author: ELMO B. HUNTER, District Judge.

text:
    Cheryl M. VAN ALLSBURG, et al., Plaintiffs, v. CITY OF KANSAS CITY, MISSOURI, et al., Defendants.
    No. 82-0675-CV-W-3.
    United States District Court, W.D. Missouri, W.D.
    Dec. 20, 1984.

      Cathleen Connealy, Kansas City, Mo., for plaintiffs.
    William D. Geary, Kansas City, Mo., for defendants.
   OPINION AND ORDER

ELMO B. HUNTER, District Judge.

Before the Court are cross motions for summary judgment. The parties are in agreement that there remain no undisputed facts and have submitted the case to be decided on stipulated facts.

This is an action seeking declaratory and injunctive relief. Plaintiffs are adult members of the Reproductive Rights Committee of the Kansas City Urban Chapter of the National, Organization for Women, a noncommercial political group. Defendants are the City of Kansas City and the Board of Parks and Recreation Commissioners.

Plaintiffs claim that certain policies of defendants unconstitutionally prohibit the free exercise of the freedom of speech in parks within the parks and boulevard system of the City. These include restrictions on signs or other advertising, selling certain items associated with protected speech activity, and soliciting funds.

In addition to declaratory and injunctive relief plaintiffs seek damages based on the deprivation of their constitutional rights resulting from the enforcement of the challenged policies.

On June 13, 1982, City of Kansas City, Missouri, park rangers, acting in their official capacity, and in furtherance of policy, required plaintiffs to leave Loose Park because of plaintiffs’ activities conducting a bike-a-thon. Loose Park is a public park of the City of Kansas City.

The following stipulation of facts was submitted by the parties:

Prior to March 8, 1977, the Board of Parks and Recreation Commissioners’ published policy was to exclude religious and political uses of parks. Following litigation, which was resolved through settlement, the Board officially deleted that exclusion. The litigation, which was filed in the Western District of Missouri, was Taxpayers Defense League v. City of Kansas City, Missouri, et al., Case No. 76-CV-674-W-4.

Prior to March 8, 1977, the Board policy concerning religious and political uses of the parks read as follows:

“Parks, playgrounds and recreation facilities shall be used for park and recreation purposes. They cannot be used for religious or political purposes, nor for the solicitation of funds for any purpose other than Parks and Recreation.”

The change in official Board policy, however, was not effectively communicated to all responsible city officials and employees who are charged with enforcing the Board’s policies and City ordinances. Inadequate training of park rangers resulted from the dissemination of incorrect information concerning the Board’s change in official policy.

After the March 8, 1977, deletion of an official policy against religious and political uses of the parks, no changes were made in the materials distributed to rangers until January, 1983, so the rangers continued to receive the old policies which prohibited political and religious uses.

The change in policy was reiterated by the Board in June, 1981, when an organization sought permission to use Loose Park for a political rally. The Board discouraged use of Loose Park because of its heavy use.

Unchanged by the litigation of 1977, and the policy change of March, 1977, was the policy to enforce the ordinances of the City as they were written.

Official Board policy was to not prohibit religious and political uses of the parks so long as all City ordinances were obeyed. Those ordinances included a prohibition on displaying any sign, including political signs, on public property; a prohibition on selling any article, whether or not the item, such as a button, bumper sticker, or T-shirt, had political content, unless the Board granted a concession contract, but the Board granted contracts only for recreational items; and a prohibition which has been interpreted by staff and officials to include signs, literature, promotion of anything including political issues unless done verbally only, and any other activities taken as a whole which promote anything.

Wearing T-shirts which display a political message such as “Abortion — A Personal Decision” and conducting a bike-a-thon with riders also wearing such T-shirts or signs was considered on June 13, 1982, to be a promotional advertising of the group and its message. Promotion within this prohibition was also considered to include distributing literature or seeking donations.

Rangers, with regard to political groups and activities, were told the following:

(a) Political groups may use the parks, but it is preferred that political activity not occur in the parks;
(b) Use of the parks to promote a political group or idea is allowed, but not preferred;
(c) Signs of any sort, political or otherwise, whether affixed to objects or persons, or hand held, or otherwise are not allowed in the parks;
(d) Sales of any object, whether commercial sales, or sale of an item with political content and message, with the idea of promoting the message are forbidden without a concession contract with the Board of Parks and Recreation Commissioners; such contracts are let only for recreational activities and items;
(e) Campaigning for a politician is forbidden if signs or literature are involved in the campaign activity, but not if only talking to individuals is involved;
(f) If a group asked to use the park for a nuclear freeze rally, for example, they would be told the City preferred they not do that in the parks; if the rally was conducted with signs, literature, or sales, the group would have been asked to cease the use of those items or leave the park;
(g) No literature may be handed out in parks;
(h) In certain parks, shelter houses may be reserved; if a political group informs the City it wishes to use the shelter for a political rally it is informed the City prefers it not use the parks for that purpose; if signs, literature or sales were involved in the rally the group would be asked to cease the activities or leave.
(i) Reservations for the use of the parks by a political group would not be made because permits are not issued for the open areas of the parks; groups may notify the Park Department that a large number of people will be in an area of the parks; groups calling to inform the Park Department of their desire to also use that area would be told of the first group’s plans.

Training of the park rangers did not include differentiating between political and commercial uses of the parks. The failure of that training resulted in applications of the policies and ordinances applicable to the parks to be violative of protected activities.

Training of rangers is primarily on-the-job training with other park rangers. There exists no training manual. Review of the materials distributed to rangers (which included the incorrect statement on religious and political activities) setting forth Board policies, associating with other rangers, and asking questions of the Superintendent of Parks Management are the primary means of imparting information to rangers. Direct responsibility for training park rangers rests with the Superintendent of Parks Management as their immediate supervisor.

It cannot be said whether the change in official Board policy made March 8, 1977, was communicated to park rangers in 1977. High Park Department officials were aware of the policy change. Even if there had been communication of the change a confusing situation would have been created because the written materials were not changed.

Adding ambiguity to the training received by the rangers was the practice of Park Department staff to discourage political uses of the parks. If a political group contacted Park Department staff seeking permission to conduct a political activity at a park, permission was not granted nor was it denied. There is no permit procedure for the use of any open area of the parks, therefore, no permit could be issued.

It was not the practice to inform political groups they would not be prevented from conducting the political activity so long as the ordinances discussed above were obeyed. The practice of discouraging political uses was followed by Park Department officials and employees whose positions included discretionary decision-making and supervisory duties.

The following ordinances of the City of Kansas City were in effect on June 13, 1982, and are still part of the Code of General Ordinances of Kansas City, Missouri:

(a) § 2.1 — Carrying Advertisements on Streets Or In Parks

(b) § 2.2 — Placing of Signs, Banners, Etc., On Public Property

(c) § 2.3 — Advertisements In Parks

(d) § 2.4 — Posting Without Permission

(e) § 2.15 through § 2.29 — Handbills

(f) § 10.1 through § 10.25 — Charitable and Religious Solicitations

(g) § 26.14 — Elections; Unlawful Use Of City Property

(h) § 26.19 — Hawking or Peddling — Generally

(i) § 30.69 — Displays Of Merchandise On Streets, Sidewalks

(j) § 30.71 — Crowds

(k) § 30.88 — Selling Articles

Copies of these ordinances are attached as an addendum to this opinion.

When considering Loose Park, an additional source of a prohibition on sales exists. The Deed of Dedication conveying Loose Park to the City includes the following restriction:

“11. No concession and/or privileges for the sale of articles of any kind within the Park shall be granted, given or sold except in or in connection with the building or buildings to be erected as aforesaid.”

Park rangers working in Loose Park are given a copy of the Deed of Dedication with the restrictions.

Plaintiffs’ group, the Reproductive Rights Committee of the Kansas City Chapter of the National Organization for Women, had planned a fund-raising event, a bike-a-thon. The riders had a route and had obtained pledges of money from people depending on the number of miles ridden. The route was in the vicinity of Loose Park, but did not include Loose Park unless a stop at the group’s table was made.

In Loose Park part of the support group for the event set up a table as a rest and water stop for the riders entering the park.

As a means of promoting this event, the group itself, its ideas, and to help raise money, the bikers wore signs on their backs announcing the bike-for-choice event; a sign announcing the bike-a-thon was placed on' the table in the park; persons sitting at the table wore T-shirts marked “Abortion — A Personal Decision”; such T-shirts were on the table available for sale; handouts, literature espousing plaintiffs’ group’s point of view were available on the table; and a small can was on the table for donations.

The bike-a-thon was a peaceful event, no disturbance was created. No complaints from the park users were received regarding the event. At no time did plaintiffs’ activities cause a “crowd” to gather which obstructed, prevented, or hindered free passage along any street or sidewalk.

Officially, there was no procedure for plaintiffs on June 13, 1982, to get a permit to hold their event in the park since no permit was required because Board policy does not prohibit use of the parks for political purposes. The plaintiffs would not be permitted to solicit, to sell, to give out literature, or to have signs. Plaintiffs would not be allowed to give out literature and have signs at political gatherings in the parks.

Plaintiffs were told by park rangers that their event violated ordinances and park policies, and that they would have to leave. Such ordinances and policies would not allow their signs, sales, solicitation of funds, or passing out literature.

Plaintiffs, on Rangers’ request, removed their signs, T-Shirts for sale, contribution can, and literature from the park. This would have left plaintiffs sitting at a table with their own T-shirts on as a rest station for their riders who also had on signs.

Even after the removal, the Rangers required plaintiffs to leave Loose Park because the plaintiffs still appeared to be an organized nonrecreational, political event. The Rangers believed that, as organized, with people sitting at a table wearing the T-shirts with signs on them, coupled with the steady arrival of the members on bikes with signs on their backs, the group was not recreational, but political, and, so organized, they were still advertising their event in violation of Park policies and ordinances.

At the request of Park Rangers, City Police arrived at Loose Park to back up the Rangers. Though no arrests or apprehensions were made by the police, plaintiffs believed that noncompliance with the request of the Rangers to leave would result in their arrest.

Plaintiffs left Loose Park, cancelling the remainder of their activities.

No out-of-pocket expenses were incurred by the plaintiffs.

Each plaintiff was damaged in the amount of $3,500.00.

Discussion

On August 9,1983, this Court entered an order pursuant to matters stipulated to, which found that several of the policies as applied to non-commercial activities were violative of the First Amendment to the Constitution of the United States, and among other directions, enjoined the City from enforcing certain of its policies. The issues remaining unresolved by that order are:

(1) Whether the First Amendment prohibits defendants from prohibiting the solicitation of funds in the open areas of a public park if the soliciting is done by a political, non-commercial group; and

(2) Whether the First Amendment prohibits defendants from prohibiting the sale of items which convey a political or religious message (such as buttons, bumper stickers, etc.) or which do not convey such a message (such as a bake sale) in the open areas of a public park, if the selling is done by a political, non-commercial group.

The constitutional protection afforded the oral or written dissemination of opinion is not lost merely because materials sought to be distributed are sold rather than given away, or because contributions or gifts are solicited in the course of communicating one’s beliefs or ideas. Heffron v. International Society for Krishna Consciousness, Inc., 452 U.S. 640, 647, 101 S.Ct. 2559, 2563, 69 L.Ed.2d 298 (1981). Nonetheless, the First Amendment does not guarantee the right to communicate one’s views at all times and places, or in any manner that may be desired.

Expression, whether oral or written or symbolized by conduct, is subject to reasonable time, place, and manner restrictions. Clark v. Community for Creative Non-Violence, — U.S. -, -, 104 S.Ct. 3065, 3069, 82 L.Ed.2d 221, 227 (1984). Restrictions of this kind are valid provided that they are justified without reference to the content of the regulated speech, that they are narrowly tailored to serve a significant governmental interest, and that they leave open ample alternative channels for communication of the information.

Section 67 of the Charter of the City of Kansas City provides:

No part of any park or other public ground under the supervision or control of the board of park commissioners shall be leased to any person, firm or corporation for any purpose; but the board may lease any building or parts thereof in any park for park purposes to any person undertaking to serve such purpose, and may grant concessions in a park for the sale of refreshments to the public using such park and for other park purposes, upon such terms and under such regulations as the board may prescribe____ No lease or concession shall be granted for any purpose not within the objects for which such park, squares and grounds or buildings are held by the City____ No shows or exhibitions of any character or kind shall be allowed or given for advertising purposes, or for profit, or for any private purposes in any park, ... but this shall not inhibit such musical, historical, patriotic or educational entertainments, concerts, dramatic productions, amateur athletic games, and zoological, horticultural or other proper exhibits in any park as may be provided or given by or with the approval of the board for the use, enjoyment and welfare of the public.

Section 30.88 of the ordinances of the City of Kansas City provides that “No person shall expose any articles or thing for sale in any park, boulevard, street, park road, driveway or other public grounds under the control or supervision of the board of park commissioners of the City, except pursuant to contract or permit from such board.”

In an attempt to comply with the mandates of the Charter and ordinance, it is the policy of the defendants to grant permission to sell or solicit only to persons or groups contemplating a “recreational activity” and to deny permits to groups seeking to sponsor an activity not “recreational.”

Defendants have no specific guidelines by which to measure a request of a person or group to conduct an activity in the park to determine whether it will be “recreational” or whether a permit will be granted. Each request is measured by the conditions existing at the time the request is made and whether the activity is believed to be a recreational activity or supportive of a recreational activity.

On June 13, 1982, the plaintiffs needed no permit to conduct a political activity in the park, but application of the above rules and policies would have precluded solicitation of funds and sales of items. Whether or not a contract or permit would have been issued to conduct a bicycle ride or race without the solicitation of funds and sales of items cannot now be determined.

A valid time, place, and manner regulation must be precisely drawn to serve a “significant governmental interest.” Heffron, 452 U.S. at 649, 101 S.Ct. at 2565; Clark v. Community for Creative Nonviolence, 104 S.Ct. at 3069, 82 L.Ed.2d at 227. The interest asserted by defendants is that of providing a place to which urban residents can find an escape from the commercial environment of the City. Consideration of a forum’s special attributes is relevant to the constitutionality of a regulation since the significance of the governmental interest must be assessed in light of the characteristic nature and function of the particular forum involved. Heffron, 452 U.S. at 650-51, 101 S.Ct. at 2565-66.

Defendants cite authority to the effect that a well ordered park system is an essential feature of city life, but cite no authority, stipulation, or evidence to the effect that “commercial type activity” is incompatible with a well run park system. For purposes of this opinion this Court will assume, but does not hold, that there is a significant governmental interest in excluding “commercial type activity” from parks.

The defendants’ restrictions on sales and solicitations are not narrowly tailored to serve the asserted government interest. There is a total ban on “non-recreational” solicitations and sales. The interest asserted could be served by a variety of time, place and manner restrictions. Defendants claim that the ban on solicitation and sales is in fact a restriction only on the manner of the exercise of first and fourteenth amendment rights in that there is no restriction on proselytizing or gatherings by non-recreational groups. Nonetheless, there is a total ban on a type of protected activity that is not replaced by the ability to gather and convert. It is plain that any ideological organization needs funds to remain a going concern.

Freedom of speech, freedom of the press and freedom of religion are available to all, not merely to those who can afford to pay their own way or to give out, free of charge, literature and propaganda. See Murdock v. Pennsylvania, 319 U.S. 105, 111, 63 S.Ct. 870, 874, 87 L.Ed. 1292 (1943).

Defendants also claim that the restrictions on fundraising are merely reasonable place restrictions in that the ban is restricted to parks. The fact remains that the entire park system, a traditional public forum and natural outlet for the exercise of first and fourteenth amendment freedoms, has been completely eliminated as a place for exercising protected rights. There is nothing in the record concerning the availability of alternative outlets for the restricted activity. Even assuming that alternatives such as door to door canvassing, phone solicitations, and street solicitations exist in the Kansas City area, the total ban on fundraising in the park system is far too restrictive when considered in light of the end sought to be achieved.

The special attributes, characteristics, and functions of the Kansas City parks would not seriously be hampered by the imposition of lesser restrictions. This is evidenced by the fact that, under the current policies, pure commercial activity unassociated with ideological expression is freely allowed so long as the Board finds the activity to be supportive of recreational activity. If having a vendor sell recreation-related articles purely for personal profit is allowed under the present policies as not unduly commercializing the parks, the Court is convinced that the nature, function, order, and beauty of parks can be preserved by restrictions significantly less onerous than a total ban on fundraising.

A major criterion for a valid time, place and manner restriction is that the restriction may not be based upon either content or subject matter. Heffron, 452 U.S. at 648, 101 S.Ct. at 2564. Defendants claim that their ban on park sales and soliciting is content neutral. All ideological sales and soliciting are banned. Only “recreation related” sales are allowed.

Plaintiffs do not contend that, once a decision is made that an activity or sale is non-recreational, there is any unequal treatment based on content or purpose of the proposed activity. Rather, plaintiffs challenge the method of determining whether a proposed activity or sale is “recreational” or “non-recreational.”

Although it is true, as defendants contend, that Courts give great weight to the interpretation of laws made by an agency enforcing the law, that maxim has no place here where there have been no interpretations or guidelines established to determine when an activity is “recreational” and where the challenge is made that the system and laws under which the agency would make interpretations are themselves unconstitutional as a prior restraint on constitutional rights. This is not a review of a particular application of the ordinance, but a systemic challenge.

Under the ordinances and policies as they exist now, the Board has discretion, unfettered by the guidance or restriction of any guidelines, to determine that an organization’s proposed activity is “recreation related” and the organization may therefore sell items, or that the activity is ideological and the organization is therefore prohibited from selling or soliciting.

This power to decide what is recreational on an ad hoc basis essentially gives the Board the power to approve activities that appeal to it and disapprove those that don’t. It is open to precisely the kind of arbitrary action that has been condemned as inherently inconsistent with a valid time, place and manner regulation, because such discretion has the potential for becoming a means of suppressing a particular point of view. In effect, the ordinance as written and as enforced subjects the exercise of first amendment freedoms to the prior restraint of a permit without narrow, objective and definite standards to guide the licensing authority. See Shuttlesworth v. Birmingham, 394 U.S. 147, 150-51, 89 S.Ct. 935, 938-39, 22 L.Ed.2d 162 (1969).

Defendants maintain that the term “recreational” is a term with a common meaning which does not require specific and detailed guidelines to insure that it is not applied arbitrarily. The Court is of the opinion that the term “recreation” is particularly unsuitable as a content-neutral qualification for commercial activity that may occur in parks. Many, if not most, organized “recreational” events are not mere opportunities for mindless relaxation and exercise, devoid of any ideological significance. Indeed, most of our holidays have deep ideological roots. For example, one could hardly argue that a 4th of July picnic or fireworks display is devoid of ideological significance. Nonetheless, activities of this type are easily termed “recreational.” The practical effect might be to allow sales relating to ideological activities that have become enough a part of our lives and traditions to be thought of as “recreational.” Less popular or less established activities are less likely to be so considered because of the unfamiliarity or novelty of their ideological component.

The record in this case makes it more than clear that the challenged ordinances and policies have the potential for becoming a means of suppressing a particular point of view. It is stipulated that plaintiffs’ group, which promotes the right of a woman to choose to have an abortion, would not have been allowed to conduct a bicycle race in the park in support of its cause and sell promotional T-Shirts and buttons to raise funds. (Defendants admit that bicycling is “recreational.”) Nonetheless, a group which has among its published goals: (1) to provide a symbol of the revitalization of the City as a whole; (2) to provide further impetus to the revitalization of downtown; (3) to showcase cultural resources of Kansas City and enable those resources to gain further exposure and generate funds (e.g., the Symphony, Jazz, the Kansas City Museum, Historic Kansas City Foundation, the Kansas City Ballet, etc.); (4) to provide an educative experience about the rich history and tradition of Kansas City, the quality of its resources today and its future; (5) to develop a network of people and institutions and a sense of common direction and potency among them; and (6) to generate local, regional, and national exposure for Kansas City, was in fact permitted to sell T-Shirts, buttons, posters, and other promotional materials in order to cover its costs and to raise funds to be used in furtherance of its published goals. That the Board would permit one and fail to permit the other on the basis that plaintiffs’ activity was ideological and the other was recreational, even though done in good faith, demonstrates the potential for abuse and arbitrary action that exists under the current system.

Even if the term “recreational” could be precisely and narrowly defined, or if narrow guidelines could be developed to draw an objective line between activities which are recreational, and those which are ideological, the extant restrictions would not pass constitutional muster. The restrictions purport to allow purely commercial activity to occur in the parks, while, because of a fear of commercialization of the parks, prohibiting “commercial type” activity of an ideological nature. In addition to the fact that the unequal treatment of recreational commercial and non-recreational “commercial type” activities undermines the defendants’ contention that the type of activity engaged in by plaintiffs would interfere with a significant governmental interest, the restrictions ignore the constitutionally preferred position of expressive speech over purely commercial speech.

Defendants do not explain how or why fundraising sales in furtherance of ideological purposes would be more threatening to the governmental interest of a “non-commercial” park than are purely commercial sales for profit. Defendants appear to imply that the activity allowed, purely commercial recreational sales, is in harmony with the recreational purposes of parks and thus less harmful to the atmosphere of the parks. This argument focuses on one aspect of parks without consideration of other purposes served by an urban park. Parks have been “held in trust for the use of the public ... for purposes of assembly, communicating thoughts between citizens, and discussing public questions.” Hague v. C.I.O., 307 U.S. 496, 515, 59 S.Ct. 954, 964, 83 L.Ed. 1423 (1939). Thus, in the balance against countervailing government interests, whatever weight is accorded to the fact that a purely commercial sale might be recreational is equalled or outweighed by the fact that the “commercial type” sale is ideological. Insofar as the defendants tolerate sales at all, it cannot choose to limit them to purely commercial, albeit recreational, sales to the exclusion of purely ideological solicitations and sales. See Metromedia, Inc. v. San Diego, 453 U.S. 490, 513, 101 S.Ct. 2882, 2895, 69 L.Ed.2d 800 (1981) (plurality opinion).

Defendants cite the deed of dedication to Loose Park as an additional justification for the restriction on sales in that park. The Court need not examine the validity of a grant of land as a public park which prohibits the exercise of first amendment rights, nor speculate on the effect of a violation of the terms of the grant. The deed purports to restrict certain uses of the land in that it provides that “No concession and/or privileges for the sale of articles of any kind within the park shall be granted, given or sold except in or in connection with the building or buildings to be erected as aforesaid.”

The City need not grant any “concession and/or privilege.” Any right to use the park for First and Fourteenth Amendment purposes arises under the United States Constitution and is not dependent on the concessions of the defendants. The question at issue here is whether defendants’ restrictions on a fundamental right are valid. Removal of these restrictions would be in spite of defendants’ efforts and only through a most tortured construction could be viewed as their grant of a “concession and/or privilege.”

Plaintiffs also challenge certain of defendants’ ordinances which prohibit anonymous or commercial handbilling and question whether the City can prohibit fundraising sales of items that are not intimately associated with the selling organization’s message (i.e., a bake sale). There is some question whether the record in this case shows an actual controversy over anonymous or commercial handbilling. Plaintiffs were told by park rangers that they would not be allowed to pass out literature at all. Subsequently, defendants agreed that the restrictions on ideological literature were void. There is no evidence that plaintiffs attempted or would be interested in, but are “chilled” from, distributing anonymous or commercial handbills, nor that the defendants are likely to try to enforce the challenged ordinances. The same is true with regard to sales of items not intimately related to plaintiffs’ message. There is no indication that plaintiffs were removed from the park for selling anything except T-Shirts and buttons, which themselves conveyed a message. In fact, plaintiffs admit that “This issue arises out of conferences of counsel.”

While the Court understands that defendants may want concrete judicial guidance in locating the outer limits of their regulatory power when formulating new ordinances, the Court has no jurisdiction to decide hypothetical issues; there must exist an actual case or controversy. U.S. Const., Art. Ill, § 2. There “must be a real and substantial controversy admitting of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.” Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 241, 57 S.Ct. 461, 464, 81 L.Ed. 617 (1936).

On the record as it now stands these issues do not present a substantial controversy between parties having adverse legal interests of sufficient immediacy and reality to warrant the issuance of a declaratory judgment. See Steffel v. Thompson, 415 U.S. 452, 460, 94 S.Ct. 1209, 1216, 39 L.Ed.2d 505 (1974). Furthermore, the issue regarding anonymous handbills was not specifically addressed as remaining in the case in the Standard Pre-trial Order No. 2 which was filed May 5, 1983, following a partial settlement of the issues originally in the case.

Accordingly, it is hereby ORDERED:

(1) That § 67 of the Charter of Kansas City, and § 30.88 of the Ordinances of Kansas City, insofar as they are applied to totally restrict the fundraising activities of political, religious, and other noncommercial activities or groups in the open areas of the public parks of the City of Kansas City, including Loose Park, are void as violative of the Fourteenth Amendment to the United States Constitution;
(2) That defendants shall refrain from enforcing § 67 of the Charter of Kansas City, and § 30.88 of the Ordinances of Kansas City as applied to political, religious and other non-commercial activities or groups in the open areas of the public parks of the City of Kansas City, including Loose Park;
(3) That the defendants shall refrain from prohibiting fundraising by political, religious, or other non-commercial groups, in the form of sales of items intimately related to a message expounded by such group, or in the form of solicitations of donations;
(4) That nothing in this order shall prevent the application of proper exercises of police power such as prohibitions on littering, disturbing the peace, affixing signs in such a way as to harm vegetation or park structures, or other regulations applicable to all users of the parks;
(5) Nothing in this order shall prevent the defendants from developing and putting into practice reasonable time, place, and manner restrictions which are narrowly tailored to further a substantial governmental interest;
(6) That the parties confer within 15 days of the date of this order and agree on a method of making public the change in policies outlined above; if no agreement is possible the Court is to be informed of the nature of the disagreement within 20 days of the date of this order;
(7) That training, including written instructions, be provided to all park rangers and supervisory personnel with responsibility for managing the parks of the City of Kansas City, which will outline and describe, in conformity with this order, the scope of political, religious and other non-commercial fundraising activities in the parks.


source: Caselaw Access Project

author: WINDER, District Judge.

license: Public Domain

text:
    In re WICAT SECURITIES LITIGATION.
    Civ. No. C-83-1117W.
    United States District Court, D. Utah, C.D.
    Dec. 20, 1984.

      Peter W. Billings, Jr., Rand M. Elison, Fabian & Clendenin, Salt Lake City, Utah, for plaintiffs Lee and Edith Woods, Bruce Youngman, Robert A. and Lou Ann Greco, William B. Weinberger.
    John E. Grasberger, Milberg, Weiss, Bershad, Specthrie & Lerach, San Diego, Cal., for plaintiff William B. Weinberger.
    Stanley M. Grossman, Pomerantz, Levy, Haudek, Block & Grossman, New York City, for plaintiff Guillermo Astudillo.
    Irving Malchman, Kaufman, Malchman & Kirby, New York City, for plaintiff Lawrence Epstein.
    Joseph Weiss, Robert S. Schachter, Goodking, Wechsler, Labaton & Rudoff, New York City, for plaintiff Nessim Husni.
    Arthur N. Abbey, Ralph L. Ellis, Abbey & Ellis, New York City, for plaintiffs Robert A. and Lou Ann Greco.
    Leonard Barrack, Gerald J. Rodos, Edward M. Gergosian, Barrack, Rodos & Bacine, Philadelphia, Pa., for plaintiffs Lee and Edith Woods.
    Harvey Greenfield, New York City, for plaintiff Guillermo Astudillo.
    I. Stephen Rabin, Wolf, Popper, Ross, Wolf & Jones, New York City, for plaintiff Bruce Youngman.
    David E. West, Armstrong, Rawlings, West & Brown, Salt Lake City, Utah, David B. Gold, Paul F. Bennett, Richard A. Rogoff, San Francisco, Cal., for plaintiff Thomas Quinn.
    Daniel L. Berman', Peggy A. Tomsic, Berman & Anderson, Salt Lake City, Utah, for defendants Dustin H. Heuston, Nancy Heuston, Robert Mendenhall, Frank M. Richardson, W. Paul Warnock, Wicat Systems, Inc. & Wicat Educ. Institute.
    Dale H. Kimball, Robert S. Clark, James D. Gordon, Rooker, Larsen, Kimball & Parr, Salt Lake City, Utah, Phillip K. Howard, Jack P. Levin, Howard, Darby & Levin, New York City, for defendants C. Victor Bunderson, W.H. Conroy, Seth H. Du-bin, Dr. Thomas Duerden, Simon M. Robertson, Arthur G. Altschul and The Independent Inv. Co.
    David B. Watkiss, Watkiss & Campbell, Salt Lake City, Utah, Gary L. Francione, Thomas D. Barr, Robert D. Joffe, Cravath, Swaine & Moore, New York City, for defendants Blyth Eastman Paine Webber, Inc., Hambrecht & Quist, Inc., Kleinwort Benson, Inc., and Kleinwort Benson, Ltd.
   MEMORANDUM DECISION AND ORDER

WINDER, District Judge.

Defendants Dustin H. Heuston, Nancy Heuston, Robert Mendenhall, Frank M. Richardson, W. Paul Warnock, WICAT Systems, Inc., and WICAT Education Institute (hereinafter referred to as the WICAT defendants) moved to dismiss count II of the plaintiffs’ consolidated complaint. The WICAT defendants contend that count' II does not state a claim as to them.

The motion was orally argued on November 29, 1984. Plaintiffs were represented by Rand M. Elison, Ralph Ellis, David West, and George Donaldson. Defendants were represented by David B. Watkiss, Robert Jaffey, Robert Clark, Phillip K. Howard, Daniel L. Berman, and Peggy A. Tomsic. The court took the matter under advisement. Since the hearing, the court has reviewed the memoranda submitted by the parties as well as the authorities cited. Being now fully advised, the court renders the following decision.

The Facts

WICAT Systems, Inc. (“WICAT”) made an initial public offering of its stock on June 30, 1983. The offering was made pursuant to a registration statement, dated May 3, 1983, and an amendment to the registration statement and a prospectus, both dated June 30, 1983. The offering was of 3,650,000 shares of WICAT common stock, which sold at $18.00 per share. At the same time, several shareholders of WI-CAT, who had purchased or obtained stock privately, offered to the public 350,000 additional shares, which also sold at $18.00 per share. This group of private shareholders included four of the WICAT defendants.

All shares in the offering were sold by the WICAT defendants to a group of underwriters, who then sold the shares to the public. The WICAT defendants claim that they sold the shares in the offering through a “firm commitment underwriting.” Although plaintiffs claim it is not proper to characterize the underwriting at this point, they did not allege that the underwriters acted as anything more than independent underwriters, and certainly did not allege that the underwriters were acting as the WICAT defendants’ agents. All agree that none of the plaintiffs purchased any shares directly from any of the WICAT defendants.

The WICAT stock which sold at $18.00 per share on June 30, 1983 was selling at less than $4.00 per share on March 12, 1984. Plaintiffs contend that the stock initially sold at an artificially high price because the prospectus contained misrepresentations and omissions. Count II of the consolidated complaint, which deals with these alleged misrepresentations and omissions, is based on §§ 12(2) and 15 of the Securities Act of 1933, 15 U.S.C. §§ 771 (2), llo.

The WICAT defendants claim that § 12(2) creates liability only for those sellers who are in “strict privity” with the plaintiffs. Plaintiffs, on the other hand, claim that § 12(2) has consistently been interpreted to create liability for those who participate in the sale of securities to the plaintiffs, thus arguing for a “loose privity” requirement. Although the positions of the two sides are polarized on opposite ends of the privity spectrum, the correct interpretation appears to be in the middle of the spectrum.

Section 12(2) of the 1933 Securities Act

The language of § 12(2) appears to support the WICAT defendants’ strict privity interpretation. In pertinent part, the statute provides that

Any person
.....
(2) offers or sells a security ..., by means of a prospectus or oral communication, which includes an untrue statement of a material fact or omits to state a material fact ..., and who shall not sustain the burden of proof that he did not know, and in the exercise of reasonable care could not have known, of such truth or omission,
shall be liable to the person purchasing such security from him____

15 U.S.C. § 111 (emphasis added). Under § 12, the plaintiff may recover the consideration paid for the security if he tenders it, or recover damages if he no longer owns the security. Id. The language of the statute seems to create liability only for the immediate seller from whom the plaintiff purchased the stock.

Although the language of the statute seems to support the WICAT defendants’ interpretation, the case law supports plaintiffs’ interpretation. Of the seven Circuits that have chosen an interpretation of the § 12(2) privity requirement, six have chosen the “loose privity” interpretation of the plaintiffs. Davis v. Avco Financial Services, 739 F.2d 1057, 1065-68 (6th Cir.1984); Admiralty Fund v. Jones, 677 F.2d 1289, 1294-95 (9th Cir.1982); Junker v. Crory, 650 F.2d 1349, 1360 (5th Cir.1981); Stokes v. Lokken, 644 F.2d 779, 784-85 (8th Cir. 1981); Lawler v. Gilliam, 569 F.2d 1283, 1287-88 (4th Cir.1978); Katz v. Amos Treat & Co., 411 F.2d 1046, 1052-53 (2d Cir.1969) (adopting similar interpretation for § 12(1) liability). See also Lennerth v. Mendenhall, 234 F.Supp. 59, 65 (N.D.Ohio 1964) (initially articulating the “participation” test for § 12(2) liability). Only the Third Circuit has adopted the “strict privity” interpretation favored by the WICAT defendants. Collins v. Signetics Corp., 605 F.2d 110, 113-14 (3d Cir.1979). See also Davis v. Avco Financial Services, 739 F.2d 1057, 1069-71 (6th Cir.1984) (Lively, J., concurring and dissenting).

Whether strict privity is required for § 12(2) liability is an open question in the Tenth Circuit. Even so, this court cannot ignore the heavy weight of authority supporting plaintiffs’ interpretation. Consequently, this court will not force plaintiffs to meet a “strict privity” requirement in their § 12(2) claim. However, plaintiffs have not alleged sufficient facts to meet even a “loose privity” standard. Therefore, count II of the consolidated complaint must be dismissed as to the WICAT defendants.

The “Substantial Factor” Standard

The privity standard adopted by most of the courts in § 12(2) cases was borrowed from torts. It originated in Lennerth v. Mendenhall, 234 F.Supp. 59 (N.D.Ohio 1964).

[Liability must lie somewhere between the narrow view, which holds only the parties to the sale, and the too-liberal view which would hold all who remotely participated in the events leading up to the transaction. We think that the line of demarcation must be drawn in terms of cause and effect: To borrow a phrase from the law of negligence, did the injury to the plaintiff flow directly and proximately from the actions of this particular defendant? If the answer is in the affirmative, we would hold him liable. But for the presence of the defendant ... in the negotiations preceding the sale, could the sale have been consummated? If the answer is in the negative, and we find that the transaction could never have materialized without the efforts of that defendant, we must find him guilty.

Id. at 65.

The Fifth Circuit recast the Lennerth “proximate cause” test, finding liability if the defendant’s actions were a “substantial factor” in bringing about the plaintiff’s purchases. Lewis v. Walston & Co., 487 F.2d 617, 622 (5th Cir.1973). The Fifth Circuit’s test focuses on the defendant’s participation in the sale to the plaintiff, not his involvement in the issuance or prior sales of the security. See Lewis, 487 F.2d at 622 (test is whether the defendant’s actions were “a ‘substantial factor’ in bringing about the plaintiffs’ purchases, and thus the ‘proximate cause’ of those purchases” (emphasis added)).

Other courts have also focused on the particular sale at issue when finding “participation” liability.

If- the defendant is not in literal privity with the plaintiff, his conduct must proximately cause the sale, or he must be a “motivating force” behind the sale; mere participation in the events leading up to the sale is not sufficient.

Hokama v. E.F. Hutton & Co., 566 F.Supp. 636, 641 (C.D.Cal.1983) (emphasis added); see also Pharo v. Smith, 621 F.2d 656, 667 (5th Cir.1980) (§ 12(2) liability arises only for those “whose participation in the buy-sell transaction is a substantial factor in causing the transaction to take place”). The Fourth Circuit appears to require that the defendant has acted as an agent “on behalf of the actual owner” of the security, stating that “any person who actively solicits an order, participates in the negotiations, or arranges the sale” is potentially liable. Lawler v. Gilliam, 569 F.2d 1283, 1287-88 (4th Cir.1978).

Although there are a plethora of cases where courts have set out the “substantial factor” standard, there are few cases where a court has ruled on the narrow question of whether an issuer of securities is a “substantial factor” in the sale of those securities by the underwriters of the issue. Most of the cases involve a factual situation where the defendant was not in the chain of distribution of the security. The defendant, although he never owned the security, was found to be a “seller” because he was behind the actual sale to the plaintiff. Because he was a motivating force behind the sale, it would be inequitable to allow him to escape liability.

The issuer-underwriter relationship is quite different from the relationship between the defendant and immediate seller in cases where the defendant actively participated in the sale to the plaintiff. In most underwriting arrangements, the issuer and underwriter are independent, each acting in its own interest. An issuer participates in the sale of its securities by an underwriter only if “some special relationship exists between the issuer and the actual seller of the securities.” Collins v. Signetics Corp., 605 F.2d 110, 112 (3d Cir. 1979). This relationship can be control, agency, or direct participation in the sale from the underwriter to the plaintiffs. Unless a special relationship of this kind is alleged, a § 12(2) claim has not been stated against an issuer if the securities were purchased from an underwriter.

Most modern underwriting of securities is done on an arm’s-length basis, with the issuer and underwriters each acting in their own interest rather than in concert.

An underwriter is not, as a matter of law, an agent of the corporation. While the facts may be such as to make an underwriter an agent of a corporation, this is not usually the case. And the fact that a corporation advertises a person as an underwriter of its stocks and bonds does not as a matter of law make such underwriter an agent of the corporation. On the contrary, he is an ultimate purchaser of so much of the stock which he agrees to take and which he does not sell. And in selling stocks or bonds the underwriter is obviously acting solely in his own interest, and to relieve himself of the necessity of taking such stock.

1A Fletcher Cyclopedia of the Law of Private Corporations § 230 (1983 rev. vol.) (footnotes omitted).

In this case, there are no allegations that the relationship between WICAT and the underwriters was anything more than a typical “firm commitment” underwriting where the underwriters purchase the shares from the issuer. There are no allegations that the underwriters were acting as agents of WICAT, which would be the case if the arrangement was a “best efforts” underwriting. There are no allegations that WICAT controlled any of the underwriters. There are no allegations, in fact, that WICAT and the other WICAT defendants did anything more than an issuer would normally do in a firm commitment underwriting.

The only allegations made by the plaintiffs against the WICAT defendants are general allegations that would apply to any issuer of securities.

71. Defendants other than the Lead Underwriters played an active and substantial role in promoting the sale of WICAT common stock issued on the Offering and the purchase of such stock by plaintiffs and other members of the class by (i) aiding and participating in the preparation of the Prospectus, (ii) negotiating or approving the underwriting agreement, (iii) signing the Registration Statement which incorporated the Prospectus and approving the Offering as members of WICAT’s Board of Directors; and (iv) failing to disclose that the Prospectus contained material omissions.
72. By virtud of the foregoing, the defendants other than the Lead Underwriters provided substantial assistance, and their actions were a substantial factor, in the sale of shares issued on the Offering to plaintiffs and other members of the Class.

Consolidated Complaint, ¶¶ 71-72. These allegations are not enough to state a § 12(2) claim against an issuer of securities who did not sell the securities directly to the plaintiffs.

The Third Circuit is the only Circuit that has addressed the question of § 12(2) liability of the issuer of securities where the plaintiffs purchased their securities from a “firm commitment” underwriter. Collins v. Signetics Corp., 605 F.2d 110 (3d Cir.1979). The Collins court held that the issuer was not liable under § 12(2) to the plaintiffs and affirmed the district court’s grant of summary judgment for the issuer. See id. at 114. In order to affirm the grant of summary judgment, the Collins court adopted a “strict privity” standard that this court declines to adopt. But adopting the Collins court holding does not contradict this court’s adoption of a “loose privity” standard. Indeed, even under the loosest privity standard there would not be adequate participation to hold an issuer liable under § 12(2) to a purchaser who purchased the security from an underwriter.

There are two main reasons why § 12(2) liability should not extend to issuers who were not in privity with the plaintiffs. First, it is unnecessary to trace § 12(2) liability back through the immediate seller to the issuer; the issuer already has primary liability under § 11 of the Securities Act of 1933, 15 U.S.C. § 77k. Therefore, an issuer does not escape liability by issuing stock through an underwriter, and there is no need for the courts to stretch § 12(2) liability to hold issuers liable for the sales of underwriters. By contrast, other “participants” in a sale would escape liability unless a “loose privity” standard is applied. A common theme in all the cases where a defendant not in privity with the plaintiff was held to be a “seller” is that the defendant would otherwise escape all liability. See, e.g., Davis v. Avco Financial Services, Inc., 739 F.2d 1057 (6th Cir.1984) (defendant who was held to be a § 12(2) “seller” provided financing to purchasers of securities).

Moreover, although the WICAT defendants are not directly liable to the plaintiffs under § 12(2), it may be the WICAT defendants who eventually bear the § 12(2) liability for the plaintiffs’ losses. If the defendant underwriters are found to be liable to the plaintiffs, the underwriters can attempt to recover from the WICAT defendants.

Subject to these exceptions involving controlling persons, agents and certain aiders and abettors — the last of which may sometimes permit Z to sue X as well as Y even though X sold to Y, who sold to Z, if Z can prove that X aided and abetted Y’s violation of § 5 or Y’s fraud — it seems quite clear that § 12 contemplates only an action by a buyer against his immediate seller. That is to say, in the case of the typical “firm-commitment underwriting,” the ultimate investor can recover only from the dealer who sold to him. But the dealer in turn can recover over against the underwriter, and the latter (with some caveat by reason of the “preliminary negotiations” clause of § 2(3)) against the issuer; and each defendant can bring in his predecessor in the chain of distribution as a third-party defendant under the Federal Rules of Civil Procedure.

3 L. Loss, Securities Regulation 1719-20 (2d ed. 1961) (as modified by 6 L. Loss, Securities Regulation 3840 (2d ed. Supp. 1969)) (footnotes omitted). In this case, the issuer and its controlling person defendants are co-defendants with the underwriters. Consequently, “upstream” liability could settle on the WICAT defendants without bringing in additional parties as third-party defendants.

In short, an issuer is not liable, as a matter of law, to a securities purchaser who purchased the securities from an underwriter where there is no relationship between the issuer and underwriter other than a firm commitment underwriting agreement. Some direct participation in the sale between underwriter and buyer must be alleged in order to state a § 12(2) claim. Other than this narrow holding, this court will not attempt to plumb the depths of the “substantial factor” standard of liability.

The plaintiffs may be able to allege some type of participation by the WICAT defendants in the sale of the securities by the underwriters to the plaintiffs. Consequently, leave will be given to amend the consolidated complaint to attempt to state a § 12(2) claim against the WICAT defendants. However, such a claim will have to be based on either specific allegations of some sort of agency or controlling relationship between WICAT and the underwriters, or allegations that the participation of the WICAT defendants was a substantial factor in the sale of the securities from the underwriters to the plaintiffs. From the facts in this case as they appear to this court, that will be a difficult task.

Accordingly,

IT IS HEREBY ORDERED that count II of the consolidated complaint is dismissed as to the WICAT defendants. Leave will be given for the plaintiffs to amend their complaint within thirty days to state a § 12(2) claim against the WICAT defendants.

      . The court also read and considered the letter submitted after oral argument by the WICAT defendants, as well as plaintiffs' responsive letter. Although such a letter is not provided for in Local Rule 5(e), it was considered because the WICAT defendants were not given adequate time to prepare the reply memorandum that is provided for in that rule. Plaintiffs’ opposing memorandum was filed only two days before oral argument, even though the WICAT defendants’ motion and supporting memorandum had been filed seven months previously.
      In the future, counsel for all parties should strictly follow Local Rule 5(e) unless the court grants leave to deviate from it. Page limitations should also be strictly observed.

      . The WICAT defendants argue that Congress intended the § 12(2) rescission remedy to be available only against a defendant in strict privity with the plaintiff. This argument is analytically sound, since it makes little sense to rescind a sale that never took place.
      However, Congress expressly made the § 12(2) rescission remedy available against controlling persons of the immediate seller. See § 15 of the Securities Act of 1933, 15 U.S.C. § 77 o. Under § 15, a controlling person might be forced to accept the tender of securities he never owned and to refund the purchase price he never received. While not analytically pleasing, it was clearly the intent of Congress that the rescission remedy be available against persons other than just the immediate seller.

      . If an issuer does try to escape liability by concocting a sham sale through a strawman underwriter, the issuer will be liable as a controlling person of the underwriter by virtue of § 15 of the Securities Act of 1933, 15 U.S.C. § 77o.


author: ANNA DIGGS TAYLOR, District Judge.

text:
    UNITED FEATURES SYNDICATE, INC., Plaintiff, v. SPREE, INC., Super Shirts, Inc., Top Tease, Inc., Lawrence Kleiman, and Neil Kleiman, Defendants.
    Civ. A. No. 83-4150.
    United States District Court, E.D. Michigan, S.D.
    Dec. 21, 1984.

      Karen B. Newborn, Cleveland, Ohio, for plaintiff.
    Abel J. Selburn, Southfield, Mich., for defendants.
   MEMORANDUM OPINION AND ORDER

ANNA DIGGS TAYLOR, District Judge.

FINDINGS OF FACTS

The cat with the bulging eyes, orange-colored fur and anthropomorphic characteristics — he loves to eat, cannot diet, and hates Mondays — is the cartoon character named “Garfield.” His floppy-eared, long-tongued and long-necked sidekick, who also has bulging eyes, is the dog named “Odie.” They are characters of the “GARFIELD” comic strip. Since the introduction of the “GARFIELD” strip in the mid-1970’s, the comic strip and its characters have gained world-wide popularity.

Plaintiff United Features Syndicate, Inc. has been commissioned by Jim Davis, the characters’ creator, as the sole proprietor of all right, title and interest in and to registered copyrights which cover the “GARFIELD” comic strip and the “Garfield” and “Odie” characters. The Register of Copyrights has duly issued certificates of registration to plaintiff and plaintiff has published notice of its copyright ownership. Plaintiff alleges here, inter alia, that defendants Neil Kleiman, Lawrence Kleiman, Super Shirts, Inc., Spree, Inc., and Top Tease, Inc. have violated the Federal Copyright Act' of 1976, 17 U.S.C. § 101 et seq. (1982) (the Act).

Defendant Neil Kleiman is a Michigan resident who is the sole stockholder of Top Tease, Inc., a corporation organized and existing under the laws of the state of Michigan. Top Tease, Inc., also a defendant, is engaged in the business of selling novelties, heat transfers, silk screen shirts and other items. Neil Kleiman is solely responsible for purchasing and controlling Top Tease, Inc.’s inventory. Defendant Lawrence Kleiman, Neil Kleiman’s brother, is also a Michigan resident. He is the majority stockholder and officer of Spree, Inc. and an employee of Top Tease, Inc. Two other defendants, Spree, Inc., and Super Shirts, Inc., are corporations organized and existing under the laws of the state of Michigan. They are presently subjects of bankruptcy proceedings pursuant to Chapters 11 and 7 respectively, of the Bankruptcy Act, 11 U.S.C. § 101 et seq. (1982). Super Shirts, Inc., was a business engaged in retailing T-shirts, transfers and other merchandise. Before it was declared bankrupt between 1982 and 1983, Neil Kleiman was solely responsible for purchasing and controlling its inventory. Spree, Inc. was in the business of retailing various kinds of merchandise. Before bankruptcy proceedings were begun in reference to it, Lawrence Kleiman had sole managerial responsibility for purchasing and controlling its stock.

The defendants have been accused of knowingly and willfully purchasing and selling T-shirts and heat transfers with the likenesses of “Garfield” and “Odie” imprinted on them: some of which transfers included the name “Garfield.” Plaintiff alleges that, contrary to the Act, defendants have been purchasing and selling such merchandise without plaintiff’s authorization and without the appropriate copyright line which plaintiff requires its distributors, manufacturers and licensees to use. Plaintiff alleged further that defendants’ conduct is likely to deceive plaintiffs customers and members of the general public, and to cause irreparable harm to plaintiffs business, reputation and good will.

In response to these allegations, defendants contend that they admit liability to the plaintiff for a “technical” violation of the law. Defendants say they sold heat transfers and T-shirts which they purchased from the manufacturer All Horizons. They deny that they were aware of any copyright infringement prior to the filing of the instant lawsuit and that their purchases and sales were willful violations of plaintiffs copyright ownership.

It is undisputed that defendants had at least constructive knowledge, if not actual knowledge, that the cartoon characters which are the subject of this suit were copyrighted and that despite that knowledge, the defendants and/or their agents purchased and sold merchandise in a manner violative of the Act. In a joint pre-trial order filed September 20, 1984, defendants stipulated that they are liable to plaintiff for violating plaintiffs copyrights in the “GARFIELD” characters; that they were aware that federal copyright laws existed to permit the creators of original works to have exclusive authority to reproduce those works; and that even though they knew the “GARFIELD” characters were copyrighted, they sold T-shirts and heat transfers which were not licensed by plaintiff. On this basis, on December 11, 1984, this court commenced and completed a bench trial on the only remaining issue: the amount of damages to which plaintiff was entitled.

INJUNCTION

As compensation for defendants’ unlawful acts, plaintiff has requested that this court order a permanent injunction against the defendants’ direct or indirect infringement of plaintiff’s copyrights to the “GARFIELD” comic strip and the “Garfield” and “Odie” characters; that defendants be ordered to pay maximum statutory damages as a consequence of defendants’ willful infringement of the copyrights; and, that defendants be ordered to pay plaintiff’s costs and reasonable attorneys’ fees incurred from this lawsuit.

First, plaintiff demands a permanent injunction against defendants’ further infringement of plaintiff’s copyrights in any manner. Section 502 of title 17 of the United States Code provides that this court may grant temporary and final injunctions on terms that it deems reasonable. Injunctions have been granted in cases where there has been a finding that defendants have infringed a copyright. See, e.g., United Feature Syndicate v. Sunrise Mold Co., 569 F.Supp. 1475, 1482 (S.D.Fla.1983); Monogram Models, Inc. v. Industro Motive Corp., 492 F.2d 1281, 1286 (6th Cir.1974), cert. denied, 419 U.S. 843, 95 S.Ct. 76, 42 L.Ed.2d 71 (1974). Injunctions have also been granted in situations where defendants are likely to cause or perpetuate additional infringements and where money damages will not suffice. Lauratex Textile Corp. v. Allton Knitting Mills, 519 F.Supp. 730, 732 (S.D.N.Y.1981).

The defendants in this case are not first time offenders. Neil and Lawrence Kleiman did know that copyrights of some cartoon characters exist because they have been sued by plaintiff on two previous occasions for infringement of plaintiff's copyrights in the “PEANUTS” characters. United Features Syndicate, Inc. v. Ego, Inc. and Lawrence Kleiman, Civil Action No. 970689 (1979); United Features Syndicate, Inc. v. Neil’s Fads, Inc. and Neil Kleiman, Civil Action No. 871045 (1979). Defendants Neil and Lawrence Kleiman have also been sued by Walt Disney for infringement of its copyrights in the Disney characters and by Aucoin Management, Inc., owners of copyrights in the KISS musical group’s characters and facial characterizations. The present case represents the fifth copyright infringement action that has been filed against Neil and/or Lawrence Kleiman. These lawsuits have not deterred defendants from further infringing activity.

As there is a history and therefore a threat of continuing violations by defendants, they are hereby enjoined, for the life of plaintiffs copyright, and any renewal thereof, from committing any further infringement of plaintiffs copyright by selling, purchasing or causing to be purchased or sold, articles with the “GARFIELD” characters, or any substantial likenesses thereof, depicted on them. Universal City Studios, Inc. v. Sony Corp. of America, 659 F.2d 963, 976 (9th Cir.1981); Gordon v. Weir, 111 F.Supp. 117 (E.D.Mich.1953), aff'd, 216 F.2d 508 (1954).

DAMAGES

Section 504(a) of the Act states that a copyright infringer is liable for either “(1) the copyright owner’s actual damages and any additional profits of the infringer ... or (2) statutory damages ....” Section 504(b) and (c) delineate the damages this court may grant and plaintiff may elect to receive for copyright infringements. Section 504(c)(1) of the Act further provides that the copyright owner may elect to receive statutory damages instead of an award of actual damages, in the sum of not less than $250.00 but not more than $10,-000.00. In cases where the court finds that the defendants have committed a willful infringement of a copyright, the court may increase the award of damages to an amount which does not exceed $50,000.00 per infringement. 17 U.S.C. § 504(c)(2) (1982); Kamakazi Music Corp. v. Robbins Music Corp., 534 F.Supp. 69, 74 (S.D.N.Y. 1982). The maximum and minimum restrictions of the statute are mandatory. Douglas v. Cunningham, 294 U.S. 207, 210, 55 S.Ct. 365, 366, 79 L.Ed. 862 (1935); Milene Music, Inc. v. Gotauco, 551 F.Supp. 1288 (D.C.R.I.1982).

Here, plaintiff has exercised its option to request statutory damages. ' Several courts, including a Michigan court, have recognized a copyright owner’s option to ask for statutory damages when neither the owner’s actual damages nor the infringer’s profits are ascertainable or are difficult to calculate, as is the case here. See Morley Music Co. v. Dick Stacey’s Plaza Motel, Inc., 725 F.2d 1, 2-3 (1st Cir.1983); Russell v. Price, 612 F.2d 1123, 1129 (9th Cir.1979); Robert Stigwood Group Ltd. v. O’Reilly, 530 F.2d 1096, 1101 (2d Cir.1976); Monogram Models, Inc., 492 F.2d at 1288; Boz Scaggs Music v. KND Corp., 491 F.Supp. 908, 914-15 (D.Conn.1980). See generally Rodgers v. Breckenridge Hotels Corp., 512 F.Supp. 1326 (E.D.Mo.1981).

These statutory damages, often referred to as in lieu damages, are also mandated in cases where there is not a showing of the copyright proprietor’s actual loss. Jewell-LaSalle Realty Co. v. Buck, 283 U.S. 202, 206-09, 51 S.Ct. 407, 408-09, 75 L.Ed. 978 (1931); R. Dakin & Co. v. A & L Novelty Co., Inc., 444 F.Supp. 1080, 1085 (E.D.N.Y.1978). When either profits or damages are difficult to prove, courts have also resorted to in lieu damages. In Douglas v. Cunningham, 294 U.S. 207, 55 S.Ct. 365, 79 L.Ed. 862 (1935), the Supreme Court explains the Congressional intent upon adopting the statute;

The phraseology of the section was adopted to avoid the strictness of construction incident to a law inquiry imposing penalties, and to give the owner of a copyright some recompense for injury done him, in a case where the evils of law render difficult or impossible proof of damages or discovery of profits.

Id. at 209, 55 S.Ct. at 366. See also Hiawatha Card Co. v. Colourpicture Publishers, Inc., 255 F.Supp. 1015, 1019 (E.D.Mich.1966). One court has held that a wronged copyright proprietor may elect to receive statutory damages whether or not its actual damages or the infringer’s profits are ascertainable. Harris v. Emus Records Corp., 734 F.2d 1329 (9th Cir.1984). In this case, the failure of defendants to keep records had made their profits unascertainable.

In FW. Woolworth Co. v. Contemporary Arts, 344 U.S. 228, 73 S.Ct. 222, 97 L.Ed. 276 (1952), the United States Supreme Court limited its decision to the amount of damages plaintiff should receive for defendant’s infringement of a work of art. Although it was established that the defendant had made a profit, the Court was unable to determine the actual sustained amount of plaintiff’s damages. But the Court still concluded that plaintiff had incurred real and substantial injury. There was evidence that the infringing art was inferior in quality, as in this case. Id. at 230, 73 S.Ct. at 224. The Court held that the statute gives the trial court broad discretion to determine whether justice would be served by allowing recovery based upon proven actual damages and profits or an arbitrary estimate within the range prescribed by the Act. The Court decided that inadequate proof of the amount of damages would warrant use of the statutory damages. Id. at 231-33, 73 S.Ct. at 224-25.

Although the court cannot state the value of plaintiff’s copyright in the “GARFIELD” characters, we do know that the copyright is of great value to plaintiff. Because the copyright to the “GARFIELD” comic strip and its characters is of such great value to plaintiff, plaintiff’s licensing program for use of the copyright is carefully cultivated and protected. Michael Goergopolis is plaintiff’s Senior Vice-President in charge of licensing. He is responsible for seeing that the subjects of the copyrights are extended into worldwide marketing, and maintains stringent quality control of manufactured products and licensing. He testified most credibly on plaintiff’s behalf.

Among other things, Georgopolis described plaintiff’s licensing procedure for authorized use of the “GARFIELD” characters. In 1978, plaintiff and Jim Davis, the cartoon’s creator, reached an agreement that plaintiff would have exclusive rights to handle copyright material for the “GARFIELD” characters. Two years later, Georgopolis had formulated the original marketing and licensing program which governs marketing, planning and developing licensees. A complex approval system is used for licensing. The first stage is concept submission — the proposed licensee submits an idea for category screening and plaintiff’s officers determine copyright application effectiveness based on the idea presented. Then a prototype is prepared and examined. Next, the idea goes through pre-production and post-production stages, always under strict quality control.

After the product is approved, there is an ongoing quality control program. Plaintiff's representatives actually visit stores to insure that licensees adhere to plaintiff’s standards. Presently, there are two hundred fifteen licensees who are licensed to sell, distribute and otherwise manage plush toys, T-shirts, and promotional activities. In addition to that, plaintiff has issued licenses for three television programs and several magazine articles. Plaintiff’s retail sales which relate to the “GARFIELD” characters are in very large figures. “Garfield” books have occupied the New York Times best seller list for substantial periods and set a record by holding two places on the list simultaneously.

All licensed products carry the copyright line as required by law and licensees are required to designate the copyright on the product. Gerald McVittie, an investigator, testified that in each of defendants’ stores, he had seen displayed and bought T-shirts and/or heat transfers with the likenesses of “GARFIELD” characters, all of poor quality. McVittie said he observed four “Garfield” transfers on display in a Spree store. Those shirts did not bear the copyright line which plaintiff and its licensees use on all licensed products. The court had the opportunity during the trial to examine the T-shirts and heat transfers McVittie had purchased and it had the opportunity to view items which had been properly licensed and copyrighted to be sold. It is clear that the unlicensed products were of substantial likeness, although of lesser quality, and would tend to confuse and mislead the public that defendants were licensed to sell products by the plaintiff, and that defendants’ goods were not of good quality.

Georgopolis also testified that they have never licensed heat transfers because plaintiff’s quality standards cannot be upheld in transfers. The copyright is of great significance to plaintiff because it values its own reputation as an asset, and it must also act as caretaker of the reputations of the talented clients it represents. Georgopolis opined that infringers place licensees in a bad position because for every infringing article that is sold, the licensees lose a good sale. In Burndy Engineering Co. v. Sheldon Service Corp., 127 F.2d 661 (2d Cir.1942), the Court of Appeals for the Second Circuit held that notwithstanding proof of the infringer’s profit; if the evidence shows that the infringer’s good will was promoted by his use of the infringing items and the copyright owner’s good will was impaired in a manner that is not shown in the proof of profits, statutory damages should be awarded.

Maximum statutory damages are appropriate in this case because defendants’ conduct was willful: having been carried forward despite four previous unsuccessful lawsuits for copyright infringements. Both Neil and Lawrence Kleiman have testified that they did not pay much attention to copyrights, and felt no duty to examine or inquire concerning them. This testimony is incredible in light of the fact that these defendants have been sued four times and never prevailed. Two of those suits resulted in consent judgments which each defendant admitted he had signed. One paragraph of each judgment includes a statement that Neil and Lawrence would refrain from further infringement of United Features Syndicate’s rights under the copyright laws.

Neil Kleiman testified that he relied upon sales representatives’ statements that the T-shirts he bought were not infringements. He testified that he had purchased licensed T-shirts from the Brandywine Company. Georgopolis had testified that Brandywine is the only corporation licensed to sell T-shirts for plaintiff.

Lawrence Kleiman testified that he did not realize that checking for copyrights was something he was supposed to do. Certainly, he may have presented that argument in response to his first lawsuit, and we do not address its likelihood of success, but this lawsuit represents the fifth time he or his brother has been accused of copyright infringement. Later, defendant Lawrence Kleiman admitted that he is now aware of copyright requirements but he does not know how to go about ascertaining whether an article is copyrighted. Their testimony was disingenious, at the least.

The defense that the sale of T-shirts as compared to the volume of other goods sold by defendants is minimal is not persuasive under the circumstances. Defendant Neil Kleiman testified that the sale of T-shirts was insignificant to his business. He testified that three dozen of the infringing T-shirts were ordered and that all except seven or nine were accounted for and returned to the seller upon his receipt of plaintiff’s notice of infringement. Neil Kleiman testified that he might have sold twenty shirts because the demand for “Garfield” T-shirts has subsided. The damage plaintiff had suffered cannot be minimized by defendants’ small number of sales. Defendants were displaying poor quality, damaging knockoffs in several shopping malls throughout southeastern Michigan. The F. W. Woolworth Co. Court noted that the purpose of statutory damages was to “compel restitution of profit and reparation for injury” as well as to discourage future infringements. The court even concluded that statutory damages could be awarded when the infringements have not yielded a profit. 344 U.S. at 233, 73 S.Ct. at 225. Another court had ruled that in lieu damage may be awarded even if the infringer only made one dollar. Blumcraft of Pittsburgh v. Newman Bros., Inc., 337 F.Supp. 859, 863 (S.D.Ohio 1971).

Defendants’ selective prosecution defense is without merit. Upon cross-examination of Georgopolis, defendants raised the fact that J.C. Penney is and has been selling license plates with caricatures of “Garfield” and the “PEANUTS” characters which Georgopolis admitted were being sold without plaintiff's permission.

Defendants contend that plaintiff has singled them, small merchants, out for suit while proceeding more slowly against a corporation as large as J.C. Penney. On the contrary, Georgopolis testified that upon defendants’ information of infringements in September of this year, an investigator was sent to J.C. Penney. This investigator has discovered that the infringing plates were being sold by a concessionaire of J.C. Penney and plaintiff has proceeded to launch its standard attack. There is no evidence that plaintiff is not pursuing all known infringers with equal vigor. In fact, the evidence is unrefuted that it is doing just that.

The court finds on the basis of the foregoing facts and law that plaintiff is entitled to receive statutory damages in the amount of $50,000.00 for each of the copyright infringements, “Garfield” and “Odie”, for a total of $100,000.00, from the defendants, jointly and severally. Such an award is necessary to deter continued flagrant infringement of plaintiff’s copyrights.

ATTORNEYS’ FEES AND COSTS

Plaintiff has requested attorneys’ fees in the amount of $19,000.00 as remuneration for defendants’ violation of plaintiff’s copyright. Section 505 of the Act permits this court in its discretion to award reasonable attorneys’ fees. Monogram Models, Inc., 492 F.2d at 1288. Plaintiff’s exhibits demonstrate that plaintiff’s Ohio counsel and its local Michigan counsel have expended numerous hours in pretrial preparation before and after the filing of this lawsuit. The Russell court stated that “the amount of work necessitated and performed and the skill employed” are to be considered in order to grant attorney fees. 612 F.2d at 1132. The skill of counsel merits the fee requested, in this community. Plaintiff’s request for attorneys’ fees is deemed reasonable under the circumstances and is granted.

Plaintiff’s prayer for relief also includes costs representing payments for services rendered by George McVittie, an investigator. Section 505 of the Act allows this court in its discretion to award full costs. Plaintiff’s request for $350.00 for the investigator, however, is denied. That was not a cost of litigation.

IT IS HEREBY ORDERED that plaintiff’s request for statutory damages in the amount of $100,000.00 and for attorneys’ fees in the amount of $19,000.00 is granted and plaintiffs request for the costs of investigation is denied.

IT IS FURTHER ORDERED that defendants are hereby enjoined from committing any further infringement of plaintiff’s copyrights.

IT IS SO ORDERED.


author: STAPLETON, Chief Judge:

text:
    Jimmie NANNEY, Plaintiff, v. CHRYSLER CORPORATION and Local 1183 of the United Automobile, Aerospace and Agricultural Implement Workers of America (UAW), Defendants.
    Civ. A. No. 83-725-WKS.
    United States District Court, D. Delaware.
    Dec. 26, 1984.

      Michael C. Heyden, Wilmington, Del., for plaintiff.
    W. Laird Stabler, III, Potter, Anderson & Corroon, Wilmington, Del., William T. McLellan, Chrysler Corp., Detroit, Mich., for defendant Chrysler.
    John Biggs, III, Biggs & Battaglia, Wilmington, Del.; Richard H. Markowitz, Andrew L. Markowitz, Markowitz & Richman, Philadelphia, Pa.; Jordan Rossen, General Counsel, Leonard R. Page, Associate General Counsel, International Union, United Automobile, Aerospace & Agricultural Implement Workers of America-UAW, Detroit, Mich., for defendant Local 1183.
   MEMORANDUM OPINION

STAPLETON, Chief Judge:

This is a duty of fair representation and • breach of contract action brought by plaintiff Jimmy Nanney against his union, Local 1183 of the United Automobile, Aerospace and Agricultural Implement Workers of America (the “Union”), and his employer, Chrysler Corporation. At issue is the settlement by the Union and Chrysler of a grievance against Chrysler filed by the Union on plaintiff’s behalf. Plaintiff claims that his Union breached its duty of fair representation by improperly settling the grievance, and that Chrysler violated its collective bargaining agreement with the Union by failing to provide plaintiff with certain vacation and holiday pay and other benefits pursuant to the settlement agreement. Plaintiff brought this action under the Labor Relations Management Act of 1947, 29 U.S.C. § 185.

Both the Union and Chrysler now move for summary judgment on the ground that plaintiff Nanney failed to exhaust the internal union remedies set forth in the union constitution. In addition, Chrysler brings this motion alleging that Nanney’s claim is precluded by the applicable statute of limitations. The Union also argues that it did not, as a matter of law, breach its duty of fair representation by settling the plaintiff’s grievance.

I will grant the motion of both defendants on the ground that plaintiff failed to exhaust his internal union remedies.

I

Plaintiff was first employed by Chrysler in March, 1969, and became a member of the Union shortly thereafter. Nanney worked for Chrysler as a tool-maker in its Newark, Delaware assembly plant.

On September 24, 1981, the plaintiff was indefinitely suspended by Chrysler for his alleged violation of Shop Rule I which prohibits “falsification of employment application or other corporation records or the use of falsified documents.”

On October 5,1981, plaintiff’s suspension was changed by Chrysler into a discharge and his employment was terminated. On the same day, the Union filed a grievance on Nanney’s behalf, protesting his discharge.

Thereafter, the Union pursued the plaintiffs grievance through step four of the grievance procedure as set forth in the Collective Bargaining Agreement (the “Agreement”) between the Union and Chrysler. See Agreement § 27. At the Appeal Board stage of step four of the grievance procedure, a settlement was reached providing for plaintiffs reinstatement with full seniority and with back pay in the amount of $18,000.00 less normal deductions. In its written disposition of the plaintiffs grievance dated January 14, 1983, the Appeal Board stated:

In full settlement of this case J. Nanney will be offered reinstatement in accordance with his seniority provided he can meet normal requirements. Upon reinstatement, J. Nanney shall be paid eighteen-thousand ($18,000.00), less his normal deductions.

Accordingly, plaintiff returned to work in late January, 1983. Several weeks later, Nanney received a check from Chrysler in the amount of $12,004.00, representing $18,000.00 of backpay less payroll deductions. Thereafter, in May 1983, plaintiff received a check from Chrysler for the holiday and vacation pay that he had earned since returning to work in late January, 1983.

Nanney’s holiday and vacation pay was calculated on the basis of the thirteen weeks he actually worked from his reinstatement in late January to May, 1983 in accordance with the graduated schedule outlined in section 106(b) of the Agreement. Nanney contends, however, that his holiday and vacation pay should have been calculated on the basis of the entire year he would have worked had he not been wrongfully discharged by Chrysler.

After receipt in May 1983 of his vacation and holiday paycheck, Nanney complained to his shop steward that he was entitled to the full amount of vacation and holiday pay as if he had been working during the 1982 period preceding his January 1983 reinstatement. The shop steward raised Nanney’s complaint with a Chrysler labor relations representative, who informed the shop steward that Nanney received everything he was entitled to under the settlement of his grievance. The steward communicated Chrysler’s position to Nanney. Plaintiff did not thereafter file an appeal with either the Local or International Union complaining of the disposition of his grievance with respect to the amount of vacation and holiday pay and other benefits he received.

In his statement of the facts, plaintiff particularly complains of the handling of his grievance during step three of the grievance procedure. See Agreement § 26. In accordance with step three, Nanney’s grievance was transmitted to the President of the Local, who is obligated to take up the matter with the Plant Manager or his' designated representative at an arranged meeting. The President herein at issue informed Nanney that if there was no settlement after the third step of the grievance procedure, the Union would proceed to what the President called “Instant Arbitration.”

Between his termination on October 5, 1981, and February 8, 1982, Nanney frequently contacted the President inquiring about the status of his grievance. The President assured plaintiff that his grievance was being properly processed. During the last week in January, 1982, in response to his inquiry, plaintiff was informed by the President that the meeting required by step three of the grievance process had taken place. Plaintiff requested a copy of the minutes of that meeting, but the President responded that he was too busy to provide them.

On February 8, 1982, plaintiff again inquired of the President about the status of his grievance. The President informed Nanney that the grievance had been transmitted to the Regional Representative of the Union, Mr. Ferrara. Mr. Ferrara told Nanney, however, that he had never received the grievance even though he had pressed the President for it on three previous occasions. When confronted with this, the President admitted to Nanney that he had never sent it to Ferrara. When Nanney reminded the President that he had promised “instant arbitration” in the event that the grievance was not resolved after step three, the President presented Nanney with a form to sign authorizing arbitration.

Plaintiff was subsequently advised by Mr. Ferrara in the summer of 1982 that his grievance would go to arbitration on August 15, 1982. That date was rescheduled on three different occasions. Finally in December 1982, Nanney was informed by Joan Patterson, a representative of the International Union, that the grievance had been settled. In early January, 1983, Nanney again spoke with Patterson and raised the issue of his vacation pay and other benefits arising during the period prior to his reinstatement. Patterson informed him that the settlement providing him with $18,000 backpay and seniority was final and urged him to accept it. She informed him that she would not take his request with respect to vacation pay back to Chrysler for further negotiations.

Notwithstanding this conversation, Nanney contends that Patterson led him to believe that the time he had been deprived of work would be counted as “time worked” for the purposes of the Union benefit package which included vacation, holiday and retirement benefits. Plaintiff further claims that he was led to believe that all references to his suspension and discharge would be expunged from his record.

Since I find that plaintiff failed to utilize his Union’s internal appeals procedure without adequate explanation, and that summary judgment is therefore warranted, I need not decide whether there are genuine issues of material fact with respect to the additional grounds for summary judgment raised by defendants.

II

“Whenever a union member has been mistreated by his bargaining representative, he must ... avail himself of his intra-union remedies before turning to the courts for relief.” Pawlak v. Int’l Bhd. of Teamsters, 444 F.Supp. 807, 810 (M.D.Pa.1977), aff'd without opinion, 571 F.2d 572 (3d Cir.1978) (citations omitted). Moreover, if a union member fails to exhaust his intra-union remedies, he carries the burden of explaining his failure. See Brady v. Trans World Airlines, Inc., 401 F.2d 87, 104 (3d Cir.1968), cert. denied, 393 U.S. 1048, 89 S.Ct. 684, 21 L.Ed.2d 691 (1969) (“The member must first exhaust the available internal union remedies, or show an adequate reason for failing to do so.”)

Recently, the Supreme Court of the United States reaffirmed the policy underlying the exhaustion of internal remedies requirement, but only where the internal union appeals procedure can either grant the aggrieved employee full relief or reactivate his grievance. Clayton v. U.A.W., 451 U.S. 679, 696, 101 S.Ct. 2088, 2099, 68 L.Ed.2d 538 (1981). Clayton indicated that the exhaustion of internal union remedies is not an absolute requirement, and listed “at least three factors”, the existence of which would allow a court to excuse an employee’s failure to exhaust:

[FJirst, whether union officials are so hostile to the employee that he could not hope to obtain a fair hearing on his claim; second, whether the internal union appeals procedures would be inadequate either to reactivate the employee’s grievance or to award him the full relief he seeks under § 301; and third, whether exhaustion of internal procedures would unreasonably delay the employee’s opportunity to obtain a judicial hearing on the merits of his claim.

Id. at 689, 101 S.Ct. at 2095.

Nanney defends his failure to exhaust the Union’s internal appeals procedure on two grounds. First, he asserts that resort to the Union’s internal appeal procedure would have been futile since the appeal procedure could not have provided the relief he seeks in this action; and, second, that resort to the internal appeal procedure would unreasonably delay disposition of his claim. These grounds must be examined to determine whether plaintiff falls within any of the exceptions listed in Clayton or otherwise recognized by the Third Circuit.

Articles 32 and 33 of the UAW Constitution set forth the Union’s internal appeals procedure. Article 33 provides members the right to challenge the actions of the Local and International Union, or their officials, in a wide range of areas, including grievance handling. If a member feels aggrieved by an action of the Local or one of its officials, he or she may appeal that action to the membership of the Local. If the membership fails to act or rejects the challenge, the member has the right to appeal to the International Executive Board (the “IEB”). Or, if the action challenged is that of an agent of the International Union, rather than the Local, the member may file the challenge directly with the IEB. Article 33 § 2(a). If the member is dissatisfied with the decision of the IEB, he or she may appeal the decision to the Convention Appeals Committee, or to the Public Review Board (“PRB”). Id.

Finally, Section 5 of Article 33, entitled “Obligation to Exhaust Internal Union Remedies”, provides:

It shall be the duty of any individual or body, if aggrieved by any action, decision or penalty imposed, to exhaust fully the individual or body’s remedy and all appeals under this Constitution and the rules of this Union before going to a civil court or governmental agency for redress.

As a member of the Union, Nanney was contractually bound to follow this procedure. Kobielnik v. Teamsters, 470 F.Supp. 125, 127 (E.D.Pa.1979) (citing Aldridge v. Ludwig-Honold Mnfg. Co., 385 F.Supp. 695 (E.D.Pa.), aff'd, 517 F.2d 1397 (3d Cir.), cert. denied, 423 U.S. 937, 96 S.Ct. 298, 46 L.Ed.2d 270 (1975).

Plaintiff’s first assertion — that the Union was powerless in this case to provide him relief, and that resort to the internal appeal procedure would therefore have been futile — is without merit, since it overlooks the existence of a “reactivation-of-grievance” agreement between Chrysler and the Union.

By way of letter agreement dated November 5, 1976, entitled “Reinstated Grievances” (the “Letter Agreement”), the UAW and Chrysler agreed to allow the reinstatement of settled grievances under certain conditions. This reactivation-of-grievance agreement provides in pertinent part:

However, in those instances where the International Union, UAW, by either its (i) Executive Board, (ii) Public Review Board, or (iii) Constitutional Convention Appeals Committee has reviewed the disposition of a grievance and found that such disposition was improperly effected by the Union or a Union representative involved, the UAW Chrysler Department may inform the Corporate Labor Relations Staff in writing that such grievance is reinstated in the grievance procedure at the step at which the original disposition of the grievance occurred.

In light of the Letter Agreement, Nanney’s assertion that the Union was powerless to pursue his grievance beyond its settlement would appear to be in error. Nanney’s complaint relates to the terms of the settlement of his grievance as effected by the Union, and would therefore appear to be precisely the type of issue the Letter Agreement is intended to address. Having offered no evidence whatsoever that the Letter Agreement is not applicable to the present case, Nanney’s first argument must fail.

Plaintiff’s second argument, that resort to the Union’s internal appeals procedure would have been unduly time-consuming, is similarly without merit. Plaintiff appears to argue that since the Union's efforts to resolve his grievance during the grievance procedure were characterized by allegedly unreasonable delays, he should not be obligated to subject himself to the possibility of again encountering such delays by utilizing the Union’s internal appeal process. Nanney points out that approximately sixteen months transpired between his discharge in October 1981 and his reinstatement in late January 1983. In addition, Nanney contends, and it is not disputed on the present record, that the Local Union President acted irresponsibly in processing his grievance and thereby causing unnecessary delay.

The problem with Nanney’s second argument is that he again offers no evidence whatever in support of his contention that resort to the internal appeals process would have been unduly time-consuming. See Dezura v. Firestone Tire & Rubber Co., 470 F.Supp. 121, 124 (E.D.Pa.), aff'd without opinion, 612 F.2d 571 (3d Cir.1979) (“Unsupported by evidence, the bare allegation that resort to appeal procedures could possibly entail years of further delay cannot justify plaintiff’s failure to act.”).

Furthermore, Article 33 of the UAW Constitution appears to set forth a reasonably expeditious procedure for the adjudication of internal union appeals. A member must appeal any decision of a Local to the Local membership within sixty (60) days of learning of the alleged action or decision appealed. When no regularly scheduled meeting of the membership body is held within forty-five (45) days of receipt of the appeal, the Local Union Executive Board may consider and rule on the appeal. Article 33, §§ 3(a), 4(c). A decision of the Local must be appealed within thirty (30) days to the IEB. Art. 33 § 4(c). Once the Nine Member Committee of the IEB decides the appeal, that decision becomes the final decision of the full International Executive Board unless a member of the Board raises an objection. If an objection is raised, the appeal shall be referred for decision to the full IEB at its next regular meeting. Art. 33 § 3(d). The IEB “shall use its best efforts to render its decision within sixty (60) days of receipt of the appeal ...” Id. The decision of the IEB may be appealed within thirty (30) days either to the Convention Appeals Committee or the Public Review Board. Art. 33 § 4(c). The Convention Appeals Committee must meet at least semi-annually to act on all appeals that have been submitted to it at least thirty (30) days prior to the date established for the meetings. Aft. 33 § 3(e).

Nanney’s unsupported contention that resort to the internal union appeal process would unreasonably delay disposition of his complaint is further undercut by the recognition among courts that the UAW internal appeal procedures are fair and reasonable. E.g., Winter v. Local Union No. 639, 569 F.2d 146, 151 n. 26 (D.C.Cir.1976). Indeed, in reference to the expeditiousness of the UAW internal appeal process, one court has stated:

While no empirical or comparative data is in the record before this Court, these procedures have been haled by other Courts, and commentators, as being virtually unique in the American labor movement, in providing fair and rapid disposition of internal union appeals.

Monroe v. International Union, UAW, 540 F.Supp. 249, 258 (S.D.Ohio 1982), aff'd, 723 F.2d 22 (6th Cir.1983).

While plaintiff' does not expressly so state, one of his concerns may be that the Local Union President, whom Nanney holds especially responsible for both delaying and improperly disposing of his grievance, may participate in the internal appeal procedure and may therefore be in a position to frustrate Nanney’s efforts at redress. Nothing in Article 33, however, indicates that a Local Union President would evaluate an internal union appeal. During the “Local” phase of the internal appeals process, it would appear that only the Local membership and the Local Union Executive Board have authority to review appeals. See Art. 33 § 3(a).’

More significantly, I read Article 33 to permit individuals in plaintiff’s position to appeal directly to the IEB and bypass the Local altogether. Nanney challenges the terms of the settlement of his grievance as finally agreed upon by the UAW-Chrysler Appeal Board, a grievance panel consisting of “two but not more than three executives of the Corporation and two but not more than three official representatives of the International Union, and an Impartial Chairman.” Agreement § 28(a) (emphasis added). Section 2(a) of Article 33 of the Union Constitution in turn allows a member bringing an internal union appeal to bypass the Lbcal and appeal directly to the IEB “[w]here the challenge is against an International Representative____”

In sum, none of plaintiff’s argument adequately explain his failure to engage the Union’s internal appeal procedure. Since the facts concerning Nanney’s failure to pursue his union remedies are not in dispute, the Union’s motion for summary judgment will be granted.

The final issue is whether plaintiff’s failure to exhaust his internal union remedies also warrants the granting of Chrysler’s motion for summary judgment. In this case, Nanney failed to show that the International Union lacked authority to reactivate his grievance pursuant to the Letter Agreement. Under these circumstances plaintiff’s failure to exhaust the internal appeals procedure precludes this action against Chrysler. Dezura, 470 F.Supp. at 125; see Pawlak, 444 F.Supp. at 811-12. Accordingly, Chrysler’s motion for summary judgment will also be granted.

      . See plaintiffs deposition, Union Exhibit 8.

      . "Instant Arbitration” appears to be a special arbitration program "designed to provide an expeditious way of submitting to arbitration a limited number of certain discharge and discipline grievances and other arbitrable grievances that involve only credibility issues.” "Instant arbitration” evidently becomes available after completion of Step Three of the grievance procedure. See Agreement at 217-220.

      . See affidavit of Carolyn Forrest, Administrative Assistant to President of the International Union, UAW, for an explanation and description of the Union internal appeal procedure.

      . Defendants submitted an affidavit by Robert Jensen, an Administrative Assistant to Vice-President & Director of the Union's Chrysler Department. He personally participated in the negotiation of the above Letter Agreement, and attests that the agreement is still in effect and applies to all grievances except those which were settled or withdrawn prior to November 5, 1976.

      . It is worth noting that had Nanney obtained reactivation of his grievance by appeal to the Union, it appears unlikely that the resulting reconsideration of his grievance by Chrysler and the Union would take nearly as long as did the original processing of the grievance. Nanney’s original grievance traveled through four different steps before it was settled in accordance with the procedure set forth in the Agreement. According to the Letter Agreement, however, a reactivated grievance "is reinstated in the grievance procedure at the step at which the original disposition of the grievance occurred." Thus, if reactivated, Nanney’s grievance would have been considered only at the fourth and last step of the grievance procedure. See Jensen affidavit.