author: LUMBARD, Circuit Judge:

text:
    JOHNSON PRODUCTS CO., INC., and Johnson Products of Nigeria, Ltd., Plaintiffs, v. M/V LA MOLINERA, her engines, boilers, etc., in rem; Caribbean Bulk Carriers, Ltd., International Customs Service, Inc., and Nigerian Star Line, in personam, Defendants.
    No. 85 Civ. 371 (JEL).
    United States District Court, S.D. New York.
    Jan. 10, 1986.

      Haight, Gardner, Poor & Havens, New York City, for plaintiffs; Thomas F. Molanphy, Mary P. Gallagher, of counsel.
    Thacher, Proffitt & Wood, New York City, for defendant Nigerian Star Line; Thomas S. Howard, Dwight B. Demeritt, Jr., Michael J. Dowd, of counsel.
    Marvin Eschen, Jericho, Long Island, N.Y., for defendant Intern. Customs Service, Inc.
   LUMBARD, Circuit Judge:

Johnson Products, Inc. (“Johnson Products”) and Johnson Products of Nigeria, Ltd. (“JPN”) sue International Customs Service, Inc. (“ICS”) and Nigerian Star Line (“NSL”) for the expenses and damages incurred by Johnson Products in securing the release of a shipment to JPN of raw materials used in the making of the hair product “Afro-Sheen,” which shipment was arranged by ICS and carried by NSL. The plaintiffs’ claims against NSL, the carrier, come within the Court’s admiralty jurisdiction. See 28 U.S.C. § 1333. The plaintiffs’ claims against freight forwarder ICS, which allege fraud and negligence in acts performed on land, are not within the Court’s admiralty jurisdiction. However, because Johnson Products is an Illinois corporation with its principal place of business in that state, ICS is a California corporation with California as its principal place of business, and NSL is a Nigerian corporation with its principal place of business in Nigeria, diversity jurisdiction exists under 28 U.S.C. § 1332. The Court has exercised its discretion to hear all of plaintiffs’ claims in a single forum. See 619 F.Supp. 764 (S.D.N.Y.1985) (dismissing claim against ICS for lack of admiralty jurisdiction but allowing leave to amend complaint to assert diversity jurisdiction); see also Wright & Miller, Federal Practice and Procedure, § 1314, at 455 (1st ed. 1969).

The court finds that ICS breached its fiduciary duty to Johnson Products as freight forwarder, and therefore is liable in the amount of the freight payment that Johnson Products made to NSL to secure release of the shipment in Nigeria. The court also finds, however, that the plaintiffs failed to mitigate their damages, and as a result, the recovery must be limited to reimbursement for what turned out to be a second ocean freight payment. If Johnson Products had monitored the status of the cargo after discovering that NSL had never received the initial freight payment, it would have avoided the additional expenses it seeks to charge to the defendants. The court finds that NSL is without blame or liability in this matter.

Most of the relevant facts are undisputed. On December 15, 1983, Johnson Products’ Traffic Manager, Loretta Dennys, telephoned Shelley Douglas of ICS to see whether ICS could arrange for a house-to-house shipment of 25 to 30 forty-foot containers from Johnson Products’ Chicago plant to Lagos, Nigeria, to sail from the United States prior to the end of December. The shipment consisted of raw materials used in the making of Afro-Sheen, ordered by JPN, Johnson Products’ Nigerian affiliate. The speed with which the goods were to be placed on a ship was important because Johnson Products’ Letter of Credit was due to expire at the end of 1983. Johnson Products had acquired this Letter, along with the other requisite documentation, in the preceding months.

Later that day, Douglas called Dennys to tell her that a ship was available and that ICS could arrange for carriage at the rate of $5,500 per container. ICS did not identify the vessel or the carrier, but told Dennys that the ship would be sailing to Nigeria before the end of the month. After Dennys received the go-ahead from her supervisor, Robert Johnson, she called Douglas back the same day to accept ICS’s proposal. ICS was to provide the containers for shipment, which Dennys requested be delivered to Johnson Products’ warehouse by the following Monday, December 19; in this way Johnson Products would be able to finish filling the containers before it closed for the holidays on December 23. Although Douglas assured Dennys that the containers would arrive by December 19, only six or seven of the 25 necessary containers had arrived by that date.

On December 20, Dennys called ICS to find out when the rest of the containers would arrive. Douglas offered Dennys the alternative of loading the shipment into containers other than those necessary for the actual shipment, with subsequent transfer into the proper containers, at ICS’s expense. Dennys’s supervisor, Robert Johnson, rejected this alternative as contrary to his policy of in-house loadings for all of Johnson Products’ shipments. Johnson agreed to wait several more days for the proper containers, which ICS said it would provide by December 23, 1983. The containers were finally packed and removed from Johnson Products’ premises by the morning of Monday, December 26.

Johnson Products re-opened after the holidays on January 2, 1984, and Dennys called ICS to confirm that the vessel had sailed. ICS assured her that everything was in order. Dennys did not inquire about, nor was she told, the identity of the vessel or the carrier. On January 5, Johnson Products received from ICS an invoice for the shipment and a bill of lading. The bill of lading was on the form of Container Overseas Agency, Inc. (“COSA”), and showed Johnson Products for the first time that ICS had used a non-vessel-operating common-carrier (“NVOCC”), i.e. COSA, as an intermediary between itself and the carrier. The bill of lading also stated that the freight had been pre-paid, and that the goods had been on board the vessel Nurenburg Express as of December 29, 1983. Based on the normal time schedule for the trip, the goods would be expected to arrive in Lagos by January 17, 1984. In the invoice sent along with the bill of lading, ICS charged Johnson Products $145,209.54 for ocean freight and for the other services it performed in connection with the shipment. Johnson Products approved payment of this invoice by check dated January 13, 1984. ICS deposited the check on January 19, 1984.

David Sharpe, the head of ICS’s Chicago office, testified that it was around this time that ICS first discovered that COSA had not sent the shipment on the Nurenburg Express, as promised, and that, contrary to Johnson Products’ instructions, the bulk of the shipment had been transferred to different containers. A May 23, 1984, ICS interoffice memorandum sent by Shelley Douglas shows, however, that ICS knew in mid-December, 1983, that the goods were going to sail late and were not going to be loaded as Johnson Products had requested, and further that ICS and COSA had agreed to conceal this fact from Johnson Products. Douglas’s entry for December 20, 1983 states:

“We also realized we would not make the December 30th sailing but Meyers said they would still give us 12/30 on board and would get the containers to sail early January.”

Douglas’s entries for the December 21-23 period continue:

“Confirmed cross-loading situation with Dave Sharpe and Tom Thorpe — of our office — who agreed we would not say anything to Johnson Products about cross-loading and late sailing.”

Thus, contrary to Sharpe’s testimony, ICS knew by mid-January at the latest that the goods had not sailed on the Nurenburg Express, and had not left the country before the end of December; and that the COSA bill - of lading it had passed on to Johnson Products was false. Despite this knowledge, ICS never informed Johnson Products what had happened, and that the shipment would not arrive in Lagos until the second week of February, 1984.

Also by mid-January, ICS had reason to believe that COSA was in financial trouble. First, the truckers who had performed the inland carriage of the goods requested payment from ICS. Although the truckers had been hired by COSA, they told ICS that they preferred direct payment because of uncertainty as to COSA’s financial stability. ICS consulted with COSA and paid the truckers, later deducting the amount from its subsequent payment to COSA. Second, ICS learned that in early January COSA had received the resignations of its president and of one of its principal salesmen. Finally, COSA asked ICS for an additional $7500 fee for “war risk insurance” and “currency fluctuation,” and when ICS balked at paying the extra charge, COSA threatened to hold up shipments for other ICS clients.

Despite all these indications of COSA’s financial difficulties, ICS still went ahead and passed on to COSA the freight money that Johnson Products had paid it, less ICS’s fee. The evidence shows that, although ICS had deposited Johnson Products’ check on January 19, 1984, and had made out its check to COSA on January 31, it did not in fact make payment to COSA until February 10, which was after the freight had arrived in Lagos. It is not clear whether ICS delayed because of diffidence, or consciously because of doubts about COSA’s solvency, but in any event ICS did make the payment with reason to know that COSA was in financial trouble and without having disclosed this trouble to the plaintiffs. The delay apparently may have arisen because of discussions ICS was having with respect to other shipments for other clients.

Plaintiffs’ expert witness, Bernard Leyden, testified that ICS had the alternative of arranging for direct payment to the carrier, and that a responsible freight forwarder would have done so in light of the shipment’s size and the false bills of lading, even without specific knowledge — such as ICS had — of COSA’s financial difficulties. Because of COSA’s subsequent bankruptcy, COSA never paid the ocean freight to the actual carrier, NSL, and Johnson Products had to make the payment itself in order to obtain its goods.

