gahl is not an officer or employee of the Justice Department, 18 U.S.C. § 3654. Whether the second routine use applies depends on whether Gahl, as a probation officer, is a “federal law enforcement official.” The parties have offered no definition of that term and neither the statute nor the regulations define it.

Although probation officers have a duty to assist prisoners and probationers and to that extent are like social workers, the Supreme Court has recognized that a probation officer “is a peace officer, and as such is allied, to a greater or lesser extent, with his fellow peace officers.” Minnesota v. Murphy, — U.S. -, 104 S.Ct. 1136, 1145, 79 L.Ed.2d 409 (1984) (quoting Fare v. Michael C., 442 U.S. 707, 720, 99 S.Ct. 2560, 2569, 61 L.Ed.2d 197 (1979)). Federal probation officers have the power to arrest a probationer, which certainly is a function for a law enforcement official. 18 U.S.C. § 3653. And though as noted the Privacy Act does not define “law enforcement”, the inclusion of probation officers in the phrase “any activity pertaining to the enforcement of criminal laws” in the general exemption section (§ 552a(j)(2)) does suggest that Congress viewed probation officers as belonging to the class of law enforcement officials. From these facts the court concludes that as a matter of law Gahl was acting as a law enforcement official within the meaning of the regulation: he was attempting to see that Kimberlin not escape the consequences of his crime and that the victims be compensated according to their lawfully obtained civil judgment. Therefore, the disclosure of the information concerning Kimberlin’s commissary account funds was made pursuant to a routine use exception and did not violate the Privacy Act.

Kimberlin also complains that the BOP did not properly account for the disclosure to Gahl as required by § 552a(c). This claim received no discussion by the parties, but it is no basis for recovery here. The civil remedies section allows suit to be brought for any violation of the Privacy Act which has “an adverse effect on an individual” (§ 552a(g)(1)(D)). Kimberlin alleges no adverse effect from the alleged failure to record the disclosure to Gahl and indeed he could not. As Congress explained, the purpose of the record-keeping requirement was to “permit an individual to determine what records pertaining to him are ... disseminated by” an executive agency. 88 Stat. 1896 (1974). Kimberlin does not allege he tried to find out what disclosures had been made concerning him and in any event he learned of the disclosure when the writ of attachment was filed. Therefore, he has suffered no adverse effect from the failure to record the disclosure and lacks standing to complain of it.

II. Counts 2 and 3: Bivens

Kimberlin’s second and third counts rest on his claim that disclosure of the information in question violated his right to due process and his constitutionally protected privacy rights. There is clearly no due process right involved here. The harm Kimberlin alleges (mental anguish, pain and suffering) is akin to damage to reputation, which has been held not to constitute a liberty or property interest in and of itself. Paul v. Davis, 424 U.S. 693, 96 S.Ct. 1155, 47 L.Ed.2d 405 (1976); Cameo Convalescent Center v. Senn, 738 F.2d 836, 843 (7th Cir.1984), cert. denied, — U.S. -, 105 S.Ct. 780, 83 L.Ed.2d 775 (1985). The only property Kimberlin risks losing here is the money from his commissary account. If that happens it will be pursuant to a court action which certainly affords all the process Kimberlin is due.

Kimberlin’s privacy claim also fails. The right to privacy includes two separate but related interests. “One is the individual interest in avoiding disclosure of personal matters, and another is the interest in independence in making certain kinds of important decisions.” Whalen v. Roe, 429 U.S. 589, 599-600, 97 S.Ct. 869, 876-877, 51 L.Ed.2d 64 (1977). These two interests are often referred to as the “confidentiality” and “autonomy” strands of the privacy right. Barry v. City of New York, 712 F.2d 1554, 1559 (2d Cir.), cert. denied, — U.S. -, 104 S.Ct. 548, 78 L.Ed.2d 723 (1983). The autonomy strand relates to such matters as “marriage, procreation, contraception, family relationships, and child rearing and education.” 429 U.S. at 600 n. 26 (quoting Paul v. Davis, 424 U.S. at 713, 96 S.Ct. at 1166, 47 L.Ed.2d 405 (1976)). Financial information is not covered by the autonomy strand. Plante v. Gonzalez, 575 F.2d 1119, 1132 (5th Cir.1978), cert. denied, 439 U.S. 1129, 99 S.Ct. 1047, 59 L.Ed.2d 90 (1979).

Whether the confidentiality strand applies here depends first on whether Kimberlin has a reasonable expectation of privacy in the non-disclosure of his disposition of the funds in his commissary account. That question “necessarily entails a balancing of interests.” Hudson v. Palmer, — U.S. -, 104 S.Ct. 3194, 3200, 82 L.Ed.2d 393 (1984). Kimberlin tries to define his interest in reliance on cases dealing with compulsory financial disclosure laws. That course is difficult enough since, though courts typically state that some right of privacy attaches to financial records, Kimberlin has cited only one decision which actually struck down a financial disclosure law. City of Carmel-by-the-Sea v. Young, 2 Cal.3d 259, 466 P.2d 225, 85 Cal.Rptr. 1 (Cal.1970); but see Barry, supra, 712 F.2d 1554 (2d Cir.1983). More important, Kimberlin’s situation is distinguishable from those cases since here Kimberlin has already disclosed the information to outsiders; namely, the prison officials in charge of commissary accounts. (It may be that the prison requires all prisoners to keep their funds in a commissary account, but Kimberlin is not attacking that requirement and in view of the legitimately diminished rights of a prisoner, Hudson, 104 S.Ct. at 3199, he could not.)

A closer analogy is found in cases dealing with public disclosure of information the plaintiff has already submitted to some outsider. For example, in St. Michael’s Convalescent Hospital v. California, 643 F.2d 1369 (9th Cir.1981), the court rejected a claim that public disclosure of cost information the plaintiff hospital had to submit to a state agency under the state’s medicare program violated the constitutional right to privacy. The court found that no privacy right in the information existed and that even if it did the state’s reason for disclosure outweighed any privacy right involved. Similarly, in United States v. Miller, 425 U.S. 435, 442-43, 96 S.Ct. 1619, 1623-1624, 48 L.Ed.2d 71 (1976), the Supreme Court found no expectation of privacy existed in a person’s bank records, and that was so even if the bank was required by law to keep the records and therefore was to be regarded as an agent for the government.

Here, the intrusion on privacy was less than that involved in St. Michael’s and Miller. Kimberlin’s entire financial history was not disclosed in detail; rather, all that was disclosed was that Kimberlin was sending money outside the prison to an unidentified female. Since Kimberlin had already disclosed that information to others, he retained no privacy right in it. And even if he had some expectation of privacy in that information, that interest is easily outweighed by the government’s interest in seeing that the victims of a crime and the recipients of a court judgment against a prisoner are not deprived of their lawful right to a recovery. Therefore, no constitutionally protected interest is involved here and counts 2 and 3 of the proposed amended complaint fail to state a cause of action.

IT IS THEREFORE ORDERED that this action is dismissed in its entirety with prejudice.

      . Since Kimberlin’s only claim for damages stems from the disclosure by Gahl and no allegation is made that Foster passed the information on to anyone, the disclosure to Foster is irrelevant.

      . What Kimberlin expects to accomplish here is not clear since anything he might collect in this action (with the possible exception of costs and fees) would presumably go toward satisfying the outstanding civil judgment in favor of DeLong.

      . The Department of Justice is also named in this count on the ground that as the department of which the other defendants are part it is an indispensable party.

      . If this court’s determination (see supra pp. 81-82) that Gahl is not an employee of the Justice Department is incorrect, then this first routine use would apply and defeat Kimberlin’s suit.

      . This conclusion does not mean that the BOP is free to ignore the requirements of § 552a(c).

      . Since counts 2 and 3 are dismissed for failure to state a claim, the other arguments by Gahl, Kight and DeLong need not be addressed. The court notes, however, that personal jurisdiction over Gahl, an Indiana resident lacking any contacts with this forum, is questionable. See Textor v. Board of Regents, 711 F.2d 1387, 1392 (7th Cir.1983). Kight and DeLong, on the other hand, apparently waived that objection by not raising it in their answer. T & R Enterprises v. Continental Grain Co., 613 F.2d 1272, 1277 (5th Cir.1980) (objections to personal jurisdiction waived if not raised in first responsive pleading); Ross v. United States, 574 F.Supp. 536, 539 (S.D.N.Y.1983) (same). Kight and DeLong’s claim that they, as private citizens, can never be liable under Bivens is also incorrect, Tower v. Glover, — U.S. -, 104 S.Ct. 2820, 2824-25, 81 L.Ed.2d 758 (1984), though perhaps here Kimberlin’s conspiracy allegations are insufficient.


author: CALDWELL, District Judge.

text:
    UNITED STATES of America, Plaintiff, v. Charles “Corky” YEAPLE, Defendant.
    Crim. No. 85-00029.
    United States District Court, M.D. Pennsylvania.
    Feb. 28, 1985.

      Bernard V. O’Hare, III, Asst. U.S. Atty., Scranton, Pa., for plaintiff.
    Samuel L. Andes, Lebanon, Pa., for defendant.
   BAIL MEMORANDUM

CALDWELL, District Judge.

On February 27, 1985 defendant was arraigned, pleaded not guilty, and was scheduled for trial on April 17, 1985. At arraignment defendant also filed an “application for release on bail.”

On February 6, 1985 the government requested a detention hearing pursuant to Section 3142(f)(1)(A) of the Comprehensive Crime Control Act of 1984. (The Act) (18 U.S.C.A. § 3142(f)(1)(A)). The government alleged that defendant was charged with a crime of violence and that if admitted to bail there will be a risk that defendant will attempt to obstruct justice through intimidation of prospective witnesses, etc.

On February 6, 1985 United States Magistrate Smyser conducted a detention hearing and on February 7, 1985 issued an order detaining defendant until trial. The Magistrate concluded that defendant posed a danger to young boys in his community.

The Act provides in Section 3145(b), entitled “Review of a Detention Order,” that where detention pending trial is ordered by a Magistrate the defendant may file with the court “a motion for revocation or amendment of the order.” We will treat defendant’s application for release as a motion for revocation or amendment under § 3145(b). Unfortunately the statute gives no guidance as to the scope of our review, but we note that a hearing is not specifically required.

The matter of pre-trial detention is a new concept for the judicial system and The Act permitting it has been with us only since October 12, 1984. Detention pending trial is authorized in Section 3141(a) of the Bail Reform Act of 1984 (a part of The Act). The procedures to be followed are also within the provisions of The Act. Where the government desires to have a defendant detained pending trial it must proceed under Section 3142(f). This section requires a judicial officer (a magistrate) to hold a detention hearing upon a motion filed by the government. The statute directs that the government’s motion must allege the existence of at least one of a number of circumstances, which in this case are (1) that the crime involved in the case is one of violence and (2) that there is a serious risk of intimidation, etc., to witnesses. Upon the filing of such a motion the judicial officer is directed by Section 3142(f) to determine whether any conditions of bail will assure the defendant’s appearance “and the safety of ... the community ....” Section 3142(e) provides that the defendant may be detained after the hearing required in subsection (f) if the judicial officer concludes that no conditions of bail, “will reasonably assure the appearance of the person ... and the safety of ... the community....”

In this particular case, after considering all of the evidence produced, and based upon the physical evidence gathered in the search of defendant’s home, Magistrate Smyser concluded that, “... the defendant has a current interest in actively participating in inducing young boys into sexual conduct. It is therefore concluded that he constitutes a danger to young boys in the community.” The Magistrate did not comment upon whether defendant is charged with a crime of violence.

We believe it is important to note that while the government must allege that the case involves a crime of violence (§ 3142(f)), The Act is silent as to whether the judicial officer must find that the designation is correct. The Act contains no definition of the term “crime of violence” and Section 3142(e) directs the Magistrate to rule on just two subjects in resolving a request for detention:

(1) whether the person will likely appear for trial.
(2) whether the safety of any person or the community will be jeopardized.

The absence of a requirement that the judicial officer actually conclude that the crime involved in the case is one of violence creates a considerable ambiguity, i.e., whether detention is limited to only those situations where a recognized crime of violence is charged. It is abundantly clear, however, that the focus and concern of the Congress in enacting the legislation was the safety of people and the community, and the legislative history indicates that “safety” is not limited to an absence of physical violence. S.Rep. No. 98-225, U.S.Code Cong. & Admin.News 1984, p. 3. In our opinion this expression of legislative intent justifies a more searching examination of the circumstances than simply determining whether the crime charged is, in fact, one of physical violence.

Defendant is charged with violating 18 U.S.C. § 2252(a)(2), which prohibits the receipt of visual depiction material if the production thereof “involves the use of a minor engaging in sexually explicit conduct.” Without more guidance in the statute it is at least arguable that this crime includes a certain form of violence. Persons who create the demand for such material by ordering or purchasing it indirectly cause minors to be drawn into this illegal activity, and bear some responsibility for the violence done to these minors, psychologically if not physically. Although defendant is charged federally with simple possession of this material, the evidence seized from his residence shows beyond doubt that he himself has photographed many minors engaging in the same sexually explicit conduct condemned by the statute. Defendant’s possession of this evidence cannot be ignored in deciding whether the safety of young boys in his community will be jeopardized by his release. We have reviewed the evidence presented to the Magistrate, as the statute requires. The Magistrate’s conclusion, that defendant’s release would constitute a danger to the safety of young boys in the community, has strong support in the record, and we agree with the Magistrate that the factual representations of counsel are inadmissible and cannot be considered in deciding the issue.

Based upon the competent evidence produced at the detention hearing we conclude that the decision to detain defendant was supported by the evidence and we find no abuse of discretion or error of law by Magistrate Smyser.

Out of an abundance of caution, and some uncertainty as to the extent of our review function, we believe the court should consider any new or additional evidence which defendant may wish to offer on the question of bail. Should defendant elect to consider this option he shall petition the court for a hearing and shall set forth specifically the nature and content of the additional evidence he desires to present. A decision on the need for a further hearing will then be made. We again emphasize that we will not second guess or reconsider the decision of the Magistrate, who heard the witnesses and viewed the exhibits, except to the extent that his decision is shown to be affected by new evidence.

ORDER

AND NOW, this 28th day of February, 1985, the application of defendant for bail, filed February 26, 1985, is denied.


author: KISER, District Judge.

text:
    Johnnie MOTLEY, Jr., Plaintiff, v. Margaret M. HECKLER, Secretary of Health and Human Services, Defendant.
    Civ. A. No. 83-0071-D.
    United States District Court, W.D. Virginia, Danville Division.
    March 2, 1985.
    J. Patterson Rogers, Danville, Va., for plaintiff.
    E. Montgomery Tucker, Asst. U.S. Atty., Roanoke, Va., for defendant.
   MEMORANDUM OPINION

KISER, District Judge.

It is trite but true that the contingent fee is the poor man’s key to the courthouse door. This is recognized both statutorily and judicially. 42 U.S.C. § 406(b)(1); Morris v. Social Security Administration, 689 F.2d 495 (4th Cir.1982). This case presents a challenge to certain procedures of the Secretary of Health and Human Services (the “Secretary”) which adversely affect the use of the contingent fee in appeals of social security benefit determinations.

I.

Johnnie Motley, Jr., suffers from severe lower back pain caused by a ruptured disc. This injury, coupled with his illiteracy, age and prior work experience, led an Administrative Law Judge to find him “disabled” on April 13, 1982. The Appeals Council elected to review this determination. Disregarding Motley’s testimony of pain, the Appeals Council reversed the decision of the AU. Motley appealed to this Court. The merits of Motley’s claim for benefits was set out in a Report and Recommendation of Magistrate B. Waugh Crigler filed January 19, 1984. On February 9, 1984, judgment was entered for Motley, and this case was remanded to the Secretary for a calculation of benefits. On remand, the Secretary determined that Motley was entitled to $10,230 in past due disability benefits under Title II of the Social Security Act, and to $5,318 in Supplemental Security Income (SSI) benefits under Title XVI of the Social Security Act.

Motley was successfully represented before this Court by J. Patterson Rogers, 3rd, Esquire. Rogers petitioned this Court for approval of attorney’s fees pursuant to § 206(b) of the Social Security Act, 42 U.S.C. § 406(b). On September 26, 1984, the Court referred this petition to United States Magistrate Crigler for proposed findings and recommendations. Magistrate Crigler filed his report on January 28, 1985. He recommends that attorney’s fees in the amount of $2,556.13 be awarded. The Secretary objects to the payment of any fee beyond the $1,476.40 currently being withheld. The difference between these figures results from the Secretary’s practice of withholding attorney’s fees based upon the net amount which will actually be paid to the claimant, rather than the gross amount of the Title II award.

II.

Magistrate Crigler has made an initial determination that an attorney’s fee award of twenty-five percent of Motley’s benefits is reasonable in this case. Section 406(b)(1) of the Social Security Act authorizes the Court to certify a fee award “not in excess of 25 percent of the total past due benefits to which the claimant is entitled by reason of such judgment” granted by the Court. While it is true that this amount is a maximum, and not appropriate for all cases, Blankenship v. Schweiker, 676 F.2d 116 (4th Cir.1982), I agree with the Magistrate that a 25 'percent award is reasonable in this case. The most influential factor in this determination is that Motley and Rogers entered into a contingent fee arrangement for legal services which provided that Rogers would receive 25 percent of Motley’s past due benefits together with recoverable costs.

The Secretary does not object to this aspect of the Magistrate’s Report. In fact, she has withheld and certified what she considers to be 25 percent of Motley’s benefits. When the concurrent award was made, the Secretary first calculated Motley’s past due SSI benefits. This sum, $5,318.90, was sent directly to Motley. Then the Secretary calculated Motley’s past due Title II award. The $10,230.90 disability benefit award was offset by the SSI award and $6.40 in undisputed deductions. Of the remaining $5,905.60, 25 percent ($1,476.40) was withheld as attorney’s fees. The remainder was paid to Motley.

The procedure used by the Secretary to offset Title II awards with SSI benefits previously or concurrently received is the result of legislation designed to prevent windfalls to claimants, Section 1127 of the Social Security Act. 42 U.S.C. § 1320a-6. Pursuant to these provisions, the Secretary adopted appropriate regulations, which are set out at 20 C.F.R. § 404.4086 and § 416.-1123. While these regulations do not explicitly amend the attorney’s fee provisions of 42 U.S.C. § 406, the interaction of these provisions was addressed when the final regulations were promulgated.

As for attorneys’ fees, the amount of retroactive benefits that is subject to withholding for payment of an-attorney’s fees is the total amount of retroactive Social Security benefits payable to the beneficiary (see § 404.1703). The amount payable is the amount of retroactive benefits less the amount of any deductions, reductions, or overpayments applicable to the retroactive period. Thus, the amount of retroactive benefits payable for purposes of withholding an attorney’s fee is the amount of retroactive Social Security benefits reduced by the amount of any SSI payments received in the retroactive period.

47 Fed.Reg. 4986 (1982) (emphasis in original).

In response to comments that this procedure would provide less incentive for attorneys to represent disability applicants, the Secretary claimed that the amount of the authorized fee is not based upon the amount of retroactive benefits payable to the claimant, but upon independent criteria. She further asserted that the amount of retroactive benefits is relevant only to the amount of the fee that the Secretary may withhold and pay directly to the attorney. 47 Fed.Reg. 4987 (1982).

Magistrate Crigler has recommended that attorney’s fees in this case be based upon the gross amount of past due Title II benefits, rather than the net benefits after the SSI offset. The Secretary objects to this recommendation.

The only two reported decisions on this question both hold that the Secretary’s offset procedure artificially reduces the amount of benefits available to make an award of attorney’s fees, and thus deters representation of social security claimants. Burnett v. Secretary of Health and Human Services, 563 F.Supp. 789, 793 (W.D.Ark.1983); Carlisi v. Secretary of Health and Human Services, 583 F.Supp. 135, 138 (E.D.Mich.1984).

Thus, in cases where the Court eventually awards a fee to claimant’s counsel, a procedure which artificially reduces the amount of benefits available from which to make such an award represents a strong disincentive for lawyers to represent Social Security claimants. This cannot have been Congress’s intent in enacting Section 1127. That section was intended to recover windfalls from those who had overcollected benefits under Title XVI, not to penalize attorneys.

Burnett, 563 F.Supp. 793.

The Secretary argues that these decisions are incorrect and premised upon an unwarranted distinction between concurrent SSI and Title II awards, and Title II awards where SSI benefits were previously paid. Such a distinction, the Secretary claims, is improper. She cites the recent decision in Gallo v. Heckler, 600 F.Supp. 1513 (D.C.E.D.N.Y.1985).

The Gallo court concluded that the offset provisions of 42 U.S.C. § 1320a-6 were properly applied in cases of concurrent adjudications. The court was particularly persuaded by the recent amendments to § 1320a-6. But the Gallo court was not presented with the issue of attorney’s fees. (At 1518, ftnt. 8). The decision was expressly limited to the calculation of the actual amount of money to be paid to the claimant. (At 1519). And the Burnett and Carlisi cases were both distinguished because they involved attorney’s fees and the problem of discouraging representation of claimants. (At 1518). Therefore, while I do not dispute the analysis used by the Gallo court, I do not believe that decision is particularly helpful in resolving the issue at hand.

III.

In enacting 42 U.S.C. § 406, Congress sought to encourage the effective legal representation of claimants by ensuring lawyers that they would receive reasonable fees through certification by the Secretary. Dawson v. Finch, 425 F.2d 1192, 1195 (5th Cir.1970), cert. denied, 400 U.S. 830, 91 S.Ct. 60, 27 L.Ed.2d 60 rehearing denied, 400 U.S. 953, 91 S.Ct. 233, 27 L.Ed.2d 261. In this case, like many others, the claimant’s disability benefits are his only source of income. Rogers contends that in the absence of withholding and certification, there is no practical method for him to collect his fee. In addition, it is clear that Motley and his attorney contemplated that the fee would be based upon the amount of any Title II judgment granted by the Court. There are no provisions under Title XVI equivalent to § 406, so an attorney cannot receive his fee out of past due SSI benefits. In the case of concurrent adjudications, the only funds available for withholding are Title II benefits.

The congressional intent behind 42 U.S.C. § 1320a-6 was to prevent the windfall to claimants that could occur under the prior law. An individual’s entitlement under SSI and Title II is to be considered as a totality, so that the claimant doesn’t receive a benefit because of the timing of Title II checks. S.Rep. No. 408, 96th Cong., 2d Sess. 78 (1980); H.R. Conference Rep. No. 944, 96th Cong., 2d Sess. 69 (1980), U.S.Code Cong. & Admin.News 1980, 1277. But at no point is there any evidence that this windfall provision was intended to affect attorney’s fees under 42 U.S.C. § 406. And such an effect is not a necessary consequence of the two acts. In fact, the Secretary’s regulations implementing § 1320a-6 appear to conflict with her earlier regulations involving the calculation of SSI benefits.

SSI benefits are available to aged, blind or disabled individuals whose income does not exceed specified levels. 42 U.S.C. § 1382(a). “Income” is defined as both earned income and unearned income, and includes:

(B) any payments received as an annuity, pension, retirement, or disability benefit, including veterans’ compensation and pensions, workmen’s compensation payments, old-age, survivors, and disability insurance benefits, railroad retirement annuities and pensions, and unemployment insurance benefits...

42 U.S.C. § 1382a(a)(2)(B).

The implementing regulations define how unearned income is counted. 20 C.F.R. § 416.1123(b)(3) provides:

(b) Amount considered as income. We may include more or less of your unearned income than you actually receive.
(3) We include less than you actually receive if part of the payment is for an expense you had in getting the payment. For example, if you are paid for damages you receive in an accident, we subtract from the amount of the payment your medical, legal, or other expenses connected with the accident. If you receive a retroactive check from a benefit program other than SSI, legal fees connected with the claim are subtracted. (emphasis added).

Thus, in calculating the amount of income “received” during a particular quarter for the purposes of establishing SSI benefits, the Secretary’s own regulations state that she will consider only the net amount of any payment after all legal expenses including attorney’s fees have been deducted. In one reported case, SSR-80-21 (July, 1980), a maintenance allowance obtained from an employer under maritime law for an injury was classified, like other disability benefits, as unearned income for SSI purposes. The portion paid in attorney’s fees was excluded, however, as an ordinary and necessary legal expense in the recovery of unearned income. Annot., 61 A.L.R.Fed. 230, 246 (1983). This approach is a logical one which recognizes that it is the net amount of a benefit, not the gross amount, that is actually available to meet living expenses. See Kimmes v. Califano, 647 F.2d 1028 (10th Cir.1981), cert. denied, 454 U.S. 898, 102 S.Ct. 400, 70 L.Ed.2d 214 (1981), and the cases cited therein.

The windfall provisions of § 1320a-6, and the regulations implementing that section at 20 C.F.R. 404.408b and 20 C.F.R. 416.1123(d), all relate to the timing of past due benefit payments, but they do not alter the calculation of SSI benefits. The recent amendments to the Social Security Act provide that retroactive Title II benefits will be treated as if they had been paid in the months they were due. SSI benefits are then calculated based upon the recipient’s “income”, including Title II benefits. The actual Title II benefits are then to be reduced (offset) by the amount of overpaid SSI benefits, if any. In making these calculations, there is no reason why the attorney’s fees awardable under 42 U.S.C. § 406 should be treated any differently than other legal expenses incurred in obtaining benefit payments.

This conclusion is supported by the language of Section 406 itself, which states that the award should not exceed 25 percent of “the total of the past due benefits to which the claimant is entitled by reason of such judgment.” 42 U.S.C. § 406(b)(1) (emphasis added). The benefits referred to are, of course, the Title II benefits awarded; any Title XVI benefits are not included. The amount to which the claimant is entitled is the total amount which should have been paid during earlier periods. This amount is not, of course, what the claimant will actually receive. Other provisions provide for deductions for prior over-payments, or the windfall provisions may apply. Even the attorney’s fee provisions themselves reduce (by up to 25 percent) the amount which the claimant will be paid. All of these deductions, however, are made from the total of the past due benefits to which the judgment entitles the claimant.

Contrary to the position taken by the Secretary in this case, the definition of “past-due benefits” set out in 20 C.F.R. § 404.1703 is not clearly inconsistent with this interpretation. That section states that:

“Past-due benefits” means the total amount of benefits payable under Title II of the Act to all beneficiaries that has accumulated because of a favorable administrative or judicial determination...

Certainly the entire amount of any Title II award is payable to the claimant. But as with all judgments, it is payable subject to certain deductions and liens, including attorney’s fees, over-payments, and offsets against SSI benefits previously paid. Nonetheless, it is the total amount of past due benefits from which the attorney’s fee award is calculated and withheld, not the net amount after deductions. The language of the Act expresses the intent of Congress to accord a priority status to attorney’s fees. Other deductions or offsets can be made before the claimant is paid, but only after attorney’s fees have first been calculated.

It is true that the Secretary is empowered to promulgate regulations, and her interpretations of the statute involved are entitled to great weight. Schweiker v. Hogan, 457 U.S. 569, 102 S.Ct. 2597, 73 L.Ed.2d 227 (1982). In this case, however, the Secretary’s procedures for implementing 42 U.S.C. § 1320a-6 are in conflict with the clear language and intent of 42 U.S.C. § 406(b) and with her own method of calculation at 20 C.F.R. § 416.1123(b)(3). The standard to be applied in such a case is whether the interpretive regulation constitutes a permissible gloss on the statute by the Secretary, in light of the statute’s language, structure, and legislative history. Whirlpool Corp. v. Marshall, 445 U.S. 1, 11, 100 S.Ct. 883, 890, 63 L.Ed.2d 154 (1980). Assuming, without deciding, that the regulations in § 404.4086 and § 416.-1123(d) are appropriate methods for implementing the windfall offset provisions of § 1320a-6,1 find that these regulations are an inappropriate gloss on § 406(b) to the extent that they require application of the SSI offset to Title II benefits before the calculation and withholding of attorney’s fees. The statute requires that those fees be calculated and withheld based upon the total amount of past due benefits, not the net amount after offset.

Accordingly, Rogers is entitled to a fee award in the case of $2,556.13.

IV.

Having reached this conclusion, there remains the question of assuring payment to Rogers. Through her own miscalculation, the Secretary has only withheld $1,476.40 with which to pay attorney’s fees.. The Secretary has improperly disbursed to Motley $1,079.73 which should have been withheld for the benefit of his attorney.

Motley’s counsel correctly notes that Motley’s only source of income, his social security payments, are not subject to attachment, garnishment or other collection proceedings. Harris v. Bailey, 574 F.Supp. 966 (W.D.Va.1983). Thus, it is only through the Secretary that Rogers can be made whole. It was the Secretary’s own mistake which resulted in an over-payment to Motley, and it is not the attorney who should suffer the loss.

Magistrate Crigler’s suggested resolution of this problem was to have the Secretary withhold 25 percent of Motley’s current benefits until the full amount of the attorney’s fee has been paid. The Secretary objects to this recommendation on the basis that § 406(b) only authorizes withholding out of past due benefits, and there is no authority for withholding any amount for attorney’s fees out of current benefits.

The Secretary is partially correct. The necessary authority can be found not in § 406(b), but in 42 U.S.C. § 404, which provides for the recovery of over-payments. It is up to the Secretary to pay out the total fee award that should have been withheld by her, and then utilize the means uniquely at her disposal to recover any over-payment to Motley.

The Clerk is directed to send certified copies of this Memorandum Opinion to all counsel of record.

      . 42 U.S.C. § 406(b)(1) provides:
      (b)(1) Whenever a court renders a judgment favorable to a claimant under this sub-chapter who was represented before the court by an attorney, the court may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of the total of the past-due benefits to which the claimant is entitled by reason of such judgment, and the Secretary may, notwithstanding the provisions of section 405(i) of this title, certify the amount of such fee for payment to such attorney out of, and not in addition to, the amount of such past-due benefits. In case of any such judgment, no other fee may be payable or certified for payment for such representation except as provided in this paragraph.

      . 42 U.S.C. § 1320a-6 has been recently amended. The amendment, found in H.R.Rep. No. 861, 98th Cong., 2d Sess. 669-670, P.L. 98-369, 98 Stat. 494 (1984), provides as follows:
      Sec. 2615. (a) Section 1127 of the Social Security Act is amended to read as follows:
      "ADJUSTMENTS IN SSI BENEFITS ON ACCOUNT OF RETROACTIVE BENEFITS UNDER TITLE II

        "SEC. 1127. (a) Notwithstanding any other provisions of this Act, in any case where an individual—
      “(1) is entitled to benefits under title II that were not paid in the months in which they were regularly due and
      "(2) is an individual or eligible spouse eligible for supplemental security income benefits for one or more months in which the benefits referred to in clause (1) were regularly due, then any benefits under title II that were regularly due in such month or months, or supplemental security income benefits for such month or months, which are due but have not been paid to such individual or eligible spouse shall be reduced by an amount equal to so much of the supplemental security income benefits, whether or not paid retroactively, as would not have been paid or would not be paid with respect to such individual or spouse if he had received such benefits under title II in the month or months in which they were regularly due.
      "(b) For purposes of this section, the term ‘supplemental security income benefits’ means benefits paid or payable by the Secretary under title XVI, including State supplementary payments under an agreement pursuant to section 16161(a) or an administration agreement under section 212(b) of Public Law 93-66.
      “(c) From the amount of the reduction made under subsection (a), the Secretary shall reimburse the State on behalf of which supplementary payments were made for the amount (if any) by which such State’s expenditures on account of such supplementary payments for the month or months involved exceeded the expenditures which the State would have made (for such month or months) if the individual had received the benefits under title II at the times they were regularly due. An amount equal to the portion of such reduction remaining after reimbursement of the State under the preceding sentence shall be covered into the general fund of the Treasury.”
      (b) the amendment made by this section shall apply for purposes of reducing retroactive benefits under title II of the Social Security Act or retroactive supplemental security income benefits payable beginning with the seventh month following the month in which this Act is enacted; except that in the case of retroactive title II benefits other than those which result from a determination of entitlement following an application for benefits under title II or from a reinstatement of benefits under title II following a period of suspension of termination of such benefits, it shall apply when the Secretary of Health and Human Services determines that it is administratively feasible.

      . 47 Fed.Reg. 4987 (1982) includes the following discussion concerning the effect of the proposed offset regulations on attorney's fees:

        Issue: Disincentive to Represent SSA Applicants.
      Several commenters suggested that if attorney fees are based upon the amount of retroactive Social Security benefits after reduction for receipt of SSI payments, the proposed rule will provide less incentive for attorneys to represent disability applicants.

        Response: Under authority of regulations issued pursuant to section 206(a) of the Act, SSA is directed to set a reasonable fee to compensate an attorney for services rendered in connection with a determination by us favorable to a claimant on a claim for Social Security benefits. The amount of the fee is not based upon the amount of retroactive benefits payable to the claimant: it is determined independently, based upon criteria for evaluating the attorney's services set out in § 404.1725(b). The amount of the fee authorized under those criteria may be equal to or larger or smaller than the amount of retroactive benefits withheld for direct payment of an attorney's fee. A fee may be authorized even if no retroactive benefits are payable. The amount of retroactive benefits payable to the claimant is pertinent only in determining how much of the authorized fee may be paid directly by SSA to the attorney. In the event that 25 percent of the retroactive benefits payable is less than the amount of the authorized fee, we will pay the amount of 25 percent directly to the attorney and the attorney is authorized to collect the remainder of the fee directly from the claimant.

      . Contrary to the argument of the Secretary, this analysis is applicable to both current and non-current adjudications. Where SSI benefits have been actually paid out prior to a Title II award, the windfall offset provisions can be applied, but only after attorney’s fees have been withheld.

      . This decision is limited, of necessity, to awards of attorney’s fees under 42 U.S.C. § 406(b)(1). It should be noted that similar statutory language is used in § 406(a). Moreover, the amount of attorney’s fees should not turn on the forum in which a claim is decided. Morris v. Social Security Administration, 689 F.2d 495, 497.


author: VIETOR, District Judge.

text:
    DROST EQUIPMENT, INC., Plaintiff, v. FORD MOTOR COMPANY, Defendant.
    Civ. No. 85-126-B.
    United States District Court, S.D. Iowa, C.D.
    March 7, 1985.

      David Dixon, Heslinga & Heslinga, Oskaloosa, Iowa, for plaintiff.
    Robert F. Holz, Jr. and Steven Nelson, Davis, Hockenberg, Wine, Brown & Koehn, Des Moines, Iowa, for defendant.
   MEMORANDUM OPINION AND ORDER OF REMAND

VIETOR, District Judge.

This case was removed from the Iowa District Court for Mahaska County. The asserted basis for federal court jurisdiction is diversity of citizenship. Plaintiff seeks remand to state court.

The action arises from a commercial transaction between plaintiff, an Iowa citizen, and defendant Ford Motor Company, a citizen of Delaware and Michigan. Plaintiff’s state court petition was filed in January 1984 and also named as a defendant William Frederick, an Iowa citizen who is a territory sales manager for Ford. On January 28, 1985, an Iowa district judge granted Frederick’s motion for summary judgment and dismissed all claims against him. On January 29 the state court administrator scheduled trial of the case for April 30, 1985. On February 15, Ford Motor Company filed its petition for removal under 28 U.S.C. §§ 1441(a) and 1446(b).

It has long been the law under section 1446(b) that for a change in the posture of the litigation to permit removal, it must have been the result of the plaintiff’s voluntary act. Removal is permitted, for example, if the plaintiff amends the complaint to allege a greater amount in controversy, see Gibson v. Atlantic Coast Line Railroad Co., 299 F.Supp. 268, 269 (S.D.N.Y.1969), or dismisses claims against the party whose original presence precluded removal, Warren Brothers Co. v. Community Building Co. of Atlanta, Inc., 386 F.Supp. 656, 658-660 (M.D.N.C.1974). However, dismissal of a party whose original presence precluded removal after a directed verdict in his favor, Weems v. Louis Dreyfus Corp., 380 F.2d 545, 548 (5th Cir.1967), or upon his successful motion for summary judgment, Saylor v. General Motors Corp., 416 F.Supp. 1173, 1175 (E.D.Ky.1976), is not voluntary as to the plaintiff and does not make the action removable. See also DeBry v. Transamerica Corp., 601 F.2d 480, 486-88 (10th Cir.1979); Self v. General Motors Corp., 588 F.2d 655 (9th Cir.1978); New England Explosives Corp. v. Maine Ledge Blasting Specialist, Inc., 542 F.Supp. 1343, 1347 (D.Me.1982); 1A J. Moore & B. Ringle, Moore’s Federal Practice, 11 0.168 [3-5-6] (2d ed. 1983); 29 Fed.Proc.L.Ed. § 69:86 (1984).

Plaintiff did not voluntarily dismiss its claims against Frederick, and therefore the case is not removable to federal court. Plaintiff’s application to remand must be granted. 28 U.S.C. § 1447(c).

IT IS ORDERED that this case be remanded to the Iowa District Court for Mahaska County, and that defendant pay all costs incurred in connection with the removal and remand.

      . The pertinent portion of 28 U.S.C. § 1446(b) provides:
      If the case stated by the initial pleading is not removable, a petition for removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.

      . An action may also be removable from state court despite the presence of a nondiverse or resident defendant if the removing defendant is able to .demonstrate that plaintiff fraudulently joined the nondiverse or resident defendant for the purpose of destroying diversity. An assertion of fraudulent joinder must be alleged with particularity and supported by clear and convincing evidence. Parks v. New York Times Co., 308 F.2d 474, 478 (5th Cir.1962), cert. denied 376 U.S. 949, 84 S.Ct. 964, 11 L.Ed.2d 969 (1964). That plaintiff is ultimately determined to not have had a cause of action against a defendant does not in itself demonstrate that he was joined in bad faith. Viles v. Sharp, 248 F.Supp. 271, 272 (W.D.Mo.1965). Similarly, mere improper joinder is not grounds for removal. Id. Defendant Ford Motor Company's conclusory statements in its response to plaintiffs application to remand that plaintiff improperly named a nondiverse party as defendant and that plaintiff "had absolutely no grounds for bringing suit against William Frederick" fall far short of alleging a fraudulent joinder, and are unsupported by any factual offering.


author: ANN ALDRICH, District Judge.

text:
    UNITED STATES of America, Plaintiff, v. George LIVIOLA, Jr., et al., Defendants.
    Civ. A. No. C 84-1879 Y.
    United States District Court, N.D. Ohio, E.D.
    March 7, 1985.

      Steven D. Bell, Asst. U.S. Atty., Cleveland, Ohio, Helen J. Brunner, Environmental Enforcement Section, Land and Natural Resources Division, U.S. Dept. of Justice, Washington, D.C., for plaintiff.
    George Liviola, Jr., Ashtabula, Ohio, Henry A. Roth, Cleveland, Ohio, for defendants.
   MEMORANDUM

ANN ALDRICH, District Judge.

The United States brings this civil action for injunctive relief and penalties for violations of two environmental statutes, the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. (“RCRA”), and the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq. (“CERCLA”). Based on the undisputed facts and applicable law as set forth below, the United States’ motion for partial summary judgment on the issue of liability is granted.

Subject matter jurisdiction exists pursuant to 28 U.S.C. §§ 1331, 1345 and 1355 and 42 U.S.C. §§ 6928 and 9613. Venue is proper pursuant to 28 U.S.C. § 1391 and 42 U.S.C. §§ 6928 and 9613.

I.

Fed.R.Civ.P. 56(c) governs summary judgment motions and provides:

... The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law....

Important guidance on the nature of materials properly presented in a summary judgment pleading is contained in Fed.R. Civ.P. 56(e):

Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.... The court may permit affidavits to be supplemented or opposed by depositions, answers to interrogatories, or further affidavits. When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.

In reviewing summary judgment motions, this Court must view the evidence in the light most favorable to the non-moving party to determine whether a genuine issue of material fact exists. Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Hasan v. CleveTrust Realty Investors, Inc., 729 F.2d 372 (6th Cir.1984). “[T]he party seeking summary judgment must conclusively show that there exists no genuine issue of material fact and that the movant is entitled to judgment as a matter of law." Bender v. Southland Corp., 749 F.2d 1205, 1210 (6th Cir.1984) (citing Smith v. Hudson, 600 F.2d 60, 63 (6th Cir.), cert. dismissed, 444 U.S. 986, 100 S.Ct. 495, 62 L.Ed.2d 415 (1979) (emphasis in original). The undisputed facts follow.

II.

This action concerns the New Lyme Landfill in New Lyme Township, Ashtabula County, Ohio (“New Lyme Site” or “the site”). Environmental Control Corporation (“ECC”) operated the site from 1970 to 1976, and defendant Jack Webb was in charge of its operations. Defendants George Liviola, Jr. and Norrell E. Dearing are partners in Ashtabula County Reclaimed Lands (“ACRL”), a partnership which operated the site as a landfill for the disposal of household, commercial and industrial wastes from June 28, 1976 through August 6, 1978. Liviola and Dearing are also corporate officers of defendant Ashtabula County Septic and Waste Services, Inc. (“ACSW”, also known as Ashtabula County Waste), which transported wastes to the New Lyme Site from June 28, 1976 through August 6, 1978. Liviola purchased the site in 1977 and was exclusively responsible for operation of the landfill since May of that year.

During 1977 and 1978, ACSW transported from the Lord Corporation plant in Saegertown, Pennsylvania to the New Lyme Site drummed wastes, including solvent recovery still bottoms, xylene, methyethyl ketone, perchloroethylene and trichloroethylene. It also transported from the Stack-pole Corporation site in St. Mary’s, Pennsylvania to the New Lyme Site liquid industrial chemical wastes including waste acetone, trichloroethylene, paints, resins, coal, tar distillates and discarded commercial chemical products. All the materials ACSW transported are deemed to be hazardous wastes and hazardous substances under RCRA and CERCLA. (Later investigations by the Environmental Protection Agency (“EPA”) revealed the presence of thirty-two toxic materials at the New Lyme Site.)

By 1982, EPA had reason to believe that hazardous substances were present at the site. Tests revealed that nearby surface waters and groundwater were contaminated with phenols. Allegations were made that drummed cyanide wastes were disposed of at the site. EPA responded by placing the New Lyme Site on its National Priorities List—a list prepared by EPA in consultation with the states which identifies approximately 400 of the nation’s most hazardous waste sites.

On May 27, 1983, Basil Constantelos, an EPA employee properly designated under RCRA and CERCLA, sent certified letters to Liviola, ACRL and ACSW requesting information concerning the type, amount and source of waste materials transported to and disposed of at the site. In June of 1983, Liviola requested an extension of the time available to respond to the EPA request, claiming that records concerning the site were scattered and disorganized. EPA granted Liviola an additional twenty days to comply with its request. Liviola did not produce the requested information. EPA issued a second request. In addition, when EPA agents conducted tests at the New Lyme Site later in 1983, they informed Liviola that the agency still needed the documents requested in May. Liviola claims that he “continued working on examining and sifting the documents as time and health would allow,” but never produced them.

On June 4, 1984, the United States commenced this action. Three months later, the requested documents were finally supplied to the EPA. In the pending motion, the United States seeks partial summary judgment against Liviola and ACSW.

III.

A.

Enacted in 1976, RCRA requires EPA to develop regulations governing the generation, transportation, treatment, storage, and disposal of hazardous wastes. To enforce its regulations, EPA is authorized to conduct inspections and gather information from individuals and entities involved with hazardous wastes. Title 42 U.S.C. § 6927 provides in part:

... For purposes of developing or assisting in the development of any regulation or enforcing the provisions of this chapter, any person who generates, stores, treats, transports, disposes of, or otherwise handles, or has handled hazardous wastes shall, upon request of any officer, employee or representative of the Environmental Protection Agency ... furnish information regarding such wastes....

This provision is modeled on substantially similar language in the Clean Air Act, 42 U.S.C. § 7413, and the Clean Water Act, 33 U.S.C. § 1318. Under the definitional sections of RCRA, the defendants are proper parties for an information request, and the materials EPA had reason to believe were present at the New Lyme Site (and later found there) are hazardous wastes. 42 U.S.C. § 6903.

CERCLA was enacted in 1980 and established a “Superfund” to finance environmental improvements at hazardous waste sites. Under CERCLA, the EPA may sue for injunctive relief and spend Superfund appropriations to investigate and remedy hazardous waste sites. It may also seek information and documents under a provision similar to that in RCRA. Title 42 U.S.C. § 9604(e)(1) provides:

... For purposes of assisting in determining the need for response to a release or threatened release [of a hazardous substance] ... or enforcing the provisions of this subchapter, any person who stores, treats, or disposes of, or, where necessary to ascertain facts not available at the facility where such hazardous substances are located, who generates, transports or otherwise handles or has handled hazardous substances shall upon request ... furnish information relating to such substances ...

“Hazardous substances” under CERCLA include “hazardous wastes” covered by RCRA. 42 U.S.C. § 9601. And, as under RCRA, the defendants were proper parties to whom EPA could direct a request for information.

In cases where requests for information are rebuffed, the EPA’s remedies are governed by 42 U.S.C. § 6928. That provision authorizes administrative compliance orders, criminal prosecutions, and civil actions. As it relates to this civil action, the law states:

(a)(1) ... [W]henever on the basis of any information the Administrator determines that any person is in violation of any requirement of this subchapter, the Administrator may issue an order requiring compliance immediately or within a specified time period or the Administrator may commence a civil action in the United States district court in the district in which the violation occurred for appropriate relief including a temporary or permanent injunction.
(g) Any person who violates any requirement of this subchapter shall be liable to the United States for a civil penalty in an amount not to exceed $25,-000 for each such violation. Each day of such violation shall, for purposes of this subsection, constitute a separate violation.

(Emphasis added.) Title 42 U.S.C. § 9613(b) provides for district court jurisdiction in controversies arising under CERCLA (other than review of EPA regulations).

B.

Generally, an administrative agency’s request for information will be enforced where: (1) the investigation is within the agency’s authority; (2) the request is not too indefinite; and (3) the information requested is reasonably relevant. United States v. Powell, 379 U.S. 48, 85 S.Ct. 248, 13 L.Ed.2d 112 (1964); United States v. Morton Salt Co., 338 U.S. 632, 70 S.Ct. 357, 94 L.Ed. 401 (1950); Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 66 S.Ct. 494, 90 L.Ed. 614 (1946); EEOC v. A.E. Staley Mfg. Co., 711 F.2d 780, 783 (7th Cir.1983), cert. denied, — U.S. -, 104 S.Ct. 1907, 80 L.Ed.2d 456 (1984) (and cases cited therein); United States v. Deak-Perera & Co., 566 F.Supp. 1398 (D.D.C.1983). The EPA was entitled to request information from the defendants, its request was reasonable, and its request was flaunted. Accordingly, this action for injunctive relief and penalties is appropriate.

Defendants contend that they did not violate the applicable statutes because their failure to comply with the information request was not willful, because the penalties of § 6928(g) do not apply to failure to provide records requested pursuant to § 6927(a), and because penalties may only issue after failure to obey a compliance order. Each argument is without merit. As the United States notes, the explicit language of RCRA requires willful intent only for criminal penalties under §§ 6928(d) and (e); had Congress desired to impose such a prerequisite for civil penalties, it would have done so. Instead, Congress patterned the civil violation provisions of RCRA after the Clean Air Act and Clean Water Act, under which civil penalties are strict liability offenses not requiring proof of willful intent. Liviola’s professed lack of intent to violate the law is irrelevant. Sierra Club v. Abston Construction Co., Inc., 620 F.2d 41 (5th Cir.1980); United States v. Earth Sciences, Inc., 599 F.2d 368 (10th Cir.1979); United States v. Bradshaw, 541 F.Supp. 884 (D.Md.1982).

Turning to the applicability of § 6928(g), it is clear that § 6927(a) imposes a “requirement of this subchapter” for purposes of § 6928(g), and that EPA need not issue a compliance order or administrative subpoena prior to seeking civil penalties. The statutory language is clear, conclusive, and consistent with the legislative history. S.Rep. No. 96-172, 96th Cong., 1st Sess. 3-4, reprinted in 1980 U.S.Code Cong. & Admin.News 5019, 5021-22. Finally, since it is patterned after provisions in the Clean Air Act and the Clean Water Act, § 6928(g) is to be read consistently with cases allowing imposition of civil penalties for violations of those statutes regardless of whether EPA issued a compliance order. United States v. Tivian Laboratories, Inc., 589 F.2d 49 (1st Cir.1978), cert. denied, 442 U.S. 942, 99 S.Ct. 2884, 61 L.Ed.2d 312 (1979); United States v. Earth Sciences, Inc., 599 F.2d at 375.

IV.

The objections to the United States’ motion being unpersuasive, partial summary judgment on the issue of liability is entered against Liviola and ACSW.

IT IS SO ORDERED.