Sometime in late December, 1983, or early January, 1984, COSA approached NSL’s New York agent, Zim, to arrange for the shipment of the 25 containers to Lagos aboard the La Molinera. In mid-January, COSA provided NSL with bills of lading that it had typed on NSL’s blank form. The bills of lading were stamped “freight to be prepaid,” which meant that the cargo could not be released until the shipper presented the original bills of lading, which it would receive upon payment in full. NSL never inquired as to the identity of the original shipper, and relied solely upon its contacts with COSA, who, as NVOCC, operated as an intermediary between NSL and ICS.

On January 20, 1984, NSL loaded the 25 sealed containers aboard the M/V La Molinera in Baltimore. Several days after the La Molinera sailed, on about January 24, NSL contacted COSA to inquire when the freight would be paid. COSA said it had “a problem with its shipper,” but assured NSL that the freight would be paid. At the end of January, Zim’s employee Ted Kaplan observed that COSA had not yet paid the ocean freight owed to NSL. He sent a precautionary telex to Lagos and Niger Shipping Agency, Ltd. (“LANSAL”), NSL’s Nigerian agent, notifying it that the freight had not been paid and reminding them not to release the cargo until it had. Kaplan then met with a COSA employee, who told him that COSA had in fact been paid but had already spent the money. NSL suggested that COSA try to pay in installments, and COSA subsequently prepared five bills of lading, on NSL's forms, that would document release of the goods in five equivalent installments. The original bills of lading were voided. NSL was not aware of, nor did it inquire as to, the identity of the original shipper.

On February 8, 1984, Allan Sym-Smith, Vice President of Johnson Products’ International Division, who was in Lagos for a meeting of the JPN Board, called the Central Bank of Nigeria. The Central Bank was supposed to have received the bill of lading and other documentation for the shipment from the Continental Bank of Illinois which, in turn, was supposed to have received it from ICS. The Bank had not received the documents. Sym-Smith then contacted LANSAL, which he learned was supposed to receive the shipment, and they informed him that they would not release the goods because the ocean freight had not been paid. At the same time SymSmith learned that the goods had not been shipped on the Nurenburg Express, but he did not at that time inquire as to the amount of freight charges outstanding or as to the name of the vessel or carrier involved.

Sym-Smith called Dennys to tell her about the problem, and she checked with Johnson Products’ International Department. After a short investigation, an employee of this department told her that the freight had not been paid and the ship was about to dock. She then contacted ICS to find out what was going on. Douglas told Dennys that the only unpaid money was the additional $7500 COSA had requested for war risk insurance and currency fluctuation. Whereas ICS alleges that it thought at this time that it had already paid COSA the freight, the other parties allege that ICS knew it had not and therefore was misleading Johnson Products when it said that the $7500 was the only amount due. The court finds that ICS was again deceiving Johnson Products by failing to disclose what had actually happened. At any rate, Sym-Smith was told that the extra $7500 payment should clear up the problem. No one at Johnson Products took any steps to verify ICS’s statements, and on February 14 Johnson Products paid the $7500 charge to COSA, under protest. ICS refunded this payment in March, 1984.

Apparently spurred on by Johnson Products’ inquiries on February 8 regarding the ocean freight payment, ICS went ahead and paid COSA by check on February 10, deducting its own commission and the trucking fee that it had already paid the truckers. The court finds that ICS made this payment with knowledge that COSA had provided Johnson Products with a falsified bill of lading, and with knowledge that COSA was in financial trouble. COSA never passed the freight money on to NSL. On February 11, 1984, the La Molinera arrived in Lagos. LANSAL, NSL’s port agent, in exercise of NSL’s carrier’s lien, refused to release the cargo because the ocean freight payment had not been received.

So far as the evidence shows, from February 11, 1984, until late March, Johnson Products did nothing to monitor the status of its shipment. It knew that it would be allowed 21 days’ free demurrage, which would last until approximately March 3. Finally, in late March, 1984, when SymSmith approached LANSAL again to obtain the 25 containers, he discovered that the ocean freight had not yet been paid. He then negotiated rent and demurrage charges with LANSAL, and tried to contact COSA about securing release of the cargo. When COSA proved unhelpful, Johnson Products contacted ICS. ICS called Kaplan (an employee of NSL’s New York agent, Zim) to tell him that Johnson Products could not get its cargo in Nigeria because NSL had not given them the original bills of lading. NSL told ICS that COSA had never made the payment for the ocean freight. Sym-Smith then for the first time discovered that the goods had been shipped on the La Molinera, and that NSL had been the carrier.

Kaplan told Sym-Smith that Johnson Products could obtain the bills of lading from NSL by paying the ocean freight directly to NSL, subject to named shipper COSA’s approval. This approval having been received by telex, Johnson Products’ Vice President and General Corporate Counsel Marilyn Cason travelled to New York and, on April 2, 1984, paid the $111,-000 freight to Zim for NSL’s account. In return, she received the five substitute bills of lading that would allow release of the cargo; she sent them to Lagos, and they were presented to LANSAL for release of the goods. In the meantime, Kaplan had telexed LANSAL to inform them that the goods could soon be released. After more delay, which was partially caused by the misdescription of the goods as “finished products,” the goods were finally released to Johnson Products on April 11, 1984.

Plaintiffs, in January, 1985, brought this action for damages incurred by the second freight payment and by delay in release of the goods, against ICS and NSL, as well as the ship La Molinera and her owner, Cara-bean Bulk Carriers, Ltd. The action against the ship and her owner was subsequently discontinued without prejudice. Meanwhile, on April 27, 1984, COSA had filed for bankruptcy.

Johnson Products argues that ICS breached its duty as a freight forwarder by negligently paying the freight charge to COSA upon a false bill of lading and with knowledge of COSA’s financial problems. The plaintiffs argue, first, that ICS’s culpability is demonstrated by analogy to the standards imposed on freight forwarders by provisions of two maritime acts: 1) the Pomerene Act, 49 U.S.C. App. § 121 (1982 & Supp. I 1983), which imposes criminal sanctions upon anyone who transfers a false bill of lading, and 2) the Shipping Act, 46 U.S.C. § 841b(b) (1982 & Supp. I 1983), and the regulations promulgated thereunder, which direct licensees to impart all correct information regarding a forwarding transaction to their principals. Plaintiffs acknowledge that this is not an action to enforce either of the provisions they have cited; they merely invoke them for analogous support. Because the court finds that ICS has breached its common-law duty as freight forwarder and fiduciary of Johnson Products, it need not address the question of whether ICS has violated any provision of maritime legislation.

The relationship between a shipper and a freight forwarder is “fiduciary” and of “the greatest trust and fidelity.” United States v. Ventura, 724 F.2d 305, 311 (2d Cir.1983). ICS, as the agent of Johnson Products, had a duty to take care in arranging and supervising the transport of the cargo. See Knudsen v. Torrington Co., 254 F.2d 283, 286 (2d Cir.1958) (noting that the agency relationship “implies a promise to use care and skill and imposes fiduciary obligations of loyalty and obedience not normally present in other bilateral agreements”). Instead, the question is whether ICS should have acted, in its fiduciary capacity, to shield Johnson Products from loss due to COSA’s financial difficulties. The court concludes that ICS could and should have so acted, but failed to — either because of conflicting interests arising out of its relationship with COSA, or because of negligence. In either case, however, ICS cannot escape liability. See Ingersoll Milling Machine Co. v. M/V Bodena, 619 F.Supp. 493 (S.D.N.Y., 1985) (holding freight forwarder liable to shipper because of negligence in supervising transport of cargo); A.P. Moller S.S. Co. v. Bromhead & Dennison Ltd., 1982 A.M.C. 1455 (S.D.Tex.1981) (same), aff'd, 1983 A.M.C. 2791, 692 F.2d 755 (5th Cir.1982); United States v. Cargo Export Corp., 675 F.2d 511, 1982 A.M.C. 2011 (2d Cir.1982) (holding freight forwarder liable to shipper because of fraud in inducing and supervising shipment).

ICS breached its fiduciary duty to Johnson Products by knowingly forwarding to them false information regarding the vessel carrying the cargo, the manner of lading, and the sailing date. The Douglas memo showed that ICS knew of this falsity when it originally induced Johnson Products to enter into the carriage agreement; even if, as ICS alleges, it only discovered that COSA’s bill of lading was false in mid-January, 1984, ICS nevertheless breached its duty by failing to pass on this material information to Johnson Products. ICS again misled Johnson Products when it stated in early February that the only payment needed to secure release of the freight was the additional $7,500 that COSA had demanded. This was a conscious deception designed to conceal ICS’s delay in making the freight payment to COSA, which delay in turn may have resulted from ICS’s relationship with COSA and its own fears as to COSA’s solvency.

In any event, ICS further breached its obligations when it went ahead and passed on to COSA the freight money that Johnson Products had paid ICS. ICS was on notice that COSA was in extreme financial difficulty, and indeed had been subjected to COSA’s attempt to extort an additional $7,500, but nevertheless ICS entrusted COSA with a $111,000 cash payment. ICS never considered paying the freight directly to NSL and thus avoiding the danger of putting cash into COSA’s shaky hands. It appears to the court that ICS paid COSA because the two companies were working in concert and ICS desired to protect its other shipments under COSA’s control. Cf. Cargo Export, supra, 675 F.2d at 512, 1982 A.M.C. at 2013 (charging fraudulent freight forwarder with NVOCC’s failure to pass on freight payment). Even if ICS had paid COSA in the good faith belief that the money would be safe, its actions would still amount to a negligent breach of its duty of care. Cf. A.P. Moller, supra (holding freight forwarder liable for failing to live up to its “expertise or at least represented expertise”). Plaintiffs’ expert witness testified, and the court agrees, that in light of the facts known to ICS by February 10, its payment of the freight to COSA was “inconceivable.” ICS simply breached its fiduciary duty to Johnson Products, and it must be held accountable for plaintiffs’ having to pay additional freight of $111,-000.

ICS argues that Clause 8, on the reverse side of its invoice sent to Johnson Products on January 5,1984, limits its liability to $50 per shipment. It seems unlikely that such a provision could apply where the liability arises from fraud on the part of the freight forwarder, but in any event, ICS offered no evidence to show that Johnson Products was familiar with and assented to the provision, and therefore Johnson Products cannot be bound by it. See, e.g., Tankers & Tramps Corp. v. Tugs Jane McAllister and Margaret M. McAllister, 358 F.2d 896, 899-900 (2d Cir.1966) (declining to enforce tug-owners’ limitation of liability clause), cert. denied, 385 U.S. 947, 87 S.Ct. 320, 17 L.Ed.2d 226 (1966); Ingersoll, supra (declining to enforce freight forwarder’s clause). In the absence of a clear and well-known industry practice limiting freight forwarders’ liability, ICS’s Clause 8 reduces to a “fine print clause[] contained in [a] standardized contract form[],” Allstate Insurance Co. v. International Shipping Corp., 703 F.2d 497, 500 (11th Cir.1983), which courts generally construe against the drafter, see Bernard Screen Printing Corp. v. Meyer Lowe, 464 F.2d 934 (2d Cir.1972).

Having found that plaintiffs may recover from ICS for the second payment of the ocean freight, the Court now turns to plaintiffs’ claims for additional expenses incurred while the goods were being held in Lagos by LANSAL. The Court finds that plaintiffs failed to take the steps necessary to mitigate their losses by avoiding these additional expenses, and therefore their damage recovery must be limited to the $111,000 payment for the second freight. Johnson Products was informed on February 8, 1984, that the basic freight charge had not been paid and that the cargo had not been released. Nevertheless, it was not until late March, 1984, that plaintiffs took any serious steps to effect release of the cargo. Plaintiffs argue that their delay was caused by a reasonable reliance upon ICS’s assertion, in early February, that the only thing holding up release of the cargo was the $7,500 additional charge. Plaintiffs assert that they paid this amount in February and then reasonably expected the goods to be released.

Although it is true that the plaintiffs had the right to rely on the freight forwarder— and, indeed, ICS’s liability upon the ocean freight is based in part upon this right— they nevertheless retain the common law and common sense obligation to monitor the status of their own goods. Assuming that plaintiffs did as an initial matter rely reasonably upon ICS’s assertions as to the $7,500, there was no excuse to delay for almost two months while the cargo sat in a hold, accumulating charges. By February 8, officials of Johnson Products knew that they must take active meaures themselves to ensure release of the shipment without risking delays that would involve additional expense. Plaintiffs had free rent and demurrage from February 8 until March 3; if they had exercised due care by acting to secure release of the cargo within that time-period, no additional rent and demur-rage charges would have accrued. Because plaintiffs did not so act, and in fact did not even begin to seek direct release of the goods until late March, their claim for $162,393 of extra storage and demurrage charges must be denied.

Plaintiffs also seek damages of $40,-232.50 for terminal and depot charges. The testimony of Sym-Smith, however, leaves some ambiguity as to whether these charges had anything to do with the delay that is the subject of this case, or whether they were normal charges. In any case, this claim must fail because it also stems from the plaintiffs’ failure to act promptly in seeking release of their goods.

Plaintiffs further claim $98,069.94 in damages resulting from actions taken by their agent Olu Mose in supervising the release of the shipment. It is not clear which of these charges were normal charges and which were additional; and further the record does not even contain any proof of the payment of Mose’s invoice. The court finds that, whatever the damages may have amounted to, and whether or not the invoice was actually paid, the plaintiffs have failed to show sufficient causal connection between defendants’ actions and the alleged damages.

Finally, plaintiffs seek $72,058.22 for salary and travel expenses incurred by SymSmith in connection with settling this matter. Again, plaintiffs’ claim is insufficiently specific to demonstrate the requisite causal connection between the alleged harms and the resulting expenses. This may be due in part to Sym-Smith’s failure to keep contemporaneous records of his time — he put the records together three months after the fact, and indeéd if he had spent as much time on this matter as he claims to have done, it seems inexplicable that it took him almost two months to discover that the goods had not been released. The court finds insufficient causal connection between defendants’ wrongs and plaintiffs’ alleged time and travel expenses; the claim is denied.

The court finds no basis for any claim against NSL. NSL properly exercised its lien for unpaid freight on the shipment. NSL had issued its bills of lading, had earned its freight by carrying the goods to Lagos, and so could exercise its lien against the goods. The bills of lading so provide, and in any event such a lien accords with general maritime law. See The Bird of Paradise, 72 U.S. (5 Wall.) 545, 555, 18 L.Ed. 662 (1866); see also 49 U.S.C. app. § 88 (1982 & Supp. I 1983) (lien provision of the Pomerene Act).

Plaintiffs argue that NSL assumed the risk of COSA’s failure to pay the freight by issuing a bill of lading marked “freight prepaid,” without having received payment on the freight. The cases plaintiffs cite to support this supposed “general rule” are inapposite, however. In each case, a carrier sued its shipper to obtain its freight payment after it had issued and released “freight pre-paid” bills of lading to the freight forwarder in exchange for the forwarder’s written acknowledgement of liability. In each case, the freight had not actually been paid, but the forwarder was a previously approved credit customer of the carrier’s — thus, the carrier was in essence extending credit to the forwarder. The carrier, not the shipper, bore the risk of the forwarder’s nonpayment.

By contrast, NSL did not release the bills of lading to COSA or accept any promise of payment in lieu of an actual payment. COSA was not an approved credit customer; instead, NSL was relying on its possession of the goods and the bills of lading to obtain payment. Nor did Johnson Products rely detrimentally — as the shippers in the cited cases did — on the presence of the words “freight prepaid” on the bills of lading. Indeed, Johnson Products had already made payment upon the freight by the time that NSL issued its first bills of lading. NSL did everything it was obliged to do in carrying plaintiffs’ cargo, and having done so it had the right to exercise a valid maritime lien.

The plaintiffs argue that NSL assumed some of the risk of COSA’s bankruptcy by looking solely to COSA for payment, and by failing to attempt to ascertain the identity of the original shipper for direct payment of the ocean freight. Plaintiffs thus also claim that NSL, pursuant to an obligation to try to contact the ultimate shipper, is partially to blame for the expenses incurred while the cargo was held by LAN-SAL. These arguments are without merit. As NSL points out, it held the bills of. lading and the goods, and assumed — with good reason — that the shipper of a load as large as this one would itself take steps to secure the release of its cargo. Nothing in the maritime law imposed a duty upon NSL to protect Johnson Products from the consequences of its own negligence.

In sum, the plaintiffs are entitled to recover damages from ICS in the amount of $111,000, with interest calculated from April 2, 1984. The complaint is dismissed as to NSL. Plaintiffs’ claims are denied in all other respects. ■ This opinion constitutes the court’s findings pursuant to Fed.R.Civ.P. 52(a).

       Sitting by designation.

      . The presence in this action of JPN and of NSL, both of which are Nigerian corporations, does not destroy the complete diversity necessary for federal subject matter jurisdiction in the action against ICS. See Romero v. International Terminal Operating Co., 358 U.S. 354, 381, 79 S.Ct. 468, 485, 3 L.Ed.2d 368 (1959). Because the action against NSL is within the court’s admiralty jurisdiction, it provides an independent source of federal jurisdiction, and therefore has no effect on the completeness of diversity. Id. This view comports both with the venerable rule in Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806), 2 L.Ed. 435, and with principles of judicial economy. The court has determined that all of Johnson Products’ claims should be heard in a single forum, and it would serve no logical purpose to require the plaintiffs to bring their two federal actions separately merely because they proceed from different founts of jurisdiction.
      Furthermore, although none of the parties has suggested it, the court notes that the action against ICS, which was originally dismissed for failure to state a claim in admiralty and repleaded to state a claim in diversity, could nonetheless have been joined to the action against NSL by virtue of pendent party jurisdiction. The actions against the two defendants stem from a common nucleus of operative facts, and it would therefore be within the court’s discretion to join the claims in a single forum. See National Resources Trading, Inc. v. Trans Freight Lines, 766 F.2d 65 (2d Cir.1985); Leather’s Best, Inc. v. S.S. Mormaclynx, 451 F.2d 800 (2d Cir.1971).

      . The bills of lading erroneously stated that the shipment consisted of 25 containers of the finished product “Afro-Sheen." In fact, the containers contained raw materials to be used in the making of "Afro-Sheen"; this misstatement was important because Nigeria prohibits the importation of finished products. Although the error caused Johnson Products additional difficulty in clearing importation of the goods, it does not affect either of the defendants' liability because the court finds that it was COSA’s fault.


source: Caselaw Access Project

author: SWEET, District Judge.

license: Public Domain

text:
    Harold DRIMMER and Mount Hope Mines, Inc., Plaintiffs, v. Donald K. APPLETON and Hope Valley Realty and Construction Corp., Defendants.
    No. 83 Civ. 5237 (RWS).
    United States District Court, S.D. New York.
    Jan. 15, 1986.
    Eric D. Koster, P.C., White Plains, N.Y., for plaintiffs; Eric D. Koster, of counsel.
    Norman I. Klein, Clifton, N.J., for defendants.
   OPINION

SWEET, District Judge.

Plaintiffs Harold L. Drimmer (“Drimmer”) and Mount Hope Mines, Inc. (“MHM”) bring this motion to compel defendant Donald L. Appleton (“Appleton”) to appear for deposition and to answer certain questions pursuant to Rule 37 of the Federal Rules of Civil Procedure. Appleton opposes this application for an order to compel him to answer these questions on the ground that they impinge on the attorney-client privilege, as they involve his conversations with counsel regarding settlement negotiations in a related Nevada State Court action. Because Appleton has waived his right to invoke the attorney-client privilege with regard to these discussions, Drimmer’s motion to compel is granted.

Facts

In May, 1979, Appleton instituted an action in the Seventh Judicial District Court for the State of Nevada. In the trial of that action, which commenced on October 25, 1982 and lasted for five days, Appleton sought to enforce a purported oral contract granting him an interest in MHM. On October 30, 1982, during the jury deliberations, the parties entered into an oral agreement settling all claims raised in the Nevada action. The agreement was negotiated by Peter D. Laxalt (“Laxalt”) and Robert H. Perry (“Perry”), Appleton’s attorneys, and by Drimmer and his attorneys Roger W. Jeppson and William Peterson. Appleton was not present, but had participated in earlier discussions with Drimmer on the subject of a settlement agreement.

Later the same day, the jury returned a verdict in Appleton’s favor, granting him 16%% interest in the profits of MHM. According to Drimmer, Appleton then attempted to repudiate the settlement agreement, Laxalt removing his name from the original of the settlement agreement and refusing to give Drimmer’s attorney a copy of the agreement. According to Appleton, the final settlement agreement did not comport with the tentative understanding which he had reached with Drimmer in prior discussions. Drimmer seeks to enforce this settlement agreement in the present action.

Judgment was entered in Nevada in Appleton’s favor based on the jury verdict, and Drimmer brought a motion for, among other things, summary enforcement of the settlement agreement or in the alternative for a new trial. At the November 30, 1982 hearing on the motion, Drimmer called Perry, Appleton’s attorney, to testify about the events surrounding the settlement agreement. The transcript of this hearing reveals that Perry testified about the following details of the settlement agreement negotiations:

(1) The circumstances surrounding the settlement meetings between opposing counsel.
(2) Perry’s conclusions about the legal validity of the settlement agreement.
(3) Perry’s discussions with Appleton about the provisions of the settlement.
(4) The circumstances of Laxalt’s repudiation of the settlement agreement and the renegotiation attempts.

On May 23, 1983 Drimmer’s motion for a new trial was granted.

Drimmer then instituted this New York proceeding on July 13, 1983. Appleton sought a stay of the New York proceeding, and on July 10, 1984, all proceedings were stayed until the resolution of the Nevada action or until June 30, 1985, whichever came earlier, except those relating to the first three causes of action which were not at issue in the Nevada action. Because of subsequent appeals to the Nevada Supreme Court and the disqualification of the original trial judge, the Nevada action is set for trial on March 10, 1986.

During his deposition in this action, Appleton invoked the attorney-client privilege, a privilege that was waived, according to Drimmer, by Perry and Laxalt’s prior testimony detailing the Nevada discussions, and refused to answer any questions which pertained to his conversations with Laxalt and Perry.

Discussion

Rule 501 of the Federal Rules of Evidence provides that in civil actions in which state law supplies the rule of decision, the privilege of a witness should be determined in accordance with state law. As this claim was removed from the state to federal court on diversity grounds, the state law of privilege applies. See Dixon v. 80 Pine Street Corp., 516 F.2d 1278, 1280 (2d Cir.1975). New York conflict rules thus determine which body of privilege law is to be applied to this action. Klaxon v. Stentor Electric Manufacturing Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941) (In diversity cases the substantive law of the state applies, including the state conflict of laws principles). In the case at hand, New York privilege rules govern this question of attorney-client privilege, as generally the New York courts apply the law of the place where the evidence in question will be introduced at trial, or the location of the discovery proceeding itself. Cepeda v. Cohane, 233 F.Supp. 465, 470 (S.D.N.Y.1964), 5 Weinstein, Korn & Miller, New York Civil Practice 114503.03 (1978). See also Resorts International, Inc. v. Straight Arrow Publishers, Inc., No. M8-85 (July 28, 1980 S.D.N.Y.) and cases cited therein. The presence of both of these factors in the case at bar makes it appropriate to determine the validity of this asserted privilege under New York law. This is the apparent conclusion of the parties, as they have briefed primarily New York State law of privilege.

The transcript of Perry’s testimony of the Nevada proceeding reveals that much of his in court discussion about the settlement agreement concerned matters within the scope of the attorney-client privilege. Judge Wyzanski’s classic statement of the scope of the privilege, a codification universally adopted by the courts of this Circuit, provides:

The privilege applies only if (1) the asserted holder of the privilege is or sought to become a client; (2) the person to whom the communication was made (a) is a member of the bar of a court, or his subordinate and (b) in connection with this communication is acting as a lawyer; (3) the communication relates to a fact of which the attorney was informed (a) by his client (b) without the presence of strangers (c) for the purpose of securing primarily either (i) an opinion on law or (ii) legal services or (iii) assistance in some legal proceeding, and not (d) for the purpose of commiting a crime or tort; and (4) the privilege has been (a) claimed and (b) not waived by the client.

United States v. United Shoe Machinery Corp., 89 F.Supp. 357, 358 (D.Mass.1950). According to Appleton, Perry’s testimony in Nevada concerned only the non-confidential underlying facts of the settlement agreement negotiations and not the communication between client and attorney which is covered by the privilege. However, the transcript of Perry’s testimony demonstrates that Perry discussed his and Laxalt’s conversations with Appleton about the course of the negotiations and the substance of the settlement agreement:

PETERSON: Did you discuss the terms of the agreement with Mr. Appleton, or was that Mr. Laxalt?
PERRY: I discussed them once. It is my understanding that Mr. Laxalt discussed them himself once. But I wasn’t present at the second discussion.
PETERSON: Did you communicate the essential terms of the Agreement to Mr. Appleton as I have described them?
PERRY: I did.
PETERSON: During that conversation, Mr, Appleton never indicated to you that he had entered into any other agreements, did he?
PERRY: No.

The question, therefore, is whether Appleton’s presence in open court during Perry’s testimony and failure to object to that testimony operates as a waiver of the attorney-client privilege. Appleton does not dispute the fact that an attorney has an implied authority to waive the privilege on behalf of his client, United States v. Aronoff, 466 F.Supp. 855, 862 n. 7 (S.D.N.Y.1979), but claims that Drimmer has not shown that Appleton had knowledge or understanding of the privilege or knowledge that Perry’s testimony would be a waiver of that privilege.

New York courts have held consistently that the burden of establishing the existence of the privilege is upon the party claiming the privilege. In Re Horowitz, 482 F.2d 72 (2d Cir.1973); United States v. Schenectady Savings Bank, 525 F.Supp. 647 (N.D.N.Y.1981) and that waiver of the privilege may be actual or implied. United States ex rel Edney v. Smith, 425 F.Supp. 1038 (E.D.N.Y.1976), aff'd, 556 F.2d 556 (2d Cir.1977). The rule applicable to implied waiver of the privilege is that “unless there are some circumstances which show that the client was surprised or misled, it seems the usual rule that the client’s failure to claim the privilege would apply here, and that decisions treating such testimony on cross-examination as being involuntary and not constituting a waiver are hardly supportable.” C. McCormick, Evidence § 97 p. 195 (1972), see also In Re Penn Central Commercial Paper Litigation, 61 F.R.D. 453, 463-464 (S.D.N.Y.1973) (Voluntary disclosure or the consent to the disclosure of a communication otherwise subject to a claim of privilege effectively waives the privilege and the person opposing the waiver must demonstrate that the waiver was not voluntary or that it was made without opportunity to claim the privilege).

Appleton has offered no evidence to demonstrate that he did not impliedly consent to Perry’s public statement on the nature of the settlement agreement. He admits that he was present in the courtroom during the exhaustive direct examination of Perry and never objected to his attorney’s discussion of conversations between himself and both Laxalt and Perry concerning their legal opinion on the fairness and terms of the settlement agreement. Neither Perry, as lawyer and witness for Appleton, nor his co-counsel Laxalt, nor Appleton himself objected to the nature of the questions being asked, although repeatedly at points during the hearing the right and possibility of objection was raised:

PETERSON: During that meeting, were you in attendance during the meeting when Mr. Laxalt indicated that he wanted to renegotiate and set the case on the basis different from that set forth in the Memorandum of Understanding?
PERRY: Yes.
PETERSON: Did you agree with that?
PERRY: Well, I didn’t say anything one way or another. Are you asking me if I personally agreed with it?
PETERSON: Yes
PERRY: Well, I don’t know. There is nobody here to object to questions. I don’t know whether my personal opinion—
THE COURT: You have no counsel to represent you in these proceedings. You are competent enough to decide whether you want to answer.
THE WITNESS: Well, I think the way to say it is I wasn’t really excited by that approach.
PETERSON: Let me ask you straight out, Mr. Perry — you can object if you want to — you acknowlege yourself, as an attorney and member of the State Bar and as Mr. Appleton’s client (sic), that you entered into a good faith agreement with us on Saturday in Mr. Bud Lloyd’s office when we settled the case and shook hands?
PERRY: That is my personal opinion. My professional opinion is different.

(Appendix D, Transcript pp. 19-20).

Both opposing counsel and the court noted that the questions asked might raise the attorney-client privilege, particularly in light of the fact that Perry was called to the stand by opposing counsel and not by his own client to serve as both attorney and witness. As the court observed, nobody was present to represent Perry, but he and Laxalt were there to represent Appleton and to raise appropriate objections.

Under these circumstances, Appleton voluntarily permitted his attorney to testify regarding the matter to which he now asserts a privilege, and must be deemed to have waived the privilege by implied consent. Jakobleff v. Cerrato, Sweeney & Cohn, 97 A.D.2d 895, 468 N.Y.S.2d 895 (N.Y.Dept.1983); Trans World Airlines, Inc. v. Hughes, 332 F.2d 602, 615 (2d Cir.1964); Kew Gardens Sanitarium, Inc. v. Trussell, 45 Misc.2d 104, 255 N.Y.S.2d 742, 744 (N.Y.Sup.Ct.1965); 5 Weinstein, Korn & Miller, New York Civil Practice, 114503.-20 (1978) (the client may waive his privilege by allowing his attorney to testify without objection), citing Kitz v. Buckmaster, 45 A.D. 283, 61 N.Y.S. 64 (4th Dept.1899). Disclosure of a significant part of these confidential communications has waived the privilege as to the entire matter, United States v. Aronoff, supra, 466 F.Supp. at 862; Teachers Insurance v. Shamrock Broadcasting Co., Inc., 521 F.Supp. 638, 641 (S.D.N.Y.1981), and it also cannot be reasserted in a subsequent judicial proceeding involving the same information. Id. at 646.

Drimmer’s Rule 37 motion to compel Appleton to answer questions concerning the settlement agreement negotiations is granted.

IT IS SO ORDERED.

      . Originally this motion contained requests for an order compelling defendant’s counsel Norman I. Klein to appear for deposition and to answer certain questions and an order extending the completion date for discovery. These matters were resolved at the motion hearing on November 15, 1985.

      . While Drimmer asserts that Laxalt also waived the privilege by quoting verbatim from his conversations with Appleton when he argued the Nevada appeal before the Nevada Supreme Court, Drimmer has failed to provide evidence or transcripts of this alleged second waiver.


author: PLATT, District Judge.

text:
    M. Antonette CAROLLO-GARDNER, Plaintiff, v. DINERS CLUB, Defendant. M. Antonette CAROLLO-GARDNER, Plaintiff, v. Ross ANDERSON and International Diamond Distributors, Defendants. M. Antonette CAROLLO-GARDNER, Plaintiff, v. FINDERS KEEPERS, N.Y., Defendant. M. Antonette CAROLLO-GARDNER, Plaintiff, v. Dolores E. CROSS, Defendant. M. Antonette CAROLLO-GARDNER, Plaintiff, v. Kenneth E. PAGE, Defendant.
    Nos. 85 CV 4638, 85 CV 4639, 85 CV 4641, 86 CV 182 and 86 CV 183.
    United States District Court, E.D. New York.
    Jan. 21, 1986.

      M. Antonette Carollo-Gardner, pro se.
    [No appearances by defendants]
   MEMORANDUM AND ORDER

PLATT, District Judge.

These five civil rights actions brought by the plaintiff contain similar allegations and have been consolidated by the Court for the purposes of this opinion.

Mrs. Carollo-Gardner, the plaintiff in these five actions, is not a stranger to this Court. In 1984 Mrs. Carollo-Gardner brought an action against the New York State Board of Higher Education. In that instance Mrs. Carollo-Gardner also proceeded pro se and in forma pauperis. The case was discontinued by plaintiff four months after it was commenced and this Court ordered entry of dismissal on June 29, 1984. Carollo-Gardner v. New York State Board of Higher Education, No. 84-1162, slip op. (E.D.N.Y. June 29, 1984).

Mrs. Carollo-Gardner now returns to this forum, seeking leave to proceed in forma pauperis against the five named defendants in the above-captioned actions. A brief synopsis of each of these cases must precede a discussion of the law governing their disposition.

In Carollo-Gardner v. Diners Club, No. 85-4638 (E.D.N.Y. filed Dec. 27, 1985), plaintiff asserts the following statutory violations:

Action in violations of civil rights pursuant to 42 U.S.C. 1983 and U.S.C. 1343....
Community Relations—
Conspiricy [sic] — District Courts Jurisdiction Statuet [sic] 28-1343
Statuet 18-241 — Injuring & oppressing free exercise or enjoyment.
Statuet 42-1985 — Deprivation.
Statuet 42-1995 — Contempt.
Statuet 42-2000h-l — Double Jeopardy.
Statuet 18-242 — Discrimination on account of the plaintiff being married to an Englishman alien residing in the USA, New York city.
Statuet 42-2000e — Disclosure of Credit 5 and 8 Information investigation unanswered.

Complt. at ¶¶ 2, 3.

The factual allegation giving rise to the complaint was an apparent lack of response by Diners Club to plaintiff’s letter and phone calls regarding plaintiff's request to cancel her charge account. Defendant’s actions, according to plaintiff, were motivated by alien discrimination against her husband, an English citizen. Plaintiff seeks $10,000 damages from Diners Club and an injunction prohibiting further harassment and discrimination.

Carollo-Gardner v. Ross Anderson and International Diamond Distributors, No. 85-4639 (E.D.N.Y. filed Dec. 27, 1985), cites the same statutory violations. In this case the allegations include “perpetual misspelling of my name, cultural name offense ... per documents or envelopes to me bears a name ‘Sandez’.” Complt. at ¶ 3. Apparently Mr. Anderson ignored plaintiff's request to remove her name from the company’s mailing list. Again, plaintiff claims these actions were motivated by a “conspiricy [sic] in alien discrimination of plaintiff and spouse.” In this case plaintiff seeks $50,000 damages and injunctive relief.

The third case, Carollo-Gardner v. Finders Keepers N.Y., No. 85-4641 (E.D.N.Y. filed Dec. 27, 1985), recites the same statutory violations with the addition of “42-20001-6 Equal Employment Violation — unlawful practices, tampering with plaintiffs name and social security number. Career and Christian abuse before Christmas. 42 — 1975b Compensation — especially financial.” Complt. at U 3. Plaintiff avers that “[e]vidence of Finders Keepers wrapping bags, and my photocopies of the actual time card during employment, shoold [sic] serve as proof these people took part in marring my character in New York City, Long Island, and the State of New Jersey, regarding clothing and related fields.” Complt. at ¶ 4. Plaintiff demands $50,000 damages and injunctive relief.

Carollo-Gardner v. Cross, No. 86-182 (E.D.N.Y. filed Jan. 16, 1986), contains plaintiffs customary statutory violations and demands $85,000 in damages plus injunctive relief. The rambling and incoherent body of the complaint is photocopied and appended to this opinion as Appendix A.

The fifth and final action is against Kenneth E. Page. Carollo-Gardner v. Page, No. 86-183 (E.D.N.Y. filed Jan. 16, 1986). Defendant, in correspondence with plaintiff, allegedly wilfully misspelled plaintiffs name, and kept the letter in office files at the Attorney General’s Office. Such actions, according to plaintiff, “signify a racial disorder and coercion with Jews.” Complt. at 113. Plaintiff seeks $80,000 damages, a protective order and any further relief the Court may deem appropriate.

DISCUSSION

Section 1915 of Title 28 of the United States Code authorizes proceedings in for-ma pauperis, It also confers power on the courts to either: (1) “request an attorney to represent any such person unable to employ counsel”; or (2) “dismiss the case if the allegation of poverty is untrue, or if satisfied that the action is frivolous or malicious.” 28 U.S.C. § 1915(d) (1982).

Consideration of whether a pro se plaintiff should be permitted to proceed in forma pauperis is a two step process. Initially the court must decide whether plaintiff’s economic status warrants waiver of fees and costs under § 1915(a). If the plaintiff is in fact impoverished, the court must permit the complaint to be filed. Second, the court must determine if the complaint is frivolous or malicious. If it is, then dismissal is appropriate under § 1915(d). See Martin-Trigona v. Stewart, 691 F.2d 856, 857 (8th Cir.1982). In this case plaintiff’s limited assets and income reported in her pauper’s affidavit in-dicate that plaintiff is entitled to proceed without paying the usual fees. The Court, therefore, must consider the second requirement of § 1915 before allowing plaintiff to litigate these cases.

A brief exposition of the dismissal standard under § 1915(d) is helpful at the outset because it differs from that under Rule 12(b)(6). Congress has empowered the courts under § 1915(d) to dismiss sua sponte, and without issuance of process, any frivolous or malicious suit in order to curtail abuses of the § 1915(a) privilege. Compelling reasons justify this in forma pauperis standard. As one court distilled the policy considerations:

Persons proceeding in forma pauperis are immune from imposition of costs if they are unsuccessful; and because of their poverty, they are practically immune from later tort actions for ‘malicious prosecution’ or abuse of process. Thus indigents, unlike other litigants, approach the courts in a context where they have nothing to lose and everything to gain.

Jones v. Bales, 58 F.R.D. 453, 463-64 (N.D.Ga.1972) (emphasis omitted), aff'd, 480 F.2d 805 (5th Cir.1973).

Sound judicial policy dictates that a district court may dismiss any “frivolous” in forma pauperis complaint. For the purposes of this section, a “frivolous” action “is one in which the plaintiff’s chances of success are slight.” Sims v. Zolango, 481 F.Supp. 388, 391 n. 1 (S.D.N.Y.1979).

A review of the allegations set forth in plaintiff’s complaints, even construed in the light most favorable to plaintiff, as we are compelled to do, reveals only confused and conclusory allegations to justify her claims for damages. Much as this Court can sympathize with plaintiff’s annoyance at receiving correspondence with her name misspelled, or being deluged with unwanted commercial mailings, or experiencing delayed responses from corporate correspondents, such inconveniences are part of the toll of modem life. Plaintiff’s problem with Diners Club is only the unexpected additional price extracted in exchange for the convenience of an all-purpose charge card. These minor indignities, frustrating as they may be, happen to each and every one of us. They are not reflective of a conspiracy or discrimination, nor do they amount to a violation of any constitutional right, privilege or immunity or of any law of the United States with which this Court is familiar. .

An equally critical deficiency in plaintiff’s pleadings is the failure to allege any State action. It is fundamental that “in order to state a cause of action under 42 U.S.C. § 1983, plaintiffs must allege state action that deprives them of a right secured by the Constitution and laws of the United States.” Schachter v. Whalen, 581 F.2d 35, 36 (2d Cir.1978) (emphasis added). See also Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Wyler v. United States, 725 F.2d 156, 159 (2d Cir.1983).

In sum, plaintiff’s chances of prevailing in a § 1983 action are “slight” or virtually nil, and this Court hereby dismisses these actions.

The Court has been informed by the Court Clerk’s Office that plaintiff has five more complaints waiting in the wings to be filed. In light of this indication of plaintiff’s unsatisfied litigious yen, the Court further orders that plaintiff, or her representatives or agents, may not file any further civil actions without leave of the Court. In seeking leave of the Court from the Miscellaneous Judge, plaintiff must certify that her allegations are bona fide and are pleaded with a reasonable degree of particularity. A failure so to certify or a false certification will be regarded as a contempt of this Court and punishable as such. When and if any subsequent papers are submitted to the Miscellaneous Judge, a copy of this Order should accompany them.

Orders of this kind have been employed by numerous district courts which “have had to respond with determination and imagination” to litigants “with a fanatical desire to flood the courts,” and who are “armed with an in forma pauperis statute and the United States Constitution.” In re Green, 669 F.2d 779, 786 (D.C.Cir.1981). Such an order is appropriate because it offends neither the statute nor the Constitution. Plaintiff is free to seek to proceed in this Court in forma pauperis, but must satisfy the terms of this Order as well as the statute. Such a condition is not unduly onerous or burdensome, and hence, in no way impedes plaintiffs right of access to the courts. See In re Green, supra.

CONCLUSION

For the reasons herein set forth, plaintiffs five cases are dismissed and no further papers will be accepted for filing in this Court without the prior permission of the presiding Miscellaneous Judge.

SO ORDERED.

APPENDIX A

      . Section 1915(a) provides in pertinent part:
      (a) Any court of the United States may authorize the commencement, prosecution or defense of any suit, action or proceeding, civil or criminal, or appeal therein, without prepayment of fees and costs or security therefor, by a person who makes affidavit that he is unable to pay such costs or give security therefor. Such affidavit shall state the nature of the action, defense or appeal and affiant’s belief that he is entitled to redress.

      . One need not be penniless to invoke the statute. See, e.g., Gift Stars, Inc. v. Alexander, 245 F.Supp. 697 (S.D.N.Y.1965).

      . The Advisory Committee’s commentary to § 1915(d) recommended "dismissal with no opportunity to respond when the complaint is irreparably frivolous or malicious.” Martin-Trigona v. Stewart, 691 F.2d 856, 857 (8th Cir.1982).

      . To those who follow the business of the courts, Mr. Martin-Trigona is a familiar plaintiff. He has filed hundreds of lawsuits, distinguished only by their utter lack of legal merit. For a list of appeals involving Martin-Trigona before the Second Circuit from 1980 to 1984, see In re Martin-Trigona, 727 F.2d 1254, 1270-74 (2d Cir.1984). Such a plaintiff aptly demonstrates why a federal court must act as more than a neutral arbiter of disputes between private parties, A court must also defend its jurisdiction and its constitutional function. The Second Circuit has endorsed this principle, stating that: “The United States Courts are not powerless to protect the public, including litigants ... from the depredations of those ... who abuse the process of the Courts to harass and annoy others with meritless, frivolous, vexatious or repetitive ... proceedings." In re Hartford Textile Corp., 659 F.2d 299, 305 (2d Cir.1981), cert. denied, 455 U.S. 1018, 102 S.Ct. 1714, 72 L.Ed.2d 136 (1982).

      . It is the law of this Circuit that “[c]omplaints relying on the civil rights statutes are plainly insufficient unless they contain some specific allegations of fact indicating a deprivation of civil rights, rather than state simple conclusions.” Koch v. Yunich, 533 F.2d 80, 85 (2d Cir.1976). To permit such vague and unsubstantiated complaints as these to escape dismissal would, in the words of one court, place "an unwarranted burden of defense ... on the [defendants] ____ Although pro se civil rights complaints must be viewed with some latitude, liberal construction of pleadings should not be permitted to override completely the rights of defendants.” Morpurgo v. Board of Higher Education in City of New York, 423 F.Supp. 704, 713 (S.D.N.Y.1976).


author: SAND, District Judge.

text:
    AMVEST CAPITAL CORPORATION, a Virginia corporation, Plaintiff, v. BANCO CENTRAL, S.A., Defendant. AMVEST CAPITAL CORPORATION, a Virginia corporation, Plaintiff, v. BANCO EXTERIOR DE ESPANA, S.A., Defendant.
    Nos. 85 Civ. 7895 (LBS), 85 Civ. 7896 (LBS).
    United States District Court, S.D. New York.
    Jan. 29, 1986.
    Hunton & Williams, New York City, for plaintiff; Jack E. McClard, of counsel.

      Akerman, Senterfitt & Eidson, Miami, Fla., for defendant Banco Central, S.A.; Stanley H. Wakshlag, of counsel.
    Sage Gray Todd & Sims, New York City, for defendant Banco Exterior de España, S.A.; Jerry J. Strochlic, of counsel.
   OPINION

SAND, District Judge.

These two actions, which are related but not consolidated, are brought by AMVEST Capital Corp. (“AMVEST”) against Banco Central and Banco Exterior de España (“Banco Exterior”) respectively. AMVEST alleges that the defendant in each case engaged in certain business transactions with Jose Mayoral (“Mayoral”), a former AMVEST vice-president, resulting in a fraud against AMVEST. Jurisdiction is based upon federal question jurisdiction, 28 U.S.C. § 1331, and upon diversity of citizenship, 28 U.S.C. § 1332(a)(2).

Each defendant now moves pursuant to 28 U.S.C. § 1404(a) for an order transferring this case from the Southern District of New York (“S.D.N.Y.”) to the Southern District of Florida (“S.D.Fla.”). The motions are granted.

Section 1404(a) of 28 U.S.C. provides: For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.

Apparently, the parties do not dispute that the action could have been brought in the S.D.Fla. pursuant to the laws relating to personal jurisdiction and the venue provisions of 28 U.S.C. §§ 1391(b), (c) & (d). Thus, the question for our determination is whether such a transfer would be “[f]or the convenience of parties and witnesses, [and] in the interest of justice.”

While as a general matter the plaintiff’s choice of forum is a “substantial consideration,” Olinick & Sons v. Dempster Bros., 365 F.2d 439, 444 (2d Cir.1966); see also Golconda Mining Corp. v. Herlands, 365 F.2d 856, 857 (2d Cir.1966), where the “plaintiff sues in a forum which is neither its home nor has any ties to the controversy, plaintiff’s choice is to be accorded less weight than would ordinarily be the case.” Wibau, Westdeutsche Industrie Und Strassenbaumachinengesellschaft v. American Hoist & Derrick Co., 293 F.Supp. 273, 275 (S.D.N.Y.1968); Ross v. Tioga Gen’l Hosp., 293 F.Supp. 209, 211 (S.D.N.Y.1968). The parties agree that the S.D.N.Y. has no ties to the controversy giving rise to these suits, Transcript of Oral Argument (“Tr.”) at 8, and both Banco Central and Banco Exterior have stated that the acts the defendants are alleged to have committed took place, if anywhere, in the S.D.Fla. Tr. at 6; Affidavit of Julian Perea at ¶13; Affidavit of Jose Manuel Varela Una at ¶¶6-7.

Moreover, despite AMVEST’s statements to the contrary, the S.D.N.Y. is not a home forum for AMVEST. AMVEST states repeatedly that it is a “resident” of New York, specifically the S.D.N.Y. See, e.g., Plaintiff’s Memorandum of Law in Opposition to Banco Central’s Motions to Transfer (“Plaintiff’s Memo.”) at 2, 5, 7, 10 & 25. AMVEST bases this contention on the fact that even though AMVEST is incorporated in Virginia and has its principal place of business there, it maintains an office in the S.D.N.Y., where it is authorized to and indeed does transact business. See Affidavit of James R. Hicks, Jr., at ¶ 113-4; Plaintiff’s Memo, at 5.

The problem with this reasoning, however, is that even though such contacts might suffice to make AMVEST a “resident” for purposes of defending a law suit, they do not qualify it as a “resident” so that plaintiff AMVEST can consider the S.D.N.Y. its “home” forum. Section 1391 of Title 28 of the United States Code contains the general venue provisions. Section 1391(c), regarding corporate defendants, states that “[a] corporation may be sued in any judicial district in which it is incorporated or licensed to do business or is doing business, and such judicial district shall be regarded as the residence of such corporation for venue purposes.” (Emphasis added.) However, the Second Circuit and the other courts that have decided the issue have declined to extend this expansive concept of “residence” to cases where corporations are suing as plaintiffs. Manchester Modes v. Schuman, 426 F.2d 629, 630 (2d Cir.1970); see also 15 Wright & Miller, Fed.Prac. & Proc. § 3811 at 60-61 (1976). The Second Circuit found that the “broadened conception of residence for corporate defendants [that is found in 28 U.S.C. § 1391(c)] was ‘a response to a general conviction that it was “intolerable if the traditional concepts of ‘residence’ and ‘presence’ kept a corporation from being sued wherever it was creating liabilities” ’ [citations omitted]. There is no evidence of similar concern over the problem of venue for corporate plaintiffs.” Manchester Modes, supra, 426 F.2d at 632.

If, for purposes of section 1391 of 28 U.S.C., a corporate plaintiff cannot establish itself as a “resident” of a district solely by doing business there, it follows that the same corporate plaintiff cannot by mere dint of doing business establish itself as a “resident” for purposes of section 1404(a) of 28 U.S.C. To allow otherwise would give corporate plaintiffs the same advantage with respect to changes in venue that Manchester Modes said they were not entitled to with respect to the establishment of venue. This is not to say that a corporate plaintiff’s “doing business” in a district is not a factor in determining whether to transfer pursuant to § 1404(a). Rather, it is to say that the corporate plaintiff cannot resist the transfer on the ordinarily compelling ground that the forum it chose is its “home.”

When the facts and circumstances of the cases here are examined in light of our findings that the controversy did not arise in the S.D.N.Y. it becomes clear that the S.D.Fla is the more appropriate forum for these actions. The fact that the S.D.N.Y. is not plaintiff’s residence is not necessary to this conclusion, but certainly bolsters it.

With regard to the interest of the parties and the witnesses, in the Banco Central case, AMVEST has named one potential witness who resides in the S.D.N.Y. and two witnesses from the S.D.Fla. The remainder of its witnesses come from Charlottesville, Va. Banco Central, on the other hand, has identified several party witnesses and two dozen non-party witnesses who reside in the S.D.Fla. Perea Aff. at ¶ ¶13-14. While AMVEST disputes several aspects of Banco Central’s witness list, it concedes that Banco Central has at least 13 witnesses from the S.D.Fla. Plaintiff’s Memo, at 15. Clearly, from the perspective of the witnesses, it is far more convenient to hold the trial in the S.D.Fla. Nor are we persuaded by AMVEST’s arguments that it is more convenient for the majority of its witnesses to travel from Virginia to the S.D.N.Y., rather than to the S.D.Fla. The marginal inconvenience of the longer trip to Florida is outweighed by the fact that nearly 20 witnesses will not have to travel at all. Accord Kyle v. Days Inn of America, 550 F.Supp. 368, 370 (M.D.Penn.1982). The witness situation in the Banco Exteri- or case is similar.

Finally, with respect to witnesses, Banco Central’s Florida-based, non-party witnesses cannot be compelled to testify in the S.D.N.Y. and there has been no showing by AMVEST that they are likely to appear voluntarily. Accord Vaughn v. American Basketball Ass’n, 419 F.Supp. 1274, 1276 (S.D.N.Y.1976).

Several other reasons, which might be deemed “in the interest of justice,” call for the transfer of these cases to the S.D.Fla. Whereas virtually all the significant events took place in Florida and whereas several of AMVEST’s claims are based on Florida statutory and common law, a federal district court sitting there is better suited to apply the local law. A federal court in the S.D.Fla. has greater familiarity with Florida law as well as greater access to the resources that aid in the law’s interpretation and application. Accord Vaughn, supra, 419 F.Supp. at 1278; Troyer v. Karcagi, 488 F.Supp. 1200, 1207 (S.D.N.Y.1980). Moreover, the documents relating to these disputes, even if few in number as AMVEST contends, are all in Florida. We also note, as the parties stipulated at oral argument, that the median time for disposition of civil cases and for proceeding to trial is the same in the S.D.Fla. and the S.D.N.Y. Tr. at 2-4; see also Plaintiff’s Memo, at 9. Finally, as AMVEST is a multi-million dollar business and as it is licensed to do business in Florida and has done business there, we are not persuaded by its argument that we should look at the relative financial strength of the parties. In sum, the S.D.N.Y. has virtually no relation to this litigation and relatively little relation to the parties. A transfer of these actions to the S.D.Fla. is appropriate here.

The motions of Banco Central and Banco Exterior are granted.

SO ORDERED.

      . The parties in both cases agree that if one action is transferred, the other should be as well. See AMVEST’s Letter of Jan. 4, 1986 at 4-5. Since we find ample reason for transferring the Banco Central case, we need not discuss the Banco Exterior case in detail. We do note in passing that even viewed independently, the Banco Exterior action would also call for transfer.

      . We asked the parties to brief the issue of whether certain potential third-party defendants, namely Mayoral and the companies he controls, could be impleaded in the S.D.N.Y. on the state claims in these cases. Although the parties reach different conclusions, we need not decide this question as we have in any event found ample reason to transfer these cases to Florida.


author: SAFFELS, District Judge.

text:
    W-V ENTERPRISES INC. and E. Michael Wayland, Plaintiffs, v. NORTH KANSAS SAVINGS ASSOCIATION, Defendant.
    Civ. A. No. 85-2568-S.
    United States District Court, D. Kansas.
    Jan. 30, 1986.
    Anne L. Baker, Eidson, Lewis, Porter & Haynes, Topeka, Kan., for plaintiffs.
    Edward C. Hageman, Hageman & Hageman, Stockton, Kan., for Third-Party Stakeholder Homequity.

      Frank Hahn, Hahn & Hahn, Phillipsburg, Kan., for Pam and Jeffrey Ditgen.
    Mark W. McGrory, Morrison, Hecker, Curtis, Kuder & Parrish, Overland Park, Kan., P. John Owen, Nancy L. Shelledy, Morrison, Hecker, Curtis, Kuder & Parrish, Kansas City, Mo., for defendant.
   MEMORANDUM AND ORDER

SAFFELS, District Judge.

This matter is before the court on plaintiffs’ motion to remand this action to the District Court of Phillips County, Kansas, for the reason that this court lacks original jurisdiction.

On July 30, 1982, plaintiffs received a judgment against defendant in the District Court of Geary County, Kansas. This judgment was registered in Phillips County, Kansas, and has not been satisfied. Defendant was the mortgagee of real property located in Phillips County, Kansas. On November 19, 1982, the Federal Home Land Bank Board appointed the Federal Savings and Loan Insurance Corporation [hereinafter FSLIC] as receiver for defendant. On or about November 15, 1984, the FSLIC assigned the mortgage to the Mid-Continent Federal Savings and Loan Association of El Dorado, Kansas.

In 1985, Pam and Jeffrey Ditgen desired to purchase said realty from Homequity. A title opinion showed a judgment lien in favor of plaintiffs W-V Enterprises, Inc. and E. Michael Wayland. On October 3, 1985, third-party stakeholders Homequity and Pam and Jeffrey Ditgen, paid into the District Court of Phillips County, Kansas, pursuant to the order of the court, an amount sufficient to satisfy the mortgage against the real estate. At that time, the court ordered that plaintiffs’ judgment lien be released. The funds paid into the District Court of Phillips County, Kansas, are now claimed by both the plaintiffs, in satisfaction of their judgment lien, and defendant FSLIC as receiver for North Kansas Savings Association.

Prior to a hearing on this action in the Phillips County District Court, FSLIC removed the case to the United States District Court for the District of Kansas pursuant to its right of removal under 12 U.S.C. 1730(k)(l) and 28 U.S.C. 1441 and 1442. FSLIC claims that by virtue of its status as an agency of the federal government, it had a right to remove this action to federal court pursuant to 28 U.S.C. 1442.

Plaintiffs oppose defendant’s claim of jurisdiction stating that the FSLIC is acting solely as a receiver and that its rights and plaintiffs’ rights arise solely under state law. Plaintiffs further state no federal question or issue arising under federal law is raised in this case.

After a review of the statutes cited by defendant as authority for removal, and the case law interpreting these statutes, the court finds that it has no jurisdiction under the facts as presented. The court finds that plaintiffs’ arguments and cited case law are persuasive.

This court finds that it has no authority pursuant to 28 U.S.C. 1442, which allows removal by an officer of the United States or agency thereof if a civil action has been commenced in state court. The court’s interpretation of the statute limits the power of removal solely to officers of the United States rather than agencies. Further, the court finds that the cases cited by defendant in support of jurisdiction pursuant to § 1442(a) can be distinguished from the case at hand. In each of these cases, the court was dealing with an officer of the agency, rather than solely with the agency itself.

The court finds the decision in Brewer v. Dept. of Housing & Urban Development, 508 F.Supp. 72 (S.D.Ohio 1980), controlling. In Brewer, the court stated that it had been consistently held that the meaning of “[s]ection 1442(a)(1) confers the right of removal only upon officers of the United States and officers of any agency of the United States [and] that no ‘agency’ of the United States has any right of removal under Section 1442(a)(1).” Id. at 74 (emphasis added) (citing KCPO Employees Credit Union v. Mitchell, 421 F.Supp. 1327, 1330 (W.D.Mo.1976)). The court found in Brewer that removal was affected solely upon the petition of an agency of the United States, rather than by a federal officer defendant in the state proceeding, and that, as such, removal was improvident. Id. Accordingly, the court in this case finds that jurisdiction cannot be claimed by the FSLIC by virtue of 28 U.S.C. 1442(a)(1).

The court will now look at defendant’s jurisdictional claim pursuant to 12 U.S.C. 1730(k)(1). In pertinent part, 12 U.S.C. 1730(k)(1) provides:

(B) any civil action, suit, or proceeding to which the Corporation [FSLIC] shall be a party shall be deemed to arise under the laws of the United States, and the United States district courts shall have original jurisdiction thereof, without regard to the amount in controversy; and (C) the Corporation may, without bond or security, remove any such action, suit or proceeding from a State court to the United States district court for the district and division embracing the place where the same is pending by following any procedure for removal now or hereafter in effect: Provided, That any action, suit, or proceeding to which the Corporation is a party in its capacity as ... receiver ... of an insured State-chartered institution and which involves only the rights or obligations of investors, creditors, stockholders, and such institution under State law shall not be deemed to arise under the laws of the United States____

Id. (emphasis added).

Plaintiffs claim that the FSLIC is acting solely as a receiver in the case at issue, and that the only rights involved are the rights of plaintiffs’ creditors. In response, defendant argues that the provision in the statute operates to bar removal only where both of two conditions exist: (1) where the FSLIC is a party only in its capacity as a receiver of a state-chartered institution, and (2) where the rights solely of creditors in the institution under state law are involved. Defendant concedes that the FSLIC is acting as a receiver of North Kansas Savings Association. It argues, however, that not only the rights of creditors and the institution are at issue here, but a challenge to the FSLIC as receiver and its distribution of assets are involved. Defendant therefore contends a federal question is raised as to whether that the exercise of the receiver’s powers and its authority to distribute assets pursuant to 12 U.S.C. 1464(d)(6)(C) have been violated. The FSLIC also contends that a challenge to its distribution of assets pursuant to 12 U.S.C. 1729(d) and 12 C.F.R. 549.3 is involved.

The court finds the decision in Hancock Financial Corp. v. FSLIC, 492 F.2d 1325 (9th Cir.1974), instructive on this issue. In Hancock, the FSLIC also argued that a federal question was raised as to the FSLIC’s duties to liquidate the association’s assets in an orderly manner. The court refuted the FSLIC’s position, stating that § 1729(d) provides that “[i]n connection with the liquidation of insured institutions in default, the Corporation shall * * * [be] subject only to the regulation of the court or other public authority having jurisdiction over the matter.” Id. at 1327 (emphasis in original). The court in Hancock stated that since the superior court of the county appointed the FSLIC as receiver, the FSLIC was subject only to the regulation of that court, and therefore the question of what constitutes an orderly liquidation must be litigated in that court in accordance with state law.

Similarly, the court finds that in the instant case the FSLIC is subject only to the regulation of the District Court of Phillips County, Kansas, and that the issue involved in this case must be litigated in that court in accordance with state law. The court finds that it has no original jurisdiction to hear the cause of action. The reasoning of the United States Court of Appeals for the Ninth Circuit in Hancock is clearly applicable to the case at hand. In that case, the court argued that where the FSLIC acts as a receiver the FSLIC would argue that, since it has a duty to liquidate assets in an orderly manner, a question of federal law is raised in each and every case. Id. at 1327-28. The court found that if such logic were accepted, the provision in § 1730(k)(l) would be rendered a nullity. The court found that Congress intended no such result. Id. The court therefore finds in the instant case that the FSLIC is barred by the first proviso clause of 12 U.S.C. 1730(k)(1).

IT IS BY THE COURT THEREFORE ORDERED that plaintiffs’ motion to remand this cause of action to the District Court of Phillips County, Kansas, is hereby granted, and this matter shall be remanded to the District Court of Phillips County, Kansas